Florida Senate - 2023 COMMITTEE AMENDMENT
Bill No. SB 7052
Ì592450ÆÎ592450
LEGISLATIVE ACTION
Senate . House
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The Committee on Fiscal Policy (Hutson) recommended the
following:
1 Senate Amendment (with title amendment)
2
3 Delete everything after the enacting clause
4 and insert:
5 Section 1. Paragraph (b) of subsection (10) of section
6 624.307, Florida Statutes, is amended to read:
7 624.307 General powers; duties.—
8 (10)
9 (b) Any person licensed or issued a certificate of
10 authority by the department or the office shall respond, in
11 writing or electronically, to the division within 14 20 days
12 after receipt of a written request for documents and information
13 from the division concerning a consumer complaint. The response
14 must address the issues and allegations raised in the complaint
15 and include any requested documents concerning the consumer
16 complaint not subject to attorney-client or work-product
17 privilege. The division may impose an administrative penalty for
18 failure to comply with this paragraph of up to $5,000 $2,500 per
19 violation upon any entity licensed by the department or the
20 office and $250 for the first violation, $500 for the second
21 violation, and up to $1,000 per for the third or subsequent
22 violation by upon any individual licensed by the department or
23 the office.
24 Section 2. Present subsection (4) of section 624.315,
25 Florida Statutes, is redesignated as subsection (5), and a new
26 subsection (4) is added to that section, to read:
27 624.315 Annual reports; quarterly reports report.—
28 (4)(a) The office shall create a report detailing all
29 actions of the office to enforce insurer compliance with this
30 code and all rules and orders of the office or department during
31 the previous year. For each of the following, the report must
32 detail the insurer or other licensee or registrant against whom
33 such action was taken; whether the office found any violation of
34 law or rule by such party, and, if so, detail such violation;
35 and the resolution of such action, including any penalties
36 imposed by the office. The report must be published on the
37 website of the office and submitted to the commission, the
38 President of the Senate, the Speaker of the House of
39 Representatives, and the legislative committees with
40 jurisdiction over matters of insurance on or before January 31
41 of each year. The report must include, but need not be limited
42 to:
43 1. The revocation, denial, or suspension of any license or
44 registration issued by the office.
45 2. All actions taken pursuant to s. 624.310.
46 3. Fines imposed by the office for violations of this code.
47 4. Consent orders entered into by the office.
48 5. Examinations and investigations conducted and completed
49 by the office pursuant to ss. 624.316 and 624.3161.
50 6. Investigations conducted and completed, by line of
51 insurance, for which the office found violations of law or rule
52 but did not take enforcement action.
53 (b) Each quarter, the office shall create a report
54 detailing all actions of the office to enforce insurer
55 compliance during the previous quarter. The report must include,
56 but not be limited to, the subjects that must be included in the
57 annual report under paragraph (a). The report must be submitted
58 to the commission, the President of the Senate, the Speaker of
59 the House of Representatives, and the legislative committees
60 with jurisdiction over matters of insurance. The report is due
61 on or before April 30, July 31, October 31, and January 31,
62 respectively, for the immediately preceding quarter. The report
63 due January 31 may be included within the annual report required
64 under paragraph (a).
65 (c) The office need not include within any report required
66 under this subsection information that would violate any
67 confidentiality provision included within any agreement, order,
68 or consent order entered into or promulgated by the office.
69 Section 3. Subsections (3) and (4) are added to section
70 624.316, Florida Statutes, to read:
71 624.316 Examination of insurers.—
72 (3) The office shall create, and the commission shall adopt
73 by rule, a risk-based selection methodology for scheduling
74 examinations of insurers subject to this section. This
75 requirement does not restrict the authority of the office to
76 conduct examinations under this section as often as it deems
77 advisable. Such methodology must include all of the following:
78 (a) Use of a risk-focused analysis to prioritize financial
79 examinations of insurers when such reporting indicates a decline
80 in the insurer’s financial condition.
81 (b) Consideration of:
82 1. Level of capitalization and identification of
83 unfavorable trends;
84 2. Negative trends in profitability or cash flow from
85 operations;
86 3. National Association of Insurance Commissioners
87 Insurance Regulatory Information System ratio results;
88 4. Risk-based capital and risk-based capital trend test
89 results;
90 5. The structure and complexity of the insurer;
91 6. Changes in the insurer’s officers or board of directors;
92 7. Changes in the insurer’s business strategy or
93 operations;
94 8. Findings and recommendations from an examination made
95 pursuant to s. 624.316 or s. 624.3161;
96 9. Current or pending regulatory actions by the office or
97 the department;
98 10. Information obtained from other regulatory agencies or
99 independent organization ratings and reports; and
100 11. The impact of an insurer’s insolvency on policyholders
101 of the insurer and the public generally.
102 (c) Prioritization of property insurers for which the
103 office identifies significant concerns about an insurer’s
104 solvency pursuant to s. 627.7154.
105 (d) Any other matters the office deems necessary to
106 consider for the protection of the public.
107 (4) To facilitate the development of the methodology for
108 scheduling examinations pursuant to this section, the commission
109 may adopt by rule the National Association of Insurance
110 Commissioners Financial Analysis Handbook, to the extent that
111 the handbook is consistent with and does not negate the
112 requirements of this section.
113 Section 4. Subsection (7) of section 624.3161, Florida
114 Statutes, is amended, and subsection (8) is added to that
115 section, to read:
116 624.3161 Market conduct examinations.—
117 (7) Notwithstanding subsection (1), any authorized insurer
118 transacting residential property insurance business in this
119 state:
120 (a) May be subject to an additional market conduct
121 examination after a hurricane if, at any time more than 90 days
122 after the end of the hurricane, the insurer:
123 (a) is among the top 20 percent of insurers based upon a
124 calculation of the ratio of hurricane-related property insurance
125 claims filed to the number of property insurance policies in
126 force;
127 (b) Must be subject to a market conduct examination after a
128 hurricane if, at any time more than 90 days after the end of the
129 hurricane, the insurer:
130 1. Is among the top 20 percent of insurers based upon a
131 calculation of the ratio of hurricane claim-related consumer
132 complaints made about that insurer to the department to the
133 insurer’s total number of hurricane-related claims;
134 2. Is among the top 20 percent of insurers based upon a
135 calculation of the ratio of hurricane claims closed without
136 payment to the insurer’s total number of hurricane claims;
137 3.(c) Has made significant payments to its managing general
138 agent since the hurricane; or
139 4.(d) Is identified by the office as necessitating a market
140 conduct exam for any other reason.
141
142 All relevant criteria under this section and s. 624.316 shall be
143 applied to the market conduct examination under this subsection.
144 Such an examination must be initiated within 18 months after the
145 landfall of a hurricane that results in an executive order or a
146 state of emergency issued by the Governor. The requirements of
147 this subsection do not limit the authority of the office to
148 conduct at any time a market conduct examination of a property
149 insurer in the aftermath of a hurricane. This subsection does
150 not require the office to conduct multiple market conduct
151 examinations of the same insurer when multiple hurricanes make
152 landfall in this state in a single calendar year. An examination
153 of an insurer under this subsection must also include an
154 examination of its managing general agent as if it were the
155 insurer.
156 (8) The office shall create, and the commission shall adopt
157 by rule, a selection methodology for scheduling and conducting
158 market conduct examinations of insurers and other entities
159 regulated by the office. This requirement does not restrict the
160 authority of the office to conduct market conduct examinations
161 as often as it deems necessary. Such selection methodology must
162 prioritize market conduct examinations of insurers and other
163 entities regulated by the office to whom any of the following
164 conditions applies:
165 (a) An insurance regulator in another state has initiated
166 or taken regulatory action against the insurer or entity
167 regarding an act or omission of such insurer which, if committed
168 in this state, would constitute a violation of the laws of this
169 state or any rule or order of the office or department.
170 (b) Given the insurer’s market share in this state, the
171 department or the office has received a disproportionate number
172 of the following types of claims-handling complaints against the
173 insurer:
174 1. Failure to timely communicate with respect to claims;
175 2. Failure to timely pay claims;
176 3. Untimely payments giving rise to the payment of
177 statutory interest;
178 4. Failure to adjust and pay claims in accordance with the
179 terms and conditions of the policy or contract and in compliance
180 with state law;
181 5. Violations of part IX of chapter 626, the Unfair
182 Insurance Trade Practices Act;
183 6. Failure to use licensed and duly appointed claims
184 adjusters;
185 7. Failure to maintain reasonable claims records; or
186 8. Failure to adhere to the company’s claims-handling
187 manual.
188 (c) The results of a National Association of Insurance
189 Commissioners Market Conduct Annual Statement indicate that the
190 insurer is a negative outlier with regard to particular metrics.
191 (d) There is evidence that the insurer is violating or has
192 violated the Unfair Insurance Trade Practices Act.
193 (e) The insurer meets the criteria in subsection (7).
194 (f) Any other conditions the office deems necessary for the
195 protection of the public.
196
197 The office shall present the proposed rule required by this
198 subsection to the commission no later than October 1, 2023. In
199 addition to the methodology required by this subsection, the
200 rule must provide criteria for how the office, in coordination
201 with the department, will determine what constitutes a
202 disproportionate number of claims-handling complaints described
203 in paragraph (b).
204 Section 5. Section 624.4211, Florida Statutes, is amended
205 to read:
206 624.4211 Administrative fine in lieu of suspension or
207 revocation.—
208 (1) If the office finds that one or more grounds exist for
209 the discretionary revocation or suspension of a certificate of
210 authority issued under this chapter, the office may, in lieu of
211 such revocation or suspension, impose a fine upon the insurer.
212 (2)(a) With respect to a any nonwillful violation, such
213 fine may not exceed:
214 1. Twenty-five thousand dollars per violation, up to an
215 aggregate amount of $100,000 for all nonwillful violations
216 arising out of the same action, related to a covered loss or
217 claim caused by an emergency for which the Governor declared a
218 state of emergency pursuant to s. 252.36.
219 2. Twelve thousand five hundred dollars $5,000 per
220 violation, up to. In no event shall such fine exceed an
221 aggregate amount of $50,000 $20,000 for all other nonwillful
222 violations arising out of the same action.
223 (b) If an insurer discovers a nonwillful violation, the
224 insurer shall correct the violation and, if restitution is due,
225 make restitution to all affected persons. Such restitution shall
226 include interest at 12 percent per year from either the date of
227 the violation or the date of inception of the affected person’s
228 policy, at the insurer’s option. The restitution may be a credit
229 against future premiums due, provided that interest accumulates
230 until the premiums are due. If the amount of restitution due to
231 any person is $50 or more and the insurer wishes to credit it
232 against future premiums, it shall notify such person that she or
233 he may receive a check instead of a credit. If the credit is on
234 a policy that is not renewed, the insurer shall pay the
235 restitution to the person to whom it is due.
236 (3)(a) With respect to a any knowing and willful violation
237 of a lawful order or rule of the office or commission or a
238 provision of this code, the office may impose a fine upon the
239 insurer in an amount not to exceed:
240 1. Two hundred thousand dollars for each such violation, up
241 to an aggregate amount of $1 million for all knowing and willful
242 violations arising out of the same action, related to a covered
243 loss or claim caused by an emergency for which the Governor
244 declared a state of emergency pursuant to s. 252.36.
245 2. One hundred thousand dollars $40,000 for each such
246 violation, up to. In no event shall such fine exceed an
247 aggregate amount of $500,000 $200,000 for all other knowing and
248 willful violations arising out of the same action.
249 (b) In addition to such fines, the insurer shall make
250 restitution when due in accordance with subsection (2).
251 (4) The failure of an insurer to make restitution when due
252 as required under this section constitutes a willful violation
253 of this code. However, if an insurer in good faith is uncertain
254 as to whether any restitution is due or as to the amount of such
255 restitution, it shall promptly notify the office of the
256 circumstances; and the failure to make restitution pending a
257 determination thereof shall not constitute a violation of this
258 code.
259 Section 6. Section 624.4301, Florida Statutes, is created
260 to read:
261 624.4301 Notice of temporary discontinuance of writing new
262 residential property insurance policies.—
263 (1) Any authorized insurer, before temporarily suspending
264 writing new residential property insurance policies in this
265 state, must give notice to the office of the insurer’s reasons
266 for such action, the effective dates of the temporary
267 suspension, and the proposed communication to its agents. Such
268 notice must be provided on a form approved by the office and
269 adopted by the commission. The insurer shall submit such notice
270 to the office the earlier of 20 business days before the
271 effective date of the temporary suspension of writing or 5
272 business days before notifying its agents of the temporary
273 suspension of writing. The insurer must provide any other
274 information requested by the office related to the insurer’s
275 temporary suspension of writing. The requirements of this
276 section do not apply to a temporary suspension of writing new
277 business made in response to a hurricane that may make landfall
278 in this state if such temporary suspension ceases within 72
279 hours after hurricane conditions are no longer present in this
280 state.
281 (2) The commission may adopt rules to administer this
282 section.
283 Section 7. Paragraph (c) of subsection (3) of section
284 626.207, Florida Statutes, is amended to read:
285 626.207 Disqualification of applicants and licensees;
286 penalties against licensees; rulemaking authority.—
287 (3) An applicant who has been found guilty of or has
288 pleaded guilty or nolo contendere to a crime not included in
289 subsection (2), regardless of adjudication, is subject to:
290 (c) A 7-year disqualifying period for all misdemeanors
291 directly related to the financial services business or any
292 violation of the Florida Insurance Code.
293 Section 8. Subsections (2) and (3) of section 626.9521,
294 Florida Statutes, are amended to read:
295 626.9521 Unfair methods of competition and unfair or
296 deceptive acts or practices prohibited; penalties.—
297 (2) Except as provided in subsection (3), any person who
298 violates any provision of this part is subject to a fine in an
299 amount not greater than $12,500 $5,000 for each nonwillful
300 violation and not greater than $100,000 $40,000 for each willful
301 violation. Fines under this subsection imposed against an
302 insurer may not exceed an aggregate amount of $50,000 $20,000
303 for all nonwillful violations arising out of the same action or
304 an aggregate amount of $500,000 $200,000 for all willful
305 violations arising out of the same action. The fines may be
306 imposed in addition to any other applicable penalty.
307 (3)(a) If a person violates s. 626.9541(1)(l), the offense
308 known as “twisting,” or violates s. 626.9541(1)(aa), the offense
309 known as “churning,” the person commits a misdemeanor of the
310 first degree, punishable as provided in s. 775.082, and an
311 administrative fine not greater than $12,500 $5,000 shall be
312 imposed for each nonwillful violation or an administrative fine
313 not greater than $187,500 $75,000 shall be imposed for each
314 willful violation. To impose an administrative fine for a
315 willful violation under this paragraph, the practice of
316 “churning” or “twisting” must involve fraudulent conduct.
317 (b) If a person violates s. 626.9541(1)(ee) by willfully
318 submitting fraudulent signatures on an application or policy
319 related document, the person commits a felony of the third
320 degree, punishable as provided in s. 775.082, and an
321 administrative fine not greater than $12,500 $5,000 shall be
322 imposed for each nonwillful violation or an administrative fine
323 not greater than $187,500 $75,000 shall be imposed for each
324 willful violation.
325 (c) If a person violates any provision of this part and
326 such violation is related to a covered loss or covered claim
327 caused by an emergency for which the Governor declared a state
328 of emergency pursuant to s. 252.36, such person is subject to a
329 fine in an amount not greater than $25,000 for each nonwillful
330 violation and not greater than $200,000 for each willful
331 violation. Fines imposed under this paragraph against an insurer
332 may not exceed an aggregate amount of $100,000 for all
333 nonwillful violations arising out of the same action or an
334 aggregate amount of $1 million for all willful violations
335 arising out of the same action.
336 (d) Administrative fines under paragraphs (a) and (b) this
337 subsection may not exceed an aggregate amount of $125,000
338 $50,000 for all nonwillful violations arising out of the same
339 action or an aggregate amount of $625,000 $250,000 for all
340 willful violations arising out of the same action.
341 Section 9. Paragraphs (i) and (w) of subsection (1) of
342 section 626.9541, Florida Statutes, are amended to read:
343 626.9541 Unfair methods of competition and unfair or
344 deceptive acts or practices defined.—
345 (1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE
346 ACTS.—The following are defined as unfair methods of competition
347 and unfair or deceptive acts or practices:
348 (i) Unfair claim settlement practices.—
349 1. Attempting to settle claims on the basis of an
350 application, when serving as a binder or intended to become a
351 part of the policy, or any other material document which was
352 altered without notice to, or knowledge or consent of, the
353 insured;
354 2. A material misrepresentation made to an insured or any
355 other person having an interest in the proceeds payable under
356 such contract or policy, for the purpose and with the intent of
357 effecting settlement of such claims, loss, or damage under such
358 contract or policy on less favorable terms than those provided
359 in, and contemplated by, such contract or policy;
360 3. Committing or performing with such frequency as to
361 indicate a general business practice any of the following:
362 a. Failing to adopt and implement standards for the proper
363 investigation of claims;
364 b. Misrepresenting pertinent facts or insurance policy
365 provisions relating to coverages at issue;
366 c. Failing to acknowledge and act promptly upon
367 communications with respect to claims;
368 d. Denying claims without conducting reasonable
369 investigations based upon available information;
370 e. Failing to affirm or deny full or partial coverage of
371 claims, and, as to partial coverage, the dollar amount or extent
372 of coverage, or failing to provide a written statement that the
373 claim is being investigated, upon the written request of the
374 insured within 30 days after proof-of-loss statements have been
375 completed;
376 f. Failing to promptly provide a reasonable explanation in
377 writing to the insured of the basis in the insurance policy, in
378 relation to the facts or applicable law, for denial of a claim
379 or for the offer of a compromise settlement;
380 g. Failing to promptly notify the insured of any additional
381 information necessary for the processing of a claim;
382 h. Failing to clearly explain the nature of the requested
383 information and the reasons why such information is necessary;
384 or
385 i. Failing to pay personal injury protection insurance
386 claims within the time periods required by s. 627.736(4)(b). The
387 office may order the insurer to pay restitution to a
388 policyholder, medical provider, or other claimant, including
389 interest at a rate consistent with the amount set forth in s.
390 55.03(1), for the time period within which an insurer fails to
391 pay claims as required by law. Restitution is in addition to any
392 other penalties allowed by law, including, but not limited to,
393 the suspension of the insurer’s certificate of authority; or
394 j. Altering or amending an insurance adjuster’s report
395 without:
396 (I) Providing a detailed explanation as to why any change
397 that has the effect of reducing the estimate of the loss was
398 made; and
399 (II) Including on the report or as an addendum to the
400 report a detailed list of all changes made to the report and the
401 identity of the person who ordered each change; or
402 (III) Retaining all versions of the report, and including
403 within each such version, for each change made within such
404 version of the report, the identity of each person who made or
405 ordered such change; or
406 4. Failing to pay undisputed amounts of partial or full
407 benefits owed under first-party property insurance policies
408 within 60 days after an insurer receives notice of a residential
409 property insurance claim, determines the amounts of partial or
410 full benefits, and agrees to coverage, unless payment of the
411 undisputed benefits is prevented by factors beyond the control
412 of the insurer as defined in s. 627.70131(5).
413 (w) Soliciting or accepting new or renewal insurance risks
414 by insolvent or impaired insurer or receipt of certain bonuses
415 by an officer or director of an insolvent insurer prohibited;
416 penalty.—
417 1. Whether or not delinquency proceedings as to the insurer
418 have been or are to be initiated, but while such insolvency or
419 impairment exists, no director or officer of an insurer, except
420 with the written permission of the office, shall authorize or
421 permit the insurer to solicit or accept new or renewal insurance
422 risks in this state after such director or officer knew, or
423 reasonably should have known, that the insurer was insolvent or
424 impaired.
425 2. Regardless of whether delinquency proceedings as to the
426 insurer have been or are to be initiated, but while such
427 insolvency or impairment exists, a director or an officer of an
428 impaired insurer may not receive a bonus from such insurer, nor
429 may such director or officer receive a bonus from a holding
430 company or an affiliate that shares common ownership or control
431 with such insurer.
432 3. As used in this paragraph, the term:
433 a. “Bonus” means a payment, in addition to an officer’s or
434 a director’s usual compensation, which is in addition to any
435 amounts contracted for or otherwise legally due.
436 b. “Impaired” includes impairment of capital or surplus, as
437 defined in s. 631.011(12) and (13).
438 4.2. Any such director or officer, upon conviction of a
439 violation of this paragraph, commits is guilty of a felony of
440 the third degree, punishable as provided in s. 775.082, s.
441 775.083, or s. 775.084.
442 Section 10. Subsection (6) of section 626.989, Florida
443 Statutes, is amended, and subsection (10) is added to that
444 section, to read:
445 626.989 Investigation by department or Division of
446 Investigative and Forensic Services; compliance; immunity;
447 confidential information; reports to division; division
448 investigator’s power of arrest.—
449 (6)(a) Any person, other than an insurer, agent, or other
450 person licensed under the code, or an employee thereof, having
451 knowledge or who believes that a fraudulent insurance act or any
452 other act or practice which, upon conviction, constitutes a
453 felony or a misdemeanor under the code, or under s. 817.234, is
454 being or has been committed may send to the Division of
455 Investigative and Forensic Services a report or information
456 pertinent to such knowledge or belief and such additional
457 information relative thereto as the department may request. Any
458 professional practitioner licensed or regulated by the
459 Department of Business and Professional Regulation, except as
460 otherwise provided by law, any medical review committee as
461 defined in s. 766.101, any private medical review committee, and
462 any insurer, agent, or other person licensed under the code, or
463 an employee thereof, having knowledge or who believes that a
464 fraudulent insurance act or any other act or practice which,
465 upon conviction, constitutes a felony or a misdemeanor under the
466 code, or under s. 817.234, is being or has been committed shall
467 send to the Division of Investigative and Forensic Services a
468 report or information pertinent to such knowledge or belief and
469 such additional information relative thereto as the department
470 may require.
471 (b) The Division of Investigative and Forensic Services
472 shall review such information or reports and select such
473 information or reports as, in its judgment, may require further
474 investigation. It shall then cause an independent examination of
475 the facts surrounding such information or report to be made to
476 determine the extent, if any, to which a fraudulent insurance
477 act or any other act or practice which, upon conviction,
478 constitutes a felony or a misdemeanor under the code, or under
479 s. 817.234, is being committed.
480 (c) The Division of Investigative and Forensic Services
481 shall report any alleged violations of law which its
482 investigations disclose to the appropriate licensing agency and
483 state attorney or other prosecuting agency having jurisdiction,
484 including, but not limited to, the statewide prosecutor for
485 crimes that impact two or more judicial circuits in this state,
486 with respect to any such violation, as provided in s. 624.310.
487 If prosecution by the state attorney or other prosecuting agency
488 having jurisdiction with respect to such violation is not begun
489 within 60 days of the division’s report, the state attorney or
490 other prosecuting agency having jurisdiction with respect to
491 such violation shall inform the division of the reasons for the
492 lack of prosecution.
493 (10) The Division of Investigative and Forensic Services
494 Bureau of Insurance Fraud shall prepare and submit a performance
495 report to the President of the Senate and the Speaker of the
496 House of Representatives by January 1 of each year. The annual
497 report must include, but need not be limited to:
498 (a) The total number of initial referrals received, cases
499 opened, cases presented for prosecution, cases closed, and
500 convictions resulting from cases presented for prosecution by
501 the Bureau of Insurance Fraud, by type of insurance fraud and
502 circuit.
503 (b) The number of referrals received from insurers, the
504 office, and the Division of Consumer Services of the department,
505 and the outcome of those referrals.
506 (c) The number of investigations undertaken by the Bureau
507 of Insurance Fraud which were not the result of a referral from
508 an insurer and the outcome of those referrals.
509 (d) The number of investigations that resulted in a
510 referral to a regulatory agency and the disposition of those
511 referrals.
512 (e) The number of cases presented by the Bureau of
513 Insurance Fraud which local prosecutors or the statewide
514 prosecutor declined to prosecute and the reasons provided for
515 declining prosecution.
516 (f) A summary of the annual report required under s.
517 626.9896.
518 (g) The total number of employees assigned to the Bureau of
519 Insurance Fraud, delineated by location of staff assigned, and
520 the number and location of employees assigned to the Bureau of
521 Insurance Fraud who were assigned to work other types of fraud
522 cases.
523 (h) The average caseload and turnaround time by type of
524 case for each investigator.
525 (i) The training provided during the year to insurance
526 fraud investigators.
527 Section 11. Subsections (1), (3), and (4) of section
528 627.0629, Florida Statutes, are amended to read:
529 627.0629 Residential property insurance; rate filings.—
530 (1) It is the intent of the Legislature that insurers
531 provide savings to consumers who install or implement windstorm
532 damage mitigation techniques, alterations, or solutions to their
533 properties to prevent windstorm losses. A rate filing for
534 residential property insurance must include actuarially
535 reasonable discounts, credits, or other rate differentials, or
536 appropriate reductions in deductibles, for properties on which
537 fixtures or construction techniques demonstrated to reduce the
538 amount of loss in a windstorm have been installed or
539 implemented. The fixtures or construction techniques must
540 include, but are not limited to, fixtures or construction
541 techniques that enhance roof strength, roof covering
542 performance, roof-to-wall strength, wall-to-floor-to-foundation
543 strength, opening protection, and window, door, and skylight
544 strength. Credits, discounts, or other rate differentials, or
545 appropriate reductions in deductibles, for fixtures and
546 construction techniques that meet the minimum requirements of
547 the Florida Building Code must be included in the rate filing.
548 The office shall determine the discounts, credits, other rate
549 differentials, and appropriate reductions in deductibles that
550 reflect the full actuarial value of such revaluation, which may
551 be used by insurers in rate filings. Effective October 1, 2023,
552 each insurer subject to the requirements of this section must
553 provide information on the insurer’s website describing the
554 hurricane mitigation discounts available to policyholders. Such
555 information must be accessible on, or through a hyperlink
556 located on, the home page of the insurer’s website or the
557 primary page of the insurer’s website for property insurance
558 policyholders or applicants for such coverage in this state. On
559 or before January 1, 2025, and every 5 years thereafter, the
560 office shall reevaluate and update the fixtures or construction
561 techniques demonstrated to reduce the amount of loss in a
562 windstorm and the discounts, credits, other rate differentials,
563 and appropriate reductions in deductibles that reflect the full
564 actuarial value of such fixtures or construction techniques. The
565 office shall adopt rules and forms necessitated by such
566 reevaluation.
567 (3) A rate filing made on or after July 1, 1995, for mobile
568 home owner insurance must include appropriate discounts,
569 credits, or other rate differentials for mobile homes
570 constructed to comply with American Society of Civil Engineers
571 Standard ANSI/ASCE 7-88, adopted by the United States Department
572 of Housing and Urban Development on July 13, 1994, and that also
573 comply with all applicable tie-down requirements provided by
574 state law.
575 (4) The Legislature finds that separate consideration and
576 notice of hurricane insurance premiums will assist consumers by
577 providing greater assurance that hurricane premiums are lawful
578 and by providing more complete information regarding the
579 components of property insurance premiums. Effective January 1,
580 1997, A rate filing for residential property insurance shall be
581 separated into two components, rates for hurricane coverage and
582 rates for all other coverages. A premium notice reflecting a
583 rate implemented on the basis of such a filing shall separately
584 indicate the premium for hurricane coverage and the premium for
585 all other coverages.
586 Section 12. Paragraph (ll) is added to subsection (6) of
587 section 627.351, Florida Statutes, to read:
588 627.351 Insurance risk apportionment plans.—
589 (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
590 (ll) The corporation may not determine that a risk is
591 ineligible for coverage with the corporation solely because such
592 risk has unrepaired damage caused by a covered loss that is the
593 subject of a claim that has been filed with the Florida
594 Insurance Guaranty Association. This paragraph applies to a risk
595 until the earlier of 36 months after the date the Florida
596 Insurance Guaranty Association began servicing such claim or the
597 Florida Insurance Guaranty Association closes the claim.
598 Section 13. Subsection (4) of section 627.410, Florida
599 Statutes, is amended to read:
600 627.410 Filing, approval of forms.—
601 (4) The office may, by order, exempt from the requirements
602 of this section for so long as it deems proper any insurance
603 document or form or type thereof as specified in such order, to
604 which, in its opinion, this section may not practicably be
605 applied, or the filing and approval of which are, in its
606 opinion, not desirable or necessary for the protection of the
607 public. The office may not exempt from the requirements of this
608 section the insurance documents or forms of any insurer, against
609 whom the office enters a final order determining that such
610 insurer violated any provision of this code, for a period of 36
611 months after the date of such order, and may not be deemed
612 approved under subsection (2).
613 Section 14. Section 627.4108, Florida Statutes, is created
614 to read:
615 627.4108 Claims-handling manuals; submission; attestation.—
616 (1) Each authorized residential property insurer conducting
617 business in this state must create and use a claims-handling
618 manual that provides guidelines and procedures and that complies
619 with the requirements of this code and comports to usual and
620 customary industry claims-handling practices. Such manual must
621 include guidelines and procedures for:
622 (a) Initially receiving and acknowledging initial receipt
623 of the claim and reviewing and evaluating the claim;
624 (b) Communicating with policyholders, beginning with the
625 receipt of the claim and continuing until closure of the claim;
626 (c) Setting the claim reserve;
627 (d) Investigating the claim, including conducting
628 inspections of the property that is the subject of the claim;
629 (e) Making preliminary estimates and estimates of the
630 covered damages to the insured property and communicating such
631 estimates to the policyholder;
632 (f) The payment, partial payment, or denial of the claim
633 and communicating such claim decision to the policyholder;
634 (g) Closing claims; and
635 (h) Any aspect of the claims-handling process which the
636 office determines should be included in the claims-handling
637 manual in order to:
638 1. Comply with the laws of this state or rules or orders of
639 the office or department;
640 2. Ensure the claims-handling manual comports with usual
641 and customary industry claims-handling guidelines; or
642 3. Protect policyholders of the insurer or the general
643 public.
644 (2) At any time, the office may request that a residential
645 property insurer submit a physical or electronic copy of the
646 insurer’s currently applicable, or otherwise specifically
647 requested, claims-handling manuals. Upon receiving such a
648 request, a residential property insurer must submit to the
649 office within 5 business days:
650 (a) A true and correct copy of each claims-handling manual
651 requested; and
652 (b) An attestation, on a form prescribed by the commission,
653 that certifies:
654 1. That the insurer has provided a true and correct copy of
655 each currently applicable, or otherwise specifically requested,
656 claims-handling manual; and
657 2. The timeframe for which each submitted claims-handling
658 manual was or is in effect.
659 (3)(a) Annually, each authorized residential property
660 insurer must certify and attest, on a form prescribed by the
661 commission, that:
662 1. Each of the insurer’s current claims-handling manuals
663 complies with the requirements of this code and comports to
664 usual and customary industry claims-handling practices; and
665 2. The insurer maintains adequate resources available to
666 implement the requirements of each of its claims-handling
667 manuals at all times, including during natural disasters and
668 catastrophic events.
669 (b) Such attestation must be submitted to the office:
670 1. On or before August 1, 2023; and
671 2. Annually thereafter, on or before May 1 of each calendar
672 year.
673 (4) The commission is authorized, and all conditions are
674 deemed met, to adopt emergency rules under s. 120.54(4), for the
675 purpose of implementing this section. Notwithstanding any other
676 law, emergency rules adopted under this section are effective
677 for 6 months after adoption and may be renewed during the
678 pendency of procedures to adopt permanent rules addressing the
679 subject of the emergency rules.
680 Section 15. Paragraph (d) of subsection (2) of section
681 627.4133, Florida Statutes, is amended to read:
682 627.4133 Notice of cancellation, nonrenewal, or renewal
683 premium.—
684 (2) With respect to any personal lines or commercial
685 residential property insurance policy, including, but not
686 limited to, any homeowner, mobile home owner, farmowner,
687 condominium association, condominium unit owner, apartment
688 building, or other policy covering a residential structure or
689 its contents:
690 (d)1. Upon a declaration of an emergency pursuant to s.
691 252.36 and the filing of an order by the Commissioner of
692 Insurance Regulation, An authorized insurer may not cancel or
693 nonrenew a personal residential or commercial residential
694 property insurance policy covering a dwelling or residential
695 property located in this state:
696 a. For a period of 90 days after the dwelling or
697 residential property has been repaired, if such property which
698 has been damaged as a result of a hurricane or wind loss that is
699 the subject of the declaration of emergency pursuant to s.
700 252.36 and the filing of an order by the Commissioner of
701 Insurance Regulation for a period of 90 days after the dwelling
702 or residential property has been repaired. A structure is deemed
703 to be repaired when substantially completed and restored to the
704 extent that it is insurable by another authorized insurer that
705 is writing policies in this state.
706 b. Until the earlier of when the dwelling or residential
707 property has been repaired or 1 year after the insurer issues
708 the final claim payment, if such property was damaged by any
709 covered peril and sub-subparagraph a. does not apply.
710 2. However, an insurer or agent may cancel or nonrenew such
711 a policy prior to the repair of the dwelling or residential
712 property:
713 a. Upon 10 days’ notice for nonpayment of premium; or
714 b. Upon 45 days’ notice:
715 (I) For a material misstatement or fraud related to the
716 claim;
717 (II) If the insurer determines that the insured has
718 unreasonably caused a delay in the repair of the dwelling; or
719 (III) If the insurer has paid policy limits.
720 3. If the insurer elects to nonrenew a policy covering a
721 property that has been damaged, the insurer shall provide at
722 least 90 days’ notice to the insured that the insurer intends to
723 nonrenew the policy 90 days after the dwelling or residential
724 property has been repaired. Nothing in this paragraph shall
725 prevent the insurer from canceling or nonrenewing the policy 90
726 days after the repairs are complete for the same reasons the
727 insurer would otherwise have canceled or nonrenewed the policy
728 but for the limitations of subparagraph 1. The Financial
729 Services Commission may adopt rules, and the Commissioner of
730 Insurance Regulation may issue orders, necessary to implement
731 this paragraph.
732 4. This paragraph shall also apply to personal residential
733 and commercial residential policies covering property that was
734 damaged as the result of Hurricane Ian or Hurricane Nicole
735 Tropical Storm Bonnie, Hurricane Charley, Hurricane Frances,
736 Hurricane Ivan, or Hurricane Jeanne.
737 5. For purposes of this paragraph:
738 a. A structure is deemed to be repaired when substantially
739 completed and restored to the extent that it is insurable by
740 another authorized insurer writing policies in this state.
741 b. The term “insurer” means an authorized insurer.
742 Section 16. Subsection (3) is added to section 627.426,
743 Florida Statutes, to read:
744 627.426 Claims administration.—
745 (3)(a) Upon receiving actual notice of an incident or a
746 loss that could give rise to a covered liability claim under an
747 insurance policy, each liability insurer must:
748 1. Assign a licensed and appointed insurance adjuster to
749 investigate the extent of the insured’s probable exposure and
750 diligently attempt to resolve any questions concerning the
751 existence or extent of the insured’s coverage.
752 2. Evaluate the claim ethically, fairly, honestly, and with
753 due regard for the interests of the insured based on available
754 information; consider the extent of the claimant’s recoverable
755 damages; and consider the information in a reasonable and
756 prudent manner.
757 3. Request from the insured or claimant additional relevant
758 information the insurer reasonably deems necessary to evaluate
759 whether to settle a claim.
760 4. Conduct all oral and written communications with the
761 insured with honesty and candor.
762 5. Make reasonable efforts to explain to persons not
763 represented by counsel matters requiring expertise beyond the
764 level normally expected of a layperson with no training in
765 insurance or claims-handling issues.
766 6. Retain all written communications and notes and retain a
767 summary of all verbal communications in a reasonable manner for
768 a period of not less than 5 years after the later of the entry
769 of a judgment against the insured in excess of policy limits
770 becomes final or the conclusion of the extracontractual claim,
771 if any, including any related appeals.
772 7. Provide the insured, within 30 days of a request, with
773 all communications related to the insurer’s handling of the
774 claim which are not privileged as to the insured.
775 8. Provide, at the insurer’s expense, reasonable
776 accommodations necessary to communicate effectively with an
777 insured covered under the Americans with Disabilities Act.
778 9. Communicate to an insured all of the following within 15
779 days after notice of the existence of a third-party claim:
780 a. The identity of any other person or entity the insurer
781 has reason to believe may be liable.
782 b. The insurer’s evaluation of the claim.
783 c. The likelihood and possible extent of an excess
784 judgment.
785 d. Steps the insured can take to avoid exposure to an
786 excess judgment, including the right to secure personal counsel
787 at the insured’s expense.
788 e. The insured’s duty to cooperate with the insurer,
789 including any specific requests required because of a settlement
790 opportunity or by the insurer in accordance with the policy, the
791 purpose of the required cooperation, and the consequences of
792 refusing to cooperate.
793 f. Any settlement demands or offers.
794 10. Initiate settlement negotiations by tendering its
795 policy limits to the claimant in exchange for a general release
796 of the insured if, after the expiration of the safe harbor
797 periods in s. 624.155(4) or (6), as applicable, the facts
798 available to the insurer indicate that the insured’s liability
799 is likely to exceed the policy limits.
800 11. Give fair consideration to a settlement offer that is
801 not unreasonable under the facts available to the insurer and
802 settle, if possible, when a reasonably prudent person, faced
803 with the prospect of paying the total probable exposure of the
804 insured, would do so. The insurer shall provide reasonable
805 assistance to the insured to comply with the insured’s
806 obligations to cooperate and act reasonably to attempt to
807 satisfy any conditions of a claimant’s settlement offer. If it
808 is not possible to settle a liability claim within the available
809 policy limits, the insurer shall act reasonably to attempt to
810 minimize the excess exposure to the insured.
811 12. Attempt to minimize the magnitude of possible excess
812 judgments against the insured when multiple claims arise out of
813 a single occurrence and the combined value of all claims exceeds
814 the total of all applicable policy limits by attempting to
815 globally settle with all such claimants within the policy limits
816 in exchange for a general release of the insured by all
817 claimants. If the insurer is unable to globally settle all
818 claims in exchange for a general release from all claimants, it
819 may utilize either process provided under s. 624.155(6). An
820 insurer does not violate this section simply because it is
821 unable to settle all claims in a multiple claimant case.
822 13. Attempt to settle the claim on behalf of all insureds
823 against whom a claim may be presented if a loss creates the
824 potential for a third-party claim against more than one insured.
825 If it is not possible to settle on behalf of all insureds, the
826 insurer, in consultation with the insureds, must attempt to
827 enter into reasonable settlements of claims against certain
828 insureds to the exclusion of other insureds.
829 14. Respond to any request for insurance information in
830 compliance with s. 626.9372 or s. 627.4137, as applicable.
831 15. Take reasonable measures to preserve evidence, for a
832 reasonable period of time, which is needed for the defense of
833 the liability claim if it appears the insured’s probable
834 exposure is greater than policy limits.
835 16. Comply with subsections (1) and (2), if applicable.
836 17. Comply with the Unfair Insurance Trade Practices Act.
837 (b) As used in this subsection, the term “actual notice”
838 means the insurer’s receipt of notice of an incident or a loss
839 that could give rise to a covered claim that is communicated to
840 the insurer or an agent of the insurer:
841 1. By any manner permitted by the policy or other documents
842 provided to the insured by the insurer;
843 2. Through the claims link on the insurer’s website; or
844 3. Through the e-mail address designated by the insurer
845 under s. 624.422.
846 (c) Any violation of this subsection constitutes a
847 violation of the Florida Insurance Code and is subject to any
848 applicable enforcement provisions therein. This subsection does
849 not create a civil cause of action, nor does it abrogate or
850 diminish any civil cause of action currently existing in
851 statutory or common law.
852 Section 17. Paragraph (a) of subsection (10) of section
853 627.701, Florida Statutes, is amended to read:
854 627.701 Liability of insureds; coinsurance; deductibles.—
855 (10)(a) Notwithstanding any other provision of law, an
856 insurer issuing a personal lines residential property insurance
857 policy may include in such policy a separate roof deductible
858 that meets all of the following requirements:
859 1. The insurer has complied with the offer requirements
860 under subsection (7) regarding a deductible applicable to losses
861 from perils other than a hurricane.
862 2. The roof deductible may not exceed the lesser of 2
863 percent of the Coverage A limit of the policy or 50 percent of
864 the cost to replace the roof.
865 3. The premium that a policyholder is charged for the
866 policy includes an actuarially sound credit or premium discount
867 for the roof deductible.
868 4. The roof deductible applies only to a claim adjusted on
869 a replacement cost basis.
870 5. The roof deductible does not apply to any of the
871 following events:
872 a. A total loss to a primary structure in accordance with
873 the valued policy law under s. 627.702 which is caused by a
874 covered peril.
875 b. A roof loss resulting from a hurricane as defined in s.
876 627.4025(2)(c).
877 c. A roof loss resulting from a tree fall or other hazard
878 that damages the roof and punctures the roof deck.
879 d. A roof loss requiring the repair of less than 50 percent
880 of the roof.
881
882 If a roof deductible is applied, no other deductible under the
883 policy may be applied to the loss or to any other loss to the
884 property caused by the same covered peril.
885 Section 18. Subsection (2) of section 627.70132, Florida
886 Statutes, is amended to read:
887 627.70132 Notice of property insurance claim.—
888 (2) A claim or reopened claim, but not a supplemental
889 claim, under an insurance policy that provides property
890 insurance, as defined in s. 624.604, including a property
891 insurance policy issued by an eligible surplus lines insurer,
892 for loss or damage caused by any peril is barred unless notice
893 of the claim was given to the insurer in accordance with the
894 terms of the policy within 1 year after the date of loss. A
895 supplemental claim is barred unless notice of the supplemental
896 claim was given to the insurer in accordance with the terms of
897 the policy within 18 months after the date of loss. The time
898 limitations of this subsection are tolled during any term of
899 deployment to a combat zone or combat support posting which
900 materially affects the ability of a servicemember as defined in
901 s. 250.01 to file a claim, supplemental claim, or reopened
902 claim.
903 Section 19. Chapter 2022-271, Laws of Florida, shall not be
904 construed to impair any right under an insurance contract in
905 effect on or before the effective date of that chapter law. To
906 the extent that chapter 2022-271, Laws of Florida, affects a
907 right under an insurance contract, that chapter law applies to
908 an insurance contract issued or renewed after the effective date
909 of that chapter law. This section is intended to clarify
910 existing law and is remedial in nature.
911 Section 20. (1) Every residential property insurer and
912 every motor vehicle insurer rate filing made or pending with the
913 Office of Insurance Regulation on or after July 1, 2023, must
914 reflect the projected savings or reduction in claim frequency,
915 claim severity, and loss adjustment expenses, including for
916 attorney fees, payment of attorney fees to claimants, and any
917 other reduction actuarially indicated, due to the combined
918 effect of the applicable provisions of chapters 2021-77, 2022
919 268, 2022-271, and 2023-15, Laws of Florida, in order to ensure
920 that rates for such insurance accurately reflect the risk of
921 providing such insurance.
922 (2) The Office of Insurance Regulation must consider in its
923 review of such rate filings the projected savings or reduction
924 in claim frequency, claim severity, and loss adjustment
925 expenses, including for attorney fees, payment of attorney fees
926 to claimants, and any other reduction actuarially indicated, due
927 to the combined effect of the applicable provisions of chapters
928 2021-77, 2022-268, 2022-271, and 2023-15, Laws of Florida. The
929 office may develop a factor or factors using generally accepted
930 actuarial techniques and standards to be used in its review of
931 rate filings governed by this section. The office may contract
932 with an appropriate vendor to advise the office in determining
933 such factor or factors. Such factor or factors are not intended
934 to create a mandatory minimum rate decrease for all motor
935 vehicle insurers and property insurers, respectively, but rather
936 to ensure that the rates for such coverage meet the requirements
937 of s. 627.062, Florida Statutes, and thus are not excessive,
938 inadequate, or unfairly discriminatory and allow such insurers a
939 reasonable rate of return.
940 (3) This section does not apply to rate filings made
941 pursuant to s. 627.062(2)(k), Florida Statutes.
942 (4) For the 2023-2024 fiscal year, the sum of $500,000 in
943 nonrecurring funds is appropriated from the Insurance Regulatory
944 Trust Fund in the Department of Financial Services to the Office
945 of Insurance Regulation to implement this section.
946 Section 21. For the 2023-2024 fiscal year, 18 full-time
947 equivalent positions with associated salary rate of 1,116,500
948 are authorized and the sum of $1,879,129 in recurring funds and
949 $185,086 in nonrecurring funds is appropriated from the
950 Insurance Regulatory Trust Fund to the Office of Insurance
951 Regulation to implement this act.
952 Section 22. For the 2023-2024 fiscal year, seven full-time
953 equivalent positions with associated salary rate of 350,000 are
954 authorized and the sum of $574,036 in recurring funds and
955 $33,467 in nonrecurring funds is appropriated from the Insurance
956 Regulatory Trust Fund to the Department of Financial Services to
957 implement this act.
958 Section 23. This act shall take effect July 1, 2023.
959
960 ================= T I T L E A M E N D M E N T ================
961 And the title is amended as follows:
962 Delete everything before the enacting clause
963 and insert:
964 A bill to be entitled
965 An act relating to insurer accountability; amending s.
966 624.307, F.S.; authorizing electronic responses to
967 certain requests from the Division of Consumer
968 Services of the Department of Financial Services
969 concerning consumer complaints; revising the timeframe
970 in which responses must be made; revising
971 administrative penalties; amending s. 624.315, F.S.;
972 requiring the Office of Insurance Regulation to
973 annually and quarterly create and publish specified
974 reports relating to the enforcement of insurer
975 compliance; requiring the office to submit such
976 reports to the Financial Services Commission and the
977 Legislature by specified dates; amending s. 624.316,
978 F.S.; requiring the office to create a specified
979 methodology for scheduling examinations of insurers;
980 specifying requirements for such methodology;
981 providing construction; authorizing the commission to
982 adopt rules; amending s. 624.3161, F.S.; revising
983 requirements and conditions for certain insurer market
984 conduct examinations after a hurricane; providing
985 construction; requiring the office to create, and the
986 commission to adopt by rule, a specified selection
987 methodology for examinations; specifying requirements
988 for such methodology; specifying rulemaking
989 requirements; amending s. 624.4211, F.S.; revising
990 administrative fines the office may impose in lieu of
991 revocation or suspension; creating s. 624.4301, F.S.;
992 specifying requirements for residential property
993 insurers temporarily suspending writing new policies
994 in notifying the office; authorizing the commission to
995 adopt rules; amending s. 626.207, F.S.; revising a
996 condition for disqualification of an insurance
997 representative applicant or licensee; amending s.
998 626.9521, F.S.; revising and specifying applicable
999 fines for unfair methods of competition and unfair or
1000 deceptive acts or practices; amending s. 626.9541,
1001 F.S.; adding an unfair claim settlement practice by an
1002 insurer; prohibiting an officer or a director of an
1003 impaired insurer from receiving a bonus from such
1004 insurer or from certain holding companies or
1005 affiliates; defining the term “bonus”; providing a
1006 criminal penalty; amending s. 626.989, F.S.; revising
1007 a reporting requirement for the department’s Division
1008 of Investigative and Forensic Services; requiring the
1009 division to submit an annual performance report to the
1010 Legislature; specifying requirements for the report;
1011 amending s. 627.0629, F.S.; specifying requirements
1012 for residential property insurers in providing certain
1013 hurricane mitigation discount information to
1014 policyholders in a specified manner; specifying
1015 requirements for the office in reevaluating and
1016 updating certain fixtures and construction techniques;
1017 deleting obsolete dates; amending s. 627.351, F.S.;
1018 prohibiting Citizens Property Insurance Corporation
1019 from determining that a risk is ineligible for
1020 coverage solely on a specified basis; providing
1021 applicability; amending s. 627.410, F.S.; prohibiting
1022 the office from exempting specified insurers from form
1023 filing requirements for a specified period; providing
1024 construction; creating s. 627.4108, F.S.; specifying
1025 requirements for residential property insurers in
1026 creating and using claims-handling manuals;
1027 authorizing the office to request submission of such
1028 manuals; providing requirements for such submissions;
1029 requiring authorized insurers to annually submit a
1030 certified attestation to the office; authorizing the
1031 commission to adopt emergency rules; amending s.
1032 627.4133, F.S.; revising prohibitions on insurers
1033 against the cancellation or nonrenewal of property
1034 insurance policies; revising applicability; providing
1035 construction; defining the term “insurer”; amending s.
1036 627.426, F.S.; specifying requirements for liability
1037 insurers after receiving actual notice of certain
1038 incidents or losses; defining the term “actual
1039 notice”; providing construction; amending s. 627.701,
1040 F.S.; providing that if a roof deductible is applied
1041 under a personal lines residential property insurance
1042 policy, no other deductible under the policy may be
1043 applied to any other loss to the property caused by
1044 the same covered peril; amending s. 627.70132, F.S.;
1045 providing for the tolling of certain timeframes for
1046 filing notices of property insurance claims for
1047 servicemembers under specified circumstances;
1048 providing construction relating to chapter 2022-271,
1049 Laws of Florida; requiring residential property
1050 insurers and motor vehicle insurer rate filings to
1051 reflect certain projected savings and reductions in
1052 expenses; specifying requirements for the office in
1053 reviewing rate filings; authorizing the office to
1054 develop certain factors and contract with a vendor for
1055 a certain purpose; providing applicability; providing
1056 appropriations; providing an effective date.