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 Appropriations Subcommittee on Agriculture, Environment, and General 
Government  
BILL: PCS/CS/SB 1874 (565284) 
INTRODUCER:  Appropriations Subcommittee on Agriculture, Environment, and General Government; 
Banking and Insurance Committee; and Senator Boyd 
SUBJECT:  Department of Financial Services 
DATE: February 24, 2022 
 
 ANALYST STAFF DIRECTOR  REFERENCE  	ACTION 
1. Johnson Knudson BI Fav/CS 
2. Sanders Betta AEG  Recommend: Fav/CS 
3.     AP  
 
Please see Section IX. for Additional Information: 
COMMITTEE SUBSTITUTE - Substantial Changes 
 
I. Summary: 
PCS/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 the 
DFS. The bill, as originally filed, revises service of process requirements by providing 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 the DFS that such information 
has made been made available on the DFS online portal. In addition, the committee substitute 
provides the following 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 a public adjuster apprentice to a public adjusting firm who may 
appoint a public adjuster apprentice. Currently a public adjuster may also appoint an 
apprentice; 
 Revises provisions relating to fingerprinting requirements to comply with federal law; 
 Creates notice requirements for agencies that cease doing business, and creates penalties for 
noncompliance; 
REVISED:   BILL: PCS/CS/SB 1874 (565284)  	Page 2 
 
 Increases the authority of the 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; and 
 Revises compensation for public adjusters by requiring the compensation be based on the 
recovery allocated to the insured for covered damage, exclusive of attorney fees and costs. 
 
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; and  
 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 an employer applying for an exemption from workers’ compensation coverage to 
provide a valid driver license or valid identification card. An applicant is also required to 
complete an online the FS 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 produce requested business records from 10 business 
days to 21 days before the 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 the DFS; 
 Requires the carrier to send an informational brochure to the injured worker within three 
business days, instead of three days, after the employee or employer notifies the carrier of an 
injury. A carrier or its third party administrator is authorized to provide the informational 
brochure to an injured worker or an employer by e-mail or regular mail; and 
 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. 
  BILL: PCS/CS/SB 1874 (565284)  	Page 3 
 
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 employees and retired employees of the Division of Rehabilitation and Liquidation 
or their surviving spouses are enrollees of the state group insurance program. 
 
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 the DFS to wind down the Fund, and to dissolve the Fund 
on or before December 31, 2023. 
 
The bill may have an insignificant but indeterminate impact on state revenues and expenditures. 
See Section V. Fiscal Impact Statement. 
 
Except as otherwise expressly provided, this act takes effect July 1, 2022. 
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 or department). 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
 
 
                                                
1
 Section 17.001, F.S. 
2
 Department of Financial Services, Divisions and Offices https://www.myfloridacfo.com/ (last visited Jan. 17, 2022).  BILL: PCS/CS/SB 1874 (565284)  	Page 4 
 
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
 
 
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 the DFS and provide their audited financial statements.
11
 The AFR is available to the 
public in the local government electronic reporting (LOGER).  
 
                                                
3
 Section 215.93(1), F.S. 
4
 Section 215.93(1)(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. 
7
 Section 216.102(3), F.S. 
8
 See Florida’s Comprehensive Annual Financial Report, Fiscal Year ended June 30, 2020, 
https://www.myfloridacfo.com/division/aa/reports/documents/DeptofFinServ-StateofFLCAFR2020-FINAL-2-26-2021.pdf 
(last visited Feb. 7, 2022). 
9
 GASB, Statement No. 98, The Annual Comprehensive Financial Report, (Oct. 2021), 
https://www.gasb.org/jsp/GASB/Document_C/DocumentPage?cid=1176178723455&acceptedDisclaimer=true (last visited 
Feb. 7, 2022). 
10
 Department of Financial Services, Division of Accounting and Auditing, Local Governments, 
https://www.myfloridacfo.com/division/aa/localgovernments/ (last visited Feb. 7, 2022). 
11
 Section 218.32, F.S.  BILL: PCS/CS/SB 1874 (565284)  	Page 5 
 
In 2018,
12
 legislation was enacted to require the 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 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 
placed into receivership in Florida.
17
 
 
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
 
                                                
12
 Ch. 2018-102, s. 4, Laws of Fla. 
13
 Section 218.32(1)(h), F.S. 
14
 Department of Financial Services, Florida Open Financial Statement Project, 
https://www.myfloridacfo.com/division/aa/projects/flopenfinancialstmtproject.htm (last visited Feb. 7, 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. 
18
 Department of Financial Services, Division of Rehabilitation and Liquidation, 
https://myfloridacfo.com/division/receiver/career-opportunities/humanresources-recruitmentandselection (last visited Feb. 7, 
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. sets forth who may apply for which licenses.  BILL: PCS/CS/SB 1874 (565284)  	Page 6 
 
 
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 available 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 a 
valid licensure in a state that has requirements at the time of original licensure that are 
substantially equivalent to or more stringent than Florida’s requirements at the same time.
23
  
 
A funeral director may apply to obtain a reciprocal licensure in Florida if the provisions of 
s. 497.374, F.S., are met. The applicant must hold 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.
24
 
 
Current law prescribes the scope of practice of funeral directing a licensed funeral director may 
perform.
25
 These duties include: 
 Selling or offering to sell funeral services;  
 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; or 
 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.
26
 The powers and duties of the CFO and the 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, viatical settlement brokers, customer 
                                                
21
 Section 497.277(2), F.S. 
22
 Section 497.369, F.S. 
23
 Section 497.369 
24
 Section 497.374(1)(b), F.S. 
25
 Section 497.372(1), F.S. 
26
 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), insurance adjusters (part VI), insurance administrators (part VII), 
and viatical settlements (part X).  BILL: PCS/CS/SB 1874 (565284)  	Page 7 
 
representatives, service representatives, and agencies.
27
 Further, the 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 the DFS is required.
28
 The powers and duties of the 
Financial Service Commission and the Office of Insurance Regulation (OIR)
 29
 specified in part I 
apply only with respect to service companies, insurance administrators, and viatical settlement 
providers and contracts.
30
 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.
31
 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 the DFS, as 
specified in s. 626.989, F.S. 
 
The Division of Insurance Agent and Agency Services (division) 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 the DFS or other law enforcement agencies as appropriate.
32
  
 
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 
Unaffiliated insurance agents, are those licensees, except a limited lines agent, who are self-
appointed and who practice as an independent consultant in the business of analyzing and 
abstracting insurance policies, providing insurance advice or counseling, or making specific 
recommendations or comparisons of insurance products for a fee established in advance in a 
written contract signed by the parties. 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.
33
 According to the 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.
34
 
 
                                                
27
 Section 626.016(1), F.S. 
28
 Section 626.016(3), F.S. 
29
 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. 
30
 Section 626.016(2), F.S. 
31
 Sections 626.016(3), F.S. 
32
 Sections 624.307, 624.317, and 624.321, F.S. 
33
 Section 626.015(20), F.S. 
34
 Department of Financial Services, 2022 Legislative Bill Analysis of SB 1874 (January 18, 2022) (on file with Senate 
Appropriations Subcommittee on Agriculture, Environment, and General Government).  BILL: PCS/CS/SB 1874 (565284)  	Page 8 
 
Insurance Adjuster Licensure Examination 
An adjuster is an individual employed by an insurer to evaluate losses and settle policyholder 
claims.
35
 An adjuster may be licensed as either an “all-lines adjuster” or a “public adjuster.”
36
 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.”
37
 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.
38
 
 
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.
39
 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 the DFS testing for the all-lines adjuster license.
40
  
 
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. 
 
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.
41
 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.
42
 
 
                                                
35
 Insurance Information Institute. I.I.I. Glossary (defining “adjuster”), https://www.iii.org/resource-center/iii-glossary/A (last 
visited Feb. 7, 2022). 
36
 Section 626.864, F.S. 
37
 Sections 626.015 and 626.8548, F.S. 
38
 Section 626.854(1), F.S. 
39
 Section 626.221, F.S. 
40
 Section 626.221(2)(j), F.S. 
41
 Department of Financial Services, Division of State Fire Marshal, https://www.myfloridacfo.com/division/sfm/ (last visited 
Feb. 7, 2022). 
42
 Id.  BILL: PCS/CS/SB 1874 (565284)  	Page 9 
 
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.
43
 
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.
44
 
 
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.
45
 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.
46
 
 
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.
47
 
 
Firefighter Assistance Grant Program 
The Firefighter Assistance Grant was created to improve the emergency response capability of 
volunteer fire departments and combination fire departments.
48
 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.
49
 Funding is 
available for training, personal protective equipment, self-contained breathing apparatus, and fire 
engine pumper apparatus.
50
 According to the 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.
51
 
 
                                                
43
 Section 633.408(4), F.S. 
44
 Sections 633.408 and 633.412, F.S. 
45
 Section 633.408(6), F.S. 
46
 Id. 
47
 Section 633.414, F.S. 
48
 Section 633.135(1), F.S. Combination fire department is a fire department that is composed of career and volunteer 
firefighters. 
49
 Section 633.135, F.S., and Rule 69A-37-501, F.A.C. 
50
 Section 633.135(4), F.S. 
51
 The Department of Financial Services, 2022 Legislative Bill Analysis of HB 959 (Similar to SB 1874) (Dec. 22, 2022).  BILL: PCS/CS/SB 1874 (565284)  	Page 10 
 
Boiler Safety Act 
Chapter 554, F.S., is the “Boiler Safety Act.”
52
 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.
53
 The State Fire Marshall performs inspections to ensure the safety of boilers in public 
buildings.
54
 Boiler inspectors must meet initial and ongoing certification requirements.
55
 The 
DFS may impose various fees, such as, initial and annual certificates of competency, certificate 
inspections. 
 
According to the DFS, some provisions within ch. 554 are outdated. For example, a requirement 
for American Society of Mechanical Engineers (ASME)
56
 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.
 57
 Additionally, the carbon monoxide detector 
requirement of ch. 509, F.S., lacks clarity as to the enforcement ability of authorized third-party 
inspectors.
58
 
 
Division of Workers’ Compensation 
The workers’ compensation law
59
 requires an employer
60
 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
61
 within the DFS provides regulatory oversight of the system.
62
 The 
DFS’ responsibilities include enforcing employer compliance with coverage requirements,
63
 
administration of the workers’ compensation health care delivery system, collecting system data, 
educating and assisting employers and injured workers. 
 
                                                
52
 Section 554.1011, F.S. 
53
 Section 554.103, F.S. 
54
 Department of Financial Services, Division of State Fire Marshal, Boiler Safety Section, 
https://www.myfloridacfo.com/Division/sfm/BFP/BoilerSafety/default.htm (last visited Feb. 7, 2022). 
55
 Section 554.104, F.S. 
56
 “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. 
57
 The Department of Financial Services (DFS), 2022 Legislative Bill Analysis of SB 1874 (January 18, 2022) (on file with 
Senate Appropriations Subcommittee on Agriculture, Environment, and General Government). 
58
 Id. 
59
 Ch. 440, F.S. 
60
 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. 
61
 Department of Financial Services, Division of Workers’ Compensation, About the Division, 
https://www.myfloridacfo.com/Division/WC/contactUs.htm (last visited Feb. 7, 2022). 
62
 Section 440.191, F.S. 
63
 Section 440.107, F.S.  BILL: PCS/CS/SB 1874 (565284)  	Page 11 
 
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.
64
 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.
65
 
 
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, 
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 the 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; the 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
 
The 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 the 
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 two for the prior two 
years.
71
 
 
                                                
64
 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. 
65
 Department of Financial Services, Division of Workers’ Compensation, Coverage Requirements, 
https://www.myfloridacfo.com/division/wc/employer/coverage.htm (last visited Feb. 7, 2022). 
66
 Sections 440.38 and 627.311(5), F.S. 
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.  BILL: PCS/CS/SB 1874 (565284)  	Page 12 
 
Reporting by Carriers and Audits by Carriers 
Within three 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 the 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 
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 
                                                
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. 
77
 Section 440.13(12)(d)1., F.S. 
78
 Section 440.13(12)(d)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.  BILL: PCS/CS/SB 1874 (565284)  	Page 13 
 
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
 
 
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
 
                                                
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). 
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.  BILL: PCS/CS/SB 1874 (565284)  	Page 14 
 
 
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 one million dollars 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 one million 
dollars within five 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, 
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 (eight million dollars).
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 eight million dollars 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, 
                                                
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 five 
million dollars 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. 
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.  BILL: PCS/CS/SB 1874 (565284)  	Page 15 
 
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 the 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 the 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 
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 the 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 Federal Bureau of Investigations (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 criminal history record information 
                                                
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. 1
st
 DCA 2018). 
108
 Markovitz at 1020. 
109
 Section 626.201, F.S. 
110
 Section 624.34, F.S.  BILL: PCS/CS/SB 1874 (565284)  	Page 16 
 
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 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. Participants had to show proof of 
$100,000 coverage from an insurer or self-insurance plan and deposit an annual fee into the 
Fund.
115
 The Fund paid the excess over $100,000 for any judgment or settlement against a 
member. The Fund was capped at $25 million and could not pay more than one million dollars 
on a given claim in any single year.
116
 The Fund commenced operations 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.
117
  
 
The Fund is subject to the supervision of a Board of Governors (board) consisting of 
11 representatives.
118
 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.
119
 The Florida Bar appoints one attorney, the Florida Medical Association appoints one 
                                                
111
 28 C.F.R. s. 20.1 
112
 Pub. L. 92-544. 
113
 Department of Financial Services (DFS), 2022 Legislative Bill Analysis of SB 1874 (January 18, 2022) (on file with Senate 
Appropriations Subcommittee on Agriculture, Environment, and General Government). 
114
 Ch. 75-9, Laws of Fla. 
115
 Section 766.105(2)(d)2, F.S. 
116
 Section 765,105, F.S.  
117
 Section 766.105(1)(a), F.S. 
118
 Section 766.105(3)(b), F.S. 
119
 Id.  BILL: PCS/CS/SB 1874 (565284)  	Page 17 
 
physician’s representative, and the Florida Hospital Association appoints two hospital 
representatives.
120
 
 
The Fund attracted providers and ran smoothly for a few years but was not actuarially sound, so 
substantial losses began to accumulate.
121,
 
122
 In 1982, the Fund assessed its members to cover 
deficits, hospitals dropped out because most of the claims were against physicians, and the Fund 
was unable to continue operating.
123
 During its short tenure, the Fund received $72 million in 
membership fees and $280 million in assessments; closed 4,595 claims and paid more than 
$311 million to victims of medical malpractice.
124
 
 
Initially, the Fund was scheduled for sunset in 1991 and repeal in 1995; however, during a 
special session in 1991 the Legislature revived and readopted all statutes that had been subject to 
future repeal, including Section 766.105, F.S.
125
 As a result, the law has not been subject to 
sunset review even though the Fund has not accepted new members since June 30, 1983.
126
 
 
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
127
 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 one million dollars per claim, three million dollars annual aggregate, 
or two million dollars per claim, four million dollars 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 two and one-half million dollars per claim and 
does not provide an annual aggregate.
128
 
 
                                                
120
 Id. 
121
 The Florida Patient’s Compensation Fund: Status Report on Terminating Activities of the Fund, Section 766.105(3)(h), F.S., 
provides that the Fund must determine whether it has minimum membership levels to offer coverage one week prior to the 
beginning of each fiscal year. The minimum membership thresholds of $5 million for non-hospital providers and $12.5 million for 
hospitals could not be met when hospitals stopped participating.  
122
 U.S. General Accounting Office, Medical Malpractice Case Study on Florida, Report to Congressional Requestors, December 
1986, at 8, www.gao.gov/assets/hrd-87-21s-3.pdf (last visited Feb. 8, 2022); and Florida House of Representatives Committee on 
Insurance, The Florida Patient’s Compensation Fund: Status Report on Terminating Activities of the Fund, at 1-7 
(December 10, 1994).  
123
 U.S. General Accounting Office, Medical Malpractice Case Study on Florida, Report to Congressional Requestors, December 
1986, at 10, www.gao.gov/assets/hrd-87-21s-3.pdf (last visited Feb. 8, 2022)  
124
 Florida House of Representatives Committee on Insurance, The Florida Patient’s Compensation Fund: Status Report on 
Terminating Activities of the Fund, at 17-18 (December 10, 1994).  
125
 Id., at 1.  
126
 Office of Insurance Regulation, Target Market Conduct Final Examination Report of the Florida Patient’s Compensation Fund, 
April 25, 2014, at 4, https://www.floir.com/siteDocuments/FLPatientsCompensationFund04252014.pdf (last visited Jan. 30, 2022).  
127
 Section 766.105(1)(b), F.S. 
128
 Section 766.105, F.S.  BILL: PCS/CS/SB 1874 (565284)  	Page 18 
 
The OIR has supervisory authority over the Fund’s Plan of Operation and any changes to the 
Plan of Operation, including repeal.
129
 
 
The law requires the OIR to review any request for assessments of plan participants or refunds of 
plan participants, and further states the Fund is required to furnish audited financial reports 
annually, upon request, to any Fund participant and to the OIR and the Joint Legislative Auditing 
Committee.
130
 The board may authorize refunds when revenues exceed known liabilities and 
expenses.
131
 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 the OIR has approved 
11 refunds.
 132
 The last year the hospitals contributed member fees was in 1982; the last year the 
physician class contributed member fees was in 1983.
133
 The last refund approved by the OIR 
was in March 2004.
134
  
 
The Fund ceased to offer coverage effective July 1, 1983, because it failed to attain the necessary 
minimum membership levels to offer coverage.
135
 The Fund purchased structured settlement 
annuities to fulfill the terms and conditions of settlement agreements with claimants in medical 
malpractice cases.
136
 According to the DFS, the Fund has represented that there are no open or 
active claims that are not being serviced through a structured settlement.
137
 
 
In 2021, an actuarial report conducted for the Fund found the Fund retains an ownership interest 
in 15 annuities that have an aggregate future value of $12,680,687. In the event of an insurer 
insolvency, many of the annuities would be covered by Florida Life and Health Insurance 
Guaranty Association (FLHIGA); therefore the actuary concluded Fund’s exposure to contingent 
liability is $2,403,590. About half of the remaining annuitants were children when their parents 
entered into structured settlements with the Fund; therefore, some of the remaining annuities may 
continue for another 40 years.
138
 
 
As of December 2020, the Fund reported a reserve for unearned fees of $15,135,541, which 
includes $14,888,634 held in investment accounts.
139
  
                                                
129
 Section 766.105(3)(c)2, F.S.  
130
 Section 766.105(3)(e)4, F.S. 
131
 Section 766.105(3), F.S. 
132
 Office of Insurance Regulation, Target Market Conduct Examination Report of the Florida Patient’s Compensation Fund 
(Apr. 25, 2014) https://www.floir.com/siteDocuments/FLPatientsCompensationFund04252014.pdf (last visited Feb. 8, 2022). 
133
 Id. 
134
 Id. 
135
 Section 766.105(3)(h), F.S., provides at least seven days prior to the beginning of each fiscal year, the Florida’s Patient 
Compensation Fund shall determine whether it will attain the minimum membership levels to offer coverage. The minimum 
membership thresholds are total membership fees of five million dollars for non-hospital health care provider members and 
$12.5 million for hospitals members. 
136
 Florida House of Representatives Committee on Insurance, The Florida Patient’s Compensation Fund: Status Report on 
Terminating Activities of the Fund (December 10, 1994). (On file with the Senate Committee on Banking and Insurance. 
137
 Department of Financial Services, 2022 Legislative Bill Analysis of SB 1874 (January 18, 2022) (on file with Senate 
Appropriations Subcommittee on Agriculture, Environment, and General Government). 
138
 Jack Swisher, ACAS, MAAA, Florida Patient’s Compensation Fund Annuity Insolvency Analysis (June 28, 2021) at 4-5; and 
Correspondence from David Yon, Esq., on behalf of the Florida Patient’s Compensation Fund, to Jane Nelson of the Office of 
Insurance Regulation (Aug. 4, 2021).  
139
 Carr Riggs & Ingram CPAs and Advisors, Florida Patient’s Compensation Fund Financial Statements (Dec. 31, 2020) at 4.   BILL: PCS/CS/SB 1874 (565284)  	Page 19 
 
 
Operating costs have increased in recent years, because the board approved the general 
manager’s request for an assistant in 2015 and approved four percent annual salary increases for 
the two Fund employees for 2017, 2018, 2019 and 2020.
140
 The Fund contributes to an employee 
pension plan and pays for legal counsel, accounting and auditing, rent and utilities, travel, and 
insurance.
141
 
 
The following comes from financial statements the Fund shared with its board and the OIR: 
 
Year 	2016 2017 2018 2019 2020 
Salaries 	$181,754 $213,668 $221,600 $229,764 $240,417 
Pension Plan 	$59,684 $52,303 $55,677 $54,424 $45,891 
Rent, Utilities & Janitorial $20,336 $16,704 $16,158 $16,758 $12,841 
General Counsel $3,500 $42,195 $36,992 $35,339 $37,065 
Accounting and Auditing $73,513 $58,294 $52,578 $52,821 $39,126 
Travel & Expense (Staff) $1,463 $4,087 $3,841 $1,962 $4,404 
Travel & Expense (Board) $7,125 $20,327 $17,627 $21,905 $22,751 
 
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.
142
 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.
143
 
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 s. 17.0315, F.S., relating to the Chief Financial Officer’s 
(CFO) financial and cash management task force due to the creation of the Florida Planning, 
Accounting and Ledger Management (PALM) financial and cash management system and its 
executive steering committee. Section 6 eliminates the requirement for an agency to post journal 
                                                
140
 Memo to the Florida Patient’s Compensation Fund Operating Committee from General Manager Charles Portrero, November 19, 
2018.  
141
 The Office of Insurance Regulation monitors meetings of the Florida Patient’s Compensation Fund by telephone and receives 
copies of meeting materials the Fund provides to its Board of Governors. The OIR provided copies of meeting materials from 2011-
2020 to the Florida House of Representatives, Insurance and Banking Subcommittee. House of Representatives Staff Analysis 
CS/CS/HB 959 (January 28, 2022), available at 
https://www.myfloridahouse.gov/Sections/Bills/billsdetail.aspx?BillId=75756&SessionId=93 (last visited Feb. 3, 2022). 
142
 Section 110.123, F.S. 
143
 Id.  BILL: PCS/CS/SB 1874 (565284)  	Page 20 
 
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 Governmental Accounting Standards 
Board (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 transact insurance and 
other specified entities licensed under the Florida Insurance Code. The section also requires the 
Department of Financial Services (DFS or department) to create a secure online portal as the sole 
means to accept service of process on the CFO under this section. 
 
Section 25 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 26 amends s. 624.422, F.S., relating to service of process, to require each licensed 
insurer to file with the 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 27 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 CFO and is delivered to the insurer or the 
DFS has notified the insurer that such information has been made available upon a secured 
online portal. 
 
Section 28 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 54-56 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. 
  BILL: PCS/CS/SB 1874 (565284)  	Page 21 
 
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. 
 
Division of Workers’ Compensation  
Section 12 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 13 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 the 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 
the 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 the exemption is not 
a license issued by the Department of Business and Professional Regulation (DBPR) and 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; and 
 Eliminates the scope of business or trade to disclosure on the notice of election to be exempt. 
 
Section 14 amends s. 440.107, F.S., relating to the DFS’ powers to enforce employer compliance 
with coverage requirements. The bill extends the deadline for an employer to submit business 
records to the DFS from 10 business days to 21 days before the DFS can take an administrative 
action. The section eliminates the requirement for the DFS to update the Stop-Work Order 
database on a daily basis. The bill also clarifies an employer must pay any outstanding assessed 
penalty prior to entering into a new payment agreement schedule with the 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  BILL: PCS/CS/SB 1874 (565284)  	Page 22 
 
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 15 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 
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 16 and 17 amend ss. 440.185 and 440.381, F.S., relating to employer and carrier 
reporting and carrier audits of employers, respectively. Section 16 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 17 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 18 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 19 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 state and had engaged in the full-time licensed 
practice of embalming in that state for at least five years. 
 
Section 20 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 21 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. 
  BILL: PCS/CS/SB 1874 (565284)  	Page 23 
 
Division of State Fire Marshal  
Section 22 amends s. 554.108, F.S., relating to boiler inspections, to clarify 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 American Society of Mechanical Engineers (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 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 23 amends s. 554.111, F.S., relating to fees, clarifies an additional amount equal to the 
certification inspection fees may be charged when it is necessary to make a special trip for 
testing and verification. In addition, this section requires an application for boiler permit to 
include the manufacturer’s data report. 
 
Section 24 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 of Insurance Agents and Agencies 
Section 29 amends s. 626.015, F.S., to relating to definitions. The definition of licensing 
authority is created to mean the department or the office.
144
 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 30 amends s. 626.171, F.S., relating to application for licensure, to provide the 
fingerprinting requirements in s. 624.34, F.S., apply to all applicants for licensure under 
ch. 626, F.S. 
 
Section 31 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(4), F.S. 
 
Section 32 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 the DFS by the submission of completed 
form prescribed by the DFS; 
                                                
144
 In this instance department means Department of Financial Services and office refers to the Office of Insurance 
Regulation.  BILL: PCS/CS/SB 1874 (565284)  	Page 24 
 
 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; and 
 Ensure all funds held in a fiduciary capacity are distributed to the rightful owners. 
 
The section provides that in a proceeding initiated pursuant to ch. 120, F.S., the 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, the DFS may also suspend or revoke the license of a licensee fined 
pursuant to this section. The section provides factors for the DFS to consider when determining 
the appropriateness of the penalty. 
 
Section 33 amends s. 626.201, F.S., relating to investigations of applicants by the DFS, provides 
that submission of an applicant’s 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 the DFS, the expiration, nonrenewal, or 
surrender of a license jeopardizes the licensing authority of the DFS to continue to investigate or 
prosecute violations committed while an individual was licensed.
145
 
 
Section 34 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 35 amends s. 626.221, F.S., to exempt an all-lines adjuster applicant who holds a 
designation as a Certified All Lines Adjuster (CALA) from Kaplan Financial Education from the 
statutory examination requirements. 
 
                                                
145
 The Department of Financial Services (DFS), 2022 Legislative Bill Analysis of SB 1874 (January 18, 2022) (on file with 
Senate Appropriations Subcommittee on Agriculture, Environment, and General Government).  BILL: PCS/CS/SB 1874 (565284)  	Page 25 
 
Section 36 amends s. 626.311, F.S., to provide 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 and may adjust claims and receive compensation as authorized. 
 
Section 37 amends s. 626.321, F.S., to provide a conforming change regarding fingerprint 
requirements in s. 626.171(4), F.S. 
 
Section 38 amends s. 626.601, F.S., to provide conforming amendment regarding fingerprint 
requirements provided in s. 626.171(4), F.S. 
 
Section 39 amends s. 626.7845, F.S., to provide technical conforming cross reference. 
 
Section 40 amends s. 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. 
 
Section 41 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 42 amends 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 43 amends s. 626.8421, F.S., to specify a title agent and a title agency must have a 
separate appointment as to each insurer by which they are appointed as agents. 
 
Section 44 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 45 amends s. 626.8433, F.S., relating to termination of appointments, to subject title 
insurance agencies to reporting terminations to the DFS. 
 
Section 46 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 47 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 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. 
  BILL: PCS/CS/SB 1874 (565284)  	Page 26 
 
Section 48 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 only appoint an apprentice. 
 
Section 49 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 six 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 one year after the expiration or termination of the license. 
 
Section 50 amends s. 626.8651, F.S., relating to public adjuster apprentice appointment and 
qualifications, to require only a public adjusting firm that has a designated primary adjuster, as 
required in s. 626.8695, F.S., to appoint the public adjuster apprentice, while eliminating a public 
all-lines adjuster’s ability to appoint a public adjuster apprentice.  
 
Further, this section requires an all lines adjuster to maintain bond coverage throughout existence 
of the license and for one full year after expiration or termination of the license. 
 
Section 51 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 
be disclosed in the application (each majority owner, partner, officer, and director of the 
adjusting firm) must be filed with the 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 52 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 one year following the expiration or termination of 
the license. 
 
Section 53 amends s. 626.8734, F.S., relating to nonresident all-lines adjuster license 
qualifications, to revise the fingerprinting requirements in accordance with s. 626.17(4), F.S. 
 
Section 57 amends s. 626.9953, F.S., relating to qualifications for registration, to provide 
conforming fingerprinting requirements. 
 
Division of State Fire Marshal 
Section 58 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 fire safety and fire rescue capabilities for 
firefighters; and 
 Protective clothing and equipment compliant with NFPA 1977, “Standard on Protective 
Clothing Equipment for Wildland Fire Fighting and Urban Interface Fire Fighting.” 
  BILL: PCS/CS/SB 1874 (565284)  	Page 27 
 
Section 59 amends s. 633.216, F.S., relating to inspections of buildings and equipment; training 
and certification requirements, to eliminate the requirement a previously certified fire safety 
inspector with a lapsed certification that has lapsed for eight years or more to repeat the fire 
safety inspector training required by the Division of State Fire Marshal. Current law requires a 
certificate is valid for four years and renewal is contingent upon the completion of continuing 
education. An exception allowing a licensee to successfully pass the examination in lieu of the 
training is deleted. 
 
Section 60 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 61 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 62 amends s. 648.34, F.S., relating to qualification of bail bond agents, to revise the 
fingerprinting process to be in accordance with s. 626.171(4), F.S. 
 
Section 63 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. 
 
Section 64 amends s. 648.46, F.S., relating to disciplinary action against bail bond licensees, to 
provide 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 65 amends s. 766.105, F.S., relating to the Florida Patient’s Compensation Fund (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.  BILL: PCS/CS/SB 1874 (565284)  	Page 28 
 
 
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 the DFS until the 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 the 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; and 
 Transfer any remaining money or assets of the fund to the CFO for deposit in the General 
Revenue Fund. 
 
The section also provides s. 766.105, F.S., is repealed effective January 1, 2024, thereby 
terminating the Florida Patient’s Compensation Fund. 
 
Section 11 creates ss. 395.1061 and section 66 and 67 amend s. 945.6041, F.S., and 
985.6441, F.S., respectively, 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 professional liability requirements. The provision is being 
transferred to s. 395.1061, F.S., because the bill repeals the current provision in s. 766.105, F.S., 
effective January 1, 2024. 
 
Section 68 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.  BILL: PCS/CS/SB 1874 (565284)  	Page 29 
 
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. 
 
Reducing the penalty calculation period and increasing credits for businesses that fail to 
comply with the workers’ compensation law, so long as the business has not previously 
failed to provide workers’ compensation coverage for its employees, should reduce the 
cost of non-compliance for small businesses, particularly those in the construction 
industry. 
 
Exempting schedules of maximum reimbursement for ambulatory surgical centers, 
healthcare providers, and hospitals from legislative ratification likely would result in 
increased fees to providers of healthcare, but could also force insurers to request rate 
increases to pay such costs. 
 
Permitting payroll audits by mail, rather than in person, for employers in the construction 
industry that have an estimated annual workers’ compensation premium of less than 
$10,000 could result in modest cost savings for insurance carriers. 
 
Permitting unaffiliated insurance agents to adjust claims, so long as the agent is also a 
licensed adjuster, could create employment opportunities for persons who hold both 
licenses and increase the pool of adjusters who can respond in the aftermath of a large 
storm or catastrophic event. 
 
Terminating the Florida Patient’s Compensation Fund (fund) could result in refunds to 
doctors and hospitals that were members of the fund in the late 1970s and early 1980s. 
C. Government Sector Impact: 
The bill may have insignificant but indeterminate impact on state revenues and 
expenditures. 
 
Service of Process 
The Department of Financial Services (DFS) is required to create a secure online portal 
as the sole means to accept service of process on the CFO under Section 2 and 
Sections 25-28. The current online portal will meet this requirement. The DFS has  BILL: PCS/CS/SB 1874 (565284)  	Page 30 
 
indicated any information technology impact can be absorbed within existing 
resources.
146
 
 
Workers’ Compensation Insurance 
The implementation of CS/SB 1874 will reduce penalties imposed on employers that do 
not comply with the workers’ compensation insurance coverage requirements. The fiscal 
impact is unknown. 
 
Firefighter Cancer Assistance Grant 
The changes made to the Firefighter Assistance Grant program will allow the program to 
fund additional necessary tools and equipment to firefighters. 
 
Florida Patients’ Compensation Fund 
Terminating the Florida Patient’s Compensation Fund could result in refunds to doctors 
and hospitals that were members of the Fund in the late 1970s and early 1980s. In 
addition, the bill allows for the transfer of any remaining money or assets, after all 
obligations have been met, to be deposited in the General Revenue Fund. 
VI. Technical Deficiencies: 
Section 9 amends local governmental entities annual financial reports. The Chief Financial 
Officer required all work product on the Florida Open Financial Statement System to be 
completed by December 31, 2021, including the recruitment and selection of contractors to build 
the eXtensible Business Reporting Language (XBRL) taxonomies and software tools. The 
section may need to be updated to reflect and conform to the completion of such deadlines.  
 
Section 29 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 33 and 63 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 33 and 65, and the removal of the definition of “licensing authority” in Section 29 
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, 440.02, 440.05, 440.107, 440.13, 
                                                
146
 The Department of Financial Services (DFS), 2022 Legislative Bill Analysis of SB 1874 (January 18, 2022) (on file with 
Senate Appropriations Subcommittee on Agriculture, Environment, and General Government).  BILL: PCS/CS/SB 1874 (565284)  	Page 31 
 
440.185, 440.381, 497.277, 497.369, 497.372, 497.374, 554.108, 554.111, 554.114, 624.307, 
624.422, 624.423, 624.610, 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.) 
Recommended CS by Appropriations Subcommittee on Agriculture, Environment, 
and General Government on February 22, 2022: 
The committee substitute retains the Stop Inmate Fraud Program within the Department 
of Financial Services. 
 
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. 
 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.