Florida Senate - 2023                          SENATOR AMENDMENT
       Bill No. CS for SB 7052
       
       
       
       
       
       
                                Ì543692<Î543692                         
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
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                Floor: 1/AD/2R         .                                
             04/26/2023 05:11 PM       .                                
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       Senator Hutson moved the following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Delete everything after the enacting clause
    4  and insert:
    5         Section 1. Section 624.115, Florida Statutes, is created to
    6  read:
    7         624.115 Referral of criminal violations.—If, during an
    8  investigation or examination, the office has reason to believe
    9  that any criminal law of this state has or may have been
   10  violated, the office shall refer any relevant records and
   11  information to the Division of Investigative and Forensic
   12  Services, state or federal law enforcement, or prosecutorial
   13  agencies, as applicable, and shall provide investigative
   14  assistance to those agencies as required.
   15         Section 2. Paragraph (b) of subsection (10) of section
   16  624.307, Florida Statutes, is amended to read:
   17         624.307 General powers; duties.—
   18         (10)
   19         (b) Any person licensed or issued a certificate of
   20  authority by the department or the office shall respond, in
   21  writing or electronically, to the division within 14 20 days
   22  after receipt of a written request for documents and information
   23  from the division concerning a consumer complaint. The response
   24  must address the issues and allegations raised in the complaint
   25  and include any requested documents concerning the consumer
   26  complaint not subject to attorney-client or work-product
   27  privilege. The division may impose an administrative penalty for
   28  failure to comply with this paragraph of up to $5,000 $2,500 per
   29  violation upon any entity licensed by the department or the
   30  office and $250 for the first violation, $500 for the second
   31  violation, and up to $1,000 per for the third or subsequent
   32  violation by upon any individual licensed by the department or
   33  the office.
   34         Section 3. Present subsection (4) of section 624.315,
   35  Florida Statutes, is redesignated as subsection (5), and a new
   36  subsection (4) is added to that section, to read:
   37         624.315 Annual reports; quarterly reports report.—
   38         (4)(a)The office shall create a report detailing all
   39  actions of the office to enforce insurer compliance with this
   40  code and all rules and orders of the office or department during
   41  the previous year. For each of the following, the report must
   42  detail the insurer or other licensee or registrant against whom
   43  such action was taken; whether the office found any violation of
   44  law or rule by such party, and, if so, detail such violation;
   45  and the resolution of such action, including any penalties
   46  imposed by the office. The report must be published on the
   47  website of the office and submitted to the commission, the
   48  President of the Senate, the Speaker of the House of
   49  Representatives, and the legislative committees with
   50  jurisdiction over matters of insurance on or before January 31
   51  of each year. The report must include, but need not be limited
   52  to:
   53         1.The revocation, denial, or suspension of any license or
   54  registration issued by the office.
   55         2. All actions taken pursuant to s. 624.310.
   56         3.Fines imposed by the office for violations of this code.
   57         4.Consent orders entered into by the office.
   58         5.Examinations and investigations conducted and completed
   59  by the office pursuant to ss. 624.316 and 624.3161.
   60         6.Investigations conducted and completed, by line of
   61  insurance, for which the office found violations of law or rule
   62  but did not take enforcement action.
   63         (b)Each quarter, the office shall create a report
   64  detailing all actions of the office to enforce insurer
   65  compliance during the previous quarter. The report must include,
   66  but need not be limited to, the subjects that must be included
   67  in the annual report under paragraph (a). The report must be
   68  submitted to the commission, the President of the Senate, the
   69  Speaker of the House of Representatives, and the legislative
   70  committees with jurisdiction over matters of insurance. The
   71  report is due on or before April 30, July 31, October 31, and
   72  January 31, respectively, for the immediately preceding quarter.
   73  The report due January 31 may be included within the annual
   74  report required under paragraph (a).
   75         (c)The office need not include within any report required
   76  under this subsection information that would violate any
   77  confidentiality provision included within any agreement, order,
   78  or consent order entered into or adopted by the office.
   79         Section 4. Paragraph (a) of subsection (2) of section
   80  624.316, Florida Statutes, is amended, and subsections (3) and
   81  (4) are added to that section, to read:
   82         624.316 Examination of insurers.—
   83         (2)(a) Except as provided in paragraph (f), the office may
   84  examine each insurer as often as may be warranted for the
   85  protection of the policyholders and in the public interest, but
   86  must, at a minimum, examine:
   87         1.High-risk insurers at least once every 3 years.
   88         2.Average- and low-risk insurers at least once every and
   89  shall examine each domestic insurer not less frequently than
   90  once every 5 years.
   91  
   92  The examination shall cover the number of fiscal years since the
   93  last examination preceding 5 fiscal years of the insurer, except
   94  for examinations of low-risk insurers, in which case the
   95  examination need only cover at least the preceding 5 fiscal
   96  years, and shall be commenced within 12 months after the end of
   97  the most recent fiscal year being covered by the examination.
   98  The examination may cover any period of the insurer’s operations
   99  since the last previous examination. The examination may include
  100  examination of events subsequent to the end of the most recent
  101  fiscal year and the events of any prior period that affect the
  102  present financial condition of the insurer.
  103         (3) The office shall create, and the commission shall adopt
  104  by rule, a risk-based selection methodology for scheduling
  105  examinations of insurers subject to this section. Except as
  106  otherwise specified in subsection (2), this requirement does not
  107  restrict the authority of the office to conduct examinations
  108  under this section as often as it deems advisable. Such
  109  methodology must include all of the following:
  110         (a)Use of a risk-focused analysis to prioritize financial
  111  examinations of insurers when such reporting indicates a decline
  112  in the insurer’s financial condition.
  113         (b)Consideration of:
  114         1.The level of capitalization and identification of
  115  unfavorable trends;
  116         2.Negative trends in profitability or cash flow from
  117  operations;
  118         3.National Association of Insurance Commissioners
  119  Insurance Regulatory Information System ratio results;
  120         4.Risk-based capital and risk-based capital trend test
  121  results;
  122         5.The structure and complexity of the insurer;
  123         6.Changes in the insurer’s officers or board of directors;
  124         7.Changes in the insurer’s business strategy or
  125  operations;
  126         8.Findings and recommendations from an examination made
  127  pursuant to this section or s. 624.3161;
  128         9. Current or pending regulatory actions by the office or
  129  the department;
  130         10.Information obtained from other regulatory agencies or
  131  independent organization ratings and reports; and
  132         11.The impact of an insurer’s insolvency on policyholders
  133  of the insurer and the public generally.
  134         (c)Prioritization of property insurers for which the
  135  office identifies significant concerns about an insurer’s
  136  solvency pursuant to s. 627.7154.
  137         (d)Any other matters the office deems necessary to
  138  consider for the protection of the public.
  139         (4)The office shall present any proposed rules
  140  implementing this section to the commission no later than
  141  October 1, 2023. In addition to the methodology required by this
  142  section, such rule or rules must include a plan to implement the
  143  examination schedule in subsection (2). To facilitate the
  144  development of the methodology for scheduling examinations
  145  pursuant to this section, the commission may also adopt by rule
  146  the National Association of Insurance Commissioners Financial
  147  Analysis Handbook, to the extent that the handbook is consistent
  148  with and does not negate the requirements of this section.
  149         Section 5. Subsection (7) of section 624.3161, Florida
  150  Statutes, is amended, and subsections (8) and (9) are added to
  151  that section, to read:
  152         624.3161 Market conduct examinations.—
  153         (7) Notwithstanding subsection (1), any authorized insurer
  154  transacting residential property insurance business in this
  155  state:
  156         (a) May be subject to an additional market conduct
  157  examination after a hurricane if, at any time more than 90 days
  158  after the end of the hurricane, the insurer:
  159         (a) is among the top 20 percent of insurers based upon a
  160  calculation of the ratio of hurricane-related property insurance
  161  claims filed to the number of property insurance policies in
  162  force;
  163         (b) Must be subject to a market conduct examination after a
  164  hurricane if, at any time more than 90 days after the end of the
  165  hurricane, the insurer:
  166         1. Is among the top 20 percent of insurers based upon a
  167  calculation of the ratio of hurricane claim-related consumer
  168  complaints made about that insurer to the department to the
  169  insurer’s total number of hurricane-related claims;
  170         2.Is among the top 20 percent of insurers based upon a
  171  calculation of the ratio of hurricane claims closed without
  172  payment to the insurer’s total number of hurricane claims on
  173  policies providing wind or windstorm coverage;
  174         3.(c) Has made significant payments to its managing general
  175  agent since the hurricane; or
  176         4.(d) Is identified by the office as necessitating a market
  177  conduct exam for any other reason.
  178  
  179  All relevant criteria under this section and s. 624.316 shall be
  180  applied to the market conduct examination under this subsection.
  181  Such an examination must be initiated within 18 months after the
  182  landfall of a hurricane that results in an executive order or a
  183  state of emergency issued by the Governor. The requirements of
  184  this subsection do not limit the authority of the office to
  185  conduct at any time a market conduct examination of a property
  186  insurer in the aftermath of a hurricane. This subsection does
  187  not require the office to conduct multiple market conduct
  188  examinations of the same insurer when multiple hurricanes make
  189  landfall in this state in a single calendar year. An examination
  190  of an insurer under this subsection must also include an
  191  examination of its managing general agent as if it were the
  192  insurer.
  193         (8) The office shall create, and the commission shall adopt
  194  by rule, a selection methodology for scheduling and conducting
  195  market conduct examinations of insurers and other entities
  196  regulated by the office. This requirement does not restrict the
  197  authority of the office to conduct market conduct examinations
  198  as often as it deems necessary. Such selection methodology must
  199  prioritize market conduct examinations of insurers and other
  200  entities regulated by the office to whom any of the following
  201  conditions applies:
  202         (a)An insurance regulator in another state has initiated
  203  or taken regulatory action against the insurer or entity
  204  regarding an act or omission of such insurer or entity which, if
  205  committed in this state, would constitute a violation of the
  206  laws of this state or any rule or order of the office or
  207  department.
  208         (b)Given the insurer’s market share in this state, the
  209  department or the office has received a disproportionate number
  210  of the following types of claims-handling complaints against the
  211  insurer:
  212         1.Failure to timely communicate with respect to claims;
  213         2.Failure to timely pay claims;
  214         3.Untimely payments giving rise to the payment of
  215  statutory interest;
  216         4.Failure to adjust and pay claims in accordance with the
  217  terms and conditions of the policy or contract and in compliance
  218  with state law;
  219         5.Violations of part IX of chapter 626, the Unfair
  220  Insurance Trade Practices Act;
  221         6.Failure to use licensed and duly appointed claims
  222  adjusters;
  223         7.Failure to maintain reasonable claims records; or
  224         8.Failure to adhere to the company’s claims-handling
  225  manual.
  226         (c)The results of a National Association of Insurance
  227  Commissioners Market Conduct Annual Statement indicate that the
  228  insurer is a negative outlier with regard to particular metrics.
  229         (d)There is evidence that the insurer is violating or has
  230  violated the Unfair Insurance Trade Practices Act.
  231         (e)The insurer meets the criteria in subsection (7).
  232         (f)Any other conditions the office deems necessary for the
  233  protection of the public.
  234  
  235  The office shall present the proposed rule required by this
  236  subsection to the commission no later than October 1, 2023. In
  237  addition to the methodology required by this subsection, the
  238  rule must provide criteria for how the office, in coordination
  239  with the department, will determine what constitutes a
  240  disproportionate number of claims-handling complaints described
  241  in paragraph (b).
  242         (9)If the office concludes through an examination pursuant
  243  to this section that an insurer providing liability coverage in
  244  this state exhibits a pattern or practice of violations of the
  245  Florida Insurance Code during any investigation or examination
  246  of the insurer, the office must review the insurer’s claims
  247  handling practices to determine if the insurer should be subject
  248  to the enhanced enforcement penalties of this subsection.
  249         (a)A liability insurer may be subject to enhanced
  250  enforcement penalties if the office reviews the insurer’s
  251  claims-handling practices and finds a pattern or practice of the
  252  insurer failing to do the following when responding to covered
  253  liability claims under an insurance policy, after receiving
  254  actual notice of such claims:
  255         1.Assign a licensed and appointed insurance adjuster to
  256  investigate whether coverage is provided under the policy and
  257  diligently attempt to resolve any questions concerning the
  258  extent of the insured’s coverage.
  259         2.Evaluate the claim fairly, honestly, and with due regard
  260  for the interests of the insured based on available information.
  261         3.Request from the insured or claimant additional relevant
  262  information the insurer reasonably deems necessary to evaluate
  263  whether to settle a claim.
  264         4.Conduct all oral and written communications with the
  265  insured with honesty and candor.
  266         5.Make reasonable efforts to explain to persons not
  267  represented by counsel matters requiring expertise beyond the
  268  level normally expected of a layperson with no training in
  269  insurance or claims-handling issues.
  270         6.Retain all written and recorded communications and
  271  create and retain a summary of all verbal communications in a
  272  reasonable manner for a period of not less than 2 years after
  273  the later of the entry of a final judgment against the insured
  274  in excess of policy limits or, if an extracontractual claim is
  275  made, the conclusion of that claim and any related appeals.
  276         7.Within 30 days after a request, provide the insured with
  277  all communications related to the insurer’s handling of the
  278  claim which are not privileged as to the insured.
  279         8.Provide, upon request and at the insurer’s expense,
  280  reasonable accommodations necessary to communicate effectively
  281  with an insured covered under the Americans with Disabilities
  282  Act.
  283         9.When handling a third-party claim, communicate each of
  284  the following to the insured:
  285         a.The identity of any other person or entity the insurer
  286  has reason to believe may be liable.
  287         b.The insurer’s final and completed estimate of the claim.
  288         c.The possibility of an excess judgment.
  289         d.The insured’s right to secure personal counsel at his or
  290  her own expense.
  291         e.That the insured should cooperate with the insurer,
  292  including providing information required by the insurer because
  293  of a settlement opportunity or in accordance with the policy.
  294         f.Any formal settlement demands or offers to settle by the
  295  claimant and any offers to settle on behalf of the insured.
  296         10.Respond to any request for insurance information in
  297  compliance with s. 626.9372 or s. 627.4137, as applicable.
  298         11.Seek to obtain a general release of each insured in
  299  making any settlement offer to a third-party claimant.
  300         12.Take reasonable measures to preserve any documentary,
  301  photographic, and forensic evidence as needed for the defense of
  302  the liability claim if it appears likely that the insured’s
  303  liability exposure is greater than policy limits and the insurer
  304  fails to secure a general release in favor of the insured.
  305         13.Comply with subsections (1) and (2), if applicable.
  306         14.Comply with the Unfair Insurance Trade Practices Act.
  307         (b)As used in this subsection, the term “actual notice”
  308  means the insurer’s receipt of notice of an incident or a loss
  309  that could give rise to a covered claim that is communicated to
  310  the insurer or an agent of the insurer:
  311         1.By any manner permitted by the policy or other documents
  312  provided to the insured by the insurer;
  313         2.Through the claims link on the insurer’s website; or
  314         3.Through the e-mail address designated by the insurer
  315  under s. 624.422.
  316         (c)In reviewing claims-handling practices, it is relevant
  317  whether the insured, claimant, and any representative of the
  318  insured or claimant were acting reasonably toward the insurer in
  319  furnishing information regarding the claim, in making demands of
  320  the insurer, in setting deadlines, and in attempting to settle
  321  the claim. Such matters include whether:
  322         1.The insured cooperated with the insurer in the defense
  323  of the claim and in making settlements by taking reasonable
  324  actions requested by the claimant or required by the policy
  325  which are necessary to assist the insurer in settling a covered
  326  claim, including:
  327         a.Executing affidavits regarding the facts within the
  328  insured’s knowledge regarding the covered loss; and
  329         b.Providing documents, including, if reasonably necessary
  330  to settle a covered claim valued in excess of policy limits and
  331  upon the request of the claimant, a summary of the insured’s
  332  assets, liabilities, obligations, and other insurance policies
  333  that may provide coverage for the claim and the name and contact
  334  information of the insured’s employer when the insured is a
  335  natural person who was acting in the course and scope of
  336  employment when the incident giving rise to the claim occurred.
  337         2.The claimant and any claimant’s representative:
  338         a.Acted honestly in furnishing information regarding the
  339  claim;
  340         b.Acted reasonably in setting deadlines; and
  341         c.Refrained from taking actions that may be reasonably
  342  expected to prevent an insurer from accepting the settlement
  343  demand, such as providing insufficient detail within the demand,
  344  providing unreasonable deadlines for acceptance of the demand,
  345  or including unreasonable conditions to settlement.
  346         (d)In addition to authorized penalties for a liability
  347  insurer that the office has determined has a pattern or practice
  348  of violations of the Florida Insurance Code at the conclusion of
  349  any investigation or examination, the office may impose enhanced
  350  enforcement penalties for insurer claims-handling practices that
  351  fail to meet the review standards of this subsection. Such
  352  enhanced enforcement penalties include, but are not limited to,
  353  administrative fines that are subject to a 2.0 multiplier and
  354  fines that exceed the limits on fine amounts and aggregate fine
  355  amounts provided for under this code.
  356         (e)This subsection does not create a civil cause of
  357  action, a civil remedy under s. 624.155, or an unfair trade
  358  practice under 626.9541.
  359         Section 6. Section 624.4211, Florida Statutes, is amended
  360  to read:
  361         624.4211 Administrative fine in lieu of suspension or
  362  revocation.—
  363         (1) If the office finds that one or more grounds exist for
  364  the discretionary revocation or suspension of a certificate of
  365  authority issued under this chapter, the office may, in lieu of
  366  such revocation or suspension, impose a fine upon the insurer.
  367         (2)(a) With respect to a any nonwillful violation, such
  368  fine may not exceed:
  369         1.Twenty-five thousand dollars per violation, up to an
  370  aggregate amount of $100,000 for all nonwillful violations
  371  arising out of the same action, related to a covered loss or
  372  claim caused by an emergency for which the Governor declared a
  373  state of emergency pursuant to s. 252.36.
  374         2.Twelve thousand five hundred dollars $5,000 per
  375  violation, up to. In no event shall such fine exceed an
  376  aggregate amount of $50,000 $20,000 for all other nonwillful
  377  violations arising out of the same action.
  378         (b) If an insurer discovers a nonwillful violation, the
  379  insurer shall correct the violation and, if restitution is due,
  380  make restitution to all affected persons. Such restitution shall
  381  include interest at 12 percent per year from either the date of
  382  the violation or the date of inception of the affected person’s
  383  policy, at the insurer’s option. The restitution may be a credit
  384  against future premiums due, provided that interest accumulates
  385  until the premiums are due. If the amount of restitution due to
  386  any person is $50 or more and the insurer wishes to credit it
  387  against future premiums, it shall notify such person that she or
  388  he may receive a check instead of a credit. If the credit is on
  389  a policy that is not renewed, the insurer shall pay the
  390  restitution to the person to whom it is due.
  391         (3)(a) With respect to a any knowing and willful violation
  392  of a lawful order or rule of the office or commission or a
  393  provision of this code, the office may impose a fine upon the
  394  insurer in an amount not to exceed:
  395         1.Two hundred thousand dollars for each such violation, up
  396  to an aggregate amount of $1 million for all knowing and willful
  397  violations arising out of the same action, related to a covered
  398  loss or claim caused by an emergency for which the Governor
  399  declared a state of emergency pursuant to s. 252.36.
  400         2.One hundred thousand dollars $40,000 for each such
  401  violation, up to. In no event shall such fine exceed an
  402  aggregate amount of $500,000 $200,000 for all other knowing and
  403  willful violations arising out of the same action.
  404         (b) In addition to such fines, the insurer shall make
  405  restitution when due in accordance with subsection (2).
  406         (4) The failure of an insurer to make restitution when due
  407  as required under this section constitutes a willful violation
  408  of this code. However, if an insurer in good faith is uncertain
  409  as to whether any restitution is due or as to the amount of such
  410  restitution, it shall promptly notify the office of the
  411  circumstances; and the failure to make restitution pending a
  412  determination thereof shall not constitute a violation of this
  413  code.
  414         Section 7. Section 624.4301, Florida Statutes, is created
  415  to read:
  416         624.4301 Notice of temporary discontinuance of writing new
  417  residential property insurance policies.—
  418         (1)Any authorized insurer, before temporarily suspending
  419  writing new residential property insurance policies in this
  420  state, must give notice to the office of the insurer’s reasons
  421  for such action, the effective dates of the temporary
  422  suspension, and the proposed communication to its agents. Such
  423  notice must be provided on a form approved by the office and
  424  adopted by the commission. The insurer shall submit such notice
  425  to the office the earlier of 20 business days before the
  426  effective date of the temporary suspension of writing or 5
  427  business days before notifying its agents of the temporary
  428  suspension of writing. The insurer must provide any other
  429  information requested by the office related to the insurer’s
  430  temporary suspension of writing. The requirements of this
  431  section do not:
  432         (a)Apply to a temporary suspension of writing new business
  433  made in response to:
  434         1.A hurricane that may make landfall in this state if such
  435  temporary suspension ceases within 72 hours after hurricane
  436  conditions are no longer present in this state; or
  437         2.Any other natural emergency as defined in s. 252.34(8)
  438  which impacts one or more counties and is the subject of a
  439  declared state of emergency by any local, state, or federal
  440  authority, if such temporary suspension applies only to the
  441  affected counties and ceases within 72 hours after such natural
  442  emergency is no longer present in those counties.
  443         (b)Require such insurers to obtain the approval of the
  444  office before temporarily suspending writing new residential
  445  property insurance policies in this state.
  446         (2)The commission may adopt rules to administer this
  447  section.
  448         Section 8. Section 624.805, Florida Statutes, is created to
  449  read:
  450         624.805 Hazardous insurer standards; office’s evaluation
  451  and enforcement authority; immediate final order.—
  452         (1)In determining whether the continued operation of any
  453  authorized insurer transacting business in this state may be
  454  deemed to be hazardous to its policyholders or creditors or to
  455  the general public, the office may consider, in the totality of
  456  the circumstances of such insurer, any of the following:
  457         (a)Adverse findings reported in financial condition or
  458  market conduct examination reports, audit reports, or actuarial
  459  opinions, reports, or summaries.
  460         (b)The National Association of Insurance Commissioners
  461  Insurance Regulatory Information System and its other financial
  462  analysis solvency tools and reports.
  463         (c)Whether the insurer has made adequate provisions,
  464  according to presently accepted actuarial standards of practice,
  465  for the anticipated cash flows required to cover its contractual
  466  obligations and related expenses.
  467         (d)The ability of an assuming reinsurer to perform and
  468  whether the insurer’s reinsurance program provides sufficient
  469  protection for the insurer’s remaining surplus after taking into
  470  account the insurer’s cash flow and the lines of insurance
  471  written, as well as the financial condition of the assuming
  472  reinsurer.
  473         (e)Whether the insurer’s operating loss in the last 12
  474  month period, including, but not limited to, net capital gain or
  475  loss, change in nonadmitted assets, and cash dividends paid to
  476  shareholders is greater than 50 percent of the insurer’s
  477  remaining surplus as regards policyholders in excess of the
  478  minimum required.
  479         (f)Whether the insurer’s operating loss in the last 12
  480  month period, excluding net capital gains, is greater than 20
  481  percent of the insurer’s remaining surplus as regards
  482  policyholders in excess of the minimum required.
  483         (g)Whether a reinsurer, an obligor, or any entity within
  484  the insurer’s insurance holding company system is insolvent,
  485  threatened with insolvency, or delinquent in payment of its
  486  monetary or other obligations, and which in the opinion of the
  487  office may affect the solvency of the insurer.
  488         (h)Contingent liabilities, pledges, or guaranties that
  489  individually or collectively involve a total amount that in the
  490  opinion of the office may affect the solvency of the insurer.
  491         (i)Whether any affiliate, as defined in s. 624.10(1), of
  492  the insurer is delinquent in the transmitting to, or payment of,
  493  net premiums to the insurer.
  494         (j)The age and collectability of receivables.
  495         (k)Whether the management of the insurer, including
  496  officers, directors, or any other person who directly or
  497  indirectly controls the operation of the insurer, fails to
  498  possess and demonstrate the competence, fitness, and reputation
  499  deemed necessary to serve the insurer in such position.
  500         (l)Whether management of the insurer has failed to respond
  501  to inquiries relative to the condition of the insurer or has
  502  furnished false or misleading information to the office
  503  concerning an inquiry.
  504         (m)Whether the insurer has failed to meet financial and
  505  holding company filing requirements in the absence of a reason
  506  satisfactory to the office.
  507         (n)Whether management of the insurer has filed any false
  508  or misleading sworn financial statement, has released a false or
  509  misleading financial statement to lending institutions or to the
  510  general public, has made a false or misleading entry, or has
  511  omitted an entry of material amount in the books of the insurer.
  512         (o)Whether the insurer has grown so rapidly and to such an
  513  extent that it lacks adequate financial and administrative
  514  capacity to meet its obligations in a timely manner.
  515         (p)Whether the insurer has experienced, or will experience
  516  in the foreseeable future, cash flow or liquidity problems.
  517         (q)Whether management has established reserves that do not
  518  comply with minimum standards established by state insurance
  519  laws and regulations, statutory accounting standards, sound
  520  actuarial principles, and standards of practice.
  521         (r)Whether management persistently engages in material
  522  under-reserving that results in adverse development.
  523         (s)Whether transactions among affiliates, subsidiaries, or
  524  controlling persons for which the insurer receives assets or
  525  capital gains, or both, do not provide sufficient value,
  526  liquidity, or diversity to assure the insurer’s ability to meet
  527  its outstanding obligations as they mature.
  528         (t)The ratio of the annual premium volume to surplus or of
  529  its liabilities to surplus in relation to loss experience, the
  530  kinds of risks insured, or both.
  531         (u)Whether the insurer’s asset portfolio, when viewed in
  532  light of current economic conditions and indications of
  533  financial or operational leverage, is of sufficient value,
  534  liquidity, or diversity to assure the company’s ability to meet
  535  its outstanding obligations as they mature.
  536         (v)Whether the excess of surplus as regards policyholders
  537  above the insurer’s statutorily required surplus as regards
  538  policyholders has decreased by more than 50 percent in the
  539  preceding 12-month period.
  540         (w)As to a residential property insurer, whether it has
  541  sufficient capital, surplus, and reinsurance to withstand
  542  significant weather events, including, but not limited to,
  543  hurricanes.
  544         (x) Whether the insurer’s required surplus, capital, or
  545  capital stock is impaired to an extent prohibited by law.
  546         (y) Whether the insurer continues to write new business
  547  when it has not maintained the required surplus or capital.
  548         (z) Whether the insurer moves to dissolve or liquidate
  549  without first having made provisions satisfactory to the office
  550  for liabilities arising from insurance policies issued by the
  551  insurer.
  552         (aa)Whether the insurer has incurred substantial new debt,
  553  has had to rely on frequent or substantial capital infusions,
  554  has a highly leveraged balance sheet.
  555         (bb)Whether the insurer relies increasingly on other
  556  entities, including, but not limited to, affiliates, third-party
  557  administrators, managing general agents, or management
  558  companies.
  559         (cc) Whether the insurer meets one or more of the grounds
  560  in s. 631.051 for the appointment of the department as receiver.
  561         (dd)Any other finding determined by the office to be
  562  hazardous to the insurer’s policyholders or creditors or to the
  563  general public.
  564         (2)For the purposes of making a determination of an
  565  insurer’s financial condition under the Florida Insurance Code,
  566  the office may:
  567         (a)Disregard any credit or amount receivable resulting
  568  from transactions with a reinsurer that is insolvent, impaired,
  569  or otherwise subject to a delinquency proceeding;
  570         (b)Make appropriate adjustments, including disallowance to
  571  asset values attributable to investments in or transactions with
  572  parents, subsidiaries, or affiliates, consistent with the
  573  National Association of Insurance Commissioners Accounting
  574  Practices and Procedures Manual and state laws and rules;
  575         (c)Refuse to recognize the stated value of accounts
  576  receivable if the ability to collect receivables is highly
  577  speculative in view of the age of the account or the financial
  578  condition of the debtor; or
  579         (d)Increase the insurer’s liability, in an amount equal to
  580  any contingent liability, pledge, or guarantee not otherwise
  581  included, if there is a substantial risk that the insurer will
  582  be called upon to meet the obligation undertaken within the next
  583  12-month period.
  584         (3)If the office determines that the continued operations
  585  of an insurer authorized to transact business in this state may
  586  be hazardous to its policyholders or creditors or to the general
  587  public, the office may issue an order requiring the insurer to
  588  do any of the following:
  589         (a)Reduce the total amount of present and potential
  590  liability for policy benefits by procuring additional
  591  reinsurance.
  592         (b)Reduce, suspend, or limit the volume of business being
  593  accepted or renewed.
  594         (c)Reduce expenses by specified methods or amounts.
  595         (d)Increase the insurer’s capital and surplus.
  596         (e)Suspend or limit the declaration and payment of
  597  dividends by an insurer to its stockholders or to its
  598  policyholders.
  599         (f)File reports in a form acceptable to the office
  600  concerning the market value of the insurer’s assets.
  601         (g)Limit or withdraw from certain investments or
  602  discontinue certain investment practices to the extent the
  603  office deems necessary.
  604         (h)Document the adequacy of premium rates in relation to
  605  the risks insured.
  606         (i)File, in addition to regular annual statements, interim
  607  financial reports on a form prescribed by the commission and
  608  adopted by the National Association of Insurance Commissioners.
  609         (j)Correct corporate governance practice deficiencies and
  610  adopt and use governance practices acceptable to the office.
  611         (k)Provide a business plan acceptable to the office in
  612  order to continue to transact business in this state.
  613         (l)Notwithstanding any other law limiting the frequency or
  614  amount of rate adjustments, adjust rates for any non-life
  615  insurance product written by the insurer which the office
  616  considers necessary to improve the financial condition of the
  617  insurer.
  618         (4)This section may not be interpreted to limit the powers
  619  granted to the office by any laws of this state, nor may it be
  620  interpreted to supersede any laws of this state.
  621         (5)The office may, pursuant to ss. 120.569 and 120.57, in
  622  its discretion and without advance notice or hearing, issue an
  623  immediate final order to any insurer requiring the actions
  624  listed in subsection (3).
  625         Section 9. Subsection (11) of section 624.81, Florida
  626  Statutes, is amended to read:
  627         624.81 Notice to comply with written requirements of
  628  office; noncompliance.—
  629         (11) The commission may adopt rules to define standards of
  630  hazardous financial condition and corrective action
  631  substantially similar to that indicated in the National
  632  Association of Insurance Commissioners’ 1997 “Model Regulation
  633  to Define Standards and Commissioner’s Authority for Companies
  634  Deemed to be in Hazardous Financial Condition,” which are
  635  necessary to implement the provisions of this part.
  636         Section 10. Section 624.865, Florida Statutes, is created
  637  to read:
  638         624.865 Rulemaking.—The commission may adopt rules to
  639  administer ss. 624.80-624.87. Such rules must protect the
  640  interests of insureds, claimants, insurers, and the public.
  641         Section 11. Paragraph (d) of subsection (2) and paragraph
  642  (b) of subsection (3) of section 628.8015, Florida Statutes, are
  643  amended to read:
  644         628.8015 Own-risk and solvency assessment; corporate
  645  governance annual disclosure.—
  646         (2) OWN-RISK AND SOLVENCY ASSESSMENT.—
  647         (d) Exemption.—
  648         1. An insurer is exempt from the requirements of this
  649  subsection if:
  650         a. The insurer has annual direct written and unaffiliated
  651  assumed premium, including international direct and assumed
  652  premium, but excluding premiums reinsured with the Federal Crop
  653  Insurance Corporation and the National Flood Insurance Program,
  654  of less than $500 million; or
  655         b. The insurer is a member of an insurance group and the
  656  insurance group has annual direct written and unaffiliated
  657  assumed premium, including international direct and assumed
  658  premium, but excluding premiums reinsured with the Federal Crop
  659  Insurance Corporation and the National Flood Insurance Program,
  660  of less than $1 billion.
  661         2. If an insurer is:
  662         a. Exempt under sub-subparagraph 1.a., but the insurance
  663  group of which the insurer is a member is not exempt under sub
  664  subparagraph 1.b., the ORSA summary report must include every
  665  insurer within the insurance group. The insurer may satisfy this
  666  requirement by submitting more than one ORSA summary report for
  667  any combination of insurers if any combination of reports
  668  includes every insurer within the insurance group.
  669         b. Not exempt under sub-subparagraph 1.a., but the
  670  insurance group of which it is a member is exempt under sub
  671  subparagraph 1.b., the insurer must submit to the office the
  672  ORSA summary report applicable only to that insurer.
  673         3. The office may require an exempt insurer to maintain a
  674  risk management framework, conduct an ORSA, and file an ORSA
  675  summary report:
  676         a. Based on unique circumstances, including, but not
  677  limited to, the type and volume of business written, ownership
  678  and organizational structure, federal agency requests, and
  679  international supervisor requests;
  680         b. If the insurer has risk-based capital for a company
  681  action level event pursuant to s. 624.4085(3), meets one or more
  682  of the standards of an insurer deemed to be in hazardous
  683  financial condition under s. 624.805 as defined in rules adopted
  684  by the commission pursuant to s. 624.81(11), or exhibits
  685  qualities of an insurer in hazardous financial condition as
  686  determined by the office; or
  687         c. If the office determines it is in the best interest of
  688  the state.
  689         4. If an exempt insurer becomes disqualified for an
  690  exemption because of changes in premium as reported on the most
  691  recent annual statement of the insurer or annual statements of
  692  the insurers within the insurance group of which the insurer is
  693  a member, the insurer must comply with the requirements of this
  694  section effective 1 year after the year in which the insurer
  695  exceeded the premium thresholds.
  696         (3) CORPORATE GOVERNANCE ANNUAL DISCLOSURE.—
  697         (b) Disclosure requirement.—
  698         1.a. An insurer, or insurer member of an insurance group,
  699  of which the office is the lead state regulator, as determined
  700  by the procedures in the most recent National Association of
  701  Insurance Commissioners Financial Analysis Handbook, shall
  702  submit a corporate governance annual disclosure to the office by
  703  June 1 of each calendar year. The initial corporate governance
  704  annual disclosure must be submitted by December 31, 2018.
  705         b. An insurer or insurance group not required to submit a
  706  corporate governance annual disclosure under sub-subparagraph a.
  707  shall do so at the request of the office, but not more than once
  708  per calendar year. The insurer or insurance group shall notify
  709  the office of the proposed submission date within 30 days after
  710  the request of the office.
  711         c. Before December 31, 2018, the office may require an
  712  insurer or insurance group to provide a corporate governance
  713  annual disclosure:
  714         (I) Based on unique circumstances, including, but not
  715  limited to, the type and volume of business written, the
  716  ownership and organizational structure, federal agency requests,
  717  and international supervisor requests;
  718         (II) If the insurer has risk-based capital for a company
  719  action level event pursuant to s. 624.4085(3), meets one or more
  720  of the standards of an insurer deemed to be in hazardous
  721  financial condition under s. 624.805 as defined in rules adopted
  722  pursuant to s. 624.81(11), or exhibits qualities of an insurer
  723  in hazardous financial condition as determined by the office;
  724         (III) If the insurer is the member of an insurer group of
  725  which the office acts as the lead state regulator as determined
  726  by the procedures in the most recent National Association of
  727  Insurance Commissioners Financial Analysis Handbook; or
  728         (IV) If the office determines that it is in the best
  729  interest of the state.
  730         2. The chief executive officer or corporate secretary of
  731  the insurer or the insurance group must sign the corporate
  732  governance annual disclosure attesting that, to the best of his
  733  or her knowledge and belief, the insurer has implemented the
  734  corporate governance practices and provided a copy of the
  735  disclosure to the board of directors or the appropriate board
  736  committee.
  737         3.a. Depending on the structure of its system of corporate
  738  governance, the insurer or insurance group may provide corporate
  739  governance information at one of the following levels:
  740         (I) The ultimate controlling parent level;
  741         (II) An intermediate holding company level; or
  742         (III) The individual legal entity level.
  743         b. The insurer or insurance group may make the corporate
  744  governance annual disclosure at:
  745         (I) The level used to determine the risk appetite of the
  746  insurer or insurance group;
  747         (II) The level at which the earnings, capital, liquidity,
  748  operations, and reputation of the insurer are collectively
  749  overseen and the supervision of those factors is coordinated and
  750  exercised; or
  751         (III) The level at which legal liability for failure of
  752  general corporate governance duties would be placed.
  753  
  754  An insurer or insurance group must indicate the level of
  755  reporting used and explain any subsequent changes in the
  756  reporting level.
  757         4. The review of the corporate governance annual disclosure
  758  and any additional requests for information shall be made
  759  through the lead state as determined by the procedures in the
  760  most recent National Association of Insurance Commissioners
  761  Financial Analysis Handbook.
  762         5. An insurer or insurance group may comply with this
  763  paragraph by cross-referencing other existing relevant and
  764  applicable documents, including, but not limited to, the ORSA
  765  summary report, Holding Company Form B or F filings, Securities
  766  and Exchange Commission proxy statements, or foreign regulatory
  767  reporting requirements, if the documents contain information
  768  substantially similar to the information described in paragraph
  769  (c). The insurer or insurance group shall clearly identify and
  770  reference the specific location of the relevant and applicable
  771  information within the corporate governance annual disclosure
  772  and attach the referenced document if it has not already been
  773  filed with, or made available to, the office.
  774         6. Each year following the initial filing of the corporate
  775  governance annual disclosure, the insurer or insurance group
  776  shall file an amended version of the previously filed corporate
  777  governance annual disclosure indicating changes that have been
  778  made. If changes have not been made in the previously filed
  779  disclosure, the insurer or insurance group should so indicate.
  780         Section 12. Paragraph (c) of subsection (3) of section
  781  626.207, Florida Statutes, is amended to read:
  782         626.207 Disqualification of applicants and licensees;
  783  penalties against licensees; rulemaking authority.—
  784         (3) An applicant who has been found guilty of or has
  785  pleaded guilty or nolo contendere to a crime not included in
  786  subsection (2), regardless of adjudication, is subject to:
  787         (c) A 7-year disqualifying period for all misdemeanors
  788  directly related to the financial services business or any
  789  misdemeanor directly related to any violation of the Florida
  790  Insurance Code.
  791         Section 13. Subsections (2) and (3) of section 626.9521,
  792  Florida Statutes, are amended to read:
  793         626.9521 Unfair methods of competition and unfair or
  794  deceptive acts or practices prohibited; penalties.—
  795         (2) Except as provided in subsection (3), any person who
  796  violates any provision of this part is subject to a fine in an
  797  amount not greater than $12,500 $5,000 for each nonwillful
  798  violation and not greater than $100,000 $40,000 for each willful
  799  violation. Fines under this subsection imposed against an
  800  insurer may not exceed an aggregate amount of $50,000 $20,000
  801  for all nonwillful violations arising out of the same action or
  802  an aggregate amount of $500,000 $200,000 for all willful
  803  violations arising out of the same action. The fines may be
  804  imposed in addition to any other applicable penalty.
  805         (3)(a) If a person violates s. 626.9541(1)(l), the offense
  806  known as “twisting,” or violates s. 626.9541(1)(aa), the offense
  807  known as “churning,” the person commits a misdemeanor of the
  808  first degree, punishable as provided in s. 775.082, and an
  809  administrative fine not greater than $12,500 $5,000 shall be
  810  imposed for each nonwillful violation or an administrative fine
  811  not greater than $187,500 $75,000 shall be imposed for each
  812  willful violation. To impose an administrative fine for a
  813  willful violation under this paragraph, the practice of
  814  “churning” or “twisting” must involve fraudulent conduct.
  815         (b) If a person violates s. 626.9541(1)(ee) by willfully
  816  submitting fraudulent signatures on an application or policy
  817  related document, the person commits a felony of the third
  818  degree, punishable as provided in s. 775.082, and an
  819  administrative fine not greater than $5,000 shall be imposed for
  820  each nonwillful violation or an administrative fine not greater
  821  than $187,500 $75,000 shall be imposed for each willful
  822  violation.
  823         (c) If a person violates any provision of this part and
  824  such violation is related to a covered loss or covered claim
  825  caused by an emergency for which the Governor declared a state
  826  of emergency pursuant to s. 252.36, such person is subject to a
  827  fine in an amount not greater than $25,000 for each nonwillful
  828  violation and not greater than $200,000 for each willful
  829  violation. Fines imposed under this paragraph against an insurer
  830  may not exceed an aggregate amount of $100,000 for all
  831  nonwillful violations arising out of the same action or an
  832  aggregate amount of $1 million for all willful violations
  833  arising out of the same action.
  834         (d) Administrative fines under paragraphs (a) and (b) this
  835  subsection may not exceed an aggregate amount of $125,000
  836  $50,000 for all nonwillful violations arising out of the same
  837  action or an aggregate amount of $625,000 $250,000 for all
  838  willful violations arising out of the same action.
  839         Section 14. Paragraphs (i) and (w) of subsection (1) of
  840  section 626.9541, Florida Statutes, are amended to read:
  841         626.9541 Unfair methods of competition and unfair or
  842  deceptive acts or practices defined.—
  843         (1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE
  844  ACTS.—The following are defined as unfair methods of competition
  845  and unfair or deceptive acts or practices:
  846         (i) Unfair claim settlement practices.—
  847         1. Attempting to settle claims on the basis of an
  848  application, when serving as a binder or intended to become a
  849  part of the policy, or any other material document which was
  850  altered without notice to, or knowledge or consent of, the
  851  insured;
  852         2. A material misrepresentation made to an insured or any
  853  other person having an interest in the proceeds payable under
  854  such contract or policy, for the purpose and with the intent of
  855  effecting settlement of such claims, loss, or damage under such
  856  contract or policy on less favorable terms than those provided
  857  in, and contemplated by, such contract or policy;
  858         3. Committing or performing with such frequency as to
  859  indicate a general business practice any of the following:
  860         a. Failing to adopt and implement standards for the proper
  861  investigation of claims;
  862         b. Misrepresenting pertinent facts or insurance policy
  863  provisions relating to coverages at issue;
  864         c. Failing to acknowledge and act promptly upon
  865  communications with respect to claims;
  866         d. Denying claims without conducting reasonable
  867  investigations based upon available information;
  868         e. Failing to affirm or deny full or partial coverage of
  869  claims, and, as to partial coverage, the dollar amount or extent
  870  of coverage, or failing to provide a written statement that the
  871  claim is being investigated, upon the written request of the
  872  insured within 30 days after proof-of-loss statements have been
  873  completed;
  874         f. Failing to promptly provide a reasonable explanation in
  875  writing to the insured of the basis in the insurance policy, in
  876  relation to the facts or applicable law, for denial of a claim
  877  or for the offer of a compromise settlement;
  878         g. Failing to promptly notify the insured of any additional
  879  information necessary for the processing of a claim;
  880         h. Failing to clearly explain the nature of the requested
  881  information and the reasons why such information is necessary;
  882  or
  883         i. Failing to pay personal injury protection insurance
  884  claims within the time periods required by s. 627.736(4)(b). The
  885  office may order the insurer to pay restitution to a
  886  policyholder, medical provider, or other claimant, including
  887  interest at a rate consistent with the amount set forth in s.
  888  55.03(1), for the time period within which an insurer fails to
  889  pay claims as required by law. Restitution is in addition to any
  890  other penalties allowed by law, including, but not limited to,
  891  the suspension of the insurer’s certificate of authority; or
  892         j.Altering or amending an insurance adjuster’s report
  893  without:
  894         (I)Providing a detailed explanation as to why any change
  895  that has the effect of reducing the estimate of the loss was
  896  made; and
  897         (II)Including on the report or as an addendum to the
  898  report a detailed list of all changes made to the report and the
  899  identity of the person who ordered each change; or
  900         (III)Retaining all versions of the report, and including
  901  within each such version, for each change made within such
  902  version of the report, the identity of each person who made or
  903  ordered such change; or
  904         4. Failing to pay undisputed amounts of partial or full
  905  benefits owed under first-party property insurance policies
  906  within 60 days after an insurer receives notice of a residential
  907  property insurance claim, determines the amounts of partial or
  908  full benefits, and agrees to coverage, unless payment of the
  909  undisputed benefits is prevented by factors beyond the control
  910  of the insurer as defined in s. 627.70131(5).
  911         (w) Soliciting or accepting new or renewal insurance risks
  912  by insolvent or impaired insurer or receipt of certain bonuses
  913  by an officer or director of an insolvent insurer prohibited;
  914  penalty.—
  915         1. Whether or not delinquency proceedings as to the insurer
  916  have been or are to be initiated, but while such insolvency or
  917  impairment exists, no director or officer of an insurer, except
  918  with the written permission of the office, shall authorize or
  919  permit the insurer to solicit or accept new or renewal insurance
  920  risks in this state after such director or officer knew, or
  921  reasonably should have known, that the insurer was insolvent or
  922  impaired.
  923         2.Regardless of whether delinquency proceedings as to the
  924  insurer have been or are to be initiated, but while such
  925  insolvency or impairment exists, a director or an officer of an
  926  impaired insurer may not receive a bonus from such insurer, nor
  927  may such director or officer receive a bonus from a holding
  928  company or an affiliate that shares common ownership or control
  929  with such insurer.
  930         3.As used in this paragraph, the term:
  931         a.“Bonus” means a payment, in addition to an officer’s or
  932  a director’s usual compensation, which is in addition to any
  933  amounts contracted for or otherwise legally due.
  934         b. “Impaired” includes impairment of capital or surplus, as
  935  defined in s. 631.011(12) and (13).
  936         4.2. Any such director or officer, upon conviction of a
  937  violation of this paragraph, commits is guilty of a felony of
  938  the third degree, punishable as provided in s. 775.082, s.
  939  775.083, or s. 775.084.
  940         Section 15. Subsection (6) of section 626.989, Florida
  941  Statutes, is amended, and subsection (10) is added to that
  942  section, to read:
  943         626.989 Investigation by department or Division of
  944  Investigative and Forensic Services; compliance; immunity;
  945  confidential information; reports to division; division
  946  investigator’s power of arrest.—
  947         (6)(a) Any person, other than an insurer, agent, or other
  948  person licensed under the code, or an employee thereof, having
  949  knowledge or who believes that a fraudulent insurance act or any
  950  other act or practice which, upon conviction, constitutes a
  951  felony or a misdemeanor under the code, or under s. 817.234, is
  952  being or has been committed may send to the Division of
  953  Investigative and Forensic Services a report or information
  954  pertinent to such knowledge or belief and such additional
  955  information relative thereto as the department may request. Any
  956  professional practitioner licensed or regulated by the
  957  Department of Business and Professional Regulation, except as
  958  otherwise provided by law, any medical review committee as
  959  defined in s. 766.101, any private medical review committee, and
  960  any insurer, agent, or other person licensed under the code, or
  961  an employee thereof, having knowledge or who believes that a
  962  fraudulent insurance act or any other act or practice which,
  963  upon conviction, constitutes a felony or a misdemeanor under the
  964  code, or under s. 817.234, is being or has been committed shall
  965  send to the Division of Investigative and Forensic Services a
  966  report or information pertinent to such knowledge or belief and
  967  such additional information relative thereto as the department
  968  may require.
  969         (b) The Division of Investigative and Forensic Services
  970  shall review such information or reports and select such
  971  information or reports as, in its judgment, may require further
  972  investigation. It shall then cause an independent examination of
  973  the facts surrounding such information or report to be made to
  974  determine the extent, if any, to which a fraudulent insurance
  975  act or any other act or practice which, upon conviction,
  976  constitutes a felony or a misdemeanor under the code, or under
  977  s. 817.234, is being committed.
  978         (c) The Division of Investigative and Forensic Services
  979  shall report any alleged violations of law which its
  980  investigations disclose to the appropriate licensing agency and
  981  state attorney or other prosecuting agency having jurisdiction,
  982  including, but not limited to, the statewide prosecutor for
  983  crimes that impact two or more judicial circuits in this state,
  984  with respect to any such violation, as provided in s. 624.310.
  985  If prosecution by the state attorney or other prosecuting agency
  986  having jurisdiction with respect to such violation is not begun
  987  within 60 days of the division’s report, The state attorney or
  988  other prosecuting agency having jurisdiction with respect to
  989  such violation shall inform the division of any the reasons why
  990  prosecution of such violation was:
  991         1.Not begun within 60 days after the division’s report; or
  992         2.Declined for the lack of prosecution.
  993         (10)The Division of Investigative and Forensic Services
  994  Bureau of Insurance Fraud shall prepare and submit a performance
  995  report to the President of the Senate and the Speaker of the
  996  House of Representatives by September 1 of each year. The annual
  997  report must include, but need not be limited to:
  998         (a) The total number of initial referrals received, cases
  999  opened, cases presented for prosecution, cases closed, and
 1000  convictions resulting from cases presented for prosecution by
 1001  the Bureau of Insurance Fraud, by type of insurance fraud and
 1002  circuit.
 1003         (b) The number of referrals received from insurers, the
 1004  office, and the Division of Consumer Services of the department,
 1005  and the outcome of those referrals.
 1006         (c) The number of investigations undertaken by the Bureau
 1007  of Insurance Fraud which were not the result of a referral from
 1008  an insurer and the outcome of those referrals.
 1009         (d) The number of investigations that resulted in a
 1010  referral to a regulatory agency and the disposition of those
 1011  referrals.
 1012         (e) The number of cases presented by the Bureau of
 1013  Insurance Fraud which local prosecutors or the statewide
 1014  prosecutor declined to prosecute and the reasons provided for
 1015  declining prosecution.
 1016         (f)A summary of the annual report required under s.
 1017  626.9896.
 1018         (g)The total number of employees assigned to the Bureau of
 1019  Insurance Fraud, delineated by location of staff assigned, and
 1020  the number and location of employees assigned to the Bureau of
 1021  Insurance Fraud who were assigned to work other types of fraud
 1022  cases.
 1023         (h) The average caseload and turnaround time by type of
 1024  case for each investigator.
 1025         (i) The training provided during the year to insurance
 1026  fraud investigators.
 1027         Section 16. Subsections (1), (3), and (4) of section
 1028  627.0629, Florida Statutes, are amended to read:
 1029         627.0629 Residential property insurance; rate filings.—
 1030         (1) It is the intent of the Legislature that insurers
 1031  provide savings to consumers who install or implement windstorm
 1032  damage mitigation techniques, alterations, or solutions to their
 1033  properties to prevent windstorm losses. A rate filing for
 1034  residential property insurance must include actuarially
 1035  reasonable discounts, credits, or other rate differentials, or
 1036  appropriate reductions in deductibles, for properties on which
 1037  fixtures or construction techniques demonstrated to reduce the
 1038  amount of loss in a windstorm have been installed or
 1039  implemented. The fixtures or construction techniques must
 1040  include, but are not limited to, fixtures or construction
 1041  techniques that enhance roof strength, roof covering
 1042  performance, roof-to-wall strength, wall-to-floor-to-foundation
 1043  strength, opening protection, and window, door, and skylight
 1044  strength. Credits, discounts, or other rate differentials, or
 1045  appropriate reductions in deductibles, for fixtures and
 1046  construction techniques that meet the minimum requirements of
 1047  the Florida Building Code must be included in the rate filing.
 1048  The office shall determine the discounts, credits, other rate
 1049  differentials, and appropriate reductions in deductibles that
 1050  reflect the full actuarial value of such revaluation, which may
 1051  be used by insurers in rate filings. Effective October 1, 2023,
 1052  each insurer subject to the requirements of this section must
 1053  provide information on the insurer’s website describing the
 1054  hurricane mitigation discounts available to policyholders. Such
 1055  information must be accessible on, or through a hyperlink
 1056  located on, the home page of the insurer’s website or the
 1057  primary page of the insurer’s website for property insurance
 1058  policyholders or applicants for such coverage in this state. On
 1059  or before January 1, 2025, and every 5 years thereafter, the
 1060  office shall reevaluate and update the fixtures or construction
 1061  techniques demonstrated to reduce the amount of loss in a
 1062  windstorm and the discounts, credits, other rate differentials,
 1063  and appropriate reductions in deductibles that reflect the full
 1064  actuarial value of such fixtures or construction techniques. The
 1065  office shall adopt rules and forms necessitated by such
 1066  reevaluation.
 1067         (3) A rate filing made on or after July 1, 1995, for mobile
 1068  home owner insurance must include appropriate discounts,
 1069  credits, or other rate differentials for mobile homes
 1070  constructed to comply with American Society of Civil Engineers
 1071  Standard ANSI/ASCE 7-88, adopted by the United States Department
 1072  of Housing and Urban Development on July 13, 1994, and that also
 1073  comply with all applicable tie-down requirements provided by
 1074  state law.
 1075         (4) The Legislature finds that separate consideration and
 1076  notice of hurricane insurance premiums will assist consumers by
 1077  providing greater assurance that hurricane premiums are lawful
 1078  and by providing more complete information regarding the
 1079  components of property insurance premiums. Effective January 1,
 1080  1997, A rate filing for residential property insurance shall be
 1081  separated into two components, rates for hurricane coverage and
 1082  rates for all other coverages. A premium notice reflecting a
 1083  rate implemented on the basis of such a filing shall separately
 1084  indicate the premium for hurricane coverage and the premium for
 1085  all other coverages.
 1086         Section 17. Paragraph (ll) is added to subsection (6) of
 1087  section 627.351, Florida Statutes, to read:
 1088         627.351 Insurance risk apportionment plans.—
 1089         (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
 1090         (ll) The corporation may not determine that a risk is
 1091  ineligible for coverage with the corporation solely because such
 1092  risk has unrepaired damage caused by a covered loss that is the
 1093  subject of a claim that has been filed with the Florida
 1094  Insurance Guaranty Association. This paragraph applies to a risk
 1095  until the earlier of 24 months after the date the Florida
 1096  Insurance Guaranty Association began servicing such claim or the
 1097  Florida Insurance Guaranty Association closes the claim.
 1098         Section 18. Subsection (4) of section 627.410, Florida
 1099  Statutes, is amended to read:
 1100         627.410 Filing, approval of forms.—
 1101         (4) The office may, by order, exempt from the requirements
 1102  of this section for so long as it deems proper any insurance
 1103  document or form or type thereof as specified in such order, to
 1104  which, in its opinion, this section may not practicably be
 1105  applied, or the filing and approval of which are, in its
 1106  opinion, not desirable or necessary for the protection of the
 1107  public. The office may not exempt from the requirements of this
 1108  section the insurance documents or forms of any insurer, against
 1109  whom the office enters a final order determining that such
 1110  insurer violated any provision of this code, for a period of 36
 1111  months after the date of such order, and may not be deemed
 1112  approved under subsection (2).
 1113         Section 19. Section 627.4108, Florida Statutes, is created
 1114  to read:
 1115         627.4108 Claims-handling manuals; submission; attestation.—
 1116         (1) Each authorized residential property insurer conducting
 1117  business in this state must create and use a claims-handling
 1118  manual that provides guidelines and procedures and that complies
 1119  with the requirements of this code and, at a minimum, comports
 1120  to usual and customary industry claims-handling practices. Such
 1121  manual must include guidelines and procedures for:
 1122         (a)Initially receiving and acknowledging initial receipt
 1123  of the claim and reviewing and evaluating the claim;
 1124         (b)Communicating with policyholders, beginning with the
 1125  receipt of the claim and continuing until closure of the claim;
 1126         (c)Setting the claim reserve;
 1127         (d)Investigating the claim, including conducting
 1128  inspections of the property that is the subject of the claim;
 1129         (e)Making preliminary estimates and estimates of the
 1130  covered damages to the insured property and communicating such
 1131  estimates to the policyholder;
 1132         (f)The payment, partial payment, or denial of the claim
 1133  and communicating such claim decision to the policyholder;
 1134         (g)Closing claims; and
 1135         (h)Any aspect of the claims-handling process which the
 1136  office determines should be included in the claims-handling
 1137  manual in order to:
 1138         1.Comply with the laws of this state or rules or orders of
 1139  the office or department;
 1140         2.Ensure that the claims-handling manual, at a minimum,
 1141  comports with usual and customary industry claims-handling
 1142  guidelines; or
 1143         3.Protect policyholders of the insurer or the general
 1144  public.
 1145         (2) At any time, the office may request that a residential
 1146  property insurer submit a physical or electronic copy of the
 1147  insurer’s currently applicable, or otherwise specifically
 1148  requested, claims-handling manuals. Upon receiving such a
 1149  request, a residential property insurer must submit to the
 1150  office within 5 business days:
 1151         (a)A true and correct copy of each claims-handling manual
 1152  requested; and
 1153         (b)An attestation, on a form prescribed by the commission,
 1154  that certifies:
 1155         1.That the insurer has provided a true and correct copy of
 1156  each currently applicable, or otherwise specifically requested,
 1157  claims-handling manual; and
 1158         2.The timeframe for which each submitted claims-handling
 1159  manual was or is in effect.
 1160         (3)(a)Annually, each authorized residential property
 1161  insurer must certify and attest, on a form prescribed by the
 1162  commission, that:
 1163         1.Each of the insurer’s current claims-handling manuals
 1164  complies with the requirements of this code and comports to, at
 1165  a minimum, usual and customary industry claims-handling
 1166  practices; and
 1167         2.The insurer maintains adequate resources available to
 1168  implement the requirements of each of its claims-handling
 1169  manuals at all times, including during natural disasters and
 1170  catastrophic events.
 1171         (b)Such attestation must be submitted to the office:
 1172         1. On or before August 1, 2023; and
 1173         2. Annually thereafter, on or before May 1 of each calendar
 1174  year.
 1175         (4)The commission is authorized, and all conditions are
 1176  deemed met, to adopt emergency rules under s. 120.54(4), for the
 1177  purpose of implementing this section. Notwithstanding any other
 1178  law, emergency rules adopted under this section are effective
 1179  for 6 months after adoption and may be renewed during the
 1180  pendency of procedures to adopt permanent rules addressing the
 1181  subject of the emergency rules.
 1182         Section 20. Paragraph (d) of subsection (2) of section
 1183  627.4133, Florida Statutes, is amended to read:
 1184         627.4133 Notice of cancellation, nonrenewal, or renewal
 1185  premium.—
 1186         (2) With respect to any personal lines or commercial
 1187  residential property insurance policy, including, but not
 1188  limited to, any homeowner, mobile home owner, farmowner,
 1189  condominium association, condominium unit owner, apartment
 1190  building, or other policy covering a residential structure or
 1191  its contents:
 1192         (d)1. Upon a declaration of an emergency pursuant to s.
 1193  252.36 and the filing of an order by the Commissioner of
 1194  Insurance Regulation, An authorized insurer may not cancel or
 1195  nonrenew a personal residential or commercial residential
 1196  property insurance policy covering a dwelling or residential
 1197  property located in this state:
 1198         a.For a period of 90 days after the dwelling or
 1199  residential property has been repaired, if such property which
 1200  has been damaged as a result of a hurricane or wind loss that is
 1201  the subject of the declaration of emergency pursuant to s.
 1202  252.36 and the filing of an order by the Commissioner of
 1203  Insurance Regulation for a period of 90 days after the dwelling
 1204  or residential property has been repaired. A structure is deemed
 1205  to be repaired when substantially completed and restored to the
 1206  extent that it is insurable by another authorized insurer that
 1207  is writing policies in this state.
 1208         b.Until the earlier of when the dwelling or residential
 1209  property has been repaired or 1 year after the insurer issues
 1210  the final claim payment, if such property was damaged by any
 1211  covered peril and sub-subparagraph a. does not apply.
 1212         2. However, an insurer or agent may cancel or nonrenew such
 1213  a policy prior to the repair of the dwelling or residential
 1214  property:
 1215         a. Upon 10 days’ notice for nonpayment of premium; or
 1216         b. Upon 45 days’ notice:
 1217         (I) For a material misstatement or fraud related to the
 1218  claim;
 1219         (II) If the insurer determines that the insured has
 1220  unreasonably caused a delay in the repair of the dwelling; or
 1221         (III) If the insurer has paid policy limits.
 1222         3. If the insurer elects to nonrenew a policy covering a
 1223  property that has been damaged, the insurer shall provide at
 1224  least 90 days’ notice to the insured that the insurer intends to
 1225  nonrenew the policy 90 days after the dwelling or residential
 1226  property has been repaired. Nothing in this paragraph shall
 1227  prevent the insurer from canceling or nonrenewing the policy 90
 1228  days after the repairs are complete for the same reasons the
 1229  insurer would otherwise have canceled or nonrenewed the policy
 1230  but for the limitations of subparagraph 1. The Financial
 1231  Services Commission may adopt rules, and the Commissioner of
 1232  Insurance Regulation may issue orders, necessary to implement
 1233  this paragraph.
 1234         4. This paragraph shall also apply to personal residential
 1235  and commercial residential policies covering property that was
 1236  damaged as the result of Hurricane Ian or Hurricane Nicole
 1237  Tropical Storm Bonnie, Hurricane Charley, Hurricane Frances,
 1238  Hurricane Ivan, or Hurricane Jeanne.
 1239         5.For purposes of this paragraph:
 1240         a.A structure is deemed to be repaired when substantially
 1241  completed and restored to the extent that it is insurable by
 1242  another authorized insurer writing policies in this state.
 1243         b.The term insurer” means an authorized insurer.
 1244         Section 21. Paragraph (a) of subsection (10) of section
 1245  627.701, Florida Statutes, is amended to read:
 1246         627.701 Liability of insureds; coinsurance; deductibles.—
 1247         (10)(a) Notwithstanding any other provision of law, an
 1248  insurer issuing a personal lines residential property insurance
 1249  policy may include in such policy a separate roof deductible
 1250  that meets all of the following requirements:
 1251         1. The insurer has complied with the offer requirements
 1252  under subsection (7) regarding a deductible applicable to losses
 1253  from perils other than a hurricane.
 1254         2. The roof deductible may not exceed the lesser of 2
 1255  percent of the Coverage A limit of the policy or 50 percent of
 1256  the cost to replace the roof.
 1257         3. The premium that a policyholder is charged for the
 1258  policy includes an actuarially sound credit or premium discount
 1259  for the roof deductible.
 1260         4. The roof deductible applies only to a claim adjusted on
 1261  a replacement cost basis.
 1262         5. The roof deductible does not apply to any of the
 1263  following events:
 1264         a. A total loss to a primary structure in accordance with
 1265  the valued policy law under s. 627.702 which is caused by a
 1266  covered peril.
 1267         b. A roof loss resulting from a hurricane as defined in s.
 1268  627.4025(2)(c).
 1269         c. A roof loss resulting from a tree fall or other hazard
 1270  that damages the roof and punctures the roof deck.
 1271         d. A roof loss requiring the repair of less than 50 percent
 1272  of the roof.
 1273  
 1274  If a roof deductible is applied, no other deductible under the
 1275  policy may be applied to the loss or to any other loss to the
 1276  property caused by the same covered peril.
 1277         Section 22. Subsection (2) of section 627.70132, Florida
 1278  Statutes, is amended to read:
 1279         627.70132 Notice of property insurance claim.—
 1280         (2) A claim or reopened claim, but not a supplemental
 1281  claim, under an insurance policy that provides property
 1282  insurance, as defined in s. 624.604, including a property
 1283  insurance policy issued by an eligible surplus lines insurer,
 1284  for loss or damage caused by any peril is barred unless notice
 1285  of the claim was given to the insurer in accordance with the
 1286  terms of the policy within 1 year after the date of loss. A
 1287  supplemental claim is barred unless notice of the supplemental
 1288  claim was given to the insurer in accordance with the terms of
 1289  the policy within 18 months after the date of loss. The time
 1290  limitations of this subsection are tolled during any term of
 1291  deployment to a combat zone or combat support posting which
 1292  materially affects the ability of a named insured who is a
 1293  servicemember as defined in s. 250.01 to file a claim,
 1294  supplemental claim, or reopened claim.
 1295         Section 23. Chapter 2022-271, Laws of Florida, shall not be
 1296  construed to impair any right under an insurance contract in
 1297  effect on or before the effective date of that chapter law. To
 1298  the extent that chapter 2022-271, Laws of Florida, affects a
 1299  right under an insurance contract, that chapter law applies to
 1300  an insurance contract issued or renewed after the applicable
 1301  effective date provided by the chapter law. This section is
 1302  intended to clarify existing law and is remedial in nature.
 1303         Section 24. (1)Every residential property insurer and
 1304  every motor vehicle insurer rate filing made or pending with the
 1305  Office of Insurance Regulation on or after July 1, 2023, must
 1306  reflect the projected savings or reduction in claim frequency,
 1307  claim severity, and loss adjustment expenses, including for
 1308  attorney fees, payment of attorney fees to claimants, and any
 1309  other reduction actuarially indicated, due to the combined
 1310  effect of the applicable provisions of chapters 2021-77, 2022
 1311  268, 2022-271, and 2023-15, Laws of Florida, in order to ensure
 1312  that rates for such insurance accurately reflect the risk of
 1313  providing such insurance.
 1314         (2)The Office of Insurance Regulation must consider in its
 1315  review of such rate filings the projected savings or reduction
 1316  in claim frequency, claim severity, and loss adjustment
 1317  expenses, including for attorney fees, payment of attorney fees
 1318  to claimants, and any other reduction actuarially indicated, due
 1319  to the combined effect of the applicable provisions of chapters
 1320  2021-77, 2022-268, 2022-271, and 2023-15, Laws of Florida. The
 1321  office may develop methodology and data that incorporate
 1322  generally accepted actuarial techniques and standards to be used
 1323  in its review of rate filings governed by this section. The
 1324  office may contract with an appropriate vendor to advise the
 1325  office in developing such methodology and data to consider. Such
 1326  methodology and data are not intended to create a mandatory
 1327  minimum rate decrease for all residential property insurers and
 1328  motor vehicle insurers, respectively, but rather to ensure that
 1329  the rates for such coverage meet the requirements of s. 627.062,
 1330  Florida Statutes, and thus are not excessive, inadequate, or
 1331  unfairly discriminatory and allow such insurers a reasonable
 1332  rate of return.
 1333         (3)This section does not apply to rate filings made
 1334  pursuant to s. 627.062(2)(k), Florida Statutes.
 1335         (4)For the 2023-2024 fiscal year, the sum of $500,000 in
 1336  nonrecurring funds is appropriated from the Insurance Regulatory
 1337  Trust Fund in the Department of Financial Services to the Office
 1338  of Insurance Regulation to implement this section.
 1339         Section 25. For the 2023-2024 fiscal year, 18 full-time
 1340  equivalent positions with associated salary rate of 1,116,500
 1341  are authorized and the sum of $1,879,129 in recurring funds and
 1342  $185,086 in nonrecurring funds is appropriated from the
 1343  Insurance Regulatory Trust Fund to the Office of Insurance
 1344  Regulation to implement this act.
 1345         Section 26. For the 2023-2024 fiscal year, seven full-time
 1346  equivalent positions with associated salary rate of 350,000 are
 1347  authorized and the sum of $574,036 in recurring funds and
 1348  $33,467 in nonrecurring funds is appropriated from the Insurance
 1349  Regulatory Trust Fund to the Department of Financial Services to
 1350  implement this act.
 1351         Section 27. This act shall take effect July 1, 2023.
 1352  
 1353  ================= T I T L E  A M E N D M E N T ================
 1354  And the title is amended as follows:
 1355         Delete everything before the enacting clause
 1356  and insert:
 1357                        A bill to be entitled                      
 1358         An act relating to insurer accountability; creating s.
 1359         624.115, F.S.; specifying a requirement for the Office
 1360         of Insurance Regulation in referring criminal
 1361         violations; amending s. 624.307, F.S.; authorizing
 1362         electronic responses to certain requests from the
 1363         Division of Consumer Services of the Department of
 1364         Financial Services concerning consumer complaints;
 1365         revising the timeframe in which responses must be
 1366         made; revising administrative penalties; amending s.
 1367         624.315, F.S.; requiring the office to annually and
 1368         quarterly create and publish specified reports
 1369         relating to the enforcement of insurer compliance;
 1370         requiring the office to submit such reports to the
 1371         Financial Services Commission and the Legislature by
 1372         specified dates; amending s. 624.316, F.S.; revising
 1373         the minimum intervals in which the office must examine
 1374         certain insurers; revising periods that examinations
 1375         must cover; requiring the office to create a specified
 1376         methodology for scheduling examinations of insurers;
 1377         specifying requirements for such methodology;
 1378         providing construction; specifying requirements for
 1379         the office in proposing rules to the commission;
 1380         authorizing the commission to adopt rules; amending s.
 1381         624.3161, F.S.; revising requirements and conditions
 1382         for certain insurer market conduct examinations after
 1383         a hurricane; requiring the office to create, and the
 1384         commission to adopt by rule, a specified selection
 1385         methodology for examinations; specifying requirements
 1386         for such methodology; specifying rulemaking
 1387         requirements; specifying requirements, procedures, and
 1388         conditions for the office’s review of a liability
 1389         insurer’s claims-handling practices and the imposition
 1390         of enhanced enforcement penalties; defining the term
 1391         “actual notice”; providing construction; amending s.
 1392         624.4211, F.S.; revising administrative fines the
 1393         office may impose in lieu of revocation or suspension;
 1394         creating s. 624.4301, F.S.; specifying requirements
 1395         for residential property insurers temporarily
 1396         suspending writing new policies in notifying the
 1397         office; providing applicability and construction;
 1398         authorizing the commission to adopt rules; creating s.
 1399         624.805, F.S.; specifying factors the office may
 1400         consider in determining whether the continued
 1401         operation of an insurer may be deemed to be hazardous
 1402         to its policyholders or creditors or to the general
 1403         public; specifying actions the office may take in
 1404         determining an insurer’s financial condition;
 1405         authorizing the office to issue an order requiring a
 1406         hazardous insurer to take specified actions; providing
 1407         construction; authorizing the office to issue
 1408         immediate final orders; amending s. 624.81, F.S.;
 1409         deleting certain rulemaking authority of the
 1410         commission; creating s. 624.865, F.S.; authorizing the
 1411         commission to adopt certain rules; amending s.
 1412         628.8015, F.S.; conforming provisions to changes made
 1413         by the act; amending s. 626.207, F.S.; revising a
 1414         condition for disqualification of an insurance
 1415         representative applicant or licensee; amending s.
 1416         626.9521, F.S.; revising and specifying applicable
 1417         fines for unfair methods of competition and unfair or
 1418         deceptive acts or practices; amending s. 626.9541,
 1419         F.S.; adding an unfair claim settlement practice by an
 1420         insurer; prohibiting an officer or a director of an
 1421         impaired insurer from receiving a bonus from such
 1422         insurer or from certain holding companies or
 1423         affiliates; defining the term “bonus”; providing a
 1424         criminal penalty; amending s. 626.989, F.S.; revising
 1425         a reporting requirement for the department’s Division
 1426         of Investigative and Forensic Services; revising a
 1427         requirement for state attorneys or other prosecuting
 1428         agencies having jurisdiction to inform the division
 1429         under certain circumstances; requiring the division to
 1430         submit an annual performance report to the
 1431         Legislature; specifying requirements for the report;
 1432         amending s. 627.0629, F.S.; specifying requirements
 1433         for residential property insurers in providing certain
 1434         hurricane mitigation discount information to
 1435         policyholders in a specified manner; specifying
 1436         requirements for the office in reevaluating and
 1437         updating certain fixtures and construction techniques;
 1438         deleting obsolete dates; amending s. 627.351, F.S.;
 1439         prohibiting Citizens Property Insurance Corporation
 1440         from determining that a risk is ineligible for
 1441         coverage solely on a specified basis; providing
 1442         applicability; amending s. 627.410, F.S.; prohibiting
 1443         the office from exempting specified insurers from form
 1444         filing requirements for a specified period; providing
 1445         construction; creating s. 627.4108, F.S.; specifying
 1446         requirements for residential property insurers in
 1447         creating and using claims-handling manuals;
 1448         authorizing the office to request submission of such
 1449         manuals; providing requirements for such submissions;
 1450         requiring authorized insurers to annually submit a
 1451         certified attestation to the office; authorizing the
 1452         commission to adopt emergency rules; amending s.
 1453         627.4133, F.S.; revising prohibitions on insurers
 1454         against the cancellation or nonrenewal of property
 1455         insurance policies; revising applicability; providing
 1456         construction; defining the term “insurer”; amending s.
 1457         627.701, F.S.; providing that if a roof deductible is
 1458         applied under a personal lines residential property
 1459         insurance policy, no other deductible under the policy
 1460         may be applied to any other loss to the property
 1461         caused by the same covered peril; amending s.
 1462         627.70132, F.S.; providing for the tolling of certain
 1463         timeframes for filing notices of property insurance
 1464         claims by named insureds who are servicemembers under
 1465         specified circumstances; providing construction
 1466         relating to chapter 2022-271, Laws of Florida;
 1467         requiring residential property insurers and motor
 1468         vehicle insurer rate filings to reflect certain
 1469         projected savings and reductions in expenses;
 1470         specifying requirements for the office in reviewing
 1471         rate filings; authorizing the office to develop
 1472         certain methodology and data and contract with a
 1473         vendor for a certain purpose; providing applicability;
 1474         providing appropriations; providing an effective date.