ENROLLED
       2023 Legislature                   CS for SB 7052, 1st Engrossed
       
       
       
       
       
       
                                                             20237052er
    1  
    2         An act relating to insurer accountability; creating s.
    3         624.115, F.S.; specifying a requirement for the Office
    4         of Insurance Regulation in referring criminal
    5         violations; amending s. 624.307, F.S.; authorizing
    6         electronic responses to certain requests from the
    7         Division of Consumer Services of the Department of
    8         Financial Services concerning consumer complaints;
    9         revising the timeframe in which responses must be
   10         made; revising administrative penalties; amending s.
   11         624.315, F.S.; requiring the office to annually and
   12         quarterly create and publish specified reports
   13         relating to the enforcement of insurer compliance;
   14         requiring the office to submit such reports to the
   15         Financial Services Commission and the Legislature by
   16         specified dates; amending s. 624.316, F.S.; revising
   17         the minimum intervals in which the office must examine
   18         certain insurers; revising periods that examinations
   19         must cover; requiring the office to create a specified
   20         methodology for scheduling examinations of insurers;
   21         specifying requirements for such methodology;
   22         providing construction; specifying requirements for
   23         the office in proposing rules to the commission;
   24         authorizing the commission to adopt rules; amending s.
   25         624.3161, F.S.; revising requirements and conditions
   26         for certain insurer market conduct examinations after
   27         a hurricane; requiring the office to create, and the
   28         commission to adopt by rule, a specified selection
   29         methodology for examinations; specifying requirements
   30         for such methodology; specifying rulemaking
   31         requirements; specifying requirements, procedures, and
   32         conditions for the office’s review of a liability
   33         insurer’s claims-handling practices and the imposition
   34         of enhanced enforcement penalties; defining the term
   35         “actual notice”; providing construction; amending s.
   36         624.4211, F.S.; revising administrative fines the
   37         office may impose in lieu of revocation or suspension;
   38         creating s. 624.4301, F.S.; specifying requirements
   39         for residential property insurers temporarily
   40         suspending writing new policies in notifying the
   41         office; providing applicability and construction;
   42         authorizing the commission to adopt rules; creating s.
   43         624.805, F.S.; specifying factors the office may
   44         consider in determining whether the continued
   45         operation of an insurer may be deemed to be hazardous
   46         to its policyholders or creditors or to the general
   47         public; specifying actions the office may take in
   48         determining an insurer’s financial condition;
   49         authorizing the office to issue an order requiring a
   50         hazardous insurer to take specified actions; providing
   51         construction; authorizing the office to issue
   52         immediate final orders; amending s. 624.81, F.S.;
   53         deleting certain rulemaking authority of the
   54         commission; creating s. 624.865, F.S.; authorizing the
   55         commission to adopt certain rules; amending s.
   56         628.8015, F.S.; conforming provisions to changes made
   57         by the act; amending s. 626.207, F.S.; revising a
   58         condition for disqualification of an insurance
   59         representative applicant or licensee; amending s.
   60         626.9521, F.S.; revising and specifying applicable
   61         fines for unfair methods of competition and unfair or
   62         deceptive acts or practices; amending s. 626.9541,
   63         F.S.; adding an unfair claim settlement practice by an
   64         insurer; prohibiting an officer or a director of an
   65         impaired insurer from receiving a bonus from such
   66         insurer or from certain holding companies or
   67         affiliates; defining the term “bonus”; providing a
   68         criminal penalty; amending s. 626.989, F.S.; revising
   69         a reporting requirement for the department’s Division
   70         of Investigative and Forensic Services; revising a
   71         requirement for state attorneys or other prosecuting
   72         agencies having jurisdiction to inform the division
   73         under certain circumstances; requiring the division to
   74         submit an annual performance report to the
   75         Legislature; specifying requirements for the report;
   76         amending s. 627.0629, F.S.; specifying requirements
   77         for residential property insurers in providing certain
   78         hurricane mitigation discount information to
   79         policyholders in a specified manner; specifying
   80         requirements for the office in reevaluating and
   81         updating certain fixtures and construction techniques;
   82         deleting obsolete dates; amending s. 627.351, F.S.;
   83         prohibiting Citizens Property Insurance Corporation
   84         from determining that a risk is ineligible for
   85         coverage solely on a specified basis; providing
   86         applicability; amending s. 627.410, F.S.; prohibiting
   87         the office from exempting specified insurers from form
   88         filing requirements for a specified period; providing
   89         construction; creating s. 627.4108, F.S.; specifying
   90         requirements for residential property insurers in
   91         creating and using claims-handling manuals;
   92         authorizing the office to request submission of such
   93         manuals; providing requirements for such submissions;
   94         requiring authorized insurers to annually submit a
   95         certified attestation to the office; authorizing the
   96         commission to adopt emergency rules; amending s.
   97         627.4133, F.S.; revising prohibitions on insurers
   98         against the cancellation or nonrenewal of property
   99         insurance policies; revising applicability; providing
  100         construction; defining the term “insurer”; amending s.
  101         627.701, F.S.; providing that if a roof deductible is
  102         applied under a personal lines residential property
  103         insurance policy, no other deductible under the policy
  104         may be applied to any other loss to the property
  105         caused by the same covered peril; amending s.
  106         627.70132, F.S.; providing for the tolling of certain
  107         timeframes for filing notices of property insurance
  108         claims by named insureds who are servicemembers under
  109         specified circumstances; providing construction
  110         relating to chapter 2022-271, Laws of Florida;
  111         requiring residential property insurers and motor
  112         vehicle insurer rate filings to reflect certain
  113         projected savings and reductions in expenses;
  114         specifying requirements for the office in reviewing
  115         rate filings; authorizing the office to develop
  116         certain methodology and data and contract with a
  117         vendor for a certain purpose; providing applicability;
  118         providing appropriations; providing an effective date.
  119          
  120  Be It Enacted by the Legislature of the State of Florida:
  121  
  122         Section 1. Section 624.115, Florida Statutes, is created to
  123  read:
  124         624.115 Referral of criminal violations.—If, during an
  125  investigation or examination, the office has reason to believe
  126  that any criminal law of this state has or may have been
  127  violated, the office shall refer any relevant records and
  128  information to the Division of Investigative and Forensic
  129  Services, state or federal law enforcement, or prosecutorial
  130  agencies, as applicable, and shall provide investigative
  131  assistance to those agencies as required.
  132         Section 2. Paragraph (b) of subsection (10) of section
  133  624.307, Florida Statutes, is amended to read:
  134         624.307 General powers; duties.—
  135         (10)
  136         (b) Any person licensed or issued a certificate of
  137  authority by the department or the office shall respond, in
  138  writing or electronically, to the division within 14 20 days
  139  after receipt of a written request for documents and information
  140  from the division concerning a consumer complaint. The response
  141  must address the issues and allegations raised in the complaint
  142  and include any requested documents concerning the consumer
  143  complaint not subject to attorney-client or work-product
  144  privilege. The division may impose an administrative penalty for
  145  failure to comply with this paragraph of up to $5,000 $2,500 per
  146  violation upon any entity licensed by the department or the
  147  office and $250 for the first violation, $500 for the second
  148  violation, and up to $1,000 per for the third or subsequent
  149  violation by upon any individual licensed by the department or
  150  the office.
  151         Section 3. Present subsection (4) of section 624.315,
  152  Florida Statutes, is redesignated as subsection (5), and a new
  153  subsection (4) is added to that section, to read:
  154         624.315 Annual reports; quarterly reports report.—
  155         (4)(a)The office shall create a report detailing all
  156  actions of the office to enforce insurer compliance with this
  157  code and all rules and orders of the office or department during
  158  the previous year. For each of the following, the report must
  159  detail the insurer or other licensee or registrant against whom
  160  such action was taken; whether the office found any violation of
  161  law or rule by such party, and, if so, detail such violation;
  162  and the resolution of such action, including any penalties
  163  imposed by the office. The report must be published on the
  164  website of the office and submitted to the commission, the
  165  President of the Senate, the Speaker of the House of
  166  Representatives, and the legislative committees with
  167  jurisdiction over matters of insurance on or before January 31
  168  of each year. The report must include, but need not be limited
  169  to:
  170         1.The revocation, denial, or suspension of any license or
  171  registration issued by the office.
  172         2. All actions taken pursuant to s. 624.310.
  173         3.Fines imposed by the office for violations of this code.
  174         4.Consent orders entered into by the office.
  175         5.Examinations and investigations conducted and completed
  176  by the office pursuant to ss. 624.316 and 624.3161.
  177         6.Investigations conducted and completed, by line of
  178  insurance, for which the office found violations of law or rule
  179  but did not take enforcement action.
  180         (b)Each quarter, the office shall create a report
  181  detailing all actions of the office to enforce insurer
  182  compliance during the previous quarter. The report must include,
  183  but need not be limited to, the subjects that must be included
  184  in the annual report under paragraph (a). The report must be
  185  submitted to the commission, the President of the Senate, the
  186  Speaker of the House of Representatives, and the legislative
  187  committees with jurisdiction over matters of insurance. The
  188  report is due on or before April 30, July 31, October 31, and
  189  January 31, respectively, for the immediately preceding quarter.
  190  The report due January 31 may be included within the annual
  191  report required under paragraph (a).
  192         (c)The office need not include within any report required
  193  under this subsection information that would violate any
  194  confidentiality provision included within any agreement, order,
  195  or consent order entered into or adopted by the office.
  196         Section 4. Paragraph (a) of subsection (2) of section
  197  624.316, Florida Statutes, is amended, and subsections (3) and
  198  (4) are added to that section, to read:
  199         624.316 Examination of insurers.—
  200         (2)(a) Except as provided in paragraph (f), the office may
  201  examine each insurer as often as may be warranted for the
  202  protection of the policyholders and in the public interest, but
  203  must, at a minimum, examine:
  204         1.High-risk insurers at least once every 3 years.
  205         2.Average- and low-risk insurers at least once every and
  206  shall examine each domestic insurer not less frequently than
  207  once every 5 years.
  208  
  209  The examination shall cover the number of fiscal years since the
  210  last examination preceding 5 fiscal years of the insurer, except
  211  for examinations of low-risk insurers, in which case the
  212  examination need only cover at least the preceding 5 fiscal
  213  years, and shall be commenced within 12 months after the end of
  214  the most recent fiscal year being covered by the examination.
  215  The examination may cover any period of the insurer’s operations
  216  since the last previous examination. The examination may include
  217  examination of events subsequent to the end of the most recent
  218  fiscal year and the events of any prior period that affect the
  219  present financial condition of the insurer.
  220         (3) The office shall create, and the commission shall adopt
  221  by rule, a risk-based selection methodology for scheduling
  222  examinations of insurers subject to this section. Except as
  223  otherwise specified in subsection (2), this requirement does not
  224  restrict the authority of the office to conduct examinations
  225  under this section as often as it deems advisable. Such
  226  methodology must include all of the following:
  227         (a)Use of a risk-focused analysis to prioritize financial
  228  examinations of insurers when such reporting indicates a decline
  229  in the insurer’s financial condition.
  230         (b)Consideration of:
  231         1.The level of capitalization and identification of
  232  unfavorable trends;
  233         2.Negative trends in profitability or cash flow from
  234  operations;
  235         3.National Association of Insurance Commissioners
  236  Insurance Regulatory Information System ratio results;
  237         4.Risk-based capital and risk-based capital trend test
  238  results;
  239         5.The structure and complexity of the insurer;
  240         6.Changes in the insurer’s officers or board of directors;
  241         7.Changes in the insurer’s business strategy or
  242  operations;
  243         8.Findings and recommendations from an examination made
  244  pursuant to this section or s. 624.3161;
  245         9. Current or pending regulatory actions by the office or
  246  the department;
  247         10.Information obtained from other regulatory agencies or
  248  independent organization ratings and reports; and
  249         11.The impact of an insurer’s insolvency on policyholders
  250  of the insurer and the public generally.
  251         (c)Prioritization of property insurers for which the
  252  office identifies significant concerns about an insurer’s
  253  solvency pursuant to s. 627.7154.
  254         (d)Any other matters the office deems necessary to
  255  consider for the protection of the public.
  256         (4)The office shall present any proposed rules
  257  implementing this section to the commission no later than
  258  October 1, 2023. In addition to the methodology required by this
  259  section, such rule or rules must include a plan to implement the
  260  examination schedule in subsection (2). To facilitate the
  261  development of the methodology for scheduling examinations
  262  pursuant to this section, the commission may also adopt by rule
  263  the National Association of Insurance Commissioners Financial
  264  Analysis Handbook, to the extent that the handbook is consistent
  265  with and does not negate the requirements of this section.
  266         Section 5. Subsection (7) of section 624.3161, Florida
  267  Statutes, is amended, and subsections (8) and (9) are added to
  268  that section, to read:
  269         624.3161 Market conduct examinations.—
  270         (7) Notwithstanding subsection (1), any authorized insurer
  271  transacting residential property insurance business in this
  272  state:
  273         (a) May be subject to an additional market conduct
  274  examination after a hurricane if, at any time more than 90 days
  275  after the end of the hurricane, the insurer:
  276         (a) is among the top 20 percent of insurers based upon a
  277  calculation of the ratio of hurricane-related property insurance
  278  claims filed to the number of property insurance policies in
  279  force;
  280         (b) Must be subject to a market conduct examination after a
  281  hurricane if, at any time more than 90 days after the end of the
  282  hurricane, the insurer:
  283         1. Is among the top 20 percent of insurers based upon a
  284  calculation of the ratio of hurricane claim-related consumer
  285  complaints made about that insurer to the department to the
  286  insurer’s total number of hurricane-related claims;
  287         2.Is among the top 20 percent of insurers based upon a
  288  calculation of the ratio of hurricane claims closed without
  289  payment to the insurer’s total number of hurricane claims on
  290  policies providing wind or windstorm coverage;
  291         3.(c) Has made significant payments to its managing general
  292  agent since the hurricane; or
  293         4.(d) Is identified by the office as necessitating a market
  294  conduct exam for any other reason.
  295  
  296  All relevant criteria under this section and s. 624.316 shall be
  297  applied to the market conduct examination under this subsection.
  298  Such an examination must be initiated within 18 months after the
  299  landfall of a hurricane that results in an executive order or a
  300  state of emergency issued by the Governor. The requirements of
  301  this subsection do not limit the authority of the office to
  302  conduct at any time a market conduct examination of a property
  303  insurer in the aftermath of a hurricane. This subsection does
  304  not require the office to conduct multiple market conduct
  305  examinations of the same insurer when multiple hurricanes make
  306  landfall in this state in a single calendar year. An examination
  307  of an insurer under this subsection must also include an
  308  examination of its managing general agent as if it were the
  309  insurer.
  310         (8) The office shall create, and the commission shall adopt
  311  by rule, a selection methodology for scheduling and conducting
  312  market conduct examinations of insurers and other entities
  313  regulated by the office. This requirement does not restrict the
  314  authority of the office to conduct market conduct examinations
  315  as often as it deems necessary. Such selection methodology must
  316  prioritize market conduct examinations of insurers and other
  317  entities regulated by the office to whom any of the following
  318  conditions applies:
  319         (a)An insurance regulator in another state has initiated
  320  or taken regulatory action against the insurer or entity
  321  regarding an act or omission of such insurer or entity which, if
  322  committed in this state, would constitute a violation of the
  323  laws of this state or any rule or order of the office or
  324  department.
  325         (b)Given the insurer’s market share in this state, the
  326  department or the office has received a disproportionate number
  327  of the following types of claims-handling complaints against the
  328  insurer:
  329         1.Failure to timely communicate with respect to claims;
  330         2.Failure to timely pay claims;
  331         3.Untimely payments giving rise to the payment of
  332  statutory interest;
  333         4.Failure to adjust and pay claims in accordance with the
  334  terms and conditions of the policy or contract and in compliance
  335  with state law;
  336         5.Violations of part IX of chapter 626, the Unfair
  337  Insurance Trade Practices Act;
  338         6.Failure to use licensed and duly appointed claims
  339  adjusters;
  340         7.Failure to maintain reasonable claims records; or
  341         8.Failure to adhere to the company’s claims-handling
  342  manual.
  343         (c)The results of a National Association of Insurance
  344  Commissioners Market Conduct Annual Statement indicate that the
  345  insurer is a negative outlier with regard to particular metrics.
  346         (d)There is evidence that the insurer is violating or has
  347  violated the Unfair Insurance Trade Practices Act.
  348         (e)The insurer meets the criteria in subsection (7).
  349         (f)Any other conditions the office deems necessary for the
  350  protection of the public.
  351  
  352  The office shall present the proposed rule required by this
  353  subsection to the commission no later than October 1, 2023. In
  354  addition to the methodology required by this subsection, the
  355  rule must provide criteria for how the office, in coordination
  356  with the department, will determine what constitutes a
  357  disproportionate number of claims-handling complaints described
  358  in paragraph (b).
  359         (9)If the office concludes through an examination pursuant
  360  to this section that an insurer providing liability coverage in
  361  this state exhibits a pattern or practice of violations of the
  362  Florida Insurance Code during any investigation or examination
  363  of the insurer, the office must review the insurer’s claims
  364  handling practices to determine if the insurer should be subject
  365  to the enhanced enforcement penalties of this subsection.
  366         (a)A liability insurer may be subject to enhanced
  367  enforcement penalties if the office reviews the insurer’s
  368  claims-handling practices and finds a pattern or practice of the
  369  insurer failing to do the following when responding to covered
  370  liability claims under an insurance policy, after receiving
  371  actual notice of such claims:
  372         1.Assign a licensed and appointed insurance adjuster to
  373  investigate whether coverage is provided under the policy and
  374  diligently attempt to resolve any questions concerning the
  375  extent of the insured’s coverage.
  376         2.Evaluate the claim fairly, honestly, and with due regard
  377  for the interests of the insured based on available information.
  378         3.Request from the insured or claimant additional relevant
  379  information the insurer reasonably deems necessary to evaluate
  380  whether to settle a claim.
  381         4.Conduct all oral and written communications with the
  382  insured with honesty and candor.
  383         5.Make reasonable efforts to explain to persons not
  384  represented by counsel matters requiring expertise beyond the
  385  level normally expected of a layperson with no training in
  386  insurance or claims-handling issues.
  387         6.Retain all written and recorded communications and
  388  create and retain a summary of all verbal communications in a
  389  reasonable manner for a period of not less than 2 years after
  390  the later of the entry of a final judgment against the insured
  391  in excess of policy limits or, if an extracontractual claim is
  392  made, the conclusion of that claim and any related appeals.
  393         7.Within 30 days after a request, provide the insured with
  394  all communications related to the insurer’s handling of the
  395  claim which are not privileged as to the insured.
  396         8.Provide, upon request and at the insurer’s expense,
  397  reasonable accommodations necessary to communicate effectively
  398  with an insured covered under the Americans with Disabilities
  399  Act.
  400         9.When handling a third-party claim, communicate each of
  401  the following to the insured:
  402         a.The identity of any other person or entity the insurer
  403  has reason to believe may be liable.
  404         b.The insurer’s final and completed estimate of the claim.
  405         c.The possibility of an excess judgment.
  406         d.The insured’s right to secure personal counsel at his or
  407  her own expense.
  408         e.That the insured should cooperate with the insurer,
  409  including providing information required by the insurer because
  410  of a settlement opportunity or in accordance with the policy.
  411         f.Any formal settlement demands or offers to settle by the
  412  claimant and any offers to settle on behalf of the insured.
  413         10.Respond to any request for insurance information in
  414  compliance with s. 626.9372 or s. 627.4137, as applicable.
  415         11.Seek to obtain a general release of each insured in
  416  making any settlement offer to a third-party claimant.
  417         12.Take reasonable measures to preserve any documentary,
  418  photographic, and forensic evidence as needed for the defense of
  419  the liability claim if it appears likely that the insured’s
  420  liability exposure is greater than policy limits and the insurer
  421  fails to secure a general release in favor of the insured.
  422         13.Comply with subsections (1) and (2), if applicable.
  423         14.Comply with the Unfair Insurance Trade Practices Act.
  424         (b)As used in this subsection, the term “actual notice”
  425  means the insurer’s receipt of notice of an incident or a loss
  426  that could give rise to a covered claim that is communicated to
  427  the insurer or an agent of the insurer:
  428         1.By any manner permitted by the policy or other documents
  429  provided to the insured by the insurer;
  430         2.Through the claims link on the insurer’s website; or
  431         3.Through the e-mail address designated by the insurer
  432  under s. 624.422.
  433         (c)In reviewing claims-handling practices, it is relevant
  434  whether the insured, claimant, and any representative of the
  435  insured or claimant were acting reasonably toward the insurer in
  436  furnishing information regarding the claim, in making demands of
  437  the insurer, in setting deadlines, and in attempting to settle
  438  the claim. Such matters include whether:
  439         1.The insured cooperated with the insurer in the defense
  440  of the claim and in making settlements by taking reasonable
  441  actions requested by the claimant or required by the policy
  442  which are necessary to assist the insurer in settling a covered
  443  claim, including:
  444         a.Executing affidavits regarding the facts within the
  445  insured’s knowledge regarding the covered loss; and
  446         b.Providing documents, including, if reasonably necessary
  447  to settle a covered claim valued in excess of policy limits and
  448  upon the request of the claimant, a summary of the insured’s
  449  assets, liabilities, obligations, and other insurance policies
  450  that may provide coverage for the claim and the name and contact
  451  information of the insured’s employer when the insured is a
  452  natural person who was acting in the course and scope of
  453  employment when the incident giving rise to the claim occurred.
  454         2.The claimant and any claimant’s representative:
  455         a.Acted honestly in furnishing information regarding the
  456  claim;
  457         b.Acted reasonably in setting deadlines; and
  458         c.Refrained from taking actions that may be reasonably
  459  expected to prevent an insurer from accepting the settlement
  460  demand, such as providing insufficient detail within the demand,
  461  providing unreasonable deadlines for acceptance of the demand,
  462  or including unreasonable conditions to settlement.
  463         (d)In addition to authorized penalties for a liability
  464  insurer that the office has determined has a pattern or practice
  465  of violations of the Florida Insurance Code at the conclusion of
  466  any investigation or examination, the office may impose enhanced
  467  enforcement penalties for insurer claims-handling practices that
  468  fail to meet the review standards of this subsection. Such
  469  enhanced enforcement penalties include, but are not limited to,
  470  administrative fines that are subject to a 2.0 multiplier and
  471  fines that exceed the limits on fine amounts and aggregate fine
  472  amounts provided for under this code.
  473         (e)This subsection does not create a civil cause of
  474  action, a civil remedy under s. 624.155, or an unfair trade
  475  practice under s. 626.9541.
  476         Section 6. Section 624.4211, Florida Statutes, is amended
  477  to read:
  478         624.4211 Administrative fine in lieu of suspension or
  479  revocation.—
  480         (1) If the office finds that one or more grounds exist for
  481  the discretionary revocation or suspension of a certificate of
  482  authority issued under this chapter, the office may, in lieu of
  483  such revocation or suspension, impose a fine upon the insurer.
  484         (2)(a) With respect to a any nonwillful violation, such
  485  fine may not exceed:
  486         1.Twenty-five thousand dollars per violation, up to an
  487  aggregate amount of $100,000 for all nonwillful violations
  488  arising out of the same action, related to a covered loss or
  489  claim caused by an emergency for which the Governor declared a
  490  state of emergency pursuant to s. 252.36.
  491         2.Twelve thousand five hundred dollars $5,000 per
  492  violation, up to. In no event shall such fine exceed an
  493  aggregate amount of $50,000 $20,000 for all other nonwillful
  494  violations arising out of the same action.
  495         (b) If an insurer discovers a nonwillful violation, the
  496  insurer shall correct the violation and, if restitution is due,
  497  make restitution to all affected persons. Such restitution shall
  498  include interest at 12 percent per year from either the date of
  499  the violation or the date of inception of the affected person’s
  500  policy, at the insurer’s option. The restitution may be a credit
  501  against future premiums due, provided that interest accumulates
  502  until the premiums are due. If the amount of restitution due to
  503  any person is $50 or more and the insurer wishes to credit it
  504  against future premiums, it shall notify such person that she or
  505  he may receive a check instead of a credit. If the credit is on
  506  a policy that is not renewed, the insurer shall pay the
  507  restitution to the person to whom it is due.
  508         (3)(a) With respect to a any knowing and willful violation
  509  of a lawful order or rule of the office or commission or a
  510  provision of this code, the office may impose a fine upon the
  511  insurer in an amount not to exceed:
  512         1.Two hundred thousand dollars for each such violation, up
  513  to an aggregate amount of $1 million for all knowing and willful
  514  violations arising out of the same action, related to a covered
  515  loss or claim caused by an emergency for which the Governor
  516  declared a state of emergency pursuant to s. 252.36.
  517         2.One hundred thousand dollars $40,000 for each such
  518  violation, up to. In no event shall such fine exceed an
  519  aggregate amount of $500,000 $200,000 for all other knowing and
  520  willful violations arising out of the same action.
  521         (b) In addition to such fines, the insurer shall make
  522  restitution when due in accordance with subsection (2).
  523         (4) The failure of an insurer to make restitution when due
  524  as required under this section constitutes a willful violation
  525  of this code. However, if an insurer in good faith is uncertain
  526  as to whether any restitution is due or as to the amount of such
  527  restitution, it shall promptly notify the office of the
  528  circumstances; and the failure to make restitution pending a
  529  determination thereof shall not constitute a violation of this
  530  code.
  531         Section 7. Section 624.4301, Florida Statutes, is created
  532  to read:
  533         624.4301 Notice of temporary discontinuance of writing new
  534  residential property insurance policies.—
  535         (1)Any authorized insurer, before temporarily suspending
  536  writing new residential property insurance policies in this
  537  state, must give notice to the office of the insurer’s reasons
  538  for such action, the effective dates of the temporary
  539  suspension, and the proposed communication to its agents. Such
  540  notice must be provided on a form approved by the office and
  541  adopted by the commission. The insurer shall submit such notice
  542  to the office the earlier of 20 business days before the
  543  effective date of the temporary suspension of writing or 5
  544  business days before notifying its agents of the temporary
  545  suspension of writing. The insurer must provide any other
  546  information requested by the office related to the insurer’s
  547  temporary suspension of writing. The requirements of this
  548  section do not:
  549         (a)Apply to a temporary suspension of writing new business
  550  made in response to:
  551         1.A hurricane that may make landfall in this state if such
  552  temporary suspension ceases within 72 hours after hurricane
  553  conditions are no longer present in this state; or
  554         2.Any other natural emergency as defined in s. 252.34(8)
  555  which impacts one or more counties and is the subject of a
  556  declared state of emergency by any local, state, or federal
  557  authority, if such temporary suspension applies only to the
  558  affected counties and ceases within 72 hours after such natural
  559  emergency is no longer present in those counties.
  560         (b)Require such insurers to obtain the approval of the
  561  office before temporarily suspending writing new residential
  562  property insurance policies in this state.
  563         (2)The commission may adopt rules to administer this
  564  section.
  565         Section 8. Section 624.805, Florida Statutes, is created to
  566  read:
  567         624.805 Hazardous insurer standards; office’s evaluation
  568  and enforcement authority; immediate final order.—
  569         (1)In determining whether the continued operation of any
  570  authorized insurer transacting business in this state may be
  571  deemed to be hazardous to its policyholders or creditors or to
  572  the general public, the office may consider, in the totality of
  573  the circumstances of such insurer, any of the following:
  574         (a)Adverse findings reported in financial condition or
  575  market conduct examination reports, audit reports, or actuarial
  576  opinions, reports, or summaries.
  577         (b)The National Association of Insurance Commissioners
  578  Insurance Regulatory Information System and its other financial
  579  analysis solvency tools and reports.
  580         (c)Whether the insurer has made adequate provisions,
  581  according to presently accepted actuarial standards of practice,
  582  for the anticipated cash flows required to cover its contractual
  583  obligations and related expenses.
  584         (d)The ability of an assuming reinsurer to perform and
  585  whether the insurer’s reinsurance program provides sufficient
  586  protection for the insurer’s remaining surplus after taking into
  587  account the insurer’s cash flow and the lines of insurance
  588  written, as well as the financial condition of the assuming
  589  reinsurer.
  590         (e)Whether the insurer’s operating loss in the last 12
  591  month period, including, but not limited to, net capital gain or
  592  loss, change in nonadmitted assets, and cash dividends paid to
  593  shareholders is greater than 50 percent of the insurer’s
  594  remaining surplus as regards policyholders in excess of the
  595  minimum required.
  596         (f)Whether the insurer’s operating loss in the last 12
  597  month period, excluding net capital gains, is greater than 20
  598  percent of the insurer’s remaining surplus as regards
  599  policyholders in excess of the minimum required.
  600         (g)Whether a reinsurer, an obligor, or any entity within
  601  the insurer’s insurance holding company system is insolvent,
  602  threatened with insolvency, or delinquent in payment of its
  603  monetary or other obligations, and which in the opinion of the
  604  office may affect the solvency of the insurer.
  605         (h)Contingent liabilities, pledges, or guaranties that
  606  individually or collectively involve a total amount that in the
  607  opinion of the office may affect the solvency of the insurer.
  608         (i)Whether any affiliate, as defined in s. 624.10(1), of
  609  the insurer is delinquent in the transmitting to, or payment of,
  610  net premiums to the insurer.
  611         (j)The age and collectability of receivables.
  612         (k)Whether the management of the insurer, including
  613  officers, directors, or any other person who directly or
  614  indirectly controls the operation of the insurer, fails to
  615  possess and demonstrate the competence, fitness, and reputation
  616  deemed necessary to serve the insurer in such position.
  617         (l)Whether management of the insurer has failed to respond
  618  to inquiries relative to the condition of the insurer or has
  619  furnished false or misleading information to the office
  620  concerning an inquiry.
  621         (m)Whether the insurer has failed to meet financial and
  622  holding company filing requirements in the absence of a reason
  623  satisfactory to the office.
  624         (n)Whether management of the insurer has filed any false
  625  or misleading sworn financial statement, has released a false or
  626  misleading financial statement to lending institutions or to the
  627  general public, has made a false or misleading entry, or has
  628  omitted an entry of material amount in the books of the insurer.
  629         (o)Whether the insurer has grown so rapidly and to such an
  630  extent that it lacks adequate financial and administrative
  631  capacity to meet its obligations in a timely manner.
  632         (p)Whether the insurer has experienced, or will experience
  633  in the foreseeable future, cash flow or liquidity problems.
  634         (q)Whether management has established reserves that do not
  635  comply with minimum standards established by state insurance
  636  laws and regulations, statutory accounting standards, sound
  637  actuarial principles, and standards of practice.
  638         (r)Whether management persistently engages in material
  639  under-reserving that results in adverse development.
  640         (s)Whether transactions among affiliates, subsidiaries, or
  641  controlling persons for which the insurer receives assets or
  642  capital gains, or both, do not provide sufficient value,
  643  liquidity, or diversity to assure the insurer’s ability to meet
  644  its outstanding obligations as they mature.
  645         (t)The ratio of the annual premium volume to surplus or of
  646  its liabilities to surplus in relation to loss experience, the
  647  kinds of risks insured, or both.
  648         (u)Whether the insurer’s asset portfolio, when viewed in
  649  light of current economic conditions and indications of
  650  financial or operational leverage, is of sufficient value,
  651  liquidity, or diversity to assure the company’s ability to meet
  652  its outstanding obligations as they mature.
  653         (v)Whether the excess of surplus as regards policyholders
  654  above the insurer’s statutorily required surplus as regards
  655  policyholders has decreased by more than 50 percent in the
  656  preceding 12-month period.
  657         (w)As to a residential property insurer, whether it has
  658  sufficient capital, surplus, and reinsurance to withstand
  659  significant weather events, including, but not limited to,
  660  hurricanes.
  661         (x) Whether the insurer’s required surplus, capital, or
  662  capital stock is impaired to an extent prohibited by law.
  663         (y) Whether the insurer continues to write new business
  664  when it has not maintained the required surplus or capital.
  665         (z) Whether the insurer moves to dissolve or liquidate
  666  without first having made provisions satisfactory to the office
  667  for liabilities arising from insurance policies issued by the
  668  insurer.
  669         (aa)Whether the insurer has incurred substantial new debt,
  670  has had to rely on frequent or substantial capital infusions, or
  671  has a highly leveraged balance sheet.
  672         (bb)Whether the insurer relies increasingly on other
  673  entities, including, but not limited to, affiliates, third-party
  674  administrators, managing general agents, or management
  675  companies.
  676         (cc) Whether the insurer meets one or more of the grounds
  677  in s. 631.051 for the appointment of the department as receiver.
  678         (dd)Any other finding determined by the office to be
  679  hazardous to the insurer’s policyholders or creditors or to the
  680  general public.
  681         (2)For the purposes of making a determination of an
  682  insurer’s financial condition under the Florida Insurance Code,
  683  the office may:
  684         (a)Disregard any credit or amount receivable resulting
  685  from transactions with a reinsurer that is insolvent, impaired,
  686  or otherwise subject to a delinquency proceeding;
  687         (b)Make appropriate adjustments, including disallowance to
  688  asset values attributable to investments in or transactions with
  689  parents, subsidiaries, or affiliates, consistent with the
  690  National Association of Insurance Commissioners Accounting
  691  Practices and Procedures Manual and state laws and rules;
  692         (c)Refuse to recognize the stated value of accounts
  693  receivable if the ability to collect receivables is highly
  694  speculative in view of the age of the account or the financial
  695  condition of the debtor; or
  696         (d)Increase the insurer’s liability, in an amount equal to
  697  any contingent liability, pledge, or guarantee not otherwise
  698  included, if there is a substantial risk that the insurer will
  699  be called upon to meet the obligation undertaken within the next
  700  12-month period.
  701         (3)If the office determines that the continued operations
  702  of an insurer authorized to transact business in this state may
  703  be hazardous to its policyholders or creditors or to the general
  704  public, the office may issue an order requiring the insurer to
  705  do any of the following:
  706         (a)Reduce the total amount of present and potential
  707  liability for policy benefits by procuring additional
  708  reinsurance.
  709         (b)Reduce, suspend, or limit the volume of business being
  710  accepted or renewed.
  711         (c)Reduce expenses by specified methods or amounts.
  712         (d)Increase the insurer’s capital and surplus.
  713         (e)Suspend or limit the declaration and payment of
  714  dividends by an insurer to its stockholders or to its
  715  policyholders.
  716         (f)File reports in a form acceptable to the office
  717  concerning the market value of the insurer’s assets.
  718         (g)Limit or withdraw from certain investments or
  719  discontinue certain investment practices to the extent the
  720  office deems necessary.
  721         (h)Document the adequacy of premium rates in relation to
  722  the risks insured.
  723         (i)File, in addition to regular annual statements, interim
  724  financial reports on a form prescribed by the commission and
  725  adopted by the National Association of Insurance Commissioners.
  726         (j)Correct corporate governance practice deficiencies and
  727  adopt and use governance practices acceptable to the office.
  728         (k)Provide a business plan acceptable to the office in
  729  order to continue to transact business in this state.
  730         (l)Notwithstanding any other law limiting the frequency or
  731  amount of rate adjustments, adjust rates for any non-life
  732  insurance product written by the insurer which the office
  733  considers necessary to improve the financial condition of the
  734  insurer.
  735         (4)This section may not be interpreted to limit the powers
  736  granted to the office by any laws of this state, nor may it be
  737  interpreted to supersede any laws of this state.
  738         (5)The office may, pursuant to ss. 120.569 and 120.57, in
  739  its discretion and without advance notice or hearing, issue an
  740  immediate final order to any insurer requiring the actions
  741  listed in subsection (3).
  742         Section 9. Subsection (11) of section 624.81, Florida
  743  Statutes, is amended to read:
  744         624.81 Notice to comply with written requirements of
  745  office; noncompliance.—
  746         (11) The commission may adopt rules to define standards of
  747  hazardous financial condition and corrective action
  748  substantially similar to that indicated in the National
  749  Association of Insurance Commissioners’ 1997 “Model Regulation
  750  to Define Standards and Commissioner’s Authority for Companies
  751  Deemed to be in Hazardous Financial Condition,” which are
  752  necessary to implement the provisions of this part.
  753         Section 10. Section 624.865, Florida Statutes, is created
  754  to read:
  755         624.865 Rulemaking.—The commission may adopt rules to
  756  administer ss. 624.80-624.87. Such rules must protect the
  757  interests of insureds, claimants, insurers, and the public.
  758         Section 11. Paragraph (d) of subsection (2) and paragraph
  759  (b) of subsection (3) of section 628.8015, Florida Statutes, are
  760  amended to read:
  761         628.8015 Own-risk and solvency assessment; corporate
  762  governance annual disclosure.—
  763         (2) OWN-RISK AND SOLVENCY ASSESSMENT.—
  764         (d) Exemption.—
  765         1. An insurer is exempt from the requirements of this
  766  subsection if:
  767         a. The insurer has annual direct written and unaffiliated
  768  assumed premium, including international direct and assumed
  769  premium, but excluding premiums reinsured with the Federal Crop
  770  Insurance Corporation and the National Flood Insurance Program,
  771  of less than $500 million; or
  772         b. The insurer is a member of an insurance group and the
  773  insurance group has annual direct written and unaffiliated
  774  assumed premium, including international direct and assumed
  775  premium, but excluding premiums reinsured with the Federal Crop
  776  Insurance Corporation and the National Flood Insurance Program,
  777  of less than $1 billion.
  778         2. If an insurer is:
  779         a. Exempt under sub-subparagraph 1.a., but the insurance
  780  group of which the insurer is a member is not exempt under sub
  781  subparagraph 1.b., the ORSA summary report must include every
  782  insurer within the insurance group. The insurer may satisfy this
  783  requirement by submitting more than one ORSA summary report for
  784  any combination of insurers if any combination of reports
  785  includes every insurer within the insurance group.
  786         b. Not exempt under sub-subparagraph 1.a., but the
  787  insurance group of which it is a member is exempt under sub
  788  subparagraph 1.b., the insurer must submit to the office the
  789  ORSA summary report applicable only to that insurer.
  790         3. The office may require an exempt insurer to maintain a
  791  risk management framework, conduct an ORSA, and file an ORSA
  792  summary report:
  793         a. Based on unique circumstances, including, but not
  794  limited to, the type and volume of business written, ownership
  795  and organizational structure, federal agency requests, and
  796  international supervisor requests;
  797         b. If the insurer has risk-based capital for a company
  798  action level event pursuant to s. 624.4085(3), meets one or more
  799  of the standards of an insurer deemed to be in hazardous
  800  financial condition under s. 624.805 as defined in rules adopted
  801  by the commission pursuant to s. 624.81(11), or exhibits
  802  qualities of an insurer in hazardous financial condition as
  803  determined by the office; or
  804         c. If the office determines it is in the best interest of
  805  the state.
  806         4. If an exempt insurer becomes disqualified for an
  807  exemption because of changes in premium as reported on the most
  808  recent annual statement of the insurer or annual statements of
  809  the insurers within the insurance group of which the insurer is
  810  a member, the insurer must comply with the requirements of this
  811  section effective 1 year after the year in which the insurer
  812  exceeded the premium thresholds.
  813         (3) CORPORATE GOVERNANCE ANNUAL DISCLOSURE.—
  814         (b) Disclosure requirement.—
  815         1.a. An insurer, or insurer member of an insurance group,
  816  of which the office is the lead state regulator, as determined
  817  by the procedures in the most recent National Association of
  818  Insurance Commissioners Financial Analysis Handbook, shall
  819  submit a corporate governance annual disclosure to the office by
  820  June 1 of each calendar year. The initial corporate governance
  821  annual disclosure must be submitted by December 31, 2018.
  822         b. An insurer or insurance group not required to submit a
  823  corporate governance annual disclosure under sub-subparagraph a.
  824  shall do so at the request of the office, but not more than once
  825  per calendar year. The insurer or insurance group shall notify
  826  the office of the proposed submission date within 30 days after
  827  the request of the office.
  828         c. Before December 31, 2018, the office may require an
  829  insurer or insurance group to provide a corporate governance
  830  annual disclosure:
  831         (I) Based on unique circumstances, including, but not
  832  limited to, the type and volume of business written, the
  833  ownership and organizational structure, federal agency requests,
  834  and international supervisor requests;
  835         (II) If the insurer has risk-based capital for a company
  836  action level event pursuant to s. 624.4085(3), meets one or more
  837  of the standards of an insurer deemed to be in hazardous
  838  financial condition under s. 624.805 as defined in rules adopted
  839  pursuant to s. 624.81(11), or exhibits qualities of an insurer
  840  in hazardous financial condition as determined by the office;
  841         (III) If the insurer is the member of an insurer group of
  842  which the office acts as the lead state regulator as determined
  843  by the procedures in the most recent National Association of
  844  Insurance Commissioners Financial Analysis Handbook; or
  845         (IV) If the office determines that it is in the best
  846  interest of the state.
  847         2. The chief executive officer or corporate secretary of
  848  the insurer or the insurance group must sign the corporate
  849  governance annual disclosure attesting that, to the best of his
  850  or her knowledge and belief, the insurer has implemented the
  851  corporate governance practices and provided a copy of the
  852  disclosure to the board of directors or the appropriate board
  853  committee.
  854         3.a. Depending on the structure of its system of corporate
  855  governance, the insurer or insurance group may provide corporate
  856  governance information at one of the following levels:
  857         (I) The ultimate controlling parent level;
  858         (II) An intermediate holding company level; or
  859         (III) The individual legal entity level.
  860         b. The insurer or insurance group may make the corporate
  861  governance annual disclosure at:
  862         (I) The level used to determine the risk appetite of the
  863  insurer or insurance group;
  864         (II) The level at which the earnings, capital, liquidity,
  865  operations, and reputation of the insurer are collectively
  866  overseen and the supervision of those factors is coordinated and
  867  exercised; or
  868         (III) The level at which legal liability for failure of
  869  general corporate governance duties would be placed.
  870  
  871  An insurer or insurance group must indicate the level of
  872  reporting used and explain any subsequent changes in the
  873  reporting level.
  874         4. The review of the corporate governance annual disclosure
  875  and any additional requests for information shall be made
  876  through the lead state as determined by the procedures in the
  877  most recent National Association of Insurance Commissioners
  878  Financial Analysis Handbook.
  879         5. An insurer or insurance group may comply with this
  880  paragraph by cross-referencing other existing relevant and
  881  applicable documents, including, but not limited to, the ORSA
  882  summary report, Holding Company Form B or F filings, Securities
  883  and Exchange Commission proxy statements, or foreign regulatory
  884  reporting requirements, if the documents contain information
  885  substantially similar to the information described in paragraph
  886  (c). The insurer or insurance group shall clearly identify and
  887  reference the specific location of the relevant and applicable
  888  information within the corporate governance annual disclosure
  889  and attach the referenced document if it has not already been
  890  filed with, or made available to, the office.
  891         6. Each year following the initial filing of the corporate
  892  governance annual disclosure, the insurer or insurance group
  893  shall file an amended version of the previously filed corporate
  894  governance annual disclosure indicating changes that have been
  895  made. If changes have not been made in the previously filed
  896  disclosure, the insurer or insurance group should so indicate.
  897         Section 12. Paragraph (c) of subsection (3) of section
  898  626.207, Florida Statutes, is amended to read:
  899         626.207 Disqualification of applicants and licensees;
  900  penalties against licensees; rulemaking authority.—
  901         (3) An applicant who has been found guilty of or has
  902  pleaded guilty or nolo contendere to a crime not included in
  903  subsection (2), regardless of adjudication, is subject to:
  904         (c) A 7-year disqualifying period for all misdemeanors
  905  directly related to the financial services business or any
  906  misdemeanor directly related to any violation of the Florida
  907  Insurance Code.
  908         Section 13. Subsections (2) and (3) of section 626.9521,
  909  Florida Statutes, are amended to read:
  910         626.9521 Unfair methods of competition and unfair or
  911  deceptive acts or practices prohibited; penalties.—
  912         (2) Except as provided in subsection (3), any person who
  913  violates any provision of this part is subject to a fine in an
  914  amount not greater than $12,500 $5,000 for each nonwillful
  915  violation and not greater than $100,000 $40,000 for each willful
  916  violation. Fines under this subsection imposed against an
  917  insurer may not exceed an aggregate amount of $50,000 $20,000
  918  for all nonwillful violations arising out of the same action or
  919  an aggregate amount of $500,000 $200,000 for all willful
  920  violations arising out of the same action. The fines may be
  921  imposed in addition to any other applicable penalty.
  922         (3)(a) If a person violates s. 626.9541(1)(l), the offense
  923  known as “twisting,” or violates s. 626.9541(1)(aa), the offense
  924  known as “churning,” the person commits a misdemeanor of the
  925  first degree, punishable as provided in s. 775.082, and an
  926  administrative fine not greater than $12,500 $5,000 shall be
  927  imposed for each nonwillful violation or an administrative fine
  928  not greater than $187,500 $75,000 shall be imposed for each
  929  willful violation. To impose an administrative fine for a
  930  willful violation under this paragraph, the practice of
  931  “churning” or “twisting” must involve fraudulent conduct.
  932         (b) If a person violates s. 626.9541(1)(ee) by willfully
  933  submitting fraudulent signatures on an application or policy
  934  related document, the person commits a felony of the third
  935  degree, punishable as provided in s. 775.082, and an
  936  administrative fine not greater than $5,000 shall be imposed for
  937  each nonwillful violation or an administrative fine not greater
  938  than $187,500 $75,000 shall be imposed for each willful
  939  violation.
  940         (c) If a person violates any provision of this part and
  941  such violation is related to a covered loss or covered claim
  942  caused by an emergency for which the Governor declared a state
  943  of emergency pursuant to s. 252.36, such person is subject to a
  944  fine in an amount not greater than $25,000 for each nonwillful
  945  violation and not greater than $200,000 for each willful
  946  violation. Fines imposed under this paragraph against an insurer
  947  may not exceed an aggregate amount of $100,000 for all
  948  nonwillful violations arising out of the same action or an
  949  aggregate amount of $1 million for all willful violations
  950  arising out of the same action.
  951         (d) Administrative fines under paragraphs (a) and (b) this
  952  subsection may not exceed an aggregate amount of $125,000
  953  $50,000 for all nonwillful violations arising out of the same
  954  action or an aggregate amount of $625,000 $250,000 for all
  955  willful violations arising out of the same action.
  956         Section 14. Paragraphs (i) and (w) of subsection (1) of
  957  section 626.9541, Florida Statutes, are amended to read:
  958         626.9541 Unfair methods of competition and unfair or
  959  deceptive acts or practices defined.—
  960         (1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE
  961  ACTS.—The following are defined as unfair methods of competition
  962  and unfair or deceptive acts or practices:
  963         (i) Unfair claim settlement practices.—
  964         1. Attempting to settle claims on the basis of an
  965  application, when serving as a binder or intended to become a
  966  part of the policy, or any other material document which was
  967  altered without notice to, or knowledge or consent of, the
  968  insured;
  969         2. A material misrepresentation made to an insured or any
  970  other person having an interest in the proceeds payable under
  971  such contract or policy, for the purpose and with the intent of
  972  effecting settlement of such claims, loss, or damage under such
  973  contract or policy on less favorable terms than those provided
  974  in, and contemplated by, such contract or policy;
  975         3. Committing or performing with such frequency as to
  976  indicate a general business practice any of the following:
  977         a. Failing to adopt and implement standards for the proper
  978  investigation of claims;
  979         b. Misrepresenting pertinent facts or insurance policy
  980  provisions relating to coverages at issue;
  981         c. Failing to acknowledge and act promptly upon
  982  communications with respect to claims;
  983         d. Denying claims without conducting reasonable
  984  investigations based upon available information;
  985         e. Failing to affirm or deny full or partial coverage of
  986  claims, and, as to partial coverage, the dollar amount or extent
  987  of coverage, or failing to provide a written statement that the
  988  claim is being investigated, upon the written request of the
  989  insured within 30 days after proof-of-loss statements have been
  990  completed;
  991         f. Failing to promptly provide a reasonable explanation in
  992  writing to the insured of the basis in the insurance policy, in
  993  relation to the facts or applicable law, for denial of a claim
  994  or for the offer of a compromise settlement;
  995         g. Failing to promptly notify the insured of any additional
  996  information necessary for the processing of a claim;
  997         h. Failing to clearly explain the nature of the requested
  998  information and the reasons why such information is necessary;
  999  or
 1000         i. Failing to pay personal injury protection insurance
 1001  claims within the time periods required by s. 627.736(4)(b). The
 1002  office may order the insurer to pay restitution to a
 1003  policyholder, medical provider, or other claimant, including
 1004  interest at a rate consistent with the amount set forth in s.
 1005  55.03(1), for the time period within which an insurer fails to
 1006  pay claims as required by law. Restitution is in addition to any
 1007  other penalties allowed by law, including, but not limited to,
 1008  the suspension of the insurer’s certificate of authority; or
 1009         j.Altering or amending an insurance adjuster’s report
 1010  without:
 1011         (I)Providing a detailed explanation as to why any change
 1012  that has the effect of reducing the estimate of the loss was
 1013  made; and
 1014         (II)Including on the report or as an addendum to the
 1015  report a detailed list of all changes made to the report and the
 1016  identity of the person who ordered each change; or
 1017         (III)Retaining all versions of the report, and including
 1018  within each such version, for each change made within such
 1019  version of the report, the identity of each person who made or
 1020  ordered such change; or
 1021         4. Failing to pay undisputed amounts of partial or full
 1022  benefits owed under first-party property insurance policies
 1023  within 60 days after an insurer receives notice of a residential
 1024  property insurance claim, determines the amounts of partial or
 1025  full benefits, and agrees to coverage, unless payment of the
 1026  undisputed benefits is prevented by factors beyond the control
 1027  of the insurer as defined in s. 627.70131(5).
 1028         (w) Soliciting or accepting new or renewal insurance risks
 1029  by insolvent or impaired insurer or receipt of certain bonuses
 1030  by an officer or director of an insolvent insurer prohibited;
 1031  penalty.—
 1032         1. Whether or not delinquency proceedings as to the insurer
 1033  have been or are to be initiated, but while such insolvency or
 1034  impairment exists, no director or officer of an insurer, except
 1035  with the written permission of the office, shall authorize or
 1036  permit the insurer to solicit or accept new or renewal insurance
 1037  risks in this state after such director or officer knew, or
 1038  reasonably should have known, that the insurer was insolvent or
 1039  impaired.
 1040         2.Regardless of whether delinquency proceedings as to the
 1041  insurer have been or are to be initiated, but while such
 1042  insolvency or impairment exists, a director or an officer of an
 1043  impaired insurer may not receive a bonus from such insurer, nor
 1044  may such director or officer receive a bonus from a holding
 1045  company or an affiliate that shares common ownership or control
 1046  with such insurer.
 1047         3.As used in this paragraph, the term:
 1048         a.“Bonus” means a payment, in addition to an officer’s or
 1049  a director’s usual compensation, which is in addition to any
 1050  amounts contracted for or otherwise legally due.
 1051         b. “Impaired” includes impairment of capital or surplus, as
 1052  defined in s. 631.011(12) and (13).
 1053         4.2. Any such director or officer, upon conviction of a
 1054  violation of this paragraph, commits is guilty of a felony of
 1055  the third degree, punishable as provided in s. 775.082, s.
 1056  775.083, or s. 775.084.
 1057         Section 15. Subsection (6) of section 626.989, Florida
 1058  Statutes, is amended, and subsection (10) is added to that
 1059  section, to read:
 1060         626.989 Investigation by department or Division of
 1061  Investigative and Forensic Services; compliance; immunity;
 1062  confidential information; reports to division; division
 1063  investigator’s power of arrest.—
 1064         (6)(a) Any person, other than an insurer, agent, or other
 1065  person licensed under the code, or an employee thereof, having
 1066  knowledge or who believes that a fraudulent insurance act or any
 1067  other act or practice which, upon conviction, constitutes a
 1068  felony or a misdemeanor under the code, or under s. 817.234, is
 1069  being or has been committed may send to the Division of
 1070  Investigative and Forensic Services a report or information
 1071  pertinent to such knowledge or belief and such additional
 1072  information relative thereto as the department may request. Any
 1073  professional practitioner licensed or regulated by the
 1074  Department of Business and Professional Regulation, except as
 1075  otherwise provided by law, any medical review committee as
 1076  defined in s. 766.101, any private medical review committee, and
 1077  any insurer, agent, or other person licensed under the code, or
 1078  an employee thereof, having knowledge or who believes that a
 1079  fraudulent insurance act or any other act or practice which,
 1080  upon conviction, constitutes a felony or a misdemeanor under the
 1081  code, or under s. 817.234, is being or has been committed shall
 1082  send to the Division of Investigative and Forensic Services a
 1083  report or information pertinent to such knowledge or belief and
 1084  such additional information relative thereto as the department
 1085  may require.
 1086         (b) The Division of Investigative and Forensic Services
 1087  shall review such information or reports and select such
 1088  information or reports as, in its judgment, may require further
 1089  investigation. It shall then cause an independent examination of
 1090  the facts surrounding such information or report to be made to
 1091  determine the extent, if any, to which a fraudulent insurance
 1092  act or any other act or practice which, upon conviction,
 1093  constitutes a felony or a misdemeanor under the code, or under
 1094  s. 817.234, is being committed.
 1095         (c) The Division of Investigative and Forensic Services
 1096  shall report any alleged violations of law which its
 1097  investigations disclose to the appropriate licensing agency and
 1098  state attorney or other prosecuting agency having jurisdiction,
 1099  including, but not limited to, the statewide prosecutor for
 1100  crimes that impact two or more judicial circuits in this state,
 1101  with respect to any such violation, as provided in s. 624.310.
 1102  If prosecution by the state attorney or other prosecuting agency
 1103  having jurisdiction with respect to such violation is not begun
 1104  within 60 days of the division’s report, The state attorney or
 1105  other prosecuting agency having jurisdiction with respect to
 1106  such violation shall inform the division of any the reasons why
 1107  prosecution of such violation was:
 1108         1.Not begun within 60 days after the division’s report; or
 1109         2.Declined for the lack of prosecution.
 1110         (10)The Division of Investigative and Forensic Services
 1111  Bureau of Insurance Fraud shall prepare and submit a performance
 1112  report to the President of the Senate and the Speaker of the
 1113  House of Representatives by September 1 of each year. The annual
 1114  report must include, but need not be limited to:
 1115         (a) The total number of initial referrals received, cases
 1116  opened, cases presented for prosecution, cases closed, and
 1117  convictions resulting from cases presented for prosecution by
 1118  the Bureau of Insurance Fraud, by type of insurance fraud and
 1119  circuit.
 1120         (b) The number of referrals received from insurers, the
 1121  office, and the Division of Consumer Services of the department,
 1122  and the outcome of those referrals.
 1123         (c) The number of investigations undertaken by the Bureau
 1124  of Insurance Fraud which were not the result of a referral from
 1125  an insurer and the outcome of those referrals.
 1126         (d) The number of investigations that resulted in a
 1127  referral to a regulatory agency and the disposition of those
 1128  referrals.
 1129         (e) The number of cases presented by the Bureau of
 1130  Insurance Fraud which local prosecutors or the statewide
 1131  prosecutor declined to prosecute and the reasons provided for
 1132  declining prosecution.
 1133         (f)A summary of the annual report required under s.
 1134  626.9896.
 1135         (g)The total number of employees assigned to the Bureau of
 1136  Insurance Fraud, delineated by location of staff assigned, and
 1137  the number and location of employees assigned to the Bureau of
 1138  Insurance Fraud who were assigned to work other types of fraud
 1139  cases.
 1140         (h) The average caseload and turnaround time by type of
 1141  case for each investigator.
 1142         (i) The training provided during the year to insurance
 1143  fraud investigators.
 1144         Section 16. Subsections (1), (3), and (4) of section
 1145  627.0629, Florida Statutes, are amended to read:
 1146         627.0629 Residential property insurance; rate filings.—
 1147         (1) It is the intent of the Legislature that insurers
 1148  provide savings to consumers who install or implement windstorm
 1149  damage mitigation techniques, alterations, or solutions to their
 1150  properties to prevent windstorm losses. A rate filing for
 1151  residential property insurance must include actuarially
 1152  reasonable discounts, credits, or other rate differentials, or
 1153  appropriate reductions in deductibles, for properties on which
 1154  fixtures or construction techniques demonstrated to reduce the
 1155  amount of loss in a windstorm have been installed or
 1156  implemented. The fixtures or construction techniques must
 1157  include, but are not limited to, fixtures or construction
 1158  techniques that enhance roof strength, roof covering
 1159  performance, roof-to-wall strength, wall-to-floor-to-foundation
 1160  strength, opening protection, and window, door, and skylight
 1161  strength. Credits, discounts, or other rate differentials, or
 1162  appropriate reductions in deductibles, for fixtures and
 1163  construction techniques that meet the minimum requirements of
 1164  the Florida Building Code must be included in the rate filing.
 1165  The office shall determine the discounts, credits, other rate
 1166  differentials, and appropriate reductions in deductibles that
 1167  reflect the full actuarial value of such revaluation, which may
 1168  be used by insurers in rate filings. Effective October 1, 2023,
 1169  each insurer subject to the requirements of this section must
 1170  provide information on the insurer’s website describing the
 1171  hurricane mitigation discounts available to policyholders. Such
 1172  information must be accessible on, or through a hyperlink
 1173  located on, the home page of the insurer’s website or the
 1174  primary page of the insurer’s website for property insurance
 1175  policyholders or applicants for such coverage in this state. On
 1176  or before January 1, 2025, and every 5 years thereafter, the
 1177  office shall reevaluate and update the fixtures or construction
 1178  techniques demonstrated to reduce the amount of loss in a
 1179  windstorm and the discounts, credits, other rate differentials,
 1180  and appropriate reductions in deductibles that reflect the full
 1181  actuarial value of such fixtures or construction techniques. The
 1182  office shall adopt rules and forms necessitated by such
 1183  reevaluation.
 1184         (3) A rate filing made on or after July 1, 1995, for mobile
 1185  home owner insurance must include appropriate discounts,
 1186  credits, or other rate differentials for mobile homes
 1187  constructed to comply with American Society of Civil Engineers
 1188  Standard ANSI/ASCE 7-88, adopted by the United States Department
 1189  of Housing and Urban Development on July 13, 1994, and that also
 1190  comply with all applicable tie-down requirements provided by
 1191  state law.
 1192         (4) The Legislature finds that separate consideration and
 1193  notice of hurricane insurance premiums will assist consumers by
 1194  providing greater assurance that hurricane premiums are lawful
 1195  and by providing more complete information regarding the
 1196  components of property insurance premiums. Effective January 1,
 1197  1997, A rate filing for residential property insurance shall be
 1198  separated into two components, rates for hurricane coverage and
 1199  rates for all other coverages. A premium notice reflecting a
 1200  rate implemented on the basis of such a filing shall separately
 1201  indicate the premium for hurricane coverage and the premium for
 1202  all other coverages.
 1203         Section 17. Paragraph (ll) is added to subsection (6) of
 1204  section 627.351, Florida Statutes, to read:
 1205         627.351 Insurance risk apportionment plans.—
 1206         (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
 1207         (ll) The corporation may not determine that a risk is
 1208  ineligible for coverage with the corporation solely because such
 1209  risk has unrepaired damage caused by a covered loss that is the
 1210  subject of a claim that has been filed with the Florida
 1211  Insurance Guaranty Association. This paragraph applies to a risk
 1212  until the earlier of 24 months after the date the Florida
 1213  Insurance Guaranty Association began servicing such claim or the
 1214  Florida Insurance Guaranty Association closes the claim.
 1215         Section 18. Subsection (4) of section 627.410, Florida
 1216  Statutes, is amended to read:
 1217         627.410 Filing, approval of forms.—
 1218         (4) The office may, by order, exempt from the requirements
 1219  of this section for so long as it deems proper any insurance
 1220  document or form or type thereof as specified in such order, to
 1221  which, in its opinion, this section may not practicably be
 1222  applied, or the filing and approval of which are, in its
 1223  opinion, not desirable or necessary for the protection of the
 1224  public. The office may not exempt from the requirements of this
 1225  section the insurance documents or forms of any insurer, against
 1226  whom the office enters a final order determining that such
 1227  insurer violated any provision of this code, for a period of 36
 1228  months after the date of such order, and may not be deemed
 1229  approved under subsection (2).
 1230         Section 19. Section 627.4108, Florida Statutes, is created
 1231  to read:
 1232         627.4108 Claims-handling manuals; submission; attestation.—
 1233         (1) Each authorized residential property insurer conducting
 1234  business in this state must create and use a claims-handling
 1235  manual that provides guidelines and procedures and that complies
 1236  with the requirements of this code and, at a minimum, comports
 1237  to usual and customary industry claims-handling practices. Such
 1238  manual must include guidelines and procedures for:
 1239         (a)Initially receiving and acknowledging initial receipt
 1240  of the claim and reviewing and evaluating the claim;
 1241         (b)Communicating with policyholders, beginning with the
 1242  receipt of the claim and continuing until closure of the claim;
 1243         (c)Setting the claim reserve;
 1244         (d)Investigating the claim, including conducting
 1245  inspections of the property that is the subject of the claim;
 1246         (e)Making preliminary estimates and estimates of the
 1247  covered damages to the insured property and communicating such
 1248  estimates to the policyholder;
 1249         (f)The payment, partial payment, or denial of the claim
 1250  and communicating such claim decision to the policyholder;
 1251         (g)Closing claims; and
 1252         (h)Any aspect of the claims-handling process which the
 1253  office determines should be included in the claims-handling
 1254  manual in order to:
 1255         1.Comply with the laws of this state or rules or orders of
 1256  the office or department;
 1257         2.Ensure that the claims-handling manual, at a minimum,
 1258  comports with usual and customary industry claims-handling
 1259  guidelines; or
 1260         3.Protect policyholders of the insurer or the general
 1261  public.
 1262         (2) At any time, the office may request that a residential
 1263  property insurer submit a physical or electronic copy of the
 1264  insurer’s currently applicable, or otherwise specifically
 1265  requested, claims-handling manuals. Upon receiving such a
 1266  request, a residential property insurer must submit to the
 1267  office within 5 business days:
 1268         (a)A true and correct copy of each claims-handling manual
 1269  requested; and
 1270         (b)An attestation, on a form prescribed by the commission,
 1271  that certifies:
 1272         1.That the insurer has provided a true and correct copy of
 1273  each currently applicable, or otherwise specifically requested,
 1274  claims-handling manual; and
 1275         2.The timeframe for which each submitted claims-handling
 1276  manual was or is in effect.
 1277         (3)(a)Annually, each authorized residential property
 1278  insurer must certify and attest, on a form prescribed by the
 1279  commission, that:
 1280         1.Each of the insurer’s current claims-handling manuals
 1281  complies with the requirements of this code and comports to, at
 1282  a minimum, usual and customary industry claims-handling
 1283  practices; and
 1284         2.The insurer maintains adequate resources available to
 1285  implement the requirements of each of its claims-handling
 1286  manuals at all times, including during natural disasters and
 1287  catastrophic events.
 1288         (b)Such attestation must be submitted to the office:
 1289         1. On or before August 1, 2023; and
 1290         2. Annually thereafter, on or before May 1 of each calendar
 1291  year.
 1292         (4)The commission is authorized, and all conditions are
 1293  deemed met, to adopt emergency rules under s. 120.54(4), for the
 1294  purpose of implementing this section. Notwithstanding any other
 1295  law, emergency rules adopted under this section are effective
 1296  for 6 months after adoption and may be renewed during the
 1297  pendency of procedures to adopt permanent rules addressing the
 1298  subject of the emergency rules.
 1299         Section 20. Paragraph (d) of subsection (2) of section
 1300  627.4133, Florida Statutes, is amended to read:
 1301         627.4133 Notice of cancellation, nonrenewal, or renewal
 1302  premium.—
 1303         (2) With respect to any personal lines or commercial
 1304  residential property insurance policy, including, but not
 1305  limited to, any homeowner, mobile home owner, farmowner,
 1306  condominium association, condominium unit owner, apartment
 1307  building, or other policy covering a residential structure or
 1308  its contents:
 1309         (d)1. Upon a declaration of an emergency pursuant to s.
 1310  252.36 and the filing of an order by the Commissioner of
 1311  Insurance Regulation, An authorized insurer may not cancel or
 1312  nonrenew a personal residential or commercial residential
 1313  property insurance policy covering a dwelling or residential
 1314  property located in this state:
 1315         a.For a period of 90 days after the dwelling or
 1316  residential property has been repaired, if such property which
 1317  has been damaged as a result of a hurricane or wind loss that is
 1318  the subject of the declaration of emergency pursuant to s.
 1319  252.36 and the filing of an order by the Commissioner of
 1320  Insurance Regulation for a period of 90 days after the dwelling
 1321  or residential property has been repaired. A structure is deemed
 1322  to be repaired when substantially completed and restored to the
 1323  extent that it is insurable by another authorized insurer that
 1324  is writing policies in this state.
 1325         b.Until the earlier of when the dwelling or residential
 1326  property has been repaired or 1 year after the insurer issues
 1327  the final claim payment, if such property was damaged by any
 1328  covered peril and sub-subparagraph a. does not apply.
 1329         2. However, an insurer or agent may cancel or nonrenew such
 1330  a policy prior to the repair of the dwelling or residential
 1331  property:
 1332         a. Upon 10 days’ notice for nonpayment of premium; or
 1333         b. Upon 45 days’ notice:
 1334         (I) For a material misstatement or fraud related to the
 1335  claim;
 1336         (II) If the insurer determines that the insured has
 1337  unreasonably caused a delay in the repair of the dwelling; or
 1338         (III) If the insurer has paid policy limits.
 1339         3. If the insurer elects to nonrenew a policy covering a
 1340  property that has been damaged, the insurer shall provide at
 1341  least 90 days’ notice to the insured that the insurer intends to
 1342  nonrenew the policy 90 days after the dwelling or residential
 1343  property has been repaired. Nothing in this paragraph shall
 1344  prevent the insurer from canceling or nonrenewing the policy 90
 1345  days after the repairs are complete for the same reasons the
 1346  insurer would otherwise have canceled or nonrenewed the policy
 1347  but for the limitations of subparagraph 1. The Financial
 1348  Services Commission may adopt rules, and the Commissioner of
 1349  Insurance Regulation may issue orders, necessary to implement
 1350  this paragraph.
 1351         4. This paragraph shall also apply to personal residential
 1352  and commercial residential policies covering property that was
 1353  damaged as the result of Hurricane Ian or Hurricane Nicole
 1354  Tropical Storm Bonnie, Hurricane Charley, Hurricane Frances,
 1355  Hurricane Ivan, or Hurricane Jeanne.
 1356         5.For purposes of this paragraph:
 1357         a.A structure is deemed to be repaired when substantially
 1358  completed and restored to the extent that it is insurable by
 1359  another authorized insurer writing policies in this state.
 1360         b.The term insurer” means an authorized insurer.
 1361         Section 21. Paragraph (a) of subsection (10) of section
 1362  627.701, Florida Statutes, is amended to read:
 1363         627.701 Liability of insureds; coinsurance; deductibles.—
 1364         (10)(a) Notwithstanding any other provision of law, an
 1365  insurer issuing a personal lines residential property insurance
 1366  policy may include in such policy a separate roof deductible
 1367  that meets all of the following requirements:
 1368         1. The insurer has complied with the offer requirements
 1369  under subsection (7) regarding a deductible applicable to losses
 1370  from perils other than a hurricane.
 1371         2. The roof deductible may not exceed the lesser of 2
 1372  percent of the Coverage A limit of the policy or 50 percent of
 1373  the cost to replace the roof.
 1374         3. The premium that a policyholder is charged for the
 1375  policy includes an actuarially sound credit or premium discount
 1376  for the roof deductible.
 1377         4. The roof deductible applies only to a claim adjusted on
 1378  a replacement cost basis.
 1379         5. The roof deductible does not apply to any of the
 1380  following events:
 1381         a. A total loss to a primary structure in accordance with
 1382  the valued policy law under s. 627.702 which is caused by a
 1383  covered peril.
 1384         b. A roof loss resulting from a hurricane as defined in s.
 1385  627.4025(2)(c).
 1386         c. A roof loss resulting from a tree fall or other hazard
 1387  that damages the roof and punctures the roof deck.
 1388         d. A roof loss requiring the repair of less than 50 percent
 1389  of the roof.
 1390  
 1391  If a roof deductible is applied, no other deductible under the
 1392  policy may be applied to the loss or to any other loss to the
 1393  property caused by the same covered peril.
 1394         Section 22. Subsection (2) of section 627.70132, Florida
 1395  Statutes, is amended to read:
 1396         627.70132 Notice of property insurance claim.—
 1397         (2) A claim or reopened claim, but not a supplemental
 1398  claim, under an insurance policy that provides property
 1399  insurance, as defined in s. 624.604, including a property
 1400  insurance policy issued by an eligible surplus lines insurer,
 1401  for loss or damage caused by any peril is barred unless notice
 1402  of the claim was given to the insurer in accordance with the
 1403  terms of the policy within 1 year after the date of loss. A
 1404  supplemental claim is barred unless notice of the supplemental
 1405  claim was given to the insurer in accordance with the terms of
 1406  the policy within 18 months after the date of loss. The time
 1407  limitations of this subsection are tolled during any term of
 1408  deployment to a combat zone or combat support posting which
 1409  materially affects the ability of a named insured who is a
 1410  servicemember as defined in s. 250.01 to file a claim,
 1411  supplemental claim, or reopened claim.
 1412         Section 23. Chapter 2022-271, Laws of Florida, shall not be
 1413  construed to impair any right under an insurance contract in
 1414  effect on or before the effective date of that chapter law. To
 1415  the extent that chapter 2022-271, Laws of Florida, affects a
 1416  right under an insurance contract, that chapter law applies to
 1417  an insurance contract issued or renewed after the applicable
 1418  effective date provided by the chapter law. This section is
 1419  intended to clarify existing law and is remedial in nature.
 1420         Section 24. (1)Every residential property insurer and
 1421  every motor vehicle insurer rate filing made or pending with the
 1422  Office of Insurance Regulation on or after July 1, 2023, must
 1423  reflect the projected savings or reduction in claim frequency,
 1424  claim severity, and loss adjustment expenses, including for
 1425  attorney fees, payment of attorney fees to claimants, and any
 1426  other reduction actuarially indicated, due to the combined
 1427  effect of the applicable provisions of chapters 2021-77, 2022
 1428  268, 2022-271, and 2023-15, Laws of Florida, in order to ensure
 1429  that rates for such insurance accurately reflect the risk of
 1430  providing such insurance.
 1431         (2)The Office of Insurance Regulation must consider in its
 1432  review of such rate filings the projected savings or reduction
 1433  in claim frequency, claim severity, and loss adjustment
 1434  expenses, including for attorney fees, payment of attorney fees
 1435  to claimants, and any other reduction actuarially indicated, due
 1436  to the combined effect of the applicable provisions of chapters
 1437  2021-77, 2022-268, 2022-271, and 2023-15, Laws of Florida. The
 1438  office may develop methodology and data that incorporate
 1439  generally accepted actuarial techniques and standards to be used
 1440  in its review of rate filings governed by this section. The
 1441  office may contract with an appropriate vendor to advise the
 1442  office in developing such methodology and data to consider. Such
 1443  methodology and data are not intended to create a mandatory
 1444  minimum rate decrease for all residential property insurers and
 1445  motor vehicle insurers, respectively, but rather to ensure that
 1446  the rates for such coverage meet the requirements of s. 627.062,
 1447  Florida Statutes, and thus are not excessive, inadequate, or
 1448  unfairly discriminatory and allow such insurers a reasonable
 1449  rate of return.
 1450         (3)This section does not apply to rate filings made
 1451  pursuant to s. 627.062(2)(k), Florida Statutes.
 1452         (4)For the 2023-2024 fiscal year, the sum of $500,000 in
 1453  nonrecurring funds is appropriated from the Insurance Regulatory
 1454  Trust Fund in the Department of Financial Services to the Office
 1455  of Insurance Regulation to implement this section.
 1456         Section 25. For the 2023-2024 fiscal year, 18 full-time
 1457  equivalent positions with associated salary rate of 1,116,500
 1458  are authorized and the sum of $1,879,129 in recurring funds and
 1459  $185,086 in nonrecurring funds is appropriated from the
 1460  Insurance Regulatory Trust Fund to the Office of Insurance
 1461  Regulation to implement this act.
 1462         Section 26. For the 2023-2024 fiscal year, seven full-time
 1463  equivalent positions with associated salary rate of 350,000 are
 1464  authorized and the sum of $574,036 in recurring funds and
 1465  $33,467 in nonrecurring funds is appropriated from the Insurance
 1466  Regulatory Trust Fund to the Department of Financial Services to
 1467  implement this act.
 1468         Section 27. This act shall take effect July 1, 2023.