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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
A bill to be entitled 1
An act relating to insurer accountability; amending s. 2
624.307, F.S.; authorizing electronic responses to 3
certain requests from the Division of Consumer 4
Services of the Department of Financial Services 5
concerning consumer complaints; revising the timeframe 6
in which responses must be made; revising 7
administrative penalties; amending s. 624.315, F.S.; 8
requiring the Office of Insurance Regulation to 9
annually and quarterly create and publish specified 10
reports relating to the enforcement of insurer 11
compliance; requiring the office to submit such 12
reports to the Financial Services Commission and the 13
Legislature by specified dates; providing that the 14
office need not include in such reports certain 15
information; amending s. 624.316, F.S.; revising the 16
schedule of examinations of insurers; requiring the 17
office to create, and the commission to adopt by rule, 18
a specified methodology for scheduling such 19
examinations; specifying requirements for such 20
methodology; authorizing the commission to adopt by 21
rule a specified handb ook; amending s. 624.3161, F.S.; 22
revising requirements and conditions for certain 23
insurer market conduct examinations after a hurricane; 24
providing construction; requiring the office to 25
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
create, and the commission to adopt by rule, a 26
specified selection meth odology for examinations; 27
specifying requirements for such methodology; 28
specifying rulemaking requirements; amending s. 29
624.4211, F.S.; revising administrative fines the 30
office may impose in lieu of revocation or suspension; 31
creating s. 624.4301, F.S.; spe cifying notification 32
requirements for residential property insurers 33
temporarily suspending writing new policies; 34
authorizing the commission to adopt rules; creating s. 35
624.805, F.S.; specifying factors the office may 36
consider in determining whether the con tinued 37
operation of an insurer may be deemed to be hazardous 38
to its policyholders or creditors or to the general 39
public; specifying actions the office may take in 40
determining an insurer's financial condition; 41
authorizing the office to issue an order requir ing a 42
hazardous insurer to take specified actions; providing 43
construction; authorizing the office to issue 44
immediate final orders; amending s. 624.81, F.S.; 45
deleting certain rulemaking authority of the 46
commission; creating s. 624.865, F.S.; authorizing the 47
commission to adopt certain rules; amending s. 48
626.207, F.S.; revising a condition for 49
disqualification of an insurance representative 50
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
applicant or licensee; amending s. 626.9521, F.S.; 51
revising and specifying applicable fines for unfair 52
methods of competition and unfair or deceptive acts or 53
practices; amending s. 626.9541, F.S.; providing an 54
additional unfair claim settlement practice by an 55
insurer; prohibiting an officer or a director of an 56
insolvent or impaired insurer from receiving a bonus 57
from such insurer or from certain holding companies or 58
affiliates; defining the term "bonus"; providing a 59
criminal penalty; amending s. 626.989, F.S.; revising 60
a reporting requirement for the department's Division 61
of Investigative and Forensic Services; requiring the 62
division to submit an annual performance report to the 63
Legislature; specifying requirements for the report; 64
amending s. 627.0629, F.S.; specifying requirements 65
for residential property insurers in providing certain 66
hurricane mitigation discount informatio n to 67
policyholders in a specified manner; specifying 68
requirements for the office in reevaluating and 69
updating certain fixtures and construction techniques; 70
deleting obsolete dates; amending s. 627.351, F.S.; 71
prohibiting Citizens Property Insurance Corporat ion 72
from determining that a risk is ineligible for 73
coverage solely on a specified basis; providing 74
applicability; amending s. 627.410, F.S.; prohibiting 75
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the office from exempting specified insurers from form 76
filing requirements for a specified period; prov iding 77
construction; creating s. 627.4108, F.S.; specifying 78
requirements for residential property insurers in 79
creating and using claims -handling manuals; 80
authorizing the office to request submission of such 81
manuals; providing requirements for such submissio ns; 82
requiring authorized insurers to annually submit a 83
certified attestation to the office; authorizing the 84
commission to adopt emergency rules; amending s. 85
627.4133, F.S.; revising prohibitions on insurers 86
against the cancellation or nonrenewal of residential 87
property insurance policies; revising applicability; 88
providing construction; defining the term "insurer"; 89
amending s. 627.701, F.S.; providing that if a roof 90
deductible is applied under a personal lines 91
residential property insurance policy, no other 92
deductible under the policy may be applied to any 93
other loss to the property caused by the same covered 94
peril; amending s. 627.70132, F.S.; providing for the 95
tolling of certain timeframes for filing notices of 96
property insurance claims for servicemembers u nder 97
specified circumstances; amending s. 628.8015, F.S.; 98
conforming provisions to changes made by the act; 99
providing construction relating to chapter 2022 -271, 100
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
Laws of Florida; requiring residential property 101
insurer and motor vehicle insurer rate filings to 102
reflect certain projected savings and reductions in 103
expenses; specifying requirements for the office in 104
reviewing rate filings; authorizing the office to 105
develop certain methodology and data and contract with 106
a vendor for a certain purpose; providing 107
applicability; providing appropriations and 108
authorizing certain positions ; providing an effective 109
date. 110
111
Be It Enacted by the Legislature of the State of Florida: 112
113
Section 1. Paragraph (b) of subsection (10) of section 114
624.307, Florida Statutes, is a mended to read: 115
624.307 General powers; duties. — 116
(10) 117
(b) Any person licensed or issued a certificate of 118
authority by the department or the office shall respond, in 119
writing or electronically, to the division within 14 20 days 120
after receipt of a writte n request for documents and information 121
from the division concerning a consumer complaint. The response 122
must address the issues and allegations raised in the complaint 123
and include any requested documents concerning the consumer 124
complaint not subject to att orney-client or work-product 125
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
privilege. The division may impose an administrative penalty for 126
failure to comply with this paragraph of up to $5,000 $2,500 per 127
violation upon any entity licensed by the department or the 128
office and $250 for the first violati on, $500 for the second 129
violation, and up to $1,000 per for the third or subsequent 130
violation by upon any individual licensed by the department or 131
the office. 132
Section 2. Present subsection (4) of section 624.315, 133
Florida Statutes, is redesignated as su bsection (5), and a new 134
subsection (4) is added to that section, to read: 135
624.315 Annual reports; quarterly reports report.— 136
(4)(a) The office shall create a report detailing all 137
actions of the office to enforce insurer compliance with this 138
code and all rules and orders of the office or department during 139
the previous year. For each of the following, the report must 140
detail the insurer or other licensee or registrant against whom 141
such action was taken; whether the office found any violation of 142
law or rule by such party, and, if so, detail such violation; 143
and the resolution of such action, including any penalties 144
imposed by the office. The report must be published on the 145
website of the office and submitted to the commission, the 146
President of the Senate, the Speaker of the House of 147
Representatives, and the legislative committees with 148
jurisdiction over matters of insurance on or before January 31 149
of each year. The report must include, but need not be limited 150
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to: 151
1. The revocation, denial, or suspension of an y license or 152
registration issued by the office. 153
2. All actions taken pursuant to s. 624.310. 154
3. Fines imposed by the office for violations of this 155
code. 156
4. Consent orders entered into by the office. 157
5. Examinations and investigations conducted and completed 158
by the office pursuant to ss. 624.316 and 624.3161. 159
6. Investigations conducted and completed, by line of 160
insurance, for which the office found violations of law or rule 161
but did not take enforcement action. 162
(b) Each quarter, the office shall create a report 163
detailing all actions of the office to enforce insurer 164
compliance during the previous quarter. The report must include, 165
but need not be limited to, the subjects that must be included 166
in the annual report under paragraph (a). The report must be 167
submitted to the commission, the President of the Senate, the 168
Speaker of the House of Representatives, and the legislative 169
committees with jurisdiction over matters of insurance. The 170
report is due on or before April 30, July 31, October 31, and 171
January 31 for the immediately preceding quarter. The report due 172
January 31 may be included in the annual report required under 173
paragraph (a). 174
(c) The office need not include in any report required 175
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under this subsection information that would violate any 176
confidentiality provision included in any agreement, order, or 177
consent order entered into or adopted by the office. 178
Section 3. Paragraph (a) of subsection (2) of section 179
624.316, Florida Statutes, is amended, and subsections (3) and 180
(4) are added to that sec tion, to read: 181
624.316 Examination of insurers. — 182
(2)(a) Except as provided in paragraph (f), the office may 183
examine each insurer as often as may be warranted for the 184
protection of the policyholders and in the public interest, but 185
must, at a minimum, ex amine insurers as follows: 186
1. High-risk insurers at least once every 3 years. 187
2. Average- and low-risk insurers at least once every 5 188
years and shall examine each domestic insurer not less 189
frequently than once every 5 years . 190
191
The examination shall cover the preceding 5 fiscal years since 192
the last examination of the insurer, except for examinations of 193
low-risk insurers, in which case the examination shall cover at 194
least the preceding 3 fiscal years, and shall be commenced 195
within 12 months after the end of the most recent fiscal year 196
being covered by the examination. The examination may cover any 197
period of the insurer's operations since the last previous 198
examination. The examination may include examination of events 199
subsequent to the end of the most recent fiscal year and the 200
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events of any prior period that affect the present financial 201
condition of the insurer. 202
(3) The office shall create, and the commission shall 203
adopt by rule, a risk -based selection methodology for scheduling 204
examinations of insurers subject to this section. Except as 205
otherwise specified in subsection (2), this requirement does not 206
restrict the authority of the office to conduct examinations 207
under this section as often as it deems advisable. Such 208
methodology must include all of the following: 209
(a) Use of a risk-focused analysis to prioritize financial 210
examinations of insurers when such reporting indicates a decline 211
in the insurer's financial condition. 212
(b) Consideration of: 213
1. Level of capitalization and ide ntification of 214
unfavorable trends; 215
2. Negative trends in profitability or cash flow from 216
operations; 217
3. National Association of Insurance Commissioners 218
Insurance Regulatory Information System ratio results; 219
4. Risk-based capital and risk -based capital trend test 220
results; 221
5. The structure and complexity of the insurer; 222
6. Changes in the insurer's officers or board of 223
directors; 224
7. Changes in the insurer's business strategy or 225
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operations; 226
8. Findings and recommendations from an examination made 227
pursuant to this section or s. 624.3161; 228
9. Current or pending regulatory actions by the office or 229
the department; 230
10. Information obtained from other regulatory agencies or 231
independent organization ratings and reports; and 232
11. The impact of the insurer's insolvency on 233
policyholders of the insurer and the public generally. 234
(c) Prioritization of property insurers for which the 235
office identifies significant concerns about an insurer's 236
solvency pursuant to s. 627.7154. 237
(d) Any other matters the offic e deems necessary to 238
consider for the protection of the public. 239
(4) The office shall present the proposed rules 240
implementing this section to the commission no later than 241
October 1, 2023. In addition to the methodology required by this 242
section, the rule must include a plan to implement the 243
examination schedule in subsection (2). To facilitate the 244
development of the methodology for scheduling examinations 245
pursuant to this section, the commission may also adopt by rule 246
the National Association of Insurance C ommissioners Financial 247
Analysis Handbook, to the extent that the handbook is consistent 248
with the requirements of this section. 249
Section 4. Subsection (7) of section 624.3161, Florida 250
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Statutes, is amended, and subsection (8) is added to that 251
section, to read: 252
624.3161 Market conduct examinations. — 253
(7) Notwithstanding subsection (1), any authorized insurer 254
transacting residential property insurance business in this 255
state: 256
(a) May be subject to an additional market conduct 257
examination after a hurrican e if, at any time more than 90 days 258
after the end of the hurricane, the insurer: 259
(a) is among the top 20 percent of insurers based upon a 260
calculation of the ratio of hurricane -related property insurance 261
claims filed to the number of property insurance po licies in 262
force; or 263
(b) Must be subject to a market conduct examination after 264
a hurricane if, at any time more than 90 days after the end of 265
the hurricane, the insurer: 266
1. Is among the top 20 percent of insurers based upon a 267
calculation of the ratio of hurricane claim-related consumer 268
complaints made about the insurer to the department to the 269
insurer's total number of hurricane-related claims; 270
2. Is among the top 20 percent of insurers based upon a 271
calculation of the ratio of hurricane claims closed without 272
payment to the insurer's total number of hurricane claims on 273
policies providing wind or windstorm coverage; 274
3.(c) Has made significant payments to its managing 275
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general agent since the hurricane; or 276
4.(d) Is identified by the office as necessita ting a 277
market conduct exam for any other reason. 278
279
All relevant criteria under this section and s. 624.316 shall be 280
applied to the market conduct examination under this subsection. 281
Such an examination must be initiated within 18 months after the 282
landfall of a hurricane that results in an executive order or a 283
state of emergency issued by the Governor. The requirements of 284
this subsection do not limit the authority of the office to 285
conduct at any time a market conduct examination of a property 286
insurer in the aftermath of a hurricane. This subsection does 287
not require the office to conduct multiple market conduct 288
examinations of the same insurer when multiple hurricanes make 289
landfall in this state in a single calendar year. An examination 290
of an insurer under this subsection must also include an 291
examination of its managing general agent as if it were the 292
insurer. 293
(8) The office shall create, and the commission shall 294
adopt by rule, a selection methodology for scheduling and 295
conducting market conduct examinations of insurers and other 296
entities regulated by the office. This requirement does not 297
restrict the authority of the office to conduct market conduct 298
examinations as often as it deems necessary. Such selection 299
methodology must prioritize market conduct examinatio ns of 300
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
insurers and other entities regulated by the office to whom any 301
of the following conditions applies: 302
(a) An insurance regulator in another state has initiated 303
or taken regulatory action against the insurer or entity 304
regarding an act or omission of such insurer or entity which, if 305
committed in this state, would constitute a violation of the 306
laws of this state or any rule or order of the office or 307
department. 308
(b) Given the insurer's market share in this state, the 309
department or the office has receiv ed a disproportionate number 310
of the following types of claims -handling complaints against the 311
insurer: 312
1. Failure to timely communicate with respect to claims; 313
2. Failure to timely pay claims; 314
3. Untimely payments giving rise to the payment of 315
statutory interest; 316
4. Failure to adjust and pay claims in accordance with the 317
terms and conditions of the policy or contract and in compliance 318
with state law; 319
5. Violations of part IX of chapter 626, the Unfair 320
Insurance Trade Practices Act; 321
6. Failure to use licensed and duly appointed claims 322
adjusters; 323
7. Failure to maintain reasonable claims records; or 324
8. Failure to adhere to the company's claims -handling 325
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manual. 326
(c) The results of a National Association of Insurance 327
Commissioners Market Conduct Annual Statement indicate that the 328
insurer is a negative outlier with regard to particular metrics. 329
(d) There is evidence that the insurer is violating or has 330
violated the Unfair Insurance Trade Practices Act. 331
(e) The insurer meets the criteria in subs ection (7). 332
(f) Any other conditions the office deems necessary for 333
the protection of the public. 334
335
The office shall present the proposed rule required by this 336
subsection to the commission no later than October 1, 2023. In 337
addition to the methodology requ ired by this subsection, the 338
rule must provide criteria for how the office, in coordination 339
with the department, will determine what constitutes a 340
disproportionate number of claims -handling complaints described 341
in paragraph (b). 342
Section 5. Section 624. 4211, Florida Statutes, is amended 343
to read: 344
624.4211 Administrative fine in lieu of suspension or 345
revocation.— 346
(1) If the office finds that one or more grounds exist for 347
the discretionary revocation or suspension of a certificate of 348
authority issued under this chapter, the office may, in lieu of 349
such revocation or suspension, impose a fine upon the insurer. 350
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(2)(a) With respect to a any nonwillful violation, such 351
fine may not exceed: 352
1. Twenty-five thousand dollars per violation, up to an 353
aggregate amount of $100,000 for all nonwillful violations 354
arising out of the same action, related to a covered loss or 355
claim caused by an emergency for which the Governor declared a 356
state of emergency pursuant to s. 252.36. 357
2. Twelve thousand five hundred dollar s $5,000 per 358
violation, up to. In no event shall such fine exceed an 359
aggregate amount of $50,000 $20,000 for all other nonwillful 360
violations arising out of the same action. 361
(b) If an insurer discovers a nonwillful violation, the 362
insurer shall correct the violation and, if restitution is due, 363
make restitution to all affected persons. Such restitution shall 364
include interest at 12 percent per year from either the date of 365
the violation or the date of inception of the affected person's 366
policy, at the insurer's option. The restitution may be a credit 367
against future premiums due , provided that interest accumulates 368
until the premiums are due. If the amount of restitution due to 369
any person is $50 or more and the insurer wishes to credit it 370
against future premiums, it shall notify such person that she or 371
he may receive a check instead of a credit. If the credit is on 372
a policy that is not renewed, the insurer shall pay the 373
restitution to the person to whom it is due. 374
(3)(a) With respect to a any knowing and willful violation 375
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of a lawful order or rule of the office or commission or a 376
provision of this code, the office may impose a fine upon the 377
insurer in an amount not to exceed : 378
1. Two hundred thousand dollars for each such violation, 379
up to an aggregate amount of $1 million for all knowing and 380
willful violations arising out of the same action, related to a 381
covered loss or claim caused by an emergency for which the 382
Governor declared a state of emergency pursuant to s. 252.36. 383
2. One hundred thousand dollars $40,000 for each such 384
violation, up to. In no event shall such fine exceed an 385
aggregate amount of $500,000 $200,000 for all other knowing and 386
willful violations arising out of the same action. 387
(b) In addition to such fines, the insurer shall make 388
restitution when due in accordance with subsection (2). 389
(4) The failure of an insurer to make restitution when due 390
as required under this section constitutes a willful violation 391
of this code. However, if an insurer in good faith is uncertain 392
as to whether any restitu tion is due or as to the amount of such 393
restitution, it shall promptly notify the office of the 394
circumstances; and the failure to make restitution pending a 395
determination thereof shall not constitute a violation of this 396
code. 397
Section 6. Section 624.430 1, Florida Statutes, is created 398
to read: 399
624.4301 Notice of temporary discontinuance of writing new 400
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residential property insurance policies. — 401
(1) Any authorized insurer, before temporarily suspending 402
writing new residential property insurance policies in this 403
state, must give notice to the office of the insurer's reasons 404
for such action, the effective dates of the temporary 405
suspension, and the proposed communication to its agents. Such 406
notice must be provided on a form approved by the office and 407
adopted by the commission. The insurer shall submit such notice 408
to the office the earlier of 20 business days before the 409
effective date of the temporary suspension of writing or 5 410
business days before notifying its agents of the temporary 411
suspension of writing. T he insurer must provide any other 412
information requested by the office related to the insurer's 413
temporary suspension of writing. The requirements of this 414
subsection do not apply to a temporary suspension of writing 415
that a new business makes in response to a hurricane that may 416
make landfall in this state if such temporary suspension ceases 417
within 72 hours after hurricane conditions are no longer present 418
in this state. 419
(2) The commission may adopt rules to administer this 420
section. 421
Section 7. Section 624. 805, Florida Statutes, is created 422
to read: 423
624.805 Hazardous insurer standards; office's evaluation 424
and enforcement authority; immediate final order. — 425
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(1) In determining whether the continued operation of any 426
authorized insurer transacting business in this state may be 427
deemed to be hazardous to its policyholders or creditors or to 428
the general public, the office may consider any of the 429
following: 430
(a) Adverse findings reported in financial condition or 431
market conduct examination reports; audit reports; or actuarial 432
opinions, reports, or summaries. 433
(b) The National Association of Insurance Commissioners 434
Insurance Regulatory Information System and its other financial 435
analysis solvency tools and reports. 436
(c) Whether the insurer has made adequate provisi ons, 437
according to presently accepted actuarial standards of practice, 438
for the anticipated cash flows required to cover its contractual 439
obligations and related expenses. 440
(d) The ability of an assuming reinsurer to perform and 441
whether the insurer's reinsur ance program provides sufficient 442
protection for the insurer's remaining surplus after taking into 443
account the insurer's cash flow and the lines of insurance 444
written, as well as the financial condition of the assuming 445
reinsurer. 446
(e) Whether the insurer's operating loss in the last 12 -447
month period, including, but not limited to, net capital gain or 448
loss, change in nonadmitted assets, and cash dividends paid to 449
shareholders is greater than 50 percent of the insurer's 450
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remaining surplus as regards policyholder s in excess of the 451
minimum required. 452
(f) Whether the insurer's operating loss in the last 12 -453
month period, excluding net capital gains, is greater than 20 454
percent of the insurer's remaining surplus as regards 455
policyholders in excess of the minimum requir ed. 456
(g) Whether a reinsurer, an obligor, or any entity within 457
the insurer's insurance holding company system is insolvent, 458
threatened with insolvency, or delinquent in payment of its 459
monetary or other obligations, and which in the opinion of the 460
office may affect the solvency of the insurer. 461
(h) Contingent liabilities, pledges, or guaranties that 462
individually or collectively involve a total amount that in the 463
opinion of the office may affect the solvency of the insurer. 464
(i) Whether any affiliate, as d efined in s. 624.10, of the 465
insurer is delinquent in the transmitting to, or payment of, net 466
premiums to the insurer. 467
(j) The age and collectability of receivables. 468
(k) Whether the management of the insurer, including 469
officers, directors, or any other person who directly or 470
indirectly controls the operation of the insurer, fails to 471
possess and demonstrate the competence, fitness, and reputation 472
deemed necessary to serve the insurer in such position. 473
(l) Whether management of the insurer has failed to 474
respond to inquiries relative to the condition of the insurer or 475
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has furnished false or misleading information to the office 476
concerning an inquiry. 477
(m) Whether the insurer has failed to meet financial and 478
holding company filing requirements in the absence of a reason 479
satisfactory to the office. 480
(n) Whether management of the insurer has filed any false 481
or misleading sworn financial statement, has released a false or 482
misleading financial statement to le nding institutions or to the 483
general public, has made a false or misleading entry, or has 484
omitted an entry of material amount in the books of the insurer. 485
(o) Whether the insurer has grown so rapidly and to such 486
an extent that it lacks adequate financial and administrative 487
capacity to meet its obligations in a timely manner. 488
(p) Whether the insurer has experienced, or will 489
experience in the foreseeable future, cash flow or liquidity 490
problems. 491
(q) Whether management has established reserves that do 492
not comply with minimum standards established by state insurance 493
laws and regulations, statutory accounting standards, sound 494
actuarial principles, and standards of practice. 495
(r) Whether management persistently engages in material 496
under-reserving that result s in adverse development. 497
(s) Whether transactions among affiliates, subsidiaries, 498
or controlling persons for which the insurer receives assets or 499
capital gains, or both, do not provide sufficient value, 500
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liquidity, or diversity to ensure the insurer's ab ility to meet 501
its outstanding obligations as they mature. 502
(t) The ratio of the annual premium volume to surplus or 503
of its liabilities to surplus in relation to loss experience, 504
the kinds of risks insured, or both. 505
(u) Whether the insurer's asset portfo lio, when viewed in 506
light of current economic conditions and indications of 507
financial or operational leverage, is of sufficient value, 508
liquidity, or diversity to ensure the company's ability to meet 509
its outstanding obligations as they mature. 510
(v) Whether the excess of surplus as regards policyholders 511
above the insurer's statutorily required surplus as regards 512
policyholders has decreased by more than 50 percent in the 513
preceding 12-month period. 514
(w) As to a residential property insurer, whether it has 515
sufficient capital, surplus, and reinsurance to withstand 516
significant weather events, including, but not limited to, 517
hurricanes. 518
(x) Whether the insurer's required surplus, capital, or 519
capital stock is impaired to an extent prohibited by law. 520
(y) Whether the insurer continues to write new business 521
when it has not maintained the required surplus or capital. 522
(z) Whether the insurer moves to dissolve or liquidate 523
without first having made provisions satisfactory to the office 524
for liabilities arising from in surance policies issued by the 525
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insurer. 526
(aa) Whether the insurer has incurred substantial new 527
debt, has had to rely on frequent or substantial capital 528
infusions, or has a highly leveraged balance sheet. 529
(bb) Whether the insurer relies increasingly on other 530
entities, including, but not limited to, affiliates, third -party 531
administrators, managing general agents, or management 532
companies. 533
(cc) Whether the insurer meets one or more of the grounds 534
in s. 631.051 for the appointment of the department as rece iver. 535
(dd) Any other finding determined by the office to be 536
hazardous to the insurer's policyholders or creditors or to the 537
general public. 538
(2) For the purpose of making a determination of an 539
insurer's financial condition under the Florida Insurance C ode, 540
the office may: 541
(a) Disregard any credit or amount receivable resulting 542
from transactions with a reinsurer that is insolvent, impaired, 543
or otherwise subject to a delinquency proceeding; 544
(b) Make appropriate adjustments, including disallowance, 545
to asset values attributable to investments in or transactions 546
with parents, subsidiaries, or affiliates, consistent with the 547
National Association of Insurance Commissioners Accounting 548
Practices and Procedures Manual and state laws and rules; 549
(c) Refuse to recognize the stated value of accounts 550
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receivable if the ability to collect receivables is highly 551
speculative in view of the age of the account or the financial 552
condition of the debtor; or 553
(d) Increase the insurer's liability, in an amount equal 554
to any contingent liability, pledge, or guarantee not otherwise 555
included, if there is a substantial risk that the insurer will 556
be called upon to meet the obligation undertaken within the next 557
12-month period. 558
(3) If the office determines that the continued opera tions 559
of an insurer authorized to transact business in this state may 560
be hazardous to its policyholders or creditors or to the general 561
public, the office may issue an order requiring the insurer to 562
do any of the following: 563
(a) Reduce the total amount of present and potential 564
liability for policy benefits by procuring additional 565
reinsurance. 566
(b) Reduce, suspend, or limit the volume of business being 567
accepted or renewed. 568
(c) Reduce expenses by specified methods or amounts. 569
(d) Increase the insurer's c apital and surplus. 570
(e) Suspend or limit the declaration and payment of 571
dividends by an insurer to its stockholders or to its 572
policyholders. 573
(f) File reports in a form acceptable to the office 574
concerning the market value of the insurer's assets. 575
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(g) Limit or withdraw from certain investments or 576
discontinue certain investment practices to the extent the 577
office deems necessary. 578
(h) Document the adequacy of premium rates in relation to 579
the risks insured. 580
(i) File, in addition to regular annual statem ents, 581
interim financial reports on a form prescribed by the commission 582
and adopted by the National Association of Insurance 583
Commissioners. 584
(j) Correct corporate governance practice deficiencies and 585
adopt and use governance practices acceptable to the off ice. 586
(k) Provide a business plan acceptable to the office in 587
order to continue to transact business in this state. 588
(l) Notwithstanding any other law limiting the frequency 589
or amount of rate adjustments, adjust rates for any nonlife 590
insurance product wr itten by the insurer which the office 591
considers necessary to improve the financial condition of the 592
insurer. 593
(4) This section may not be interpreted to limit the 594
powers granted to the office by any laws of this state, nor may 595
it be interpreted to superse de any laws of this state. 596
(5) The office may, pursuant to ss. 120.569 and 120.57, in 597
its discretion and without advance notice or hearing, issue an 598
immediate final order to any insurer requiring any of the 599
actions listed in subsection (3). 600
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Section 8. Subsection (11) of section 624.81, Florida 601
Statutes, is amended to read: 602
624.81 Notice to comply with written requirements of 603
office; noncompliance. — 604
(11) The commission may adopt rules to define standards of 605
hazardous financial condition and correct ive action 606
substantially similar to that indicated in the National 607
Association of Insurance Commissioners' 1997 "Model Regulation 608
to Define Standards and Commissioner's Authority for Companies 609
Deemed to be in Hazardous Financial Condition," which are 610
necessary to implement the provisions of this part. 611
Section 9. Section 624.865, Florida Statutes, is created 612
to read: 613
624.865 Rulemaking. —The commission may adopt rules to 614
administer ss. 624.80 -624.87. 615
Section 10. Paragraph (c) of subsection (3) of se ction 616
626.207, Florida Statutes, is amended to read: 617
626.207 Disqualification of applicants and licensees; 618
penalties against licensees; rulemaking authority. — 619
(3) An applicant who has been found guilty of or has 620
pleaded guilty or nolo contendere to a c rime not included in 621
subsection (2), regardless of adjudication, is subject to: 622
(c) A 7-year disqualifying period for all misdemeanors 623
directly related to the financial services business or any 624
violation of the Florida Insurance Code . 625
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Section 11. Subsections (2) and (3) of section 626.9521, 626
Florida Statutes, are amended to read: 627
626.9521 Unfair methods of competition and unfair or 628
deceptive acts or practices prohibited; penalties. — 629
(2) Except as provided in subsection (3), any person who 630
violates any provision of this part is subject to a fine in an 631
amount not greater than $12,500 $5,000 for each nonwillful 632
violation and not greater than $100,000 $40,000 for each willful 633
violation. Fines under this subsection imposed against an 634
insurer may not exceed an aggregate amount of $50,000 $20,000 635
for all nonwillful violations arising out of the same action or 636
an aggregate amount of $500,000 $200,000 for all willful 637
violations arising out of the same action. The fines may be 638
imposed in addition to any other applicable penalty. 639
(3)(a) If a person violates s. 626.9541(1)(l), the offense 640
known as "twisting," or violates s. 626.9541(1)(aa), the offense 641
known as "churning," the person commits a misdemeanor of the 642
first degree, punishable as provided in s. 775.08 2, and an 643
administrative fine not greater than $12,500 $5,000 shall be 644
imposed for each nonwillful violation or an administrative fine 645
not greater than $187,500 $75,000 shall be imposed for each 646
willful violation. To impose an administrative fine for a 647
willful violation under this paragraph, the practice of 648
"churning" or "twisting" must involve fraudulent conduct. 649
(b) If a person violates s. 626.9541(1)(ee) by willfully 650
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submitting fraudulent signatures on an application or policy -651
related document, the per son commits a felony of the third 652
degree, punishable as provided in s. 775.082, and an 653
administrative fine not greater than $5,000 shall be imposed for 654
each nonwillful violation or an administrative fine not greater 655
than $187,500 $75,000 shall be imposed for each willful 656
violation. 657
(c) If a person violates any provision of this part and 658
such violation is related to a covered loss or covered claim 659
caused by an emergency for which the Governor declared a state 660
of emergency pursuant to s. 252.36, such person is subject to a 661
fine in an amount not greater than $25,000 for each nonwillful 662
violation and not greater than $200,000 for each willful 663
violation. Fines imposed under this paragraph may not exceed an 664
aggregate amount of $100,000 for all nonwillful violations 665
arising out of the same action or an aggregate amount of $1 666
million for all willful violations arising out of the same 667
action. 668
(d) Administrative fines under paragraphs (a) and (b) this 669
subsection may not exceed an aggregate amount of $125,000 670
$50,000 for all nonwillful violations arising out of the same 671
action or an aggregate amount of $625,000 $250,000 for all 672
willful violations arising out of the same action. 673
Section 12. Paragraphs (i) and (w) of subsection (1) of 674
section 626.9541, Florida Statutes, are amended to read: 675
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626.9541 Unfair methods of competition and unfair or 676
deceptive acts or practices defined. — 677
(1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE 678
ACTS.—The following are defined as unfair methods of comp etition 679
and unfair or deceptive acts or practices: 680
(i) Unfair claim settlement practices. — 681
1. Attempting to settle claims on the basis of an 682
application, when serving as a binder or intended to become a 683
part of the policy, or any other material document which was 684
altered without notice to, or knowledge or consent of, the 685
insured; 686
2. A material misrepresentation made to an insured or any 687
other person having an interest in the proceeds payable under 688
such contract or policy, for the purpose and wi th the intent of 689
effecting settlement of such claims, loss, or damage under such 690
contract or policy on less favorable terms than those provided 691
in, and contemplated by, such contract or policy; 692
3. Committing or performing with such frequency as to 693
indicate a general business practice any of the following: 694
a. Failing to adopt and implement standards for the proper 695
investigation of claims; 696
b. Misrepresenting pertinent facts or insurance policy 697
provisions relating to coverages at issue; 698
c. Failing to acknowledge and act promptly upon 699
communications with respect to claims; 700
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d. Denying claims without conducting reasonable 701
investigations based upon available information; 702
e. Failing to affirm or deny full or partial coverage of 703
claims, and, as to partial coverage, the dollar amount or extent 704
of coverage, or failing to provide a written statement that the 705
claim is being investigated, upon the written request of the 706
insured within 30 days after proof -of-loss statements have been 707
completed; 708
f. Failing to promptly provide a reasonable explanation in 709
writing to the insured of the basis in the insurance policy, in 710
relation to the facts or applicable law, for denial of a claim 711
or for the offer of a compromise settlement; 712
g. Failing to promptly notify the insu red of any 713
additional information necessary for the processing of a claim; 714
h. Failing to clearly explain the nature of the requested 715
information and the reasons why such information is necessary; 716
or 717
i. Failing to pay personal injury protection insuranc e 718
claims within the time periods required by s. 627.736(4)(b). The 719
office may order the insurer to pay restitution to a 720
policyholder, medical provider, or other claimant, including 721
interest at a rate consistent with the amount set forth in s. 722
55.03(1), for the time period within which an insurer fails to 723
pay claims as required by law. Restitution is in addition to any 724
other penalties allowed by law, including, but not limited to, 725
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the suspension of the insurer's certificate of authority; or 726
j. Altering or amending an insurance adjuster's report 727
without providing a detailed explanation as to why any change 728
that has the effect of reducing the estimate of the loss was 729
made and without: 730
(I) Including on the report or as an addendum to the 731
report a detailed li st of all changes made to the report and the 732
identity of the person who ordered each change; or 733
(II) Retaining all versions of the report, and including 734
within each such version, for each change made within such 735
version of the report, the identity of eac h person who made or 736
ordered such change; or 737
4. Failing to pay undisputed amounts of partial or full 738
benefits owed under first -party property insurance policies 739
within 60 days after an insurer receives notice of a residential 740
property insurance claim, de termines the amounts of partial or 741
full benefits, and agrees to coverage, unless payment of the 742
undisputed benefits is prevented by factors beyond the control 743
of the insurer as defined in s. 627.70131(5). 744
(w) Soliciting or accepting new or renewal insura nce risks 745
by insolvent or impaired insurer or receipt of certain bonuses 746
by officer or director of insolvent or impaired insurer 747
prohibited; penalty. — 748
1. Regardless of whether or not delinquency proceedings as 749
to the insurer have been or are to be initia ted, but while such 750
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insolvency or impairment exists, a no director or an officer of 751
an insurer, except with the written permission of the office, 752
may not shall authorize or permit the insurer to solicit or 753
accept new or renewal insurance risks in this stat e after such 754
director or officer knew, or reasonably should have known, that 755
the insurer was insolvent or impaired. 756
2. Regardless of whether delinquency proceedings as to the 757
insurer have been or are to be initiated, while such insolvency 758
or impairment exists, a director or an officer of an insolvent 759
or impaired insurer may not receive a bonus from such insurer, 760
nor may such director or officer receive a bonus from a holding 761
company or an affiliate that shares common ownership or control 762
with such insurer. 763
3. As used in this paragraph, the term: 764
a. "Bonus" means a payment that is in addition to an 765
officer's or a director's usual compensation and to any amounts 766
contracted for or otherwise legally due. 767
b. "Impaired" includes impairment of capital or su rplus, 768
as defined in s. 631.011(12) and (13). 769
4.2. Any such director or officer, upon conviction of a 770
violation of this paragraph, commits is guilty of a felony of 771
the third degree, punishable as provided in s. 775.082, s. 772
775.083, or s. 775.084. 773
Section 13. Subsection (6) of section 626.989, Florida 774
Statutes, is amended, and subsection (10) is added to that 775
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section, to read: 776
626.989 Investigation by department or Division of 777
Investigative and Forensic Services; compliance; immunity; 778
confidential information; reports to division; division 779
investigator's power of arrest. — 780
(6)(a) Any person, other than an insurer, agent, or other 781
person licensed under the code, or an employee thereof, having 782
knowledge or who believes that a fraudulent insurance act o r any 783
other act or practice which, upon conviction, constitutes a 784
felony or a misdemeanor under the code, or under s. 817.234, is 785
being or has been committed may send to the Division of 786
Investigative and Forensic Services a report or information 787
pertinent to such knowledge or belief and such additional 788
information relative thereto as the department may request. Any 789
professional practitioner licensed or regulated by the 790
Department of Business and Professional Regulation, except as 791
otherwise provided by law, any medical review committee as 792
defined in s. 766.101, any private medical review committee, and 793
any insurer, agent, or other person licensed under the code, or 794
an employee thereof, having knowledge or who believes that a 795
fraudulent insurance act or any ot her act or practice which, 796
upon conviction, constitutes a felony or a misdemeanor under the 797
code, or under s. 817.234, is being or has been committed shall 798
send to the Division of Investigative and Forensic Services a 799
report or information pertinent to suc h knowledge or belief and 800
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such additional information relative thereto as the department 801
may require. 802
(b) The Division of Investigative and Forensic Services 803
shall review such information or reports and select such 804
information or reports as, in its judgm ent, may require further 805
investigation. It shall then cause an independent examination of 806
the facts surrounding such information or report to be made to 807
determine the extent, if any, to which a fraudulent insurance 808
act or any other act or practice which, u pon conviction, 809
constitutes a felony or a misdemeanor under the code, or under 810
s. 817.234, is being committed. 811
(c) The Division of Investigative and Forensic Services 812
shall report any alleged violations of law which its 813
investigations disclose to the appropriate licensing agency and 814
state attorney or other prosecuting agency having jurisdiction , 815
including, but not li mited to, the statewide prosecutor for 816
crimes that impact two or more judicial circuits in this state, 817
with respect to any such violation, as provided in s. 624.310. 818
If prosecution by the state attorney or other prosecuting agency 819
having jurisdiction with respect to such violation is not begun 820
within 60 days of the division's report, the state attorney or 821
other prosecuting agency having jurisdiction with respect to 822
such violation shall inform the division of the reasons for the 823
lack of prosecution. 824
(10) The Division of Investigative and Forensic Services 825
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Bureau of Insurance Fraud shall prepare and submit a performance 826
report to the President of the Senate and the Speaker of the 827
House of Representatives by January 1 of each year. The annual 828
report must include, but need not be limited to: 829
(a) The total number of initial referrals received, cases 830
opened, cases presented for prosecution, cases closed, and 831
convictions resulting from cases presented for prosecution by 832
the Bureau of Insurance Fraud, by t ype of insurance fraud and 833
circuit. 834
(b) The number of referrals received from insurers, the 835
office, and the Division of Consumer Services of the department, 836
and the outcome of those referrals. 837
(c) The number of investigations undertaken by the Bureau 838
of Insurance Fraud which were not the result of a referral from 839
an insurer, and the outcome of those referrals. 840
(d) The number of investigations that resulted in a 841
referral to a regulatory agency , and the disposition of those 842
referrals. 843
(e) The number of cases presented by the Bureau of 844
Insurance Fraud which local prosecutors or the statewide 845
prosecutor declined to prosecute , and the reasons provided for 846
declining prosecution. 847
(f) A summary of the annual report required under s. 848
626.9896. 849
(g) The total number of employees assigned to the Bureau 850
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of Insurance Fraud, delineated by location of staff assigned, 851
and the number and location of employees assigned to the Bureau 852
of Insurance Fraud who were assigned to work other types of 853
fraud cases. 854
(h) The average caseload and turnaround time , by type of 855
case for each insurance fraud investigator. 856
(i) The training provided during the year to insurance 857
fraud investigators. 858
Section 14. Subsections (1), (3), and (4) of section 859
627.0629, Florida Statutes, a re amended to read: 860
627.0629 Residential property insurance; rate filings. — 861
(1) It is the intent of the Legislature that insurers 862
provide savings to consumers who install or implement windstorm 863
damage mitigation techniques, alterations, or solutions to their 864
properties to prevent windstorm losses. A rate filing for 865
residential property insurance must include actuarially 866
reasonable discounts, credits, or other rate differentials, or 867
appropriate reductions in deductibles, for properties on which 868
fixtures or construction techniques demonstrated to reduce the 869
amount of loss in a windstorm have been installed or 870
implemented. The fixtures or construction techniques must 871
include, but are not limited to, fixtures or construction 872
techniques that enhance roof stre ngth, roof covering 873
performance, roof-to-wall strength, wall-to-floor-to-foundation 874
strength, opening protection, and window, door, and skylight 875
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strength. Credits, discounts, or other rate differentials, or 876
appropriate reductions in deductibles, for fixtur es and 877
construction techniques that meet the minimum requirements of 878
the Florida Building Code must be included in the rate filing. 879
The office shall determine the discounts, credits, other rate 880
differentials, and appropriate reductions in deductibles that 881
reflect the full actuarial value of such revaluation, which may 882
be used by insurers in rate filings. Effective October 1, 2023, 883
each insurer subject to the requirements of this section must 884
provide information on the insurer's website describing the 885
hurricane mitigation discounts available to policyholders. Such 886
information must be accessible on, or through a hyperlink 887
located on, the home page of the insurer's website or the 888
primary page of the insurer's website for property insurance 889
policyholders or appl icants for such coverage in this state. On 890
or before January 1, 2025, and every 5 years thereafter, the 891
office shall reevaluate and update the fixtures or construction 892
techniques demonstrated to reduce the amount of loss in a 893
windstorm and the discounts, c redits, other rate differentials, 894
and appropriate reductions in deductibles that reflect the full 895
actuarial value of such fixtures or construction techniques. The 896
office shall adopt rules and forms necessitated by such 897
reevaluation. 898
(3) A rate filing made on or after July 1, 1995, for 899
mobile home owner insurance must include appropriate discounts, 900
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credits, or other rate differentials for mobile homes 901
constructed to comply with American Society of Civil Engineers 902
Standard ANSI/ASCE 7 -88, adopted by the Uni ted States Department 903
of Housing and Urban Development on July 13, 1994, and that also 904
comply with all applicable tie -down requirements provided by 905
state law. 906
(4) The Legislature finds that separate consideration and 907
notice of hurricane insurance premium s will assist consumers by 908
providing greater assurance that hurricane premiums are lawful 909
and by providing more complete information regarding the 910
components of property insurance premiums. Effective January 1, 911
1997, A rate filing for residential property insurance shall be 912
separated into two components, rates for hurricane coverage and 913
rates for all other coverages. A premium notice reflecting a 914
rate implemented on the basis of such a filing shall separately 915
indicate the premium for hurricane coverage and the premium for 916
all other coverages. 917
Section 15. Paragraph (ll) is added to subsection (6) of 918
section 627.351, Florida Statutes, to read: 919
627.351 Insurance risk apportionment plans. — 920
(6) CITIZENS PROPERTY INSURANCE CORPORATION. — 921
(ll) The corporation may not determine that a risk is 922
ineligible for coverage with the corporation solely because such 923
risk has unrepaired damage caused by a covered loss that is the 924
subject of a claim that has been filed with the Florida 925
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Insurance Guaranty Association. Th is paragraph applies to a risk 926
until the earlier of 24 months after the date the Florida 927
Insurance Guaranty Association began servicing such claim or the 928
Florida Insurance Guaranty Association closes the claim. 929
Section 16. Subsection (4) of section 627 .410, Florida 930
Statutes, is amended to read: 931
627.410 Filing, approval of forms. — 932
(4) The office may, by order, exempt from the requirements 933
of this section for so long as it deems proper any insurance 934
document or form or type thereof as specified in suc h order, to 935
which, in its opinion, this section may not practicably be 936
applied, or the filing and approval of which are, in its 937
opinion, not desirable or necessary for the protection of the 938
public. The office may not exempt from the requirements of this 939
section the insurance documents or forms of any insurer against 940
whom the office enters a final order determining that such 941
insurer violated any provision of this code, for a period of 36 942
months after the date of such order . The forms submitted by the 943
insurer may not be deemed approved under subsection (2). 944
Section 17. Section 627.4108, Florida Statutes, is created 945
to read: 946
627.4108 Claims-handling manuals; submission; 947
attestation.— 948
(1) Each authorized residential property insurer 949
conducting business i n this state must create and use a claims -950
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handling manual that provides guidelines and procedures and that 951
complies with the requirements of this code and com plies with 952
usual and customary industry claims -handling practices. Such 953
manual must include guidel ines and procedures for: 954
(a) Initially receiving and acknowledging initial receipt 955
of the claim and reviewing and evaluating the claim; 956
(b) Communicating with policyholders, beginning with the 957
receipt of the claim and continuing until closure of the cl aim; 958
(c) Setting the claim reserve; 959
(d) Investigating the claim, including conducting 960
inspections of the property that is the subject of the claim; 961
(e) Making preliminary estimates and estimates of the 962
covered damages to the insured property and communicating such 963
estimates to the policyholder; 964
(f) The payment, partial payment, or denial of the claim 965
and communicating such claim decision to the policyholder; 966
(g) Closing the claim; and 967
(h) Any aspect of the claims -handling process which the 968
office determines should be included in the claims -handling 969
manual in order to: 970
1. Comply with the laws of this state or rules or orders 971
of the office or department; 972
2. Ensure that the claims -handling manual comp lies with 973
usual and customary industry cl aims-handling guidelines; or 974
3. Protect policyholders of the insurer or the general 975
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public. 976
(2) At any time, the office may request that a residential 977
property insurer submit a physical or electronic copy of the 978
insurer's currently applicable, or other wise specifically 979
requested, claims-handling manuals. Upon receiving such a 980
request, a residential property insurer must submit to the 981
office within 5 business days: 982
(a) A true and correct copy of each claims -handling manual 983
requested; and 984
(b) An attestation, on a form prescribed by the 985
commission, which certifies: 986
1. That the insurer has provided a true and correct copy 987
of each currently applicable, or otherwise specifically 988
requested, claims-handling manual; and 989
2. The timeframe for which each submitted claims-handling 990
manual was or is in effect. 991
(3)(a) Annually, each authorized residential property 992
insurer must certify and attest, on a form prescribed by the 993
commission, that: 994
1. Each of the insurer's current claims -handling manuals 995
complies with the requirements of this code and comp lies with 996
usual and customary industry claims -handling practices; and 997
2. The insurer maintains adequate resources available to 998
implement the requirements of each of its claims -handling 999
manuals at all times, inc luding during natural disasters and 1000
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catastrophic events. 1001
(b) The attestation required under paragraph (a) must be 1002
submitted to the office on or before August 1, 2023, and on or 1003
before May 1 of each year thereafter. 1004
(4) The commission is authorized, and all conditions are 1005
deemed met, to adopt emergency rules under s. 120.54(4) for the 1006
purpose of implementing this section. Notwithstanding any other 1007
law, emergency rules adopted under this section are effective 1008
for 6 months after adoption and may be renewed during the 1009
pendency of procedures to adopt permanent rules addressing the 1010
subject of the emergency rules. 1011
Section 18. Paragraph (d) of subsection (2) of section 1012
627.4133, Florida Statutes, is amended to read: 1013
627.4133 Notice of cancellation, nonrene wal, or renewal 1014
premium.— 1015
(2) With respect to any personal lines or commercial 1016
residential property insurance policy, including, but not 1017
limited to, any homeowner, mobile home owner, farmowner, 1018
condominium association, condominium unit owner, apartment 1019
building, or other policy covering a residential structure or 1020
its contents: 1021
(d)1. Upon a declaration of an emergency pursuant to s. 1022
252.36 and the filing of an order by the Commissioner of 1023
Insurance Regulation, An authorized insurer may not cancel or 1024
nonrenew a personal residential or commercial residential 1025
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property insurance policy covering a dwelling or residential 1026
property located in this state : 1027
a. For a period of 90 days after the dwelling or 1028
residential property has been repaired, if such property which 1029
has been damaged as a result of a hurricane or wind loss that is 1030
the subject of the declaration of emergency pursuant to s. 1031
252.36 and the filing of an order by the Commissioner of 1032
Insurance Regulation for a period of 90 days after the dwelling 1033
or residential property has been repaired . A structure is deemed 1034
to be repaired when substantially completed and restored to the 1035
extent that it is insurable by another authorized insurer that 1036
is writing policies in this state. 1037
b. Until the earlier of when the dwelling or residential 1038
property has been repaired or 1 year after the insurer issues 1039
the final claim payment, if such property was damaged by any 1040
covered peril and sub -subparagraph a. does not apply. 1041
2. However, an insurer or agent may cancel or nonrene w 1042
such a policy before prior to the repair of the dwelling or 1043
residential property: 1044
a. Upon 10 days' notice for nonpayment of premium; or 1045
b. Upon 45 days' notice: 1046
(I) For a material misstatement or fraud related to the 1047
claim; 1048
(II) If the insurer de termines that the insured has 1049
unreasonably caused a delay in the repair of the dwelling; or 1050
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(III) If the insurer has paid policy limits. 1051
3. If the insurer elects to nonrenew a policy covering a 1052
property that has been damaged, the insurer shall provide at 1053
least 90 days' notice to the insured that the insurer intends to 1054
nonrenew the policy 90 days after the dwelling or residential 1055
property has been repaired. Nothing in this paragraph shall 1056
prevent the insurer from canceling or nonrenewing the policy 90 1057
days after the repairs are complete for the same reasons the 1058
insurer would otherwise have canceled or nonrenewed the policy 1059
but for the limitations of subparagraph 1. The Financial 1060
Services Commission may adopt rules, and the Commissioner of 1061
Insurance Regulation may issue orders, necessary to implement 1062
this paragraph. 1063
4. This paragraph shall also apply to personal residential 1064
and commercial residential policies covering property that was 1065
damaged as the result of Hurricane Ian or Hurricane Nicole 1066
Tropical Storm Bonnie, Hurricane Charley, Hurricane Frances, 1067
Hurricane Ivan, or Hurricane Jeanne . 1068
5. For purposes of this paragraph: 1069
a. A structure is deemed to be repaired when substantially 1070
completed and restored to the extent that it is insurable by 1071
another authorized insurer writing policies in this state. 1072
b. The term "insurer" means an authorized insurer. 1073
Section 19. Paragraph (a) of subsection (10) of section 1074
627.701, Florida Statutes, is amended to read: 1075
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627.701 Liability of insureds; coinsurance; d eductibles.— 1076
(10)(a) Notwithstanding any other provision of law, an 1077
insurer issuing a personal lines residential property insurance 1078
policy may include in such policy a separate roof deductible 1079
that meets all of the following requirements: 1080
1. The insurer has complied with the offer requirements 1081
under subsection (7) regarding a deductible applicable to losses 1082
from perils other than a hurricane. 1083
2. The roof deductible may not exceed the lesser of 2 1084
percent of the Coverage A limit of the policy or 50 perc ent of 1085
the cost to replace the roof. 1086
3. The premium that a policyholder is charged for the 1087
policy includes an actuarially sound credit or premium discount 1088
for the roof deductible. 1089
4. The roof deductible applies only to a claim adjusted on 1090
a replacement cost basis. 1091
5. The roof deductible does not apply to any of the 1092
following events: 1093
a. A total loss to a primary structure in accordance with 1094
the valued policy law under s. 627.702 which is caused by a 1095
covered peril. 1096
b. A roof loss resulting from a hu rricane as defined in s. 1097
627.4025(2)(c). 1098
c. A roof loss resulting from a tree fall or other hazard 1099
that damages the roof and punctures the roof deck. 1100
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d. A roof loss requiring the repair of less than 50 1101
percent of the roof. 1102
1103
If a roof deductible is appl ied, no other deductible under the 1104
policy may be applied to the loss or to any other loss to the 1105
property caused by the same covered peril . 1106
Section 20. Subsection (2) of section 627.70132, Florida 1107
Statutes, is amended to read: 1108
627.70132 Notice of pro perty insurance claim. — 1109
(2) A claim or reopened claim, but not a supplemental 1110
claim, under an insurance policy that provides property 1111
insurance, as defined in s. 624.604, including a property 1112
insurance policy issued by an eligible surplus lines insurer, 1113
for loss or damage caused by any peril is barred unless notice 1114
of the claim was given to the insurer in accordance with the 1115
terms of the policy within 1 year after the date of loss. A 1116
supplemental claim is barred unless notice of the supplemental 1117
claim was given to the insurer in accordance with the terms of 1118
the policy within 18 months after the date of loss. The time 1119
limitations of this subsection are tolled during any term of 1120
deployment to a combat zone or combat support posting which 1121
materially affects t he ability of a servicemember as defined in 1122
s. 250.01 to provide notice of a claim, supplemental claim, or 1123
reopened claim. 1124
Section 21. Paragraph (d) of subsection (2) and paragraph 1125
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(b) of subsection (3) of section 628.8015, Florida Statutes, are 1126
amended to read: 1127
628.8015 Own-risk and solvency assessment; corporate 1128
governance annual disclosure. — 1129
(2) OWN-RISK AND SOLVENCY ASSESSMENT. — 1130
(d) Exemption.— 1131
1. An insurer is exempt from the requirements of this 1132
subsection if: 1133
a. The insurer has annual d irect written and unaffiliated 1134
assumed premium, including international direct and assumed 1135
premium, but excluding premiums reinsured with the Federal Crop 1136
Insurance Corporation and the National Flood Insurance Program, 1137
of less than $500 million; or 1138
b. The insurer is a member of an insurance group and the 1139
insurance group has annual direct written and unaffiliated 1140
assumed premium, including international direct and assumed 1141
premium, but excluding premiums reinsured with the Federal Crop 1142
Insurance Corporation and the National Flood Insurance Program, 1143
of less than $1 billion. 1144
2. If an insurer is: 1145
a. Exempt under sub -subparagraph 1.a., but the insurance 1146
group of which the insurer is a member is not exempt under sub -1147
subparagraph 1.b., the ORSA summary report must include every 1148
insurer within the insurance group. The insurer may satisfy this 1149
requirement by submitting more than one ORSA summary report for 1150
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any combination of insurers if any combination of reports 1151
includes every insurer within the insurance group. 1152
b. Not exempt under sub -subparagraph 1.a., but the 1153
insurance group of which it is a membe r is exempt under sub -1154
subparagraph 1.b., the insurer must submit to the office the 1155
ORSA summary report applicable only to that insurer. 1156
3. The office may require an exempt insurer to maintain a 1157
risk management framework, conduct an ORSA, and file an ORSA 1158
summary report: 1159
a. Based on unique circumstances, including, but not 1160
limited to, the type and volume of business written, ownership 1161
and organizational structure, federal agency requests, and 1162
international supervisor requests; 1163
b. If the insurer has ris k-based capital for a company 1164
action level event pursuant to s. 624.4085(3), meets one or more 1165
of the standards of an insurer deemed to be in hazardous 1166
financial condition under s. 624.805 as defined in rules adopted 1167
by the commission pursuant to s. 624.81 (11), or exhibits 1168
qualities of an insurer in hazardous financial condition as 1169
determined by the office; or 1170
c. If the office determines it is in the best interest of 1171
the state. 1172
4. If an exempt insurer becomes disqualified for an 1173
exemption because of cha nges in premium as reported on the most 1174
recent annual statement of the insurer or annual statements of 1175
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the insurers within the insurance group of which the insurer is 1176
a member, the insurer must comply with the requirements of this 1177
section effective 1 year after the year in which the insurer 1178
exceeded the premium thresholds. 1179
(3) CORPORATE GOVERNANCE ANNUAL DISCLOSURE. — 1180
(b) Disclosure requirement. — 1181
1.a. An insurer, or insurer member of an insurance group, 1182
of which the office is the lead state regulator, as determined 1183
by the procedures in the most recent National Association of 1184
Insurance Commissioners Financial Analysis Handbook, shall 1185
submit a corporate governance annual disclosure to the office by 1186
June 1 of each calendar year. The initial corporate gover nance 1187
annual disclosure must be submitted by December 31, 2018. 1188
b. An insurer or insurance group not required to submit a 1189
corporate governance annual disclosure under sub -subparagraph a. 1190
shall do so at the request of the office, but not more than once 1191
per calendar year. The insurer or insurance group shall notify 1192
the office of the proposed submission date within 30 days after 1193
the request of the office. 1194
c. Before December 31, 2018, the office may require an 1195
insurer or insurance group to provide a corpora te governance 1196
annual disclosure: 1197
(I) Based on unique circumstances, including, but not 1198
limited to, the type and volume of business written, the 1199
ownership and organizational structure, federal agency requests, 1200
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and international supervisor requests; 1201
(II) If the insurer has risk -based capital for a company 1202
action level event pursuant to s. 624.4085(3), meets one or more 1203
of the standards of an insurer deemed to be in hazardous 1204
financial condition under s. 624.805 as defined in rules adopted 1205
pursuant to s. 624.81(11), or exhibits qualities of an insurer 1206
in hazardous financial condition as determined by the office; 1207
(III) If the insurer is the member of an insurer group of 1208
which the office acts as the lead state regulator as determined 1209
by the procedures in th e most recent National Association of 1210
Insurance Commissioners Financial Analysis Handbook; or 1211
(IV) If the office determines that it is in the best 1212
interest of the state. 1213
2. The chief executive officer or corporate secretary of the 1214
insurer or the insuran ce group must sign the corporate 1215
governance annual disclosure attesting that, to the best of his 1216
or her knowledge and belief, the insurer has implemented the 1217
corporate governance practices and provided a copy of the 1218
disclosure to the board of directors or the appropriate board 1219
committee. 1220
3.a. Depending on the structure of its system of corporate 1221
governance, the insurer or insurance group may provide corporate 1222
governance information at one of the following levels: 1223
(I) The ultimate controlling parent leve l; 1224
(II) An intermediate holding company level; or 1225
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(III) The individual legal entity level. 1226
b. The insurer or insurance group may make the corporate 1227
governance annual disclosure at: 1228
(I) The level used to determine the risk appetite of the 1229
insurer or insurance group; 1230
(II) The level at which the earnings, capital, liquidity, 1231
operations, and reputation of the insurer are collectively 1232
overseen and the supervision of those factors is coordinated and 1233
exercised; or 1234
(III) The level at which legal liabili ty for failure of 1235
general corporate governance duties would be placed. 1236
1237
An insurer or insurance group must indicate the level of 1238
reporting used and explain any subsequent changes in the 1239
reporting level. 1240
4. The review of the corporate governance annual 1241
disclosure and any additional requests for information shall be 1242
made through the lead state as determined by the procedures in 1243
the most recent National Association of Insurance Commissioners 1244
Financial Analysis Handbook. 1245
5. An insurer or insurance group may comply with this 1246
paragraph by cross-referencing other existing relevant and 1247
applicable documents, including, but not limited to, the ORSA 1248
summary report, Holding Company Form B or F filings, Securities 1249
and Exchange Commission proxy statements, or foreign regulatory 1250
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reporting requirements, if the documents contain information 1251
substantially similar to the information described in paragraph 1252
(c). The insurer or insurance group shall clearly identify and 1253
reference the specif ic location of the relevant and applicable 1254
information within the corporate governance annual disclosure 1255
and attach the referenced document if it has not already been 1256
filed with, or made available to, the office. 1257
6. Each year following the initial filing of the corporate 1258
governance annual disclosure, the insurer or insurance group 1259
shall file an amended version of the previously filed corporate 1260
governance annual disclosure indicating changes that have been 1261
made. If changes have not been made in the previou sly filed 1262
disclosure, the insurer or insurance group should so indicate. 1263
Section 22. Chapter 2022-271, Laws of Florida, shall not 1264
be construed to impair any right under an insurance contract in 1265
effect on or before the effective date of that chapter law . To 1266
the extent that chapter 2022 -271, Laws of Florida, affects a 1267
right under an insurance contract, that chapter law applies to 1268
an insurance contract issued or renewed after the applicable 1269
effective date provided by the chapter law. This section is 1270
intended to clarify existing law and is remedial in nature. 1271
Section 23. (1) Each residential property insurer and 1272
each motor vehicle insurer rate filing made or pending with the 1273
Office of Insurance Regulation on or after July 1, 2023, must 1274
reflect the projected savings or reduction in claim frequency, 1275
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claim severity, and loss adjustment expenses, including for 1276
attorney fees, payment of attorney fees to claimants, and any 1277
other reduction actuarially indicated, due to the combined 1278
effect of the applicable prov isions of chapters 2021 -77, 2022-1279
268, 2022-271, and 2023-15, Laws of Florida, in order to ensure 1280
that rates for such insurance accurately reflect the risk of 1281
providing such insurance. 1282
(2) The Office of Insurance Regulation must consider in 1283
its review of such rate filings the projected savings or 1284
reduction in claim frequency, claim severity, and loss 1285
adjustment expenses, including for attorney fees, payment of 1286
attorney fees to claimants, and any other reduction actuarially 1287
indicated, due to the combined ef fect of the applicable 1288
provisions of chapters 2021 -77, 2022-268, 2022-271, and 2023-15, 1289
Laws of Florida. The office may develop methodology and data 1290
that incorporate generally accepted actuarial techniques and 1291
standards to be used in its review of rate fil ings governed by 1292
this section. The office may contract with an appropriate vendor 1293
to advise the office in developing such methodology and data to 1294
consider. Such methodology and data are not intended to create a 1295
mandatory minimum rate decrease for all prope rty insurers and 1296
motor vehicle insurers, but rather to ensure that the rates for 1297
such coverage meet the requirements of s. 627.062, Florida 1298
Statutes, and thus are not excessive, inadequate, or unfairly 1299
discriminatory and allow such insurers a reasonable ra te of 1300
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return. 1301
(3) This section does not apply to rate filings made 1302
pursuant to s. 627.062(2)(k), Florida Statutes. 1303
(4) For the 2023-2024 fiscal year, the sum of $500,000 in 1304
nonrecurring funds is appropriated from the Insurance Regulatory 1305
Trust Fund to the Office of Insurance Regulation to implement 1306
this section. 1307
Section 24. For the 2023-2024 fiscal year, 18 full -time 1308
equivalent positions with associated salary rate of 1,116,500 1309
are authorized and the sum s of $1,879,129 in recurring funds and 1310
$185,086 in nonrecurring funds are appropriated from the 1311
Insurance Regulatory Trust Fund to the Office of Insurance 1312
Regulation to implement this act. 1313
Section 25. For the 2023-2024 fiscal year, seven full -time 1314
equivalent positions with associated salary rate o f 350,000 are 1315
authorized and the sum s of $574,036 in recurring funds and 1316
$33,467 in nonrecurring funds are appropriated from the 1317
Insurance Regulatory Trust Fund to the Department of Financial 1318
Services to implement this act. 1319
Section 26. This act shall t ake effect July 1, 2023. 1320