Florida Senate - 2026 SB 234
By Senator Smith
17-00289A-26 2026234__
1 A bill to be entitled
2 An act relating to insurers’ financial transactions;
3 amending s. 624.424, F.S.; requiring certain insurers
4 to annually provide specified information to the
5 Office of Insurance Regulation; defining the term
6 “managing general agent”; requiring the office to
7 contract annually with a specified entity to conduct a
8 review of certain transactions; specifying a
9 requirement of such contract; requiring insurers to
10 post certain information on their websites; specifying
11 that certain information is not considered a trade
12 secret and is subject to public disclosure; creating
13 s. 624.4244, F.S.; prohibiting an insurer from
14 engaging in certain transactions with affiliates;
15 specifying prohibited transactions; prohibiting an
16 insurer from declaring or paying dividends to
17 shareholders or issuing executive bonuses under
18 certain circumstances; providing an effective date.
19
20 Be It Enacted by the Legislature of the State of Florida:
21
22 Section 1. Subsection (13) of section 624.424, Florida
23 Statutes, is amended to read:
24 624.424 Annual statement and other information.—
25 (13)(a) Each insurer doing business in this state which
26 pays a fee, commission, or other financial consideration or
27 payment to any affiliate directly or indirectly shall annually
28 is required upon request to provide to the office all of the
29 following any information: the office deems necessary. The fee,
30 commission, or other financial consideration or payment to any
31 affiliate must be fair and reasonable. In determining whether
32 the fee, commission, or other financial consideration or payment
33 is fair and reasonable, the office shall consider, among other
34 things, the actual cost of the service being provided.
35 1. A description and cost analysis of each service provided
36 by an affiliate, including the actual cost of the service, the
37 amount charged to the insurer, the basis used to determine the
38 amount charged to the insurer, and any profit margin included in
39 the amount charged.
40 2. A benchmarking study demonstrating that the fee,
41 commission, or other financial consideration is comparable to
42 the rates ordinarily payable to vendors independent of and
43 unaffiliated with the insurer.
44 3. The total amount of affiliate fees, commissions, or
45 other financial considerations for the reporting period, whether
46 paid by the insurer or forgiven by the affiliate, reported both
47 in dollars and as a percentage of the insurer’s gross written
48 premiums for that period.
49 4. A certification that the percentage reported in
50 subparagraph 3. does not exceed 20 percent, or a certification
51 that any amount exceeding 20 percent is necessary for the
52 insurer’s operations, including the specific reasons why such
53 fees, commissions, or other financial considerations are
54 necessary. If the percentage reported in subparagraph 3. exceeds
55 20 percent, the insurer must also report the total amount of any
56 dividends and officer and director compensation paid during the
57 same period.
58 (b) As used in this paragraph, the term “managing general
59 agent” has the same meaning as provided in s. 626.015. Each
60 insurer doing business in this state which pays a fee,
61 commission, or other financial consideration or payment to a
62 managing general agent shall annually provide to the office all
63 of the following information:
64 1. The total amount of managing general agent fees,
65 commissions, or other financial considerations for the reporting
66 period, whether paid by the insurer or forgiven by the managing
67 general agent, reported both in dollars and as a percentage of
68 the insurer’s gross written premiums for that period.
69 2. A certification that the percentage reported under
70 subparagraph 1. does not exceed 20 percent, or a certification
71 that any amount exceeding 20 percent is necessary for the
72 insurer’s operations, including the specific reasons why such
73 fees, commissions, or other financial considerations are
74 necessary. If the percentage reported in subparagraph 1. exceeds
75 20 percent, the insurer must also report the total amount of any
76 dividends and officer and director compensation paid during the
77 same period.
78 (c) The office shall contract annually with an independent
79 third-party entity with expertise in insurance regulation to
80 conduct a review of affiliate and managing general agent
81 transactions reported under this subsection. The contract must
82 require submission of a final report to the office by February 1
83 of each year, which report must identify any affiliate and
84 managing general agent transactions that are not fair and
85 reasonable.
86 (d) Insurers shall annually post the information reported
87 under paragraphs (a) and (b) on their websites in a clear and
88 readily accessible format. Information disclosed under
89 paragraphs (a) and (b) is not considered a trade secret and is
90 subject to public disclosure.
91 Section 2. Section 624.4244, Florida Statutes, is created
92 to read:
93 624.4244 Prohibitions relating to affiliate transactions.—
94 (1) An insurer may not engage in any transaction or series
95 of transactions with an affiliate which have the purpose or
96 effect of misrepresenting or misstating the insurer’s financial
97 condition. Prohibited transactions include, but are not limited
98 to, transactions in which an affiliate forgives, waives, or
99 otherwise cancels fees or other amounts owed by the insurer for
100 the purpose or effect of manipulating the insurer’s financial
101 position, or engaging in circular transactions intended to
102 misrepresent the insurer’s financial condition.
103 (2) An insurer may not declare or pay dividends to
104 shareholders or issue executive bonuses if the insurer is in
105 hazardous financial condition, as defined in s. 627.942, or if
106 its financial statements or reports to the office indicate that
107 the insurer’s financial condition has been materially affected
108 by high affiliate fees or expenses.
109 Section 3. This act shall take effect July 1, 2026.