Florida Senate Bill S1874 Analysis / Analysis

                    The Florida Senate 
BILL ANALYSIS AND FISCAL IMPACT STATEMENT 
(This document is based on the provisions contained in the legislation as of the latest date listed below.) 
Prepared By: The Professional Staff of the Committee on Banking and Insurance  
 
BILL: CS/SB 1874 
INTRODUCER:  Banking and Insurance Committee and Senator Boyd  
SUBJECT:  Department of Financial Services 
DATE:   January 27, 2022 
 
 ANALYST STAFF DIRECTOR  REFERENCE  	ACTION 
1. Johnson Knudson BI Fav/CS 
2.     AEG   
3.     AP  
 
I. Summary: 
CS/SB 1874 amends sections of Florida Statutes relating to the powers and duties of the 
Department of Financial Services (DFS). The Chief Financial Officer (CFO) is the head of DFS. 
The SB revises service of process requirements by providing that the service of process is valid 
and binding upon the insurer on the date the process served on the CFO is delivered to the 
insurer, or the insurer has been notified by DFS that such information has made been made 
available on the DFS online portal. In addition, the CS/SB provides the additional changes: 
 
Division of Insurance Agents and Agencies 
 Adds an exemption to the examination requirements for an all-lines adjuster who has 
received the designation of a Certified All Lines Adjuster from Kaplan Financial Education. 
 Authorizes an adjuster who holds an adjuster license and who is an unaffiliated insurance 
agent to obtain an adjuster appointment while maintaining his or her unaffiliated agent 
appointment. This will allow the adjuster to adjust claims and receive compensation. 
 Limits the appointment of public adjuster apprentice to a public adjusting firm may appoint a 
public adjuster apprentice. Currently a public adjuster may also appoint an apprentice. 
 Revises provisions relating to the fingerprinting requirements to comply with federal law. 
 Creates notice requirements for agencies that cease doing business, and creates penalties for 
noncompliance. 
 Increases the authority of DFS to investigate and prosecute violations committed by a 
licensee while licensed under ch. 626, F.S., even if the license has expired, is not renewed, or 
is surrendered. 
 Revises compensation for public adjusters by requiring that the compensation be based on 
the recovery allocated to the insured for covered damage, exclusive of attorney fees and 
costs. 
 
 
REVISED:   BILL: CS/SB 1874   	Page 2 
 
Funeral, Cemetery, and Consumer Services 
 Eliminates the fee cap of $50 for a consumer transferring the burial rights from one purchaser 
to another and revises the licensure requirements for embalmers and funeral directors. 
  
State Fire Marshal 
 Authorizes expenditure of funds from the Firefighter Assistance Grant Program for the  
purchase of other equipment and tools and protective clothing and equipment compliant with 
certain standards. 
 Revises firefighter certification requirements. 
 Revises provisions relating to the inspection of boiler rooms. 
 
Division of Workers’ Compensation 
 Exempts the schedules of maximum reimbursement allowances adopted by the three-member 
panel from rule ratification requirements by the Legislature. 
 Requires a carrier to reimburse a physician, hospital, or ambulatory surgical center at the 
agreed-upon contract price, or if there is no contract price, the lessor of the provider’s billed 
charge or the maximum reimbursement allowance. Currently, the carrier must reimburse at 
the agreed-upon contract price or the maximum reimbursement allowance. 
 Clarifies the definition of employer. 
 Clarifies that an employer applying for an exemption from workers’ compensation coverage 
to provide a valid driver’s license or valid identification card. An applicant is also required to 
complete an online DFS coverage and compliance tutorial as a condition for application. 
 Revises the formula for calculating coverage penalties to reduce the period subject to a 
penalty with exceptions. 
 Provides a penalty credit for an employer who has been issued a stop-work order or an 
enforcement action if the employer successfully completes an online coverage and 
compliance tutorial. 
 Extends the deadline for an employer to provide submit requested business records from 10 
business days to 21 days before DFS can take an administrative action. 
 Requires an employer to pay any outstanding assessed payment prior to entering into a new 
penalty payment program with DFS. 
 Requires the carrier to send an informational brochure to the injured within three business 
days, instead of three days, after the employee or employer notifies the carrier. A carrier is 
authorized to provide informational brochure to an injured worker or an employer by e-mail 
or regular mail. 
 Revises onsite audit requirements for construction classes by requiring such annual audits if 
the estimated annual premium is $10,000 or more. Currently, there is no minimum threshold. 
 
Division of Accounting and Auditing 
 Amends provisions relating to the planning and accounting, ledger management system 
(PALM) and local government financial reporting. 
 
Division of Rehabilitation and Liquidation 
 Provides that employees and retired employees of the Division of Rehabilitation and 
Liquidation or their surviving spouses are enrollees of the state group insurance program. 
  BILL: CS/SB 1874   	Page 3 
 
Florida Patient’s Compensation Fund (Fund) 
 Revises structure and authority of the Fund by eliminating the board of governors of the 
Fund and transferring the supervision of the Fund to the CFO or his or her designee. 
 Prescribes duties of the CFO and DFS to wind down the fund, and to dissolve the fund on or 
before December 31, 2023. 
II. Present Situation: 
The Chief Financial Officer (CFO) is the chief fiscal officer of Florida and is responsible for 
settling and approving accounts against the state and keeping all state funds and securities.
1
 The 
CFO serves as the head of the Department of Financial Services (DFS). Offices and divisions 
within the DFS include: 
 Insurance Consumer Advocate; 
 Accounting and Auditing; 
 Administration; 
 Consumer Services; 
 Funeral, Cemetery, and Consumer Services; 
 Insurance Agent and Agency Services; 
 Investigative and Forensic Services; 
 Public Assistance Fraud; 
 Rehabilitation and Liquidation; 
 Risk Management; 
 State Fire Marshal; 
 Treasury; 
 Unclaimed Property; and  
 Workers’ Compensation.
2
 
 
Division of Accounting and Auditing 
Section 215.93, F.S., establishes the Florida Financial Management Information System 
(FFMIS) for the state. The intent  of the FFMIS is to ensure the efficient operation of an 
integrated financial management information system and to provide necessary information for 
the effective operation of state government.
3
 The Florida Accounting Information Resource 
Subsystem (FLAIR) is the state’s accounting system, and it is a subsystem of the FFMIS.
4
 The 
functions of FLAIR include accounting and reporting of information to producing financial 
statements for the state and auditing and settling claims against the state.
5
 In 2014, DFS created 
the Florida Planning, Accounting, and Ledger Management (PALM) Project to replace the State 
of Florida’s current accounting and cash management systems with an integrated, enterprise 
financial management solution that will allow the state to organize, define, and standardize its 
financial management processes. The Florida PALM Project is a multiyear project.
6
 
                                                
1
 Section 17.001, F.S. 
2
 Florida Department of Financial Services, Divisions and Offices https://www.myfloridacfo.com/ (last visited Jan.17, 2022). 
3
 Section 215.93(1), F.S. 
4
 Section 215.93(10(b), F.S. The DFS is the functional owner of FLAIR. Section 215.94(2), F.S. 
5
 Section 215.94(2), F.S. 
6
 Id.  BILL: CS/SB 1874   	Page 4 
 
 
The Division of Accounting and Auditing, Bureau of Financial Reporting (Bureau), is 
responsible for the oversight of local government financial reports and the Comprehensive 
Annual Financial Reports (CAFR). The Chief Financial Officer is required to publish a CAFR in 
accordance with generally accepted accounting principles (GAAP).
7
 The CAFR includes the 
audited financial statements, other disclosures, and supplementary information, presenting the 
state's financial condition  and results of operations during the fiscal year.
8
 The Government 
Accounting Standards Board (GASB) establishes accounting and financial reporting standards 
for U.S. state and local governments that follow GAAP and. recently changed the term, 
“Comprehensive Annual Financial Report” (CAFR)
9
 to the term, “Annual Comprehensive 
Financial Report” (ACFR).  
 
Chapter 218, F.S., prescribes financial management and reporting requirements for local 
governments, which include counties, municipalities, and special districts. The Division of 
Accounting and Auditing’s website provides resources to assist local governments in fulfilling 
their reporting requirements.
10
 Local governments must submit their annual financial reports 
(AFRs) to DFS t and provide their audited financial statements.
11
 The AFR is available to the 
public in the local government electronic reporting (LOGER).  
 
In 2018,
12
 legislation was enacted to require DFS to create an interactive repository of financial 
statement information, known as the Florida Open Financial Statement System.
13
 This system 
must have standardized taxonomies for state, county, municipal, and special district financial 
filings. The Division of Accounting & Auditing and the Office of Information Technology are 
designing the Florida Open Financial Statement System.
14
 
 
Division of Rehabilitation and Liquidation 
Federal law provides that insurance companies may not file for bankruptcy.
15
 The state, through 
the Division of Rehabilitation (division or receiver), is instead responsible for rehabilitating or 
liquidating an insurer.
16
 States primarily regulate insurance companies, and the state of domicile 
serves as the primary regulator for insurers. The receiver administers insurance companies that 
are placed into receivership in Florida.
17
 
                                                
7
 Section 216.102(3), F.S. 
8
 See Florida’s Comprehensive Annual Financial Report, Fiscal Year ended June 30, 2020, available at Dept. of Fin Serv - 
State of FL CAFR 2020 (myfloridacfo.com) (last viewed Jan. 17, 2022). 
9
 GASB, Statement No. 98, The Annual Comprehensive Financial Report, (Oct. 2021) available at GASB Statement No. 98, 
The Annual Comprehensive Financial Report (last visited Jan. 18, 2022). 
10
 DFS, Division of Accounting and Auditing, Local Governments, available at Local Governments Home 
(myfloridacfo.com) (last visited Jan. 17, 2022). 
11
 Section 218.32, F.S. 
12
 Ch. 2018-102, s. 4, Laws of Fla. 
13
 Section 218.32(1)(h), F.S. 
14
 DFS, Florida Open Financial Statement Project, available at Florida Open Financial Statement System Project 
(myfloridacfo.com) (last visited Jan. 21, 2021). 
15
 The Bankruptcy Code expressly provides that "a domestic insurance company" may not be the subject of a federal 
bankruptcy proceeding. 11 U.S.C. s. 109(b)(2). The exclusion of insurers from the federal bankruptcy court process is 
consistent with federal policy generally allowing states to regulate the business of insurance. See 15 U.S.C. ss. 1011- 1012. 
16
 Sections 631.051 and 631.061, F.S. Chapter 631, F.S., governs the receivership process for insurance companies in Florida. 
17
 Id.  BILL: CS/SB 1874   	Page 5 
 
 
Insurance companies in receivership fund positions within the division. Since these positions are 
not appropriated from state funds, the positions are not state employee positions and are not 
eligible for the state group insurance program.
18
 Because the division must purchase health 
insurance in the small group market, it is unable to leverage the economies of scale, and faces 
yearly premium increases. The division anticipates these increases will continue to occur in the 
future, which ultimately affects the claimants in the receivership estates. The division is a 
participating entity of the Florida Retirement System.
19
 The division also participates in the 
State's Deferred Compensation program.  
 
Division of Funeral, Cemetery, and Consumer Services 
Section 20.121(4), F.S., creates the Board of Funeral, Cemetery, and Consumer Services (board) 
within the Division of Funeral, Cemetery, and Consumer Services of the DFS. The board acts as 
the licensing and rulemaking authority for the purposes of certain matters related to examinations 
and other substantive requirements for licensure within the death care industry under ch. 497, 
F.S., including facility requirements.
20
 
 
Fees 
Current law imposes a maximum charge to consumers of $50 for transference of burial rights 
from one purchaser to another.
21
 
 
Licensure  
There are several options for embalmers or funeral directors to obtain reciprocal licensure in 
Florida.
22
 One method to receive a reciprocal licensure for an embalmer is to hold an original 
licensure in a state that has requirements at the time of initial licensure that are substantially 
equivalent to or more stringent than Florida’s requirements at the same time.
23
 One of the paths 
for a funeral director to obtain a reciprocal licensure in Florida includes the requirement that an 
applicant holds a valid license to practice funeral directing in another state, provided that, when 
the applicant secured her or his original license, the requirements for licensure were substantially 
equivalent to or more stringent than those existing in Florida. 
 
Current law prescribes the scope of practice of funeral directing that a licensed funeral director 
may perform.
24
 These duties include: 
                                                
18
 DFS, Division of Rehabilitation and Liquidation, Human Resources Recruitment and Selection Frequently Asked 
Questions (myfloridacfo.com) (last visited Jan. 17, 2022). 
19
 Id. 
20
 See s. 497.103(1)(a)-(cc), F.S. Licenses available to natural persons include: embalmer apprentice and intern; funeral 
directors and intern; funeral director and embalmer, direct disposer, monument establishment sales agent, and preneed sales 
agent. Section 497.141(12)(a), F.S. Licenses available to natural persons, corporations, limited liability companies, and 
partnerships include: funeral establishment, centralized embalming facility, refrigeration facility, direct disposal 
establishment, monument establishment, cinerator facility, removal service, preneed sales business under s. 497.453, F.S., 
and cemetery. Section 497.141(12)(b)-(c), F.S.  
21
 Section 497.277(2), F.S. 
22
 Section 497.369, F.S. 
23
 Section 497.369 
24
 Section 497.372(1), F.S.  BILL: CS/SB 1874   	Page 6 
 
 Planning or arranging the details of the funeral services; 
 Embalming, cremation, or other services relating to the final disposition of human remains; 
including the removals of such remains from the state; 
 Setting the time of the service;  
 Establishing the type of services to be rendered;  
 Acquiring the services of the clergy;  
 Obtaining vital information for the filing of death certificates and burial transit permits 
 Directing any memorial services that is held prior to or within 72 hours of the burial or 
cremation if such service is old or arranged by the licensee. 
 
Division of Insurance Agents and Agencies 
Chapter 626, F.S., governs the regulation of insurance field representatives, navigators, insurance 
administrators, unauthorized insurers and surplus lines, viatical settlements, structured 
settlements, and operations.
25
 The powers and duties of CFO and DFS in part I of ch. 626, F.S., 
apply only with respect to insurance agents, insurance agencies, managing general agents, 
insurance adjusters, reinsurance intermediaries, customer representatives, service representatives, 
and agencies.
26
 Further, DFS has jurisdiction to enforce provisions of parts VIII and IX of ch. 
626, F.S., with respect to persons engaged in actions for which a license issued by DFS is 
required.
27
 The powers and duties of the Financial Service Commission and the Office of 
Insurance Regulation (OIR)
 28
 specified in part I apply only with respect to service companies, 
insurance administrators, and viatical settlement providers and contracts.
29
 The OIR has 
jurisdiction to enforce provisions of parts VIII and IX of ch. 626, F.S., with respect to persons 
who engage in actions for which a license or certificate of authority issued by the OIR is 
required.
30
 However, s. 626.016, F.S., is not intended to limit the authority of the DFS and the 
Division of Investigative and Forensic Services within DFS, as specified in s. 626.989, F.S. 
 
The Division of Insurance Agent and Agency Services licenses and appoints individuals and 
entities authorized to transact insurance in Florida as provided in s. 626.016, F.S.. Further, the 
division receives and reviews applications for insurance licenses and oversees the examination, 
licensing, and continuing education of licensees. The division also conducts investigations of 
alleged violations of the Florida Insurance Code and refers suspected criminal violations of the 
Florida Insurance Code to the Division of Investigative and Forensic Services' Bureau of 
Insurance Fraud within DFS or other law enforcement agencies as appropriate.
31
  
 
                                                
25
 This includes licensing and other requirements (part I), general lines agents (part II), life insurance agents (part III), health 
insurance agents (part IV), title insurance agents (part V), and insurance adjusters (part VI), insurance administrators (part 
VII), viatical settlements (part X) 
26
 Section 626.016(1), F.S. 
27
 Section 626.016(3), F.S. 
28
 Pursuant to s. 20.121(3), F.S., the Office of Insurance Regulation is an office within the Financial Services Commission 
(FSC). The FSC is composed of the Governor, the Attorney General, the Chief Financial Officer, and the Commissioner of 
Agriculture. The FSC members serve as the agency head for purposes of rulemaking under ss. 120.536-120.565, F.S. 
29
 Section 626.016(2), F.S. 
30
 Sections 626.016(3), F.S. 
31
 Sections 624.307, 624.317, and 624.321, F.S.  BILL: CS/SB 1874   	Page 7 
 
Section 626.112, F.S., states that no person may be, act as, or advertise or hold himself or herself 
out to be an insurance agent, insurance adjuster, customer representative, service representative, 
or managing general agent unless he or she is currently licensed by the department and appointed 
by an appropriate appointing entity or person. All licenses require an appointment with the 
exception of insurance agency licenses. 
 
Agents with Unaffiliated appointments 
According to DFS, unaffiliated appointments were intended to allow a licensee to hold their 
license in good standing, giving the licensee credentials in the knowledge for holding a license, 
without soliciting insurance coverage.
32
 Licensees who do not want or need to maintain an active 
appointment may want to maintain their license so they can provide insurance consultation, can 
appoint themselves as an unaffiliated agent under s.  626.015(18), F.S.
33
  
 
Insurance Adjuster Licensure Examination 
An adjuster is an individual employed by an insurer to evaluate losses and settle policyholder 
claims.
34
 An adjuster may be licensed as either an “all-lines adjuster” or a “public adjuster.”
35
 An 
all-lines adjuster “is a person who, for money, commission, or any other thing of value, directly 
or indirectly undertakes on behalf of a public adjuster or an insurer to ascertain and determine the 
amount of any claim, loss, or damage payable under an insurance contract or undertakes to effect 
settlement of such claim, loss, or damage.”
36
 Subject to certain exceptions, a public adjuster is 
someone that is paid by an insured to prepare and file a claim against his or her insurer.
37
 
 
Among other requirements, an applicant must pass an examination to obtain an adjuster’s 
license; however, the examination requirement is waived if the applicant has attained certain 
professional designations that document their successful completion of professional education 
coursework. An examination is not required for all-lines adjuster applicants that obtains certain 
specified professional designations.
38
 The DFS must approve the curriculum, which must include 
comprehensive analysis of basic property and casualty lines of insurance and testing at least 
equal to that of standard DFS testing for the all-lines adjuster license.
39
  
 
Closure of an Insurance Agency 
Currently an agency is not required to provide notification to a policyholder or premium finance 
company or follow protocols when an agency is closing for an extended period or closing 
permanently. 
 
                                                
32
 Supra at note 50. 
33
 DFS, Division of Agent and Agency Services, Insurance Insights, (Apr.2015), available at Insurance Insights - April 2015 
- Compliance Corner (myfloridacfo.com) (last visited January 17, 2022). 
34
 INSURANCE INFORMATION INSTITUTE, GLOSSARY (defining “adjuster”), https://www.iii.org/resource-center/iii-glossary/A 
(last visited Jan. 21, 2022). 
35
 Section 626.864, F.S. 
36
 Sections 626.015 and 626.8548, F.S. 
37
 Section 626.854, F.S. 
38
 Section 626.221, F.S. 
39
 Section 626.221(2)(j), F.S.  BILL: CS/SB 1874   	Page 8 
 
Division of State Fire Marshal 
The Division of State Fire Marshal protects people and property throughout Florida and has 
authority to inspect buildings, structures, equipment, vehicles and chemicals when there is 
reasonable cause to believe a violation of the Florida Fire Code has occurred.
40
 The Division of 
State Fire Marshal: 
 Conducts safety inspections and reviews construction plans for all state-owned buildings, 
regulates fireworks and the fire sprinkler industry, inspects and licenses boilers, and certifies 
persons working in the fire suppression industry; and 
 Approves curricula and training at the Florida State Fire College and certifies that fire service 
members meet industry standards.
41
 
 
Firefighter Certification 
To be certified as a firefighter, a person must complete a minimum standards course and 
examination established by the State Fire Marshal or show proof of equivalent training in another 
state, and pass an exam within one year of completing the minimum standards course.
42
 
Additionally, the applicant must be in good physical condition, as determined by a medical 
examination, and have good moral character, as determined by a background investigation that 
includes the processing of fingerprints for a national criminal background check.
43
 
 
To serve as an administrative and command head of a fire service provider, or to work in a 
position directing incident outcomes, a certified firefighter must earn a Special Certificate of 
Compliance.
44
 Such person must be active as a firefighter, maintain a valid fire service instructor 
certificate and teach at least 40 hours of instruction during a four-year period, and complete a 
Firefighter Retention Refresher Course prior to expiration of the four-year period.
45
 
 
To renew a certification, a firefighter must: 
 Be active as a firefighter, meaning the certificate holder was employed as a firefighter or 
served as a volunteer firefighter for at least six months during a four-year period; or  
 Hold a fire service instructor certificate and instruct at least 40 hours during a four-year 
period, or  
 Complete a Firefighter Retention Refresher Course during the six months before the four-
year period expires, or 
 Retake and pass the Minimum Standards Course examination during the six months before 
the four-year period expires.
46
 
 
                                                
40
 DFS, Division of State Fire Marshal, available at State Fire Marshal Home (myfloridacfo.com) (last visited Jan. 21, 2022). 
41
 Id. 
42
 Section 633.408(4), F.S. 
43
 Sections 633.408 and 633.412, F.S. 
44
 Section 633.408(6), F.S. 
45
 Id. 
46
 Section 633.414, F.S.  BILL: CS/SB 1874   	Page 9 
 
Firefighter Assistance Grant Program 
The Firefighter Assistance grant was created to improve the emergency response capability of 
volunteer fire departments and combination fire departments.
47
 The program is required to 
provide financial assistance to improve firefighter safety and to enable such fire departments to 
provide firefighting, emergency medical, and rescue services to their communities.
48
 Funding is 
available for training, personal protective equipment, self-contained breathing apparatus, and fire 
engine pumper apparatus.
49
 According to DFS, many of the fire departments that are eligible to 
participate in this grant program are in rural economically challenged areas of the state and have 
limited funding opportunities to purchase additional crucially needed tools and equipment.
50
 
 
Boiler Safety Act 
Chapter 554, F.S., is the “Boiler Safety Act.”
51
 The DFS is authorized to adopt by rule a State 
Boiler Code for the safe construction, installation, inspection, maintenance, and repair of boilers 
in Florida.
52
 The State Fire Marshall performs inspections to ensure the safety of boilers in public 
buildings.
53
 Boiler inspectors must meet initial and ongoing certification requirements.
54
 The 
DFS may impose various fees, such as, initial and annual certificates of competency, certificate 
inspections. 
 
According to DFS, some provisions within ch. 554 are outdated. For example, a requirement for 
ASME
55
 stamping of boilers between 200,000 and 400,000 BTU has been in the statute for 
several years but did not have a phase in date to allow for utilization of manufacturer’s 
inventory.
 56
 Additionally, the carbon monoxide detector requirement of ch. 509, F.S., lacks 
clarity as to the enforcement ability of authorized third-party inspectors.
57
 
 
Stop Inmate Fraud Program/Division of Public Assistance Fraud 
Effective July 1, 2011, the Stop Inmate Fraud Program was transferred from the Florida 
Department of Law Enforcement to DFS.
58
 The intent of the program is to identify incarcerated 
persons who are wrongfully receiving public assistance benefits or entitlement benefits.
59
 The 
Stop Inmate Fraud Program is housed within the Division of Public Assistance Fraud. This 
                                                
47
 Section 633.135(1), F.S. Combination fire department is a fire department that is composed of career and volunteer 
firefighters. 
48
 Section 633.135, F.S., and Rule 69A-37-501, F.A.C. 
49
 Section 633.135(4), F.S.. 
50
 Department of Financial Services, 2022 Legislative Bill Analysis of HB 959 (companion to SB 1874) (Dec. 22, 2022). 
51
 Section 554.1011, F.S. 
52
 Section 554.103, F.S. 
53
 Department of Financial Services, Division of State Fire Marshal, Boiler Safety Section, available at Boiler Safety 
(myfloridacfo.com) (last visited Jan. 22, 2022). 
54
 Section 554.104, F.S. 
55
 “ASME Code” is the American Society of Mechanical Engineers (ASME) Boiler and Pressure Vessel Code published by 
that Society, which are incorporated by reference in Rule 69A-51.010, F.A.C. See Rule 69A-51.005(6), F.A.C. 
56
 Supra at note 50. 
57
 Id. 
58
 Section 414.40, F.S. (Ch. 2011-213). 
59
 Section 414.40(2)(a), F.S.  BILL: CS/SB 1874   	Page 10 
 
division investigates all public assistance provided to all residents of the state or provided to 
others by the state.
60
  
 
Division of Workers’ Compensation 
The workers’ compensation law
61
 requires an employer
62
 to obtain coverage for their 
“employees” that provides for lost income and all medically necessary remedial treatment, 
attendance, and care resulting from work related injuries and occupational diseases. The Division 
of Workers’ Compensation within the DFS provides regulatory oversight of the system.
63
 The 
DFS’ responsibilities include enforcing employer compliance with coverage requirements,
64
 
administration of the workers’ compensation health care delivery system, collecting system data, 
educating and assisting employers and injured workers. 
 
Coverage Requirements; Enforcement 
Whether an employer is required to have workers’ compensation insurance depends upon the 
employer’s industry (i.e., construction, non-construction, or agricultural) and the number of 
employees.
65
 The coverage thresholds are as follows: 
 Construction – one or more “employees;” 
 Non-construction – four or more “employees;” and  
 Agricultural - six or more regular employees and/or 12 or more seasonal employees who 
work for more than 30 days.  
 
Employers may obtain coverage by purchasing a workers’ compensation insurance policy from 
an insurer; purchasing coverage from the Workers’ Compensation Joint Underwriting 
Association (for employers that are unable to purchase a workers’ compensation insurance policy 
from an authorized insurance company); or qualifying as a self-insurer.
66
 In order to apply for or 
renew an exemption from workers' compensation law, the exemption applicant must complete 
and submit a Notice of Election to be Exempt application online. The notice must list the name, 
                                                
60
 Section 414.411, F.S. 
61
 Ch. 440, F.S. 
62
 Employer” means the state and all political subdivisions thereof, all public and quasi-public corporations therein, every 
person carrying on any employment, and the legal representative of a deceased person or the receiver or trustees of any 
person. “Employer” also includes employment agencies, employee leasing companies, and similar agents who provide 
employees to other persons. s. 440.02(16), F.S. The most common exception to this is non-construction industry employers 
with fewer than four employees. There are a number of other exceptions, exclusions, and exemptions that affect whether an 
employer must provide workers’ compensation coverage generally or to a particular individual. See s. 440.02(15)–(17), F.S. 
63
 Section 440.191, F.S. 
64
 Section 440.107, F.S. 
65
 The terms “injured employee” and “injured worker” are used interchangeably throughout ch. 440, F.S., in relation to 
individuals claiming or receiving workers’ compensation benefits. However, neither term is expressly defined in the workers’ 
compensation law. Since the term “injured employee” implies a continuing employment relationship that may not in fact 
exist following an injury, this analysis will use the term “injured worker” exclusively, but it is intended to mean both “injured 
employee” and “injured worker” wherever it is used, unless the context or law requires otherwise. The term “injured 
employee” is not same as “employee.” The former denotes one who is claiming benefits following an injury, while the latter 
denotes one who may be subject to the coverage requirements of the workers’ compensation law, depending upon the 
circumstances of their employment and nature of their employer. 
66
 Sections 440.38 and 627.311(5), F.S.  BILL: CS/SB 1874   	Page 11 
 
date of birth, and driver’s license number of Florida identification card number, and other 
specified information.
67
 
 
The DFS has the authority to enter and inspect any place of business for purposes of ensuring 
employer compliance with workers’ compensation law, and DFS can request an employer’s 
business records.
68
 An employer must produce the required business records within ten business 
days of receiving the written request for records. The failure of an employer to comply with the 
workers' compensation coverage requirements is considered to pose an immediate danger to 
public health, safety, and welfare; DFS must issue a Stop-Work Order within 72 hours of 
determination of non-compliance, which requires the employer to cease all business operations.
69
 
DFS may release a Stop-Work Order when an employer provides proof of compliance and pays 
$1,000, as a down payment, and agrees to enter into a penalty payment agreement with DFS for 
the full amount.
70
 The penalty is a minimum of $1,000 and is based on the insurance premiums, 
which should have been paid, but were not, multiplied by 2 for the prior two years.
71
 
 
Reporting by Carriers and Audits by Carriers 
Within 3 days after the employer or the employee informs the carrier of an injury, the carrier 
must mail to the injured worker an informational brochure approved by DFS that provides an 
explanation of the rights, benefits, procedures for obtaining benefits and assistance, criminal 
penalties, and obligations of injured workers and their employers under the Florida Workers’ 
Compensation Law.
72
 
 
Further, the carrier or its third-party administrator is required to mail the same brochure annually 
to employers.
73
 
 
Three-member Panel; Guides of Maximum Reimbursement Allowances; Rulemaking 
Florida’s workers’ compensation law provides for medically necessary treatment and care of 
injured employees. An individual physician, hospital, ambulatory surgical center, pain program, 
or work-hardening program must be reimbursed at either the agreed-upon contract price or the 
maximum reimbursement allowance in the appropriate schedule.
74
 The law provides 
reimbursement formulas and methodologies to compensate providers of health services, subject 
to maximum reimbursement allowances (MRAs).
75
 
 
A three-member panel (panel) consisting of the Chief Financial Officer (CFO) or CFO’s 
designee and two Governor’s appointees sets the MRAs.
76
 The DFS incorporates the statewide 
schedules of the MRAs by rule in reimbursement manuals. In establishing the MRA manuals, the 
panel considers the usual and customary levels of reimbursement for treatment, services, and 
                                                
67
 Section 440.05(3), F.S. 
68
 Section 440.107(7)(a), F.S. 
69
 Id. 
70
 Section 440.107(7)(d), F.S. 
71
 Id. 
72
 Section 440.185(3), F.S. 
73
 Id. 
74
 Id. 
75
 Section 440.13(12), F.S. 
76
 Section 440.13(12)(a), F.S.  BILL: CS/SB 1874   	Page 12 
 
care;
77
 the cost impact to employers for providing reimbursement that ensures that injured 
workers have access to necessary medical care; and the financial impact of the MRAs on 
healthcare providers and facilities.
78
 Florida law requires the panel to develop MRA manuals that 
are reasonable, promote the workers’ compensation system’s healthcare cost containment and 
efficiency, and are sufficient to ensure that medically necessary treatment is available for injured 
workers.
79
 
 
The panel develops four different reimbursement manuals to determine statewide schedules of 
maximum reimbursement allowances. The healthcare provider manual limits the maximum 
reimbursement for licensed physicians to 110 percent of Medicare reimbursement,
80
 while 
reimbursement for surgical procedures is limited to 140 percent of Medicare.
81
 The hospital 
manual sets maximum reimbursement for outpatient scheduled surgeries at 60 percent of usual 
and customary charges,
82
 while other outpatient services are limited to 75 percent of usual and 
customary charges.
83
 Reimbursement of inpatient hospital care is limited based on a schedule of 
per diem rates approved by the panel.
84
 The ambulatory surgical centers manual limits 
reimbursement to 60 percent of usual and customary as such services are generally scheduled 
outpatient surgeries. The prescription drug reimbursement manual limits reimbursement to the 
average wholesale price plus a $4.18 dispensing fee.
85
 Repackaged or relabeled prescription 
medication dispensed by a dispensing practitioner has a maximum reimbursement of 
112.5 percent of the average wholesale price plus an $8.00 dispensing fee.
86
 Fees may not exceed 
the schedules adopted under Ch. 440, F.S., and department rule.
87
 
 
Rulemaking Authority and Legislative Ratification 
A rule is an “agency statement of general applicability that implements, interprets, or prescribes 
law or policy.”
88
 Rulemaking authority is delegated by the Legislature in law to an agency, and 
authorizes an agency to adopt, develop, establish, or otherwise create a rule.
89
 An agency may 
not engage in rulemaking unless it has a legislative grant of authority to do so.
90
 The statutory 
authority for rulemaking must be specific enough to guide an agency’s rulemaking and an 
agency rule must not exceed the bounds of authority granted by the Legislature.
91
 
 
                                                
77
 Section 440.13(12)(d)1., F.S. 
78
 Section 440.13(12)9d)(2), F.S. 
79
 Section 440.13(12)(d)3., F.S. 
80
 Section 440.13(12)(b)4., F.S. 
81
 Section 440.13(12)(b)5., F.S. 
82
 Section 440.13(12)(b)3., F.S. 
83
 Section 440.13(12)(a), F.S. 
84
 Section 440.13(12)(a), F.S. 
85
 Section 440.13(12)(c), F.S. 
86
 Id. 
87
 Section 440.13(13)(b), F.S.  The department also has broad rulemaking authority under s. 440.591, F.S. 
88
 Section 120.52(16), F.S. 
89
 Section 120.52(17), F.S. 
90
 See ss. 120.52(8) and 120.536, F.S. 
91
 See Sloban v. Florida Board of Pharmacy, 982 So.2d 26 (Fla. 1st DCA 2008) and Southwest Florida Water Management 
District v. Save the Manatee Club, Inc., 773 So.2d 594 (Fla 1st DCA 2000).  BILL: CS/SB 1874   	Page 13 
 
Prior to the adoption, amendment, or repeal of any rule, an agency must file a notice of the 
proposed rule in the Florida Administrative Register.
92
 The notice of the proposed rule must 
include:  
 An explanation of the purpose and effect; 
 The specific legal authority for the rule;  
 The full text of the rule; and 
 A summary of the agency’s statement of estimated regulatory costs (SERC), if one is 
prepared.
93
 
 
Within 21 days of the notice, the public may provide an agency with information regarding the 
SERC or provide proposals for a lower cost alternative to the rule.
94
  
 
SERC Requirements 
Agencies must prepare the SERC for a rule that has an adverse impact on small businesses or 
that increases regulatory costs more than $200,000 within one year after implementation of the 
rule.
95
 
 
A SERC must include estimates of the following: 
 The number of people and entities effected by the proposed rule;  
 The cost to the agency and other governmental entities to implement the proposed rule;  
 Transactional costs likely to be incurred for compliance; and 
 An analysis of the proposed rule’s impact on small businesses, counties, and cities.
96
  
 
The SERC must also include an economic analysis on the likelihood that the proposed rule will 
have an adverse impact in excess of $1 million within the first five years of implementation on:  
 Economic growth, private-sector job creation or employment, or private-sector investment;  
 Business competitiveness,
97
 productivity, or innovation; or 
 Regulatory costs, including any transactional costs.
98
 
 
If the economic analysis results in an adverse impact or regulatory costs in excess of $1 million 
within 5 years after implementation of the rule, then the Legislature must ratify the rule in order 
for it to take effect.
99
 
 
The Legislature previously ratified Rule 69L-7.020, F.A.C., of the DFS, which incorporates by 
reference the 2016 Edition of the Florida Workers’ Compensation Health Care Provider Manual, 
                                                
92
 See ss. 120.54(2)(a) and 120.55(1)(b), F.S. 
93
 Section 120.54(3)(a)1., F.S. 
94
 See ss. 120.54(3)(a)1., and 120.541(1)(a), F.S. 
95
 Section 120.541(1)(a), F.S. 
96
 Section 120.541(2)(b)-(e), F.S. A small city has an unincarcerated population of 10,000 or less. A small county has an 
unincarcerated population of 75,000 or less. A small business employs less than 200 people, and has a net worth of $5 million 
or less.  
97
 Business competitiveness includes the ability of those doing business in Florida to compete with those doing business in 
other states or domestic markets. 
98
 Section 120.541(2)(a), F.S. 
99
 Section 120.541(3), F.S. Legislative ratification is not required for adoption of federal standards, amendments to the Florida 
Building Code, or amendments to the Florida Fire Prevention Code. See s. 120.541(4), F.S.  BILL: CS/SB 1874   	Page 14 
 
providing for reimbursement of healthcare providers under the increased MRAs approved by the 
panel. The DFS has subsequently adopted amended versions of the rule, incorporating by 
referenced the Manual. The updated Manual is estimated to increase workers’ compensation 
system costs by 0.2 percent ($8 million).
100
 According to the SERC, the revisions to the MRAs 
in the updated manual are projected to result in increased costs to the overall compensation 
system of $8 million over the next five years.
101
 
 
In 2022, SB 1274 was filed, which would ratify Rule 69L-7.020, F.A.C. 
 
The Chief Financial Officer as Agent for Service of Process on Insurers 
Florida’s Chief Financial Officer
102
 (CFO) is the agent for service of process on all insurers 
applying for authority to transact insurance in this state, all licensed nonresident insurance 
agents, all nonresident disability insurance agents licensed pursuant to s. 626.835, F.S., any 
unauthorized insurer under s. 626.906, F.S. or s. 626.937, F.S., domestic reciprocal insurers, 
fraternal benefit societies under ch. 632, F.S., warranty associations under ch. 634, F.S., prepaid 
limited health service organizations under ch. 636, F.S., and persons required to file statements 
under s. 628.461, F.S.
103
 
 
Service of process on the CFO is made by mail, personal service, or internet-based transmission 
system created by DFS.
104
 Upon receipt of service of process, the CFO retains a record copy in 
paper or electronic form and promptly forwards one copy of the process documents to the 
insurer’s designated process agent by registered or certified mail.
105
 The CFO may also make the 
process documents available from a secure website created by DFS and provide notice of 
availability and retrieval instructions to the insurer’s designated process agent under s. 
624.307(9), F.S. Under current law, service of process is considered valid and binding service on 
the insurer when the process documents are served on the CFO and sent or made available to the 
insurer pursuant to s. 624.307(9), F.S., rather than at such time the insurer receives the process 
documents.
106
  
 
Recent court cases have addressed similar questions related to whether service of process on an 
insurer is perfected at the time served on the CFO or at the time received by the insurer. For 
example, in Markovits,
107
 an uninsured motorist lawsuit that also involved an award of attorney 
fees for a rejected proposal for settlement, the court was asked to determine whether a proposal 
for settlement served on the insurer 91 days after service of the complaint on the CFO but 88 
days after the complaint was forwarded by the CFO to the insurer, constituted valid service 
within a 90-day deadline for proposals for settlement on the insurer. In addition to finding 
statutory authority under s. 624.423(3), F.S., the court ultimately based its decision on 
                                                
100
 National Council on Compensation Insurance, Inc., Analysis of Florida Medical Fee Schedule Changes Proposed to be 
Effective July 1, 2021, November 16, 2020 (on file with the Senate Committee on Banking and Insurance). 
101
 Florida Department of Financial Services, Statement of Estimated Regulatory Costs Rule 69L-7.020, F.A.C. (November 
2021)(on file with the Senate Committee on Banking and Insurance). 
102
 The CFO’s assistant, deputy, or another person in charge of the office may also serve as the agent for service of process. 
103
 Section 48.151(3), F.S. 
104
 Id. 
105
 Section 624.423(1), F.S. 
106
 Section 624.423(3), F.S. 
107
 Markovits v. Stater Farm Mutual Automobile Insurance, 235 So. 3d 1018 (Fla. 1st DCA 2018).  BILL: CS/SB 1874   	Page 15 
 
s. 48.151(1), F.S., relating to service on statutory agents for certain persons, citing in part 
“[w]hen any law designates a public officer, board, agency, or commission as agent for service 
of process” and the person or entity so designated is served with process, then “service is valid 
service for all purposes,” and holding that service of process is considered valid and binding on 
the insurer when served on the CFO.
108
 
 
Fingerprints for Background Checks 
The Florida Insurance Code authorizes DFS to investigate any applicant or licensee, and further 
states that licensing statutes, which require an evaluation of an applicant’s character or fitness 
must include the submission of fingerprints for a national criminal records check.
109
 Applicants 
and licensees submit fingerprints to the Florida Department of Law Enforcement (FDLE), which 
forwards the fingerprints to the FBI for a federal background check.
110
 The federal check is 
conducted through the FBI, which manages a criminal history record information (CHRI) 
system, through which this information can be obtained. The purpose of the CHRI system is to 
assure that criminal history record information wherever it appears is collected, stored, and 
disseminated in a manner to ensure the accuracy, completeness, currency, integrity, and security 
of such information and to protect individual privacy.
111
 
 
Federal law authorizes the exchange of CHRI with officials of state and local governmental 
agencies for licensing and employment purposes.
112
 However, this access can only be authorized 
by a state statute, which has been subsequently approved by the Attorney General of the United 
States. The FBI processes fingerprints only if the criteria established by the U.S. Department of 
Justice has been satisfied. To satisfy federal law, a state licensing statute must identify the 
specific categories of licenses that require the submission of fingerprints as part of an application 
and expressly state that the applicant’s fingerprints will be submitted to the FBI or submitted for 
a national criminal records background check. 
 
The DFS has recommended many technical amendments to licensing laws including chs. 626, 
and 648, F.S., to ensure compliance with federal law and continuation of FBI background checks 
for applicants seeking licensure with DFS.
113
 
 
Florida’s Patient Compensation Fund 
In response to the mid-1970’s medical malpractice crisis, the Florida Legislature enacted 
comprehensive medical malpractice reforms with the passage of "The Medical Malpractice 
Reform Act of 1975."
114
 One of the main features of the 1975 Medical Malpractice Act was the 
creation of the Florida Patient's Compensation Fund (Fund), which was designed to provide 
medical malpractice coverage to doctors, practitioners, hospitals, and health care facilities that 
were unable to purchase coverage in the commercial market. The Fund commenced operations 
                                                
108
 Markovitz at 1020. 
109
 Section 626.201, F.S. 
110
 Section 624.34, F.S. 
111
 28 C.F.R. s. 20.1 
112
 Pub. L. 92-544. 
113
 Supra at note 50. 
114
 Ch. 75-9, Laws of Fla.  BILL: CS/SB 1874   	Page 16 
 
on July 1, 1975, in accordance with s. 766.105, F.S. The Fund is a political subdivision of the 
state; however, it is not a state agency, board, or commission.
115
  
 
The Fund is subject to the supervision of a board of governors consisting of 11 representatives.
116
 
Seven representatives, one each from the insurance industry, physicians’ insurance, physicians’ 
self-insurance, hospital insurance, hospital self-insurance, osteopathic or podiatric physicians’ 
insurance or self-insurance, and the general public, are appointed by the CFO.
117
 The Florida Bar 
appoints one attorney, the Florida Medical Association appoints one physician’s representative, 
and the Florida Hospital Association appoints two hospital representatives.
118
 
 
Hospitals licensed pursuant to ch. 395, F.S., are mandatory members unless they can demonstrate 
financial responsibility to pay claims and costs described in s. 766.105(2)(c), F.S. Other health 
care providers
119
 such as physicians, osteopaths, and professional associations are allowed to 
participate in the Fund. To become members of the Fund, all licensed Florida hospitals and 
health care providers electing to enroll in the fund must pay an annual membership fee and any 
applicable assessments based upon past and prospective loss and expense experience; and prior 
claims experience of the members covered under the fund. Members receive coverage for claims 
arising from rendering or failure to render medical care or services resulting in injury or death to 
a patient. Health care providers choose between two coverage limits afforded by the Fund. 
Coverage may not exceed $1 million per claim, $3 million annual aggregate, or $2 million per 
claim, $4 million annual aggregate. Health care providers are responsible for paying claim 
amounts in excess of the selected limit and the Fund is not responsible for paying punitive 
damages that may be awarded to plaintiffs. Coverage limits afforded by the Fund to hospitals 
may not exceed $2.5 million per claim and does not provide an annual aggregate.
120
 
 
The board of governors may authorize refunds when revenues exceed known liabilities and 
expenses.
121
 Excesses or unearned fees are refunded to members in proportion to the 
contributions made in accordance with procedures adopted by the Board and approved by the 
OIR. The Fund has certified to the OIR twelve assessments, and OIR has approved 11 refunds.
 
122
 The last year the hospitals contributed member fees was in 1982; the last year the physician 
class contributed member fees was in 1983.
123
 The last refund approved by OIR was in March 
2004.
124
 As of December 31, 2019, the Fund reported a reserve for unearned fees of 
$14,790,396.
125
  
 
                                                
115
 Section 766.105(1)(a), F.S. 
116
 Section 766.105(3)(b), F.S. 
117
 Id. 
118
 Id. 
119
 Section 766.105(1)(b), F.S. 
120
 Section 766.105, F.S. 
121
 Section 766.105(3), F.S. 
122
 Office of Insurance Regulation, Target Market Conduct Examination Report of the Florida Patient’s Compensation Fund 
(Apr. 25, 2014) available at 2003 TARGET P&C MARKET CONDUCT EXAMINATION OF: (floir.com) (last visited Jan. 
8, 2022). 
123
 Id. 
124
 Id. 
125
 Carr, Riggs, and Ingram CPAs, Florida Patient’s Compensation Fund Audit Report, as of Dec. 31, 2019, (May 19, 2021) 
on file with Senate Banking and Insurance Committee.  BILL: CS/SB 1874   	Page 17 
 
The Fund ceased to offer coverage effective July 1, 1983, because if failed to attain the necessary 
minimum membership levels to offer coverage.
126
 The fund purchased structured settlement 
annuities to fulfill the terms and conditions of settlement agreements with claimants in medical 
malpractice cases.
127
 According to DFS, the Fund has represented that there are no open or active 
claims that are not being serviced through a structured settlement.
128
 
 
Division of State Group Insurance 
The Division of State Group Insurance within the Department of Management Services 
administers the state group health insurance program (program) under a cafeteria plan consistent 
with s. 125 of the Internal Revenue Code for state employees.
129
 Eligible Employees of the 
program include, state officers; state employees paid from “salaries and benefits” appropriation 
categories, regardless of the number of hours worked; retired state officers and state employees; 
surviving spouses of deceased state officers and state employees; certain terminated state officers 
and state employees; and certain state employees paid from “other-personal-services” 
appropriation categories.
130
 
III. Effect of Proposed Changes: 
Division of Accounting and Auditing 
Sections 1 and 6-10 repeals s. 17.0315, and amends ss. 215.34, 215.93, 215.94, 216.102, and 
218.32, respectively, relating to financial and cash management programs and local government 
financial reporting. Section 1 repeals 17.0315, F.S., relating to the CFO’s financial and cash 
management task force due to the creation of the PALM financial and cash management system 
and its executive steering committee. Section 6 eliminates the requirement for an agency to post 
journal entries since PALM records debit memorandums. Sections 7 and 8 remove the term, 
“cash management subsystem” and replaces it with the term, “financial management system.” 
Section 9 replaces the term, “comprehensive annual financial report, with the term, “annual 
comprehensive financial report,” to conform to a change in GASB standards. Section 10 revises 
the local government reporting system to designate the Florida Open Government Financial 
Statement System as the primary location for governmental financial reporting. 
Service of Process 
Section 2 amends s. 48.151, F.S., relating to service on statutory agents, to clarify that the CFO 
is the agent for service of process on all insurers applying for authority to transaction insurance 
and other specified entities licensed under the Florida Insurance Code. The section also requires 
DFS to create a secure online portal as the sole means to accept service of process on the CFO 
under this section. 
                                                
126
 At least 7 days prior to the beginning of each fiscal year, the Fund determines whether it will attain the minimum 
membership levels to offer coverage. The minimum membership thresholds are total membership fees of $5 million for non-
hospital health care provider members and $12.5 million for hospitals members. 
127
 The Florida Patient’s Compensation Fund: Status Report on Terminating Activities of the Fund (Dec. 10, 1994) by House 
of Representatives Committee on Insurance. On file with the Senate Committee on Banking and Insurance. 
128
 Supra at note 50. 
129
 Section 110.123, F.S. 
130
 Id.  BILL: CS/SB 1874   	Page 18 
 
 
Section 26 amends s. 624.307, F.S., to require any regulated person or any unauthorized insurer 
under s. 626.906, F.S., to appoint the CFO as its agent to receive services of all legal process. 
Further, the CFO must make the process available through a secure online portal to the person 
designated by the regulated person or unauthorized insurer to receive the process. The notice 
must disclose the uniform resource locater (URL) where the process may be obtained.  
 
Section 27 amends s. 624.422, F.S., relating to service of process, to require each licensed 
insurer to file with DFS designation of the name and e-mail address of the person to whom 
process against it served upon the CFO is to be made through the online portal. The online portal 
is the sole method for service of process. 
 
Section 28 amends s. 624.423, F.S., to clarify that service of process is valid and binding upon 
the insurer on the date the process is served upon the Chief Financial Officer and is delivered to 
the insurer or DFS has notified the insurer that such information has been made available upon a 
secured online portal. 
 
Section 29 amends s. 624.610, F.S., relating to reinsurance, to provide conforming changes 
relating to service of process referencing s. 48.151(3), F.S., and to provide service to agents of 
insurers solely through the department’s online portal. 
 
Sections 55-57 amend ss. 626.906, 626.912, and 626.937, F.S., respectively, to provide 
conforming changes. 
 
Division of Rehabilitation and Liquidation 
Sections 3 and 4 amend ss. 110.123 and 110.131, F.S., respectively, to allow full-time and part-
time employees, retired employees, and surviving spouses of employees of the Division of 
Rehabilitation and Liquidation to participate in the state group insurance program. 
 
Rule Ratification 
Section 5 amends s. 120.541, F.S., to exempt the schedules of maximum reimbursement 
allowances adopted by the three-member panel within the DFS from the rule ratification 
requirements. 
 
Stop Inmate Fraud Program/Division of Public Assistance Fraud 
Section 12 amends s. 414.40, F.S., to transfer the Stop Inmate Fraud Program within the 
Division of Public Assistance Fraud from DFS to the Department of Economic Opportunity. 
Further, the section is amended to authorize the Division of Public Assistance Fraud of DFS to 
have access to records containing correctional information not exempt from public records on 
incarcerated persons that have been generated as criminal justice information. 
  BILL: CS/SB 1874   	Page 19 
 
Division of Workers’ Compensation  
Section 13 amends s. 440.02, F.S., to revise the definition of the term, “employer,” to include 
employment agencies and employment leasing companies that provide employees to other 
business entities or persons. Currently, the definition includes employment agencies, employee 
leasing companies, and similar agents who provide employees to other persons. The term, 
“similar agents,” is an undefined term, and is removed. 
 
Section 14 amends s. 440.05, F.S. relating to the election of exemption from workers’ 
compensation insurance coverage requirements to provide the following changes: 
 Requires an applicant for an exemption to provide a valid driver’s license number or valid 
identification card number as a prerequisite for DFS to process the application. Currently, the 
statute does not specify such documents must be valid. 
 Eliminates the requirement for an applicant for an exemption from coverage to provide a 
social security number as a requirement for processing the application. 
 Requires an applicant for a workers’ compensation exemption to certify he or she has 
completed an online workers’ compensation coverage and compliance tutorial developed by 
DFS. 
 Replaces the mandatory exemption and revocation of exemption notification requirement to 
carriers with a carrier opt-in via electronic notification process. 
 Adds disclosures to the Certificate of Election to be Exempt that provide that the exemption 
is not a license issued by the Department of Business and Professional Regulation (DBPR) 
and that the DBPR’s website has information that can be used to verify an exemption 
holder’s licensure status. 
 Eliminates a duplicative business records requirement for exemption holders in the 
construction industry. 
 Eliminates the scope of business or trade to disclosure on the notice of election to be exempt. 
 
Section 15 amends s. 440.107, F.S., relating to DFS’ powers to enforce employer compliance 
with coverage requirements. The bill extends the deadline for an employer to submit business 
records to DFS from 10 business days to 21 days before DFS can take an administrative action. 
The section eliminates the requirement for DFS to update the Stop-Work Order database on a 
daily basis. The bill also clarifies that an employer must pay any outstanding assessed penalty 
prior to entering into a new payment agreement schedule with DFS. In addition, the bill modifies 
the timeframe for an employer to enter into a payment agreement schedule with the DFS or pay 
the penalty in full from 28 days after the service of the stop work order to within 21 days after 
service of the first penalty assessment. For first time employers that do not comply with coverage 
requirements, the timeframe to calculate a penalty for an employer’s penalty formula is reduced 
from a 24-month period to a 12-month period, thereby reducing the penalty. The 24-month 
period will remain for employers who were previously issued a stop-work order or materially or 
understated payroll. The section allows an employer who has not been issued a Stop-Work Order 
or an enforcement action an opportunity to reduce their penalty by 15 percent by completing and 
correctly answering 80 percent of the questions from an on-line workers’ compensation coverage 
and compliance tutorial. 
 
Section 16 amends s. 440.13, F.S., relating to maximum reimbursement allowances for medical 
services by allowing a carrier to reimburse a health care provider the lesser of the billed charge  BILL: CS/SB 1874   	Page 20 
 
of a provider or the maximum reimbursement allowance, if an agreed-upon contract price is not 
in effect. Currently, a carrier must reimburse a provider at the agreed-upon contract or the 
maximum reimbursement allowance. The section provides rulemaking authority for 
implementing this section. See also Section 5. 
 
Sections 17 and 18 amend ss. 440.185 and 440.381, F.S., relating to employer and carrier 
reporting and carrier audits of employers, respectively. Section 17 extends the amount of time an 
employer has to notify a carrier of an injury from three days to three business days and 
authorizes a carrier to send specified information to an injured worker or employer by e-mail as 
an option to regular mail. Section 18 provides that a carrier must conduct a physical onsite audit 
of construction class employers with policies with an estimated annual premium of $10,000 or 
more. Currently, there is no minimum premium threshold for physical onsite audits. 
 
Division of Funeral, Cemetery, and Consumer Services 
Section 19 amends s. 497.277, F.S., to eliminate the fee cap of $50 for the transference of burial 
rights from the purchaser to another. 
 
Section 20 amends s. 497.369, F.S., to revise the requirements for obtaining an embalmer’s 
license in Florida. The changes would allow an applicant to obtain a reciprocal licensure in 
Florida if they held a valid license in another and had engaged in the full-time licensed practice 
of embalming in that state for at least 5 years. 
 
Section21 amends s. 497.372, F.S., to revise the duties that only a licensed funeral director may 
perform. The changes will result in non-licensed individuals being able to handle more clerical 
responsibilities, including obtaining information from families for the filing of death certificates 
and setting a time for services. Further, the section removes the current period during which 
funeral directors must direct memorial services. As a result, a funeral director would be 
responsible for directing any memorial service arranged by the funeral establishment following 
burial or cremation, regardless of when the memorial service takes place. 
 
Section 22 amends s. 497.374, F.S. to revise the requirements for a funeral director to obtain a 
reciprocal license by allowing individuals licensed in another state to obtain licensure in Florida 
if they have a current license in that state and have practiced funeral directing for at least five 
years. As an alternative, a funeral directors may obtain a reciprocal license if the applicant has a 
diploma or certificate from an accredited program of mortuary science instead of an associate 
degree or higher, and meets other current requirements. 
 
Division of State Fire Marshal  
Section 23 amends s. 554.108, F.S., relating to boiler inspections, to clarify that a boiler with an 
input of 200,000 British thermal units (Btu) per hour and above, up to an input of 400,000 Btu 
per hour, is exempt from inspection. However, such an exempt boiler, if manufactured after July 
1, 2022, must be stamped with the ASME code symbol. A requirement for ASME stamping of 
boilers between 200,000 and 400,000 Btu has been in the statute for several years but did not 
have a phase in date to allow for utilization of a manufacturer’s inventory. The addition of the  BILL: CS/SB 1874   	Page 21 
 
carbon monoxide detector requirements currently found in ch. 509, F.S., clarifies the authority of 
authorized third party inspectors to enforce this safety feature. 
 
Section 24 amends s. 554.111, F.S., relating to fees, clarifies the certification inspection fees and 
the reporting of the manufacturer’s data report. 
 
Section 25 amends s. 554.114, F.S., relating to prohibited acts and penalties, to revise 
compliance deadlines and penalties for an insurer authorized to sell boiler insurance that fails to 
inspect a boiler pursuant to the requirements of this section. 
 
Division Insurance Agents and Agencies 
Section 30 amends s. 626.015, F.S., to relating to definitions. The definition of licensing 
authority is created to mean the department or the office. The definition of unaffiliated 
appointment is revised to provide an exception to the current prohibition that an unaffiliated 
insurance agent may not be affiliated with an insurer, insurer-appointed insurance agent, or 
insurance agency contracted with or employing insurer-appointed insurance agents. This change 
would allow a licensed adjuster to obtain an adjuster appointment in order to adjust claims on 
behalf of an insurer while holding an unaffiliated appointment on an agent license.  
 
Section 31 amends s. 626.171, F.S., relating to application for licensure, to provide that the 
fingerprinting requirements in s. 624.34, F.S., apply to all applicants for licensure under ch. 626, 
F.S. 
 
Section 32 amends s. 626.172, F.S., relating to insurance agency licensure, to clarify 
fingerprinting must be processed in accordance with the requirements of s. 626.171, F.S. 
 
Section 33 creates s. 626.173, F.S., relating to insurance agency closure, to specify an insurance 
agency’s responsibilities, when closing or ceasing to transact business for more than 30  days, 
Within 35 days after  the agency first ceases to transact insurance, the agency owner or an officer 
listed on the original application for licensure must: 
 Cancel the insurance agency’s license by notifying DFS by the submission of completed 
form prescribed by DFS. 
 Notify all insurers with whom the agency or agent in charge are appointed, that the agency 
operations have ceased, the date operations ceased, the identity of any agent or agency to 
whom the agency’s current book of business has been transferred, and the method by which 
the agency records may be obtained during the time stipulated in sections 626.748 and 
626.561, F.S. 
 Notify all policyholders currently insured by a policy written, produced, or serviced by the 
agency that the agency has ceased operations, the date the operations ceased and the identity 
of the agency or agent to whom the agency’s current book of business was transferred. If no 
transfer has occurred, notification should direct the policyholder to contact the insurance 
company that will assist the policyholder in locating a licensed agent to service the policy.  
 Notify all premium finance companies through which active policies are financed, that the 
agency has ceased operations, the date operations ceased and the identity of the agent or 
agency to whom the agency’s current book of business has been transferred. 
 Ensure all funds held in a fiduciary capacity are distributed to the rightful owners.  BILL: CS/SB 1874   	Page 22 
 
 
The section provides that in a proceeding initiated pursuant to ch. 120, F.S., DFS may, impose an 
administrative fine against the agent in charge or director or officer found in the proceeding to 
have violated any provision of this section. A proceeding may not be initiated and fine may not 
accrue until after the person has been notified in writing of the nature of the violation, has been 
afforded 10 business days to correct the violation, and has failed to do so. Fines imposed 
pursuant to this section may not exceed the amounts specified in s. 626.681, F.S. per violation. 
Further, DFS may also suspend or revoke the license of a licensee fined pursuant to this section. 
The section provides factors for DFS to consider when determining the appropriateness of the 
penalty. 
 
Section 34 amends s. 626.201, F.S., relating to investigations of an applicants by DFS, provides 
that submission of an applicant’ fingerprints must be in accordance with s. 626.171(4), F.S. 
Further, the section provides that the expiration, nonrenewal, or surrender of a license under ch. 
626, F.S., does not eliminate jurisdiction of the licensing authority to investigate and prosecute 
for a violation committed by the licensee while licensed under ch. 626, F.S. Further, the section 
provides that notwithstanding the withdrawal of a complaint, the prosecution of any matter may 
be initiated or continued. According to DFS, the expiration, nonrenewal, or surrender of a license 
jeopardizes the licensing authority of DFS to continue to investigate or prosecute violations 
committed while an individual was licensed.
131
 
 
Section 35 amends s. 626.202, F.S., relating to fingerprinting requirements, to require that the 
submission of fingerprints must be in accordance with s. 626.171(4), F.S. 
 
Section 36 amends s. 626.221, F.S., to exempt an all-lines adjuster applicant who has holds a 
designation as a Certified All Lines Adjuster (CALA) from Kaplan Financial Education from the 
statutory examination requirements. 
 
Section 37 amends s. 626.311, F.S., to provide that a licensed adjuster may obtain an adjuster 
appointment in order to adjust claims on behalf of an insurer while holding an unaffiliated 
appointment on an agent license. 
 
Section38 amends s. 626.321, F.S., to provide a conforming change regarding fingerprint 
requirements in s. 626.171(4), F.S. 
 
Section 39 amends s. 626.601, F.S., to provide conforming amendment regarding fingerprint 
requirements provided in s. 626.171(4), F.S. 
 
Section 40 amends s. 626.7845, F.S., to provide technical conforming cross reference. 
 
Section 41 amends 626.8411, F.S., relating to application provisions applicable to general lines 
agents or agencies, to require compliance with fingerprint requirements in s. 626.172(2)(f), F.S. 
Subsection (2) of the section is amended to clarify that paragraph (2)(f) of s. 626.172, F.S., 
applies to the agent in full charge. 
 
                                                
131
 Supra at note 50.  BILL: CS/SB 1874   	Page 23 
 
Section 42 amends s. 626.8412, F.S., to clarify that in addition to the agent, the insurance agency 
must also hold an appointment issued by an insurer in order to sell a title insurance policy. 
 
Section 43amends s. 626.8417, F.S., to allow an applicant for a title insurance license to fulfill 
the 40-hour course requirement in person or online by removing the requirement that it be a 
classroom course. 
 
Section 44 amends s. 626.8421, F.S., to specify that a title agent and a title agency must have a 
separate appointment as to each insurer by which they are appointed as agents. 
 
Section 45 amends s. 626.843, F.S., relating to the renewal, continuation, reinstatement, or 
termination of a title insurance agent’s or title agency’s appointment, to require a title insurance 
agency to be appointed, as prescribed by section 624.501, F.S., until suspended, revoked, or 
otherwise terminated. Further, the section requires that title insurance agency appointments must 
be renewed pursuant to s. 626.381, F.S. 
 
Section 46 amends s. 626.8433, F.S., relating to termination of appointments, to subject title 
insurance agencies to reporting terminations to DFS. 
 
Section 47 amends s. 626.8447, F.S., relating to effect of suspension or revocation upon other 
licensees and appointees, to subject title insurance agencies to the same provisions. 
 
Section 48 amends s. 626.854, F.S., to prohibit compensation of a public adjuster being based on 
amounts attributable to additional living expenses, unless the insured agrees to a separate 
agreement with a prescribed disclosure. In addition, the section provides  that compensation of a 
public adjuster must be based on the recovery allocated to the insured for covered damages, 
exclusive of attorney fees and costs. The bill also prohibits increasing public adjuster 
compensation based on a claim being resolved by litigation. 
 
Section 49 amends s. 626.8561, F.S, relating to the definition of the term, “public adjuster 
apprentice,” to allow an adjusting firm to appoint, employ, or contract with a public adjuster 
apprentice. Currently, a public adjuster may also appoint an apprentice. 
 
Section 50 amends s. 626.865, F.S., relating to public adjuster qualifications, to provide that a 
nonresident public adjuster who has been licensed and appointed on a continual basis for the 
previous 6 months to the list of licensed categories considered qualified for the public adjuster 
license. The section also requires that the $50,000 bond required as a condition for licensure 
must remain in effect for 1 year after the expiration or termination of the license. 
 
Section 51 amends s. 626.8651, F.S., relating to public adjuster apprentice appointment and 
qualifications, to require that only a public adjusting firm that has a designated primary adjuster, 
as required in section 626.8695, F.S., may appoint the public adjuster apprentice, while 
eliminating a public all-lines adjuster’s ability to appoint a public adjuster apprentice. 
 
Section 52 amends s. 626.8696, F.S., relating to requirements of an application for an adjusting 
firm license, to require the name and license number of the designated primary adjuster for each 
adjusting firm location as required in s. 626.8695, F.S. Further, fingerprints of each individual to  BILL: CS/SB 1874   	Page 24 
 
be disclosed in the application (each majority owner, partner, officer, and director of the 
adjusting firm) must be filed with DFS in accordance with s. 626.171(4), F.S., unless an 
individual is currently licensed and appointed under ch. 626, F.S. Only one of the individuals 
required to be listed on the application must sign the application. Currently, each owner of the 
firm must sign the application. 
 
Section 53 amends s. 626.8732, F.S., relating to bond requirements for a nonresident public 
adjuster, to provide that the mandated bond must be maintained unimpaired throughout the 
existence of the license and for a period of 1 year following the expiration or termination of the 
license. 
 
Section 54 amends s. 626.8734, F.S., relating to nonresident all-lines adjuster license 
qualifications, to revise the fingerprinting requirements. 
 
Section 58 amends s. 626.9953, F.S., relating to qualifications for registration, to provide 
conforming fingerprinting requirements. 
 
Division of State Fire Marshal 
Section 59 amends s. 633.135, F.S, relating to the Firefighter Assistance Grant Program, to 
expand the list of purchases eligible for the grant program to include: 
 Other equipment and tools that improve firesafety and fire rescue capabilities for firefighters. 
 Protective clothing and equipment compliant with NFPA 1977, “Standard on Protective 
Clothing Equipment for Wildland Fire Fighting and Urban Interface Fire Fighting.” 
 
Section 60 amends s. 633.216, F.S., relating to inspections of buildings and equipment; training 
and certification requirements, to eliminate the requirement that a previously certified firesafety 
inspector with a certification that has lapsed for 8 years or more to repeat the fire safety inspector 
training required by the division. Current law requires that a certificate is valid for 4 years and 
renewal is contingent upon the completion of continuing education. An exception allowing a 
licensee to pass successfully the examination in lieu of the training is deleted. 
 
Section 61 amends s. 633.408, F.S., relating to training and certification, to authorize the 
Division of Fire Marshal to establish the requirements of the minimum standards course by rule. 
The section also provides technical changes. 
 
Section 62 amends s. 633.414, F.S., relating to retention of firefighter and volunteer firefighter 
certifications, to provide that the renewal requirements for the special certificate of compliance is 
the same as a firefighter certificate of compliance. The bill also changes the definition of an 
active firefighter.  
 
Section 63 amends s. 648.34, F.S., relating to qualification of bail bond agents, to revise the 
fingerprinting process to be in accordance with s. 626.171794), F.S. 
 
Section 64 amends s. 648.355, F.S., relating to temporary limited license as limited surety agent 
or professional bail bond agent, to revise fingerprinting requirements to conform to s. 
626.171(4), F.S.  BILL: CS/SB 1874   	Page 25 
 
 
Section 65 amends s. 648.46, F.S., relating to disciplinary action against bail bond licensees, to 
provide that the expiration, nonrenewal, or surrender of licensure under ch. 648, F.S., does not 
eliminate the jurisdiction of the licensing authority to investigate and prosecute for a violation 
committed by a licensee while licensed under this chapter. Notwithstanding the withdrawal of a 
complaint, the prosecution of any matter may be initiated or continued. 
 
Florida Patient Compensation Fund 
Section 66 amends s. 766.105, F.S., relating to the Florida Patient’s Compensation Fund, to 
revise operations and duties of the board of governors of the fund and the Agency for Health 
Care Administration (agency) relating to financial responsibility or coverage requirements and 
certification of such coverage. The section provides that the agency would receive and review 
the documents and determine compliance. The supervision of the fund is transferred from the 
board of governors to the Chief Financial Officer or his or her designee.  
 
Currently, the agency must review documentation submitted by hospitals demonstrating financial 
responsibility to pay claims and costs arising out of the rendering or failure to render medical 
services and for bodily injury or property damage to a person or property arising out of the 
activities of the hospital, as provided in s. 766.105(2), F.S. Once the agency completes the 
review, the agency delivers the documents to the board of governors. At least 60 days prior to the 
issuance or renewal of a hospital’s license, the agency must request that the board of governors 
certify that each hospital complies with coverage requirements. Currently, the board of governors 
of the Fund are responsible for the supervision and operation  of the Fund. 
 
The section provides that the Fund must operate subject to the supervision of the CFO or his or 
her designee, subject to the policies and procedures and under the auspices of the Division of 
Rehabilitation and Liquidation within DFS until DFS executes a legal dissolution of the fund on 
or before December 31, 2023. Prior to the legal dissolution of the fund, DFS must: 
 Obtain all existing records and retain necessary records of the fund pursuant to law. 
 Identify all remaining property held by the fund and attempt to return such property to its 
owners and, for property that cannot be returned to the owner, transfer such property to the 
Division of Unclaimed Property within DFS. 
 Make a final accounting of the finances of the fund. 
 Ensure that the fund has met all its obligations pursuant to structured settlements, annuities, 
or other instruments established to pay covered claims, and, if the fund has not done so, 
attempt to meet such obligations before final and complete dissolution of the fund. 
 Sell or otherwise dispose of all physical assets of the fund. 
 Execute a legal dissolution of the fund. 
 Transfer any remaining money or assets of the fund to the CFO for deposit in the General 
Revenue Fund. 
 
The section also provides that s. 766.105, F.S., is repealed effective January 1, 2024. 
 
Section 11 creates ss. 395.1061 and section 67 and 68 amend s.945.6041, F.S., and 985.6441, 
F.S., to provide conforming changes relating to the repeal of s. 766.105, F.S., and transferring a 
provision relating to health care providers and their financial responsibility in complying with  BILL: CS/SB 1874   	Page 26 
 
professional liability requirements. The provision is being transferred to s. 395.1061, F.S., 
because the bill repeals the current provision in 766.105, F.S.. 
 
Section 69 transfers all powers, duties, functions, records, offices, positions, property, pending 
issues, existing contracts, and administrative authority relating to the Stop Inmate Fraud Program 
within the DFS to the Department of Economic Opportunity. 
 
Section 70 provides that, except as otherwise expressly provided in this act, this act takes effect 
July 1, 2022. 
IV. Constitutional Issues: 
A. Municipality/County Mandates Restrictions: 
None. 
B. Public Records/Open Meetings Issues: 
None. 
C. Trust Funds Restrictions: 
None. 
D. State Tax or Fee Increases: 
None. 
E. Other Constitutional Issues: 
None. 
V. Fiscal Impact Statement: 
A. Tax/Fee Issues: 
None. 
B. Private Sector Impact: 
The bill eliminates the current maximum fee of $50 to consumers for the transference of 
burial rights. 
C. Government Sector Impact: 
The implementation of SB 1874 will reduce penalties imposed on employers that do not 
comply with the workers’ compensation insurance coverage requirements. The fiscal 
impact is unknown. 
  BILL: CS/SB 1874   	Page 27 
 
The changes made to the Firefighter Assistance Grant program will allow the program to 
fund additional necessary tools and equipment to firefighters. 
VI. Technical Deficiencies: 
Section 30 creates a definition for the term, “licensing authority.” The term means the respective 
jurisdiction of the department or the office, as provided by law. Sections 34 and 64 of the bill 
amends s. 626.201, F.S., and uses the term, “licensing authority.” Other existing provisions in the 
Florida Insurance Code use the term, “department or office.” Currently, the term licensing 
authority is used in  ss. 626.8732 and 626.8734, F.S., in the context of a licensing authority of 
another state. The replacement of the term, “licensing authority,” with “department or office” in 
Sections 34 and 64, and the removal of the definition of “licensing authority” in Section 30 
would provide greater clarity and consistency with the use of the term, “licensing authority,” in 
current law. 
VII. Related Issues: 
None. 
VIII. Statutes Affected: 
This bill substantially amends the following sections of the Florida Statutes: 48.151, 110.123, 
110.131, 120.541, 215.34, 215.93, 215.94, 216.102, 218.32, 414.40, 440.02, 440.05, 440.107, 
440.13, 440.185, 440.381, 497.277, 497.369, 497.372, 497.374, 554.108, 554.111, 554.114, 
624.307, 624.422, 624.423, 626.015, 626.171, 626.172, 626.201, 626.202, 626.221, 626.311, 
626.321, 626.601, 626.7845, 626.8411, 626.8412, 626.8417, 626.8421, 626.843, 626.8433, 
626.8447, 626.854, 626.8561, 626.865, 626.8651, 626.8696, 626.8732, 626.8734, 626.906, 
626.912, 626.937, 626.9953, 633.135, 633.216, 633.408, 633.414, 648.34, 648.355, 648.46, 
766.105, 945.6041, and 985.6441. 
 
This bill creates sections 395.1061 and 626.173 of the Florida Statutes: 
This bill repeals section 17.035 of the Florida Statutes. 
IX. Additional Information: 
A. Committee Substitute – Statement of Changes: 
(Summarizing differences between the Committee Substitute and the prior version of the bill.) 
CS by Banking and Insurance on January 25, 2022: 
 Revises compensation for public adjuster by requiring that the compensation must be 
based on the recovery allocated to the insured for covered damage, exclusive of 
attorney fee and costs. 
 Revises service of process requirements and provides conforming changes relating to 
service of process. 
 Transfers responsibilities of the Florida Patient’s Compensation Fund relating to 
hospitals demonstrating financial responsibility for maintaining professional liability 
coverage to the Agency for Health Care Administration. 
 Revising requirements for closing an insurance agency.  BILL: CS/SB 1874   	Page 28 
 
 Provides technical changes. 
B. Amendments: 
None. 
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.