Florida Senate - 2022 SB 1292 By Senator Gruters 23-01096A-22 20221292__ 1 A bill to be entitled 2 An act relating to fraud prevention; amending s. 3 501.165, F.S.; requiring sellers to allow consumers to 4 cancel in a specified manner and by specified means 5 service contracts that have automatic renewal 6 provisions; amending s. 626.854, F.S.; revising 7 maximum fines for public adjusters and public adjuster 8 apprentices for certain violations under a specified 9 circumstance; revising maximum fines for certain 10 violations by certain persons under a specified 11 circumstance; amending s. 626.989, F.S.; redefining 12 the term active; deleting provisions relating to 13 circumstances under which investigations are 14 considered active; authorizing the Department of 15 Financial Services to impose an administrative fine on 16 insurers under certain circumstances; authorizing the 17 Division of Investigative and Forensic Services to 18 adopt certain rules; amending s. 633.112, F.S.; 19 redefining the term active; deleting provisions 20 relating to circumstances under which investigations 21 are considered active; amending s. 633.126, F.S.; 22 authorizing the department to impose an administrative 23 fine on insurance companies under certain 24 circumstances; deleting criminal penalties; 25 authorizing the division to adopt certain rules; 26 amending s. 634.095, F.S.; revising requirements for 27 advertisements issued or caused to be issued by 28 service agreement companies or salespersons; amending 29 s. 775.15, F.S.; revising felony violations for which 30 prosecutions must be commenced within a specified 31 timeframe; amending s. 817.234, F.S.; providing that 32 certain insurers are entitled to recover specified 33 expenses at the trial and appellate courts under 34 certain circumstances; providing effective dates. 35 36 Be It Enacted by the Legislature of the State of Florida: 37 38 Section 1.Subsection (2) of section 501.165, Florida 39 Statutes, is amended to read: 40 501.165Automatic renewal of service contracts. 41 (2)SERVICE CONTRACTS WITH AUTOMATIC RENEWAL PROVISIONS. 42 (a)A Any seller that sells, leases, or offers to sell or 43 lease any service to a consumer pursuant to a service contract 44 that has an automatic renewal provision, unless the consumer 45 cancels that contract, shall disclose the automatic renewal 46 provision clearly and conspicuously in the contract or contract 47 offer. 48 (b)A Any seller that sells or offers to sell any service 49 to a consumer pursuant to a service contract the term of which 50 is a specified period of 12 months or more and that 51 automatically renews for a specified period of more than 1 52 month, unless the consumer cancels the contract, shall provide 53 the consumer with written or electronic notification of the 54 automatic renewal provision. Notification shall be provided to 55 the consumer no less than 30 days or no more than 60 days before 56 the cancellation deadline pursuant to the automatic renewal 57 provision. Such notification shall disclose clearly and 58 conspicuously: 59 1.That unless the consumer cancels the contract the 60 contract will automatically renew. 61 2.Methods by which the consumer may obtain details of the 62 automatic renewal provision and cancellation procedure, whether 63 by contacting the seller at a specified telephone number or 64 address, by referring to the contract, or by any other method. 65 (c)A seller that fails to comply with the requirements of 66 this subsection violates is in violation of this subsection 67 unless the seller demonstrates that: 68 1.As part of the sellers routine business practice, the 69 seller has established and implemented written procedures to 70 comply with this section and enforces compliance with the 71 procedures; 72 2.Any failure to comply with this subsection is the result 73 of error; and 74 3.As part of the sellers routine business practice, where 75 an error has caused the failure to comply with this subsection, 76 the unearned portion of the contract subject to the automatic 77 renewal provision is refunded as of the date on which the seller 78 is notified of the error. 79 (d)A seller shall allow a consumer to cancel a service 80 contract that has an automatic renewal provision in the same 81 manner, and by the same means, as the service contract was 82 entered into. 83 (e)This subsection does not apply to: 84 1.A financial institution as defined in s. 655.005 or any 85 depository institution as defined in 12 U.S.C. s. 1813(c)(2). 86 2.A foreign bank maintaining a branch or agency licensed 87 under the laws of any state of the United States. 88 3.Any subsidiary or affiliate of an entity described in 89 subparagraph 1. or subparagraph 2. 90 4.A health studio as defined in s. 501.0125. 91 5.Any entity licensed under chapter 624, chapter 627, 92 chapter 634, chapter 636, or chapter 641. 93 6.Any electric utility as defined in s. 366.02. 94 7.Any private company as defined in s. 180.05 providing 95 services described in chapter 180 which is competing against a 96 governmental entity or has a governmental entity providing 97 billing services on its behalf. 98 (f)(e)A violation of this subsection renders the automatic 99 renewal provision void and unenforceable. 100 Section 2.Paragraphs (b) and (c) of subsection (22) of 101 section 626.854, Florida Statutes, are amended, and paragraph 102 (a) of that subsection is republished, to read: 103 626.854Public adjuster defined; prohibitions.The 104 Legislature finds that it is necessary for the protection of the 105 public to regulate public insurance adjusters and to prevent the 106 unauthorized practice of law. 107 (22)(a)Any following act by a public adjuster, a public 108 adjuster apprentice, or a person acting on behalf of a public 109 adjuster or public adjuster apprentice is prohibited and shall 110 result in discipline as applicable under this part: 111 1.Offering to a residential property owner a rebate, gift, 112 gift card, cash, coupon, waiver of any insurance deductible, or 113 any other thing of value in exchange for: 114 a.Allowing a contractor, a public adjuster, a public 115 adjuster apprentice, or a person acting on behalf of a public 116 adjuster or public adjuster apprentice to conduct an inspection 117 of the residential property owners roof; or 118 b.Making an insurance claim for damage to the residential 119 property owners roof. 120 2.Offering, delivering, receiving, or accepting any 121 compensation, inducement, or reward for the referral of any 122 services for which property insurance proceeds would be used for 123 roofing repairs or replacement. 124 (b)Notwithstanding the fine set forth in s. 626.8698, a 125 public adjuster or public adjuster apprentice may be subject to 126 a fine not to exceed $10,000 per act for a violation of this 127 subsection and a fine not to exceed $20,000 per act for a 128 violation of this subsection that occurs during a state of 129 emergency declared by executive order or proclamation of the 130 Governor pursuant to s. 252.36. 131 (c)A person who engages in an act prohibited by this 132 subsection and who is not a public adjuster or a public adjuster 133 apprentice, or is not otherwise exempt from licensure, is guilty 134 of the unlicensed practice of public adjusting and may be: 135 1.Subject to all applicable penalties set forth in this 136 part. 137 2.Notwithstanding subparagraph 1., subject to a fine not 138 to exceed $10,000 per act for a violation of this subsection and 139 a fine not to exceed $20,000 per act for a violation of this 140 subsection that occurs during a state of emergency declared by 141 executive order or proclamation of the Governor pursuant to s. 142 252.36. 143 Section 3.Present subsections (7), (8), and (9) of section 144 626.989, Florida Statutes, are redesignated as subsections (9), 145 (10), and (11), respectively, new subsections (7) and (8) and 146 subsection (12) are added to that section, and subsections (5) 147 and (6) of that section are amended, to read: 148 626.989Investigation by department or Division of 149 Investigative and Forensic Services; compliance; immunity; 150 confidential information; reports to division; division 151 investigators power of arrest. 152 (5)The offices and the departments papers, documents, 153 reports, or evidence relative to the subject of an investigation 154 under this section are confidential and exempt from the 155 provisions of s. 119.07(1) until such investigation is completed 156 or ceases to be active. For purposes of this subsection, the 157 term an investigation is considered active has the same 158 meaning as in s. 119.011(3)(d) while the investigation is being 159 conducted by the office or department with a reasonable, good 160 faith belief that it could lead to the filing of administrative, 161 civil, or criminal proceedings. An investigation does not cease 162 to be active if the office or department is proceeding with 163 reasonable dispatch and has a good faith belief that action 164 could be initiated by the office or department or other 165 administrative or law enforcement agency. After an investigation 166 is completed or ceases to be active, portions of records 167 relating to the investigation shall remain exempt from the 168 provisions of s. 119.07(1) if disclosure would: 169 (a)Jeopardize the integrity of another active 170 investigation; 171 (b)Impair the safety and soundness of an insurer; 172 (c)Reveal personal financial information; 173 (d)Reveal the identity of a confidential source; 174 (e)Defame or cause unwarranted damage to the good name or 175 reputation of an individual or jeopardize the safety of an 176 individual; or 177 (f)Reveal investigative techniques or procedures. Further, 178 such papers, documents, reports, or evidence relative to the 179 subject of an investigation under this section shall not be 180 subject to discovery until the investigation is completed or 181 ceases to be active. Office, department, or division 182 investigators shall not be subject to subpoena in civil actions 183 by any court of this state to testify concerning any matter of 184 which they have knowledge pursuant to a pending insurance fraud 185 investigation by the division. 186 (6)Any person, other than an insurer, agent, or other 187 person licensed under the code, or an employee thereof, having 188 knowledge or who believes that a fraudulent insurance act or any 189 other act or practice which, upon conviction, constitutes a 190 felony or a misdemeanor under the code, or under s. 817.234, is 191 being or has been committed may send to the Division of 192 Investigative and Forensic Services a report or information 193 pertinent to such knowledge or belief and such additional 194 information relative thereto as the department may request. Any 195 professional practitioner licensed or regulated by the 196 Department of Business and Professional Regulation, except as 197 otherwise provided by law, any medical review committee as 198 defined in s. 766.101, any private medical review committee, and 199 any insurer, agent, or other person licensed under the code, or 200 an employee thereof, having knowledge or who believes that a 201 fraudulent insurance act or any other act or practice which, 202 upon conviction, constitutes a felony or a misdemeanor under the 203 code, or under s. 817.234, is being or has been committed shall 204 send to the Division of Investigative and Forensic Services a 205 report or information pertinent to such knowledge or belief and 206 such additional information relative thereto as the department 207 may require. 208 (7)If an insurer fails or otherwise refuses to comply with 209 this section, the department may impose an administrative fine 210 of not more than $2,000 per day for such failure until the 211 department deems the insurer to be in compliance. 212 (8)The Division of Investigative and Forensic Services 213 shall review such information or reports and select such 214 information or reports as, in its judgment, may require further 215 investigation. It shall then cause an independent examination of 216 the facts surrounding such information or report to be made to 217 determine the extent, if any, to which a fraudulent insurance 218 act or any other act or practice which, upon conviction, 219 constitutes a felony or a misdemeanor under the code, or under 220 s. 817.234, is being committed. The Division of Investigative 221 and Forensic Services shall report any alleged violations of law 222 which its investigations disclose to the appropriate licensing 223 agency and state attorney or other prosecuting agency having 224 jurisdiction with respect to any such violation, as provided in 225 s. 624.310. If prosecution by the state attorney or other 226 prosecuting agency having jurisdiction with respect to such 227 violation is not begun within 60 days of the divisions report, 228 the state attorney or other prosecuting agency having 229 jurisdiction with respect to such violation shall inform the 230 division of the reasons for the lack of prosecution. 231 (12)The Division of Investigative and Forensic Services 232 may adopt reasonable rules as are necessary to administer this 233 section. Such rules must meet all of the following requirements: 234 (a)They may not enlarge upon or extend the provisions of 235 this section. 236 (b)They must identify specific factors that determine the 237 grades of penalty. 238 (c)They must specify mitigating and aggravating factors 239 for a violation of this section. 240 Section 4.Subsection (7) of section 633.112, Florida 241 Statutes, is amended to read: 242 633.112State Fire Marshal; hearings; investigations; 243 recordkeeping and reports; subpoenas of witnesses; orders of 244 circuit court. 245 (7)The State Fire Marshal shall keep a record of all fires 246 and explosions occurring in this state upon which she or he had 247 caused an investigation to be made and all facts concerning the 248 same. These records, obtained or prepared by the State Fire 249 Marshal pursuant to her or his investigation, include documents, 250 papers, letters, maps, diagrams, tapes, photographs, films, 251 sound recordings, and evidence. These records are confidential 252 and exempt from the provisions of s. 119.07(1) until the 253 investigation is completed or ceases to be active. For purposes 254 of this section, the term an investigation is considered 255 active has the same meaning as in s. 119.011(3)(d) while such 256 investigation is being conducted by the department with a 257 reasonable, good faith belief that it may lead to the filing of 258 administrative, civil, or criminal proceedings. An investigation 259 does not cease to be active if the department is proceeding with 260 reasonable dispatch, and there is a good faith belief that 261 action may be initiated by the department or other 262 administrative or law enforcement agency. Further, these 263 documents, papers, letters, maps, diagrams, tapes, photographs, 264 films, sound recordings, and evidence relative to the subject of 265 an investigation are shall not be subject to subpoena until the 266 investigation is completed or ceases to be active, unless the 267 State Fire Marshal consents. These records shall be made daily 268 from the reports furnished the State Fire Marshal by her or his 269 agents or others. 270 Section 5.Subsection (9) of section 633.126, Florida 271 Statutes, is amended, subsection (10) is added to that section, 272 and subsection (2) of that section is republished, to read: 273 633.126Investigation of fraudulent insurance claims and 274 crimes; immunity of insurance companies supplying information. 275 (2)If an insurance company has reason to suspect that a 276 fire or explosion loss to its insureds real or personal 277 property was caused by intentional means, the company shall 278 notify the State Fire Marshal and shall furnish her or him with 279 all material acquired by the company during its investigation. 280 The State Fire Marshal may adopt rules to implement this 281 subsection. 282 (9)If an insurance company fails or otherwise refuses to 283 comply with this section, the department may impose an 284 administrative fine of not more than $2,000 per day for such 285 failure until the department deems the insurance company to be 286 in compliance A person who willfully violates this section 287 commits a misdemeanor of the first degree, punishable as 288 provided in s. 775.082 or s. 775.083. 289 (10)The Division of Investigative and Forensic Services 290 may adopt reasonable rules as are necessary to administer this 291 section. Such rules must meet all of the following requirements: 292 (a)They may not enlarge upon or extend the provisions of 293 this section. 294 (b)They must identify specific factors that determine the 295 grades of penalty. 296 (c)They must specify mitigating and aggravating factors 297 for a violation of this section. 298 Section 6.Effective January 1, 2023, present paragraphs 299 (b), (c), and (d) of subsection (3) of section 634.095, Florida 300 Statutes, are redesignated as paragraphs (d), (e), and (f), 301 respectively, new paragraphs (b) and (c) are added to that 302 subsection, and paragraph (a) of that subsection is amended, to 303 read: 304 634.095Prohibited acts.Any service agreement company or 305 salesperson that engages in one or more of the following acts 306 is, in addition to any applicable denial, suspension, 307 revocation, or refusal to renew or continue any appointment or 308 license, guilty of a misdemeanor of the second degree, 309 punishable as provided in s. 775.082 or s. 775.083: 310 (3)Issuing or causing to be issued any advertisement that 311 which: 312 (a)Does not fully disclose in a written advertisement, in 313 at least 12-point, boldface boldfaced type, the name, address, 314 and Florida Company Code license number of the service agreement 315 company. 316 (b)Does not fully disclose in a radio or television 317 advertisement the full legal name of the licensed salesperson or 318 the service agreement company. 319 (c)Does not fully identify the soliciting licensed 320 salespersons full legal name and license number when the 321 salesperson begins, and the soliciting salespersons telephone 322 number when the salesperson concludes, each telephone 323 solicitation. For the purposes of this paragraph, the actual 324 telephone number of the salesperson may be the number on file 325 with the department or the number at which the salesperson may 326 be contacted. 327 Section 7.Subsection (11) of section 775.15, Florida 328 Statutes, is amended to read: 329 775.15Time limitations; general time limitations; 330 exceptions. 331 (11)A prosecution for a felony violation of s. 440.105 or 332 s. 817.234 ss. 440.105 and 817.234 must be commenced within 5 333 years after the violation is committed. 334 Section 8.Subsection (5) of section 817.234, Florida 335 Statutes, is amended to read: 336 817.234False and fraudulent insurance claims. 337 (5)(a)Any insurer damaged as a result of a violation of 338 any provision of this section when there has been a criminal 339 adjudication of guilt shall have a cause of action to recover 340 compensatory damages, plus all reasonable investigation and 341 litigation expenses, including attorney attorneys fees, at the 342 trial and appellate courts. 343 (b)If an insurer damaged as a result of a violation of any 344 provision of this section has reported the possible fraudulent 345 insurance act to the Division of Investigative and Forensic 346 Services pursuant to s. 626.9891 and if there has been a 347 criminal adjudication of guilt, the insurer is entitled to 348 recover reasonable investigation and litigation expenses, 349 including attorney fees, at the trial and appellate courts. 350 Section 9.Except as otherwise expressly provided in this 351 act, this act shall take effect upon becoming a law.