Florida Senate Bill S1398 Introduced / Bill

 Florida Senate - 2023 SB 1398  By Senator DiCeglie 18-00549B-23 20231398__ 1 A bill to be entitled 2 An act relating to consumer protection; amending s. 3 494.001, F.S.; revising the definition of the term 4 branch office; defining the term remote location; 5 authorizing a licensee under ch. 494, F.S., to allow 6 loan originators to work from remote locations if 7 specified conditions are met; amending s. 494.0067, 8 F.S.; specifying that mortgage lenders may transact 9 business from branch offices and remote locations; 10 providing a requirement for operating remote 11 locations; creating s. 501.2042, F.S.; defining terms; 12 providing requirements for organizers of crowd-funding 13 campaigns related to disasters and for crowd-funding 14 platforms; amending s. 520.23, F.S.; revising 15 disclosure requirements for agreements governing the 16 sale or lease of a distributed energy generation 17 system; amending s. 626.551, F.S.; revising the 18 timeframe in which an insurance representative must 19 notify the Department of Financial Services of certain 20 changes in information; amending s. 626.602, F.S.; 21 providing applicability of provisions relating to the 22 disapproval of insurance agency names to adjusting 23 firm names; revising grounds on which such names may 24 be disapproved by the department; providing for repeal 25 of a provision upon becoming obsolete; amending s. 26 626.854, F.S.; revising the definition of public 27 adjuster; prohibiting public adjusters from 28 contracting with anyone other than the named insured 29 without the insureds written consent; specifying a 30 penalty for noncompliance; specifying timeframes in 31 which an insured or a claimant may cancel a public 32 adjusters contract without penalty or contract under 33 certain circumstances; revising requirements for 34 public adjusters contracts; specifying requirements 35 for public adjusters if the insurer, within a certain 36 timeframe, pays or commits in writing to pay to the 37 insured the policy limit of the policy; specifying the 38 commission a public adjuster receives under certain 39 circumstances; amending s. 626.860, F.S.; providing 40 that an attorneys exemption from public adjuster 41 licensure requirements do not apply to certain 42 persons; amending s. 626.865, F.S.; revising 43 qualifications for a public adjusters license; 44 requiring applicants for public adjuster licenses to 45 file with the department a specified errors and 46 omissions insurance policy; amending s. 626.875, F.S.; 47 revising recordkeeping requirements for appointed 48 independent adjusters and licensed public adjusters; 49 creating s. 626.8751, F.S.; specifying claims payment 50 requirements for insurers when a claim is settled 51 while the insured is represented by a public adjuster; 52 amending s. 626.8796, F.S.; revising requirements for 53 public adjuster contracts; specifying requirements for 54 and prohibitions on public adjusters relating to such 55 contracts; providing construction; authorizing the 56 department to adopt rules; amending s. 626.8797, F.S.; 57 revising a fraud statement requirement in proof-of 58 loss statements; amending s. 626.9541, F.S.; adding a 59 unfair or deceptive insurance act relating to health 60 insurance contracts; amending s. 627.4025, F.S.; 61 revising the definition of the term hurricane, and 62 defining the term hurricane deductible, as used in 63 policies providing residential coverage; amending s. 64 627.4133, F.S.; revising the timeframe after which 65 certain insurers may not cancel policies except for 66 specified reasons; amending s. 627.4554, F.S.; 67 revising legislative purpose; revising applicability; 68 revising and defining terms; revising and specifying 69 duties of insurers and agents relating to the 70 recommendation and sale of annuity investments; 71 specifying comparable standards that comply with such 72 requirements; specifying agent training requirements; 73 providing and revising construction; amending s. 74 634.041, F.S.; specifying authorized methods of paying 75 claims for motor vehicle service agreements; providing 76 a directive to the Division of Law Revision; providing 77 an effective date. 78 79 Be It Enacted by the Legislature of the State of Florida: 80 81 Section 1.Subsections (35) through (38) of section 82 494.001, Florida Statutes, are renumbered as subsections (36) 83 through (39), respectively, subsection (3) is amended, and a new 84 subsection (35) is added to that section, to read: 85 494.001Definitions.As used in this chapter, the term: 86 (3)Branch office means a remote location or a location, 87 other than a mortgage brokers or mortgage lenders principal 88 place of business: 89 (a)The address of which appears on business cards, 90 stationery, or advertising used by the licensee in connection 91 with business conducted under this chapter; 92 (b)At which the licensees name, advertising or 93 promotional materials, or signage suggests that mortgage loans 94 are originated, negotiated, funded, or serviced; or 95 (c)At which mortgage loans are originated, negotiated, 96 funded, or serviced by a licensee. 97 (35)Remote location means a location, other than a 98 principal place of business or a branch office, at which a loan 99 originator of a licensee may conduct business. A licensee may 100 allow loan originators to work from remote locations if: 101 (a)The licensee has written policies and procedures for 102 supervision of loan originators working from remote locations. 103 (b)Access to company platforms and customer information is 104 in accordance with the licensees comprehensive written 105 information security plan. 106 (c)An in-person customer interaction does not occur at a 107 loan originators residence unless such residence is a licensed 108 location. 109 (d)Physical records are not maintained at a remote 110 location. 111 (e)Customer interactions and conversations about consumers 112 will be in compliance with federal and state information 113 security requirements, including applicable provisions under the 114 Gramm-Leach-Bliley Act and the Safeguards Rule established by 115 the Federal Trade Commission, set forth at 16 C.F.R. part 314, 116 as such requirements may be amended from time to time. 117 (f)A loan originator working at a remote location accesses 118 the companys secure systems, including a cloud-based system, 119 directly from any out-of-office device such as a laptop, phone, 120 desktop computer, or tablet, through a virtual private network 121 or comparable system that ensures secure connectivity and that 122 requires passwords or other forms of authentication to access. 123 (g)The licensee ensures that appropriate security updates, 124 patches, or other alterations to the security of all devices 125 used at remote locations are installed and maintained. 126 (h)The licensee is able to remotely lock or erase company 127 related contents of any device or otherwise remotely limit all 128 access to a companys secure systems. 129 (i)The registrys record of a loan originator who works 130 from a remote location designates the principal place of 131 business as the loan originators registered location, or the 132 loan originator has elected a licensed branch office as a 133 registered location. 134 Section 2.Subsection (1) of section 494.0067, Florida 135 Statutes, is amended to read: 136 494.0067Requirements of mortgage lenders. 137 (1)A mortgage lender that makes mortgage loans on real 138 estate in this state shall transact business from a principal 139 place of business, branch office, or remote location. Each 140 principal place of business, and each branch office, and remote 141 location shall be operated under the full charge, control, and 142 supervision of the licensee pursuant to this part. 143 Section 3.Section 501.2042, Florida Statutes, is created 144 to read: 145 501.2042Unlawful acts and practices by online crowd 146 funding campaigns. 147 (1)As used in this section, the term: 148 (a)Crowd-funding campaign means an online fundraising 149 initiative that is intended to receive monetary donations from 150 donors and is created by an organizer in the interest of a 151 beneficiary. 152 (b)Crowd-funding platform means an entity doing business 153 in this state which provides an online medium for the creation 154 and facilitation of a crowd-funding campaign. 155 (c)Disaster means any natural, technological, or civil 156 emergency that occurs in this state and that causes damage of 157 sufficient severity and magnitude to result in a declaration of 158 a state of emergency by a county, the Governor, or the President 159 of the United States. 160 (d)Organizer means a person who: 161 1.Resides or is domiciled in this state. 162 2.Has an account on a crowd-funding platform and has 163 created a crowd-funding campaign either as a beneficiary or on 164 behalf of a beneficiary, regardless of whether the beneficiary 165 or the crowd-funding campaign has received donations. 166 (2)When an organizer arranges a crowd-funding campaign 167 related to a disaster, the organizer must produce to the crowd 168 funding platform a complete and accurate accounting of all 169 donations received and expended by the crowd-funding campaign. 170 The crowd-funding platform must publish all received accountings 171 on its website. 172 Section 4.Section 520.23, Florida Statutes, is amended to 173 read: 174 520.23Disclosures required.Each agreement governing the 175 sale or lease of a distributed energy generation system shall, 176 at a minimum, include a written statement printed in at least 177 12-point type that is separate from the agreement, is separately 178 acknowledged by the buyer or lessee, and includes the following 179 information and disclosures, if applicable: 180 (1)The name, address, telephone number, and e-mail address 181 of the buyer or lessee. 182 (2)The name, address, telephone number, e-mail address, 183 and valid state contractor license number of the person 184 responsible for installing the distributed energy generation 185 system. 186 (3)The name, address, telephone number, e-mail address, 187 and valid state contractor license number of the distributed 188 energy generation system maintenance provider, if different from 189 the person responsible for installing the distributed energy 190 generation system. 191 (4)The customer contact center phone number for the 192 Department of Business and Professional Regulation. 193 (5)(4)A written statement indicating whether the 194 distributed energy generation system is being purchased or 195 leased. 196 (a)If the distributed energy generation system will be 197 leased, the written statement must include a disclosure in 198 substantially the following form: You are entering into an 199 agreement to lease a distributed energy generation system. You 200 will lease (not own) the system installed on your property. 201 (b)If the distributed energy generation system will be 202 purchased, the written statement must include a disclosure in 203 substantially the following form: You are entering into an 204 agreement to purchase a distributed energy generation system. 205 You will own (not lease) the system installed on your property. 206 (6)(5)The total cost to be paid by the buyer or lessee, 207 including any interest, installation fees, document preparation 208 fees, service fees, or other fees. 209 (7)(6)A payment schedule, including any amounts owed at 210 contract signing, at the commencement of installation, at the 211 completion of installation, and any final payments. If the 212 distributed energy generation system is being leased, the 213 written statement must include the frequency and amount of each 214 payment due under the lease and the total estimated lease 215 payments over the term of the lease. 216 (8)(7)Each state or federal tax incentive or rebate, if 217 any, relied upon by the seller in determining the price of the 218 distributed energy generation system. 219 (9)(8)A description of the assumptions used to calculate 220 any savings estimates provided to the buyer or lessee, and if 221 such estimates are provided, a statement in substantially the 222 following form: It is important to understand that future 223 electric utility rates are estimates only. Your future electric 224 utility rates may vary. 225 (10)(9)A description of any one-time or recurring fees, 226 including, but not limited to, estimated system removal fees, 227 maintenance fees, Internet connection fees, and automated 228 clearinghouse fees. If late fees may apply, the description must 229 describe the circumstances triggering such late fees. 230 (11)(10)A statement notifying the buyer whether the 231 distributed energy generation system is being financed and, if 232 so, a statement in substantially the following form: If your 233 system is financed, carefully read any agreements and/or 234 disclosure forms provided by your lender. This statement does 235 not contain the terms of your financing agreement. If you have 236 any questions about your financing agreement, contact your 237 finance provider before signing a contract. 238 (12)(11)A statement notifying the buyer whether the seller 239 is assisting in arranging financing of the distributed energy 240 generation system and, if so, a statement in substantially the 241 following form: If your system is financed, carefully read any 242 agreements and/or disclosure forms provided by your lender. This 243 statement does not contain the terms of your financing 244 agreement. If you have any questions about your financing 245 agreement, contact your finance provider before signing a 246 contract. 247 (13)(12)A provision notifying the buyer or lessee of the 248 right to rescind the agreement for a period of at least 3 249 business days after the agreement is signed. This subsection 250 does not apply to a contract to sell or lease a distributed 251 energy generation system in a solar community in which the 252 entire community has been marketed as a solar community and all 253 of the homes in the community are intended to have a distributed 254 energy generation system, or a solar community in which the 255 developer has incorporated solar technology for purposes of 256 meeting the Florida Building Code in s. 553.73. 257 (14)(13)A description of the distributed energy generation 258 system design assumptions, including the make and model of the 259 major components, system size, estimated first-year energy 260 production, and estimated annual energy production decreases, 261 including the overall percentage degradation over the estimated 262 life of the distributed energy generation system, and the status 263 of utility compensation for excess energy generated by the 264 system at the time of contract signing. A seller who provides a 265 warranty or guarantee of the energy production output of the 266 distributed energy generation system may provide a description 267 of such warranty or guarantee in lieu of a description of the 268 system design and components. 269 (15)(14)A description of any performance or production 270 guarantees. 271 (16)(15)A description of the ownership and transferability 272 of any tax credits, rebates, incentives, or renewable energy 273 certificates associated with the distributed energy generation 274 system, including a disclosure as to whether the seller will 275 assign or sell any associated renewable energy certificates to a 276 third party. 277 (17)(16)A statement in substantially the following form: 278 You are responsible for property taxes on property you own. 279 Consult a tax professional to understand any tax liability or 280 eligibility for any tax credits that may result from the 281 purchase of your distributed energy generation system. 282 (18)(17)The approximate start and completion dates for the 283 installation of the distributed energy generation system. 284 (19)(18)A disclosure as to whether maintenance and repairs 285 of the distributed energy generation system are included in the 286 purchase price. 287 (20)(19)A disclosure as to whether any warranty or 288 maintenance obligations related to the distributed energy 289 generation system may be sold or transferred by the seller to a 290 third party and, if so, a statement in substantially the 291 following form: Your contract may be assigned, sold, or 292 transferred without your consent to a third party who will be 293 bound to all the terms of the contract. If a transfer occurs, 294 you will be notified if this will change the address or phone 295 number to use for system maintenance or repair requests. 296 (21)(20)If the distributed energy generation system will 297 be purchased, a disclosure notifying the buyer of the 298 requirements for interconnecting the system to the utility 299 system. 300 (22)(21)A disclosure notifying the buyer or lessee of the 301 party responsible for obtaining interconnection approval. 302 (23)(22)A description of any roof warranties. 303 (24)A statement in substantially the following form: You 304 should consider the age and remaining life of your roof prior to 305 installing a distributed energy generation system. Replacement 306 of your roof may require re-installment of the distributed 307 energy generation system. 308 (25)(23)A disclosure notifying the lessee whether the 309 seller will insure a leased distributed energy generation system 310 against damage or loss and, if applicable, the circumstances 311 under which the seller will not insure the system against damage 312 or loss. 313 (26)(24)A statement, if applicable, in substantially the 314 following form: You are responsible for obtaining insurance 315 policies or coverage for any loss of or damage to the system. 316 Consult an insurance professional to understand how to protect 317 against the risk of loss or damage to the system. 318 (27)A statement in substantially the following form: 319 Placing a distributed energy generation system on your roof may 320 impact your future insurance premiums. You are responsible for 321 contacting your insurance carrier, prior to entering into a 322 purchase or lease agreement, to confirm whether your current 323 policy or coverage will need to be modified upon installing the 324 distributed energy generation system onto your dwelling. 325 (28)(25)A disclosure notifying the buyer or lessee whether 326 the seller or lessor will place a lien on the buyers or 327 lessees home or other property as a result of entering into a 328 purchase or lease agreement for the distributed energy 329 generation system. 330 (29)(26)A disclosure notifying the buyer or lessee whether 331 the seller or lessor will file a fixture filing or a State of 332 Florida Uniform Commercial Code Financing Statement Form (UCC-1) 333 on the distributed energy generation system. 334 (30)(27)A disclosure identifying whether the agreement 335 contains any restrictions on the buyers or lessees ability to 336 modify or transfer ownership of a distributed energy generation 337 system, including whether any modification or transfer is 338 subject to review or approval by a third party. 339 (31)(28)A disclosure as to whether the lease agreement may 340 be transferred to a purchaser upon sale of the home or real 341 property to which the system is affixed, and any conditions for 342 such transfer. 343 (32)(29)A blank section that allows the seller to provide 344 additional relevant disclosures or explain disclosures made 345 elsewhere in the disclosure form. 346 347 The requirement to provide a written statement under this 348 section may be satisfied by the electronic delivery of a 349 document within 24 hours after execution of the written 350 statement containing the required statement if the intended 351 recipient of the electronic document affirmatively acknowledges 352 its receipt. An electronic document satisfies the font and other 353 formatting standards required for the written statement if the 354 format and the relative size of characters of the electronic 355 document are reasonably similar to those required in the written 356 document or if the information is otherwise displayed in a 357 reasonably conspicuous manner. 358 Section 5.Section 626.551, Florida Statutes, is amended to 359 read: 360 626.551Notice of change of address, name.A licensee must 361 notify the department, in writing, within 5 30 days after a 362 change of name, residence address, principal business street 363 address, mailing address, contact telephone numbers, including a 364 business telephone number, or e-mail address. A licensee who has 365 moved his or her principal place of residence and principal 366 place of business from this state shall have his or her license 367 and all appointments immediately terminated by the department. 368 Failure to notify the department within the required time shall 369 result in a fine not to exceed $250 for the first offense and a 370 fine of at least $500 or suspension or revocation of the license 371 pursuant to s. 626.611, s. 626.6115, s. 626.621, or s. 626.6215 372 for a subsequent offense. The department may adopt rules to 373 administer and enforce this section. 374 Section 6.Section 626.602, Florida Statutes, is amended to 375 read: 376 626.602Insurance agency and adjusting firm names; 377 disapproval.The department may disapprove the use of any true 378 or fictitious name, other than the bona fide natural name of an 379 individual, by any insurance agency or adjusting firm on any of 380 the following grounds: 381 (1)The name interferes with or is too similar to a name 382 already filed and in use by another agency, adjusting firm, or 383 insurer. 384 (2)The use of the name may mislead the public in any 385 respect. 386 (3)The name states or implies that the agency or adjusting 387 firm is an insurer, motor club, hospital service plan, state or 388 federal agency, charitable organization, or entity that 389 primarily provides advice and counsel rather than sells or 390 solicits insurance, settles claims, or is entitled to engage in 391 insurance activities not permitted under licenses held or 392 applied for. This provision does not prohibit the use of the 393 word state or states in the name of the agency. The use of 394 the word state or states in the name of an agency or 395 adjusting firm does not in and of itself imply that the agency 396 or adjusting firm is a state agency. 397 (4)(a)The name contains the word Medicare or Medicaid. 398 (b)An insurance agency whose name contains the word 399 Medicare or Medicaid but which is licensed as of July 1, 400 2021, may continue to use that name until June 30, 2023, 401 provided that the agencys license remains valid. If the 402 agencys license expires or is suspended or revoked, the agency 403 may not be relicensed using that name. Licenses for agencies 404 with names containing either of these words automatically expire 405 on July 1, 2023, unless these words are removed from the name. 406 This paragraph is repealed July 1, 2023. 407 Section 7.Section 626.854, Florida Statutes, is amended to 408 read: 409 626.854Public adjuster defined; prohibitions.The 410 Legislature finds that it is necessary for the protection of the 411 public to regulate public insurance adjusters and to prevent the 412 unauthorized practice of law. 413 (1)A public adjuster is any person, except a duly 414 licensed attorney at law as exempted under s. 626.860, who, for 415 money, commission, or any other thing of value, directly or 416 indirectly prepares, completes, or files an insurance claim for 417 an insured or third-party claimant, regardless of how that 418 person describes or presents his or her services, or who, for 419 money, commission, or any other thing of value, acts on behalf 420 of, or aids an insured or third-party claimant in negotiating 421 for or effecting the settlement of a claim or claims for loss or 422 damage covered by an insurance contract, regardless of how that 423 person describes or presents his or her services, or who 424 advertises for employment as an adjuster of such claims. The 425 term also includes any person who, for money, commission, or any 426 other thing of value, directly or indirectly solicits, 427 investigates, or adjusts such claims on behalf of a public 428 adjuster, an insured, or a third-party claimant. The term does 429 not include a person who photographs or inventories damaged 430 personal property or business personal property or a person 431 performing duties under another professional license, if such 432 person does not otherwise solicit, adjust, investigate, or 433 negotiate for or attempt to effect the settlement of a claim. 434 (2)This definition does not apply to: 435 (a)A licensed health care provider or employee thereof who 436 prepares or files a health insurance claim form on behalf of a 437 patient. 438 (b)A licensed health insurance agent who assists an 439 insured with coverage questions, medical procedure coding 440 issues, balance billing issues, understanding the claims filing 441 process, or filing a claim, as such assistance relates to 442 coverage under a health insurance policy. 443 (c)A person who files a health claim on behalf of another 444 and does so without compensation. 445 (3)A public adjuster may not give legal advice or act on 446 behalf of or aid any person in negotiating or settling a claim 447 relating to bodily injury, death, or noneconomic damages. 448 (4)For purposes of this section, the term insured 449 includes only the policyholder and any beneficiaries named or 450 similarly identified in the policy. 451 (5)A public adjuster may not directly or indirectly 452 through any other person or entity solicit an insured or 453 claimant by any means except on Monday through Saturday of each 454 week and only between the hours of 8 a.m. and 8 p.m. on those 455 days. 456 (6)(a)When entering a contract for adjuster services after 457 July 1, 2023, a public adjuster is prohibited from contracting 458 with anyone other than the named insured unless the named 459 insured provides written consent, subsequent to entering a 460 contract for public adjusting services. 461 (b)In the event a public adjuster contracts with a third 462 party in settling the named insureds claim, without first 463 obtaining the insureds written consent, payment of the third 464 partys fees shall be made from the public adjusters fee. 465 (7)(6)An insured or claimant may cancel a public 466 adjusters contract to adjust a claim without penalty or 467 obligation within 10 days after the date on which the contract 468 is executed. If the contract was entered into based on events 469 that are the subject of a declaration of a state of emergency by 470 the Governor, an insured or claimant may cancel the public 471 adjusters contract to adjust a claim without penalty or 472 obligation within 30 days after the date on which the contract 473 is executed. The public adjusters contract must contain the 474 following language in minimum 18-point bold type immediately 475 before the space reserved in the contract for the signature of 476 the insured or claimant: You, the insured, may cancel this 477 contract for any reason without penalty or obligation to you 478 within 10 days after the date of this contract. If this contract 479 was entered into based on events that are the subject of a 480 declaration of a state of emergency by the Governor, you may 481 cancel this contract for any reason without penalty or 482 obligation to you within 30 days after the date of this 483 contract. You may also cancel the contract without penalty or 484 obligation to you if I, as your public adjuster, fail to provide 485 you and your insurer a copy of a written estimate within 45 days 486 of the execution of the contract in accordance with s. 487 626.854(14)(b), Florida Statutes. The by providing notice of 488 cancellation shall be provided to ...(name of public 489 adjuster)..., submitted in writing and sent by certified mail, 490 return receipt requested, or other form of mailing that provides 491 proof thereof, at the address specified in the contract. 492 (8)(7)It is an unfair and deceptive insurance trade 493 practice pursuant to s. 626.9541 for a public adjuster or any 494 other person to circulate or disseminate any advertisement, 495 announcement, or statement containing any assertion, 496 representation, or statement with respect to the business of 497 insurance which is untrue, deceptive, or misleading. 498 (a)The following statements, made in any public adjusters 499 advertisement or solicitation, are considered deceptive or 500 misleading: 501 1.A statement or representation that invites an insured 502 policyholder to submit a claim when the policyholder does not 503 have covered damage to insured property. 504 2.A statement or representation that invites an insured 505 policyholder to submit a claim by offering monetary or other 506 valuable inducement. 507 3.A statement or representation that invites an insured 508 policyholder to submit a claim by stating that there is no 509 risk to the policyholder by submitting such claim. 510 4.A statement or representation, or use of a logo or 511 shield, that implies or could mistakenly be construed to imply 512 that the solicitation was issued or distributed by a 513 governmental agency or is sanctioned or endorsed by a 514 governmental agency. 515 (b)For purposes of this paragraph, the term written 516 advertisement includes only newspapers, magazines, flyers, and 517 bulk mailers. The following disclaimer, which is not required to 518 be printed on standard size business cards, must be added in 519 bold print and capital letters in typeface no smaller than the 520 typeface of the body of the text to all written advertisements 521 by a public adjuster: 522 523 THIS IS A SOLICITATION FOR BUSINESS. IF YOU HAVE HAD 524 A CLAIM FOR AN INSURED PROPERTY LOSS OR DAMAGE AND YOU 525 ARE SATISFIED WITH THE PAYMENT BY YOUR INSURER, YOU 526 MAY DISREGARD THIS ADVERTISEMENT. 527 528 (9)(8)A public adjuster, a public adjuster apprentice, or 529 any person or entity acting on behalf of a public adjuster or 530 public adjuster apprentice may not give or offer to give a 531 monetary loan or advance to a client or prospective client. 532 (10)(9)A public adjuster, public adjuster apprentice, or 533 any individual or entity acting on behalf of a public adjuster 534 or public adjuster apprentice may not give or offer to give, 535 directly or indirectly, any article of merchandise having a 536 value in excess of $25 to any individual for the purpose of 537 advertising or as an inducement to entering into a contract with 538 a public adjuster. 539 (11)If the insurer, not later than 14 days after the date 540 on which the loss is reported to the insurer, either pays or 541 commits in writing to pay to the insured the policy limit of the 542 insurance policy, the public adjuster shall: 543 (a)Inform the insured that, due to the insurers payment 544 or commitment to pay the policy limit, the loss recovery amount 545 might not be increased by the insurer. 546 (b)Not receive a commission consisting of a percentage of 547 the total amount paid by an insurer to resolve the claim. 548 (c)Be entitled only to reasonable compensation from the 549 insured for the time spent and expenses incurred on the claim by 550 the public adjuster, until the claim is paid or the insured 551 receives a written commitment to pay from the insurer. 552 (12)If the public adjuster enters into a contract with an 553 insured or claimant after the insured or claimant unsuccessfully 554 negotiates an insurance claim payment and the public adjuster is 555 successful in obtaining a higher insurance claim payment, the 556 public adjuster shall receive a commission consisting of 10 557 percent of the difference between the initial insurance claim 558 payment offer made to the insured and the final insurance claim 559 payment obtained through the work of the public adjuster after 560 entering into the contract with the insured or claimant. 561 (13)(10)(a)If a public adjuster enters into a contract 562 with an insured or claimant to reopen a claim or file a 563 supplemental claim that seeks additional payments for a claim 564 that has been previously paid in part or in full or settled by 565 the insurer, the public adjuster may not charge, agree to, or 566 accept from any source compensation, payment, commission, fee, 567 or any other thing of value based on a previous settlement or 568 previous claim payments by the insurer for the same cause of 569 loss. The charge, compensation, payment, commission, fee, or any 570 other thing of value must be based only on the claim payments or 571 settlements paid to the insured, exclusive of attorney fees and 572 costs, obtained through the work of the public adjuster after 573 entering into the contract with the insured or claimant. 574 Compensation for the reopened or supplemental claim may not 575 exceed 20 percent of the reopened or supplemental claim payment. 576 In no event shall the contracts described in this paragraph 577 exceed the limitations in paragraph (b). 578 (b)A public adjuster may not charge, agree to, or accept 579 from any source compensation, payment, commission, fee, or any 580 other thing of value in excess of: 581 1.Ten percent of the amount of insurance claim payments or 582 settlements, exclusive of attorney fees and costs, paid to the 583 insured by the insurer for claims based on events that are the 584 subject of a declaration of a state of emergency by the 585 Governor. This provision applies to claims made during the year 586 after the declaration of emergency. After that year, the 587 limitations in subparagraph 2. apply. 588 2.Twenty percent of the amount of insurance claim payments 589 or settlements, exclusive of attorney fees and costs, paid to 590 the insured by the insurer for claims that are not based on 591 events that are the subject of a declaration of a state of 592 emergency by the Governor. 593 (c)Insurance claim payments made by the insurer do not 594 include policy deductibles, and public adjuster compensation may 595 not be based on the deductible portion of a claim. 596 (d)Public adjuster compensation may not be based on 597 amounts attributable to additional living expenses, unless such 598 compensation is affirmatively agreed to in a separate agreement 599 that includes a disclosure in substantially the following form: 600 I agree to retain and compensate the public adjuster for 601 adjusting my additional living expenses and securing payment 602 from my insurer for amounts attributable to additional living 603 expenses payable under the policy issued on my (home/mobile 604 home/condominium unit). 605 (e)Public adjuster rate of compensation may not be 606 increased based solely on the fact that the claim is litigated. 607 (f)Any maneuver, shift, or device through which the limits 608 on compensation set forth in this subsection are exceeded is a 609 violation of this chapter punishable as provided under s. 610 626.8698. 611 (14)(a)(11)Each public adjuster must provide to the 612 claimant or insured a written estimate of the loss to assist in 613 the submission of a proof of loss or any other claim for payment 614 of insurance proceeds within 60 days after the date of the 615 contract. The written estimate must include an itemized, per 616 unit estimate of the repairs, including itemized information on 617 equipment, materials, labor, and supplies, in accordance with 618 accepted industry standards. The public adjuster shall retain 619 such written estimate for at least 5 years and shall make the 620 estimate available to the claimant or insured, the insurer, and 621 the department upon request. 622 (b)An insured may cancel the contract with no additional 623 penalties or fees charged by the public adjuster if such an 624 estimate is not provided within 45 days, subject to the 625 cancellation notice requirement in this section. 626 (15)(12)A public adjuster, public adjuster apprentice, or 627 any person acting on behalf of a public adjuster or apprentice 628 may not accept referrals of business from any person with whom 629 the public adjuster conducts business if there is any form or 630 manner of agreement to compensate the person, directly or 631 indirectly, for referring business to the public adjuster. A 632 public adjuster may not compensate any person, except for 633 another public adjuster, directly or indirectly, for the 634 principal purpose of referring business to the public adjuster. 635 (16)(13)A company employee adjuster, independent adjuster, 636 attorney, investigator, or other persons acting on behalf of an 637 insurer that needs access to an insured or claimant or to the 638 insured property that is the subject of a claim must provide at 639 least 48 hours notice to the insured or claimant, public 640 adjuster, or legal representative before scheduling a meeting 641 with the claimant or an onsite inspection of the insured 642 property. The insured or claimant may deny access to the 643 property if the notice has not been provided. The insured or 644 claimant may waive the 48-hour notice. 645 (17)(14)The public adjuster must ensure that prompt notice 646 is given of the claim to the insurer, the public adjusters 647 contract is provided to the insurer, the property is available 648 for inspection of the loss or damage by the insurer, and the 649 insurer is given an opportunity to interview the insured 650 directly about the loss and claim. The insurer must be allowed 651 to obtain necessary information to investigate and respond to 652 the claim. 653 (a)The insurer may not exclude the public adjuster from 654 its in-person meetings with the insured. The insurer shall meet 655 or communicate with the public adjuster in an effort to reach 656 agreement as to the scope of the covered loss under the 657 insurance policy. The public adjuster shall meet or communicate 658 with the insurer in an effort to reach agreement as to the scope 659 of the covered loss under the insurance policy. This section 660 does not impair the terms and conditions of the insurance policy 661 in effect at the time the claim is filed. 662 (b)A public adjuster may not restrict or prevent an 663 insurer, company employee adjuster, independent adjuster, 664 attorney, investigator, or other person acting on behalf of the 665 insurer from having reasonable access at reasonable times to any 666 insured or claimant or to the insured property that is the 667 subject of a claim. 668 (c)A public adjuster may not act or fail to reasonably act 669 in any manner that obstructs or prevents an insurer or insurers 670 adjuster from timely conducting an inspection of any part of the 671 insured property for which there is a claim for loss or damage. 672 The public adjuster representing the insureds may be present for 673 the insurers inspection, but if the unavailability of the 674 public adjuster otherwise delays the insurers timely inspection 675 of the property, the public adjuster or the insureds must allow 676 the insurer to have access to the property without the 677 participation or presence of the public adjuster or insureds in 678 order to facilitate the insurers prompt inspection of the loss 679 or damage. 680 (18)(15)A licensed contractor under part I of chapter 489, 681 or a subcontractor of such licensee, may not advertise, solicit, 682 offer to handle, handle, or perform public adjuster services as 683 provided in subsection (1) unless licensed and compliant as a 684 public adjuster under this chapter. The prohibition against 685 solicitation does not preclude a contractor from suggesting or 686 otherwise recommending to a consumer that the consumer consider 687 contacting his or her insurer to determine if the proposed 688 repair is covered under the consumers insurance policy, except 689 as it relates to solicitation prohibited in s. 489.147. In 690 addition, the contractor may discuss or explain a bid for 691 construction or repair of covered property with the residential 692 property owner who has suffered loss or damage covered by a 693 property insurance policy, or the insurer of such property, if 694 the contractor is doing so for the usual and customary fees 695 applicable to the work to be performed as stated in the contract 696 between the contractor and the insured. 697 (19)(16)A public adjuster shall not acquire any interest 698 in salvaged property, except with the written consent and 699 permission of the insured through a signed affidavit. 700 (20)(17)A public adjuster, a public adjuster apprentice, 701 or a person acting on behalf of an adjuster or apprentice may 702 not enter into a contract or accept a power of attorney that 703 vests in the public adjuster, the public adjuster apprentice, or 704 the person acting on behalf of the adjuster or apprentice the 705 effective authority to choose the persons or entities that will 706 perform repair work in a property insurance claim or provide 707 goods or services that will require the insured or third-party 708 claimant to expend funds in excess of those payable to the 709 public adjuster under the terms of the contract for adjusting 710 services. 711 (21)(18)Subsections (5)-(20) (5)-(17) apply only to 712 residential property insurance policies and condominium unit 713 owner policies as described in s. 718.111(11). 714 (22)(19)Except as otherwise provided in this chapter, no 715 person, except an attorney at law or a licensed public adjuster, 716 may for money, commission, or any other thing of value, directly 717 or indirectly: 718 (a)Prepare, complete, or file an insurance claim for an 719 insured or a third-party claimant; 720 (b)Act on behalf of or aid an insured or a third-party 721 claimant in negotiating for or effecting the settlement of a 722 claim for loss or damage covered by an insurance contract; 723 (c)Offer to initiate or negotiate a claim on behalf of an 724 insured; 725 (d)Advertise services that require a license as a public 726 adjuster; or 727 (e)Solicit, investigate, or adjust a claim on behalf of a 728 public adjuster, an insured, or a third-party claimant. 729 (23)(20)The department may take administrative actions and 730 impose fines against any persons performing claims adjusting, 731 soliciting, or any other services described in this section 732 without the licensure required under this section or s. 626.112. 733 (24)(21)A public adjuster, public adjuster apprentice, or 734 public adjusting firm that solicits a claim and does not enter 735 into a contract with an insured or a third-party claimant 736 pursuant to paragraph (13)(a) (10)(a) may not charge an insured 737 or a third-party claimant or receive payment by any other source 738 for any type of service related to the insured or third-party 739 claimants claim. 740 (25)(22)(a)Any following act by a public adjuster, a 741 public adjuster apprentice, or a person acting on behalf of a 742 public adjuster or public adjuster apprentice is prohibited and 743 shall result in discipline as applicable under this part: 744 1.Offering to a residential property owner a rebate, gift, 745 gift card, cash, coupon, waiver of any insurance deductible, or 746 any other thing of value in exchange for: 747 a.Allowing a contractor, a public adjuster, a public 748 adjuster apprentice, or a person acting on behalf of a public 749 adjuster or public adjuster apprentice to conduct an inspection 750 of the residential property owners roof; or 751 b.Making an insurance claim for damage to the residential 752 property owners roof. 753 2.Offering, delivering, receiving, or accepting any 754 compensation, inducement, or reward for the referral of any 755 services for which property insurance proceeds would be used for 756 roofing repairs or replacement. 757 (b)Notwithstanding the fine set forth in s. 626.8698, a 758 public adjuster or public adjuster apprentice may be subject to 759 a fine not to exceed $10,000 per act for a violation of this 760 subsection and a fine not to exceed $20,000 per act for a 761 violation of this subsection that occurs during a state of 762 emergency declared by executive order or proclamation of the 763 Governor pursuant to s. 252.36. 764 (c)A person who engages in an act prohibited by this 765 subsection and who is not a public adjuster or a public adjuster 766 apprentice, or is not otherwise exempt from licensure, is guilty 767 of the unlicensed practice of public adjusting and may be: 768 1.Subject to all applicable penalties set forth in this 769 part. 770 2.Notwithstanding subparagraph 1., subject to a fine not 771 to exceed $10,000 per act for a violation of this subsection and 772 a fine not to exceed $20,000 per act for a violation of this 773 subsection that occurs during a state of emergency declared by 774 executive order or proclamation of the Governor pursuant to s. 775 252.36. 776 Section 8.Section 626.860, Florida Statutes, is amended to 777 read: 778 626.860Attorneys at law; exemption.Attorneys at law duly 779 licensed to practice law in the courts of this state, and in 780 good standing with The Florida Bar, shall not be required to be 781 licensed under the provisions of this code to authorize them to 782 adjust or participate in the adjustment of any claim, loss, or 783 damage arising under policies or contracts of insurance. This 784 exemption does not extend to the employees, interns, volunteers, 785 or contractors of an attorney or of a law firm. 786 Section 9.Section 626.865, Florida Statutes, is amended to 787 read: 788 626.865Public adjusters qualifications;, bond; errors and 789 omissions insurance. 790 (1)The department shall issue a license to an applicant 791 for a public adjusters license upon determining that the 792 applicant has paid the applicable fees specified in s. 624.501 793 and possesses the following qualifications: 794 (a)Is a natural person at least 18 years of age. 795 (b)Is a United States citizen or legal alien who possesses 796 work authorization from the United States Bureau of Citizenship 797 and Immigration Services. 798 (c)Is trustworthy and has such business reputation as 799 would reasonably assure that the applicant will conduct his or 800 her business as insurance adjuster fairly and in good faith and 801 without detriment to the public. 802 (d)Has not been found guilty of or has not pleaded guilty 803 or nolo contendere to any crime involving theft or dishonesty, 804 regardless of adjudication, within the last 10 years. 805 (e)(d)Has had sufficient experience, training, or 806 instruction concerning the adjusting of damages or losses under 807 insurance contracts, other than life and annuity contracts, is 808 sufficiently informed as to the terms and effects of the 809 provisions of those types of insurance contracts, and possesses 810 adequate knowledge of the laws of this state relating to such 811 contracts as to enable and qualify him or her to engage in the 812 business of insurance adjuster fairly and without injury to the 813 public or any member thereof with whom the applicant may have 814 business as a public adjuster. 815 (f)(e)Has been licensed and appointed in this state as a 816 nonresident public adjuster on a continual basis for the 817 previous 6 months, or has been licensed as an all-lines 818 adjuster, and has been appointed on a continual basis for the 819 previous 6 months as a public adjuster apprentice under s. 820 626.8561, as an independent adjuster under s. 626.855, or as a 821 company employee adjuster under s. 626.856. 822 (2)At the time of application for license as a public 823 adjuster, the applicant shall file with the department a bond 824 executed and issued by a surety insurer authorized to transact 825 such business in this state, in the amount of $50,000, 826 conditioned for the faithful performance of his or her duties as 827 a public adjuster under the license for which the applicant has 828 applied, and thereafter maintain the bond unimpaired throughout 829 the existence of the license. 830 (a)The bond must be in favor of the department and must 831 specifically authorize recovery by the department of the damages 832 sustained in case the licensee is guilty of fraud or unfair 833 practices in connection with his or her business as public 834 adjuster. 835 (b)The bond must remain in effect for 1 year after the 836 expiration or termination of the license. 837 (c)The aggregate liability of the surety for all such 838 damages may not exceed the amount of the bond. The bond may not 839 be terminated unless at least 30 days written notice is given 840 to the licensee and filed with the department. 841 (3)At the time of application for license as a public 842 adjuster, the applicant must file with the department a current 843 certificate of an errors and omissions policy executed by and 844 issued by an admitted insurer authorized to issue errors and 845 omissions policies in this state, which shall be in the minimum 846 amount of $500,000 per occurrence. 847 (4)(3)The department may not issue a license as a public 848 adjuster to any individual who has not passed the examination 849 for a public adjusters license. Any individual who is applying 850 for reinstatement of a license after completion of a period of 851 suspension and any individual who is applying for a new license 852 after termination, cancellation, revocation, or expiration of a 853 prior license as a public adjuster must pass the examination 854 required for licensure as a public adjuster after approval of 855 the application for reinstatement or for a new license 856 regardless of whether the applicant passed an examination prior 857 to issuance of the license that was suspended, terminated, 858 canceled, revoked, or expired. 859 Section 10.Section 626.875, Florida Statutes, is amended 860 to read: 861 626.875Office and records. 862 (1)(a)Each appointed independent adjuster and licensed 863 public adjuster must maintain a place of business in this state 864 which is accessible to the public and keep therein the usual and 865 customary records pertaining to transactions under the license. 866 This provision does not prohibit maintenance of such an office 867 in the home of the licensee. 868 (b)A license issued under this chapter must at all times 869 be posted in a conspicuous place in the principal place of 870 business of the license holder. If the licensee is conducting 871 business away from the place of business such that the license 872 cannot be posted, the licensee shall have such license in his or 873 her actual possession at the time of carrying on such business. 874 (2)The records of the adjuster relating to a particular 875 claim or loss shall be so retained in the adjusters place of 876 business for a period of not less than 5 years after completion 877 of the adjustment and shall be available for inspection by the 878 department at all times. This provision shall not be deemed to 879 prohibit return or delivery to the insurer or insured of 880 documents furnished to or prepared by the adjuster and required 881 by the insurer or insured to be returned or delivered thereto. 882 At a minimum, the following records must be maintained for a 883 period of not less than 5 years: 884 (a)Name, address, telephone number, and e-mail address of 885 the insured, and the name of the attorney representing the 886 insured, if applicable. 887 (b)The date, location, and amount of the loss. 888 (c)An unaltered copy of the executed disclosure document 889 required by s. 626.8796. 890 (d)An unaltered copy of the executed public adjuster 891 contract required by s. 626.8796. 892 (e)A copy of the estimate of damages provided to the 893 insurer. 894 (f)The name of the insurer; the name of the claims 895 representative of the insurer; and the amount, expiration date, 896 and number of each policy under which the loss is covered. 897 (g)An itemized statement of the recoveries by the insured 898 from the sources known to the adjuster. 899 (h)An itemized statement of all compensation received by 900 the public adjuster from any source, in connection with the 901 loss. 902 (i)A register of all money received, deposited, disbursed, 903 and withdrawn in connection with a transaction with the insured, 904 including fees, transfers, and disbursements in connection with 905 the loss. 906 Section 11.Section 626.8751, Florida Statutes, is created 907 to read: 908 626.8751Payment of claim.When a claim is settled while 909 the insured is represented by a public adjuster, the insurer 910 shall issue the payment in check form. A total of two checks 911 shall be issued. The first check shall be made payable to the 912 public adjuster as payee, but not in excess of the amount of the 913 public adjusters fee, as indicated in the executed public 914 adjuster contract signed by the insured and submitted to the 915 insurer. The second check must reflect the balance of the 916 proceeds and be payable to the insured as the payee in the form 917 of a separate check. 918 Section 12.Section 626.8796, Florida Statutes, is amended 919 to read: 920 626.8796Public adjuster contracts; disclosure statement; 921 fraud statement. 922 (1)All contracts for public adjuster services must be in 923 writing in at least 12-point font, titled Public Adjuster 924 Contract and prominently display the following statement on the 925 contract in minimum 18-point bold type before the space reserved 926 for in the contract for the signature of the insured: Pursuant 927 to s. 817.234, Florida Statutes, any person who, with the intent 928 to injure, defraud, or deceive an insurer or insured, prepares, 929 presents, or causes to be presented a proof of loss or estimate 930 of cost or repair of damaged property in support of a claim 931 under an insurance policy knowing that the proof of loss or 932 estimate of claim or repairs contains false, incomplete, or 933 misleading information concerning any fact or thing material to 934 the claim commits a felony of the third degree, punishable as 935 provided in s. 775.082, s. 775.083, or s. 775.084, Florida 936 Statutes. 937 (2)A public adjuster contract relating to a property and 938 casualty claim must contain the full name, permanent business 939 address, phone number, e-mail address, and license number of the 940 public adjuster; the full name of the public adjusting firm; and 941 the insureds full name, and street address, phone number, and 942 e-mail address, together with a brief description of the loss. 943 The contract must state the percentage of compensation for the 944 public adjusters services in minimum 18-point bold type before 945 the space reserved for in the contract for the signature of the 946 insured; the type of claim, including an emergency claim, 947 nonemergency claim, or supplemental claim; the initials of the 948 named insured on each page that does not contain the insureds 949 signature; the signatures of the public adjuster and all named 950 insureds; and the signature date. If all of the named insureds 951 signatures are not available, the public adjuster must submit an 952 affidavit signed by the available named insureds attesting that 953 they have authority to enter into the contract and settle all 954 claim issues on behalf of the named insureds. An unaltered copy 955 of the executed contract must be remitted to the insured at the 956 time of execution and to the insurer within 3 30 days after 957 execution. A public adjusting firm that adjusts claims primarily 958 for commercial entities with operations in more than one state 959 and that does not directly or indirectly perform adjusting 960 services for insurers or individual homeowners is deemed to 961 comply with the requirements of this subsection if, at the time 962 a proof of loss is submitted, the public adjusting firm remits 963 to the insurer an affidavit signed by the public adjuster or 964 public adjuster apprentice that identifies: 965 (a)The full name, permanent business address, phone 966 number, e-mail address, and license number of the public 967 adjuster or public adjuster apprentice. 968 (b)The full name of the public adjusting firm. 969 (c)The insureds full name, and street address, phone 970 number, and e-mail address, together with a brief description of 971 the loss. 972 (d)An attestation that the compensation for public 973 adjusting services will not exceed the limitations provided by 974 law. 975 (e)The type of claim, including an emergency claim, 976 nonemergency claim, or supplemental claim. 977 (3)The public adjuster shall not provide services until 978 both the insured and insurer have been provided with unaltered 979 copies of the executed contract. 980 (4)The insured may rescind the contract for public 981 adjuster services if the public adjuster has not submitted a 982 written estimate to the insurer within 45 days after executing 983 the contract. 984 (5)Before the signing of the contract, the public adjuster 985 shall provide the insured with a separate disclosure document to 986 be signed by the insured, on a form adopted by the department, 987 regarding the claim process that accomplishes the following: 988 (a)Defines the following types of adjusters who may be 989 involved in the claim process: company adjuster, independent 990 adjuster, and public adjuster. 991 (b)Explains that the public adjuster is not a 992 representative or employee of the insurer. 993 (c)Explains that the insured is not required to hire a 994 public adjuster, but has a right to do so. 995 (d)Explains that an insured has a right to initiate direct 996 communications with the insureds attorney, the insurer, the 997 company adjuster, the insurers attorney, or any person 998 regarding the settlement of the insureds claim. 999 (e)Explains that the public adjusters salary, fee, 1000 commission, or other consideration to be paid to a public 1001 adjuster is the insureds responsibility. 1002 (f)Explains that the public adjuster is required to 1003 provide the insured an unaltered copy of the executed contract 1004 at the time of execution. 1005 (g)Explains that if the contract was entered based on 1006 events that are the subject of a declaration of a state of 1007 emergency by the Governor, the insured has a right to rescind 1008 the contract within 30 days. 1009 (h)The public adjuster shall provide an unaltered copy of 1010 the executed disclosure document to the insured at the time of 1011 execution. 1012 (6)A contract that does not comply with this section is 1013 invalid and unenforceable. 1014 (7)The department may adopt rules pursuant to ss. 1015 120.536(1) and 120.54 to implement this section, including rules 1016 to adopt forms required by this section. 1017 Section 13.Section 626.8797, Florida Statutes, is amended 1018 to read: 1019 626.8797Proof of loss; fraud statement.All proof-of-loss 1020 statements must prominently display the following statement in 1021 minimum 18-point bold type before the space reserved in the 1022 contract for the signature of the insured: Pursuant to s. 1023 817.234, Florida Statutes, any person who, with the intent to 1024 injure, defraud, or deceive any insurer or insured, prepares, 1025 presents, or causes to be presented a proof of loss or estimate 1026 of cost or repair of damaged property in support of a claim 1027 under an insurance policy knowing that the proof of loss or 1028 estimate of claim or repairs contains any false, incomplete, or 1029 misleading information concerning any fact or thing material to 1030 the claim commits a felony of the third degree, punishable as 1031 provided in s. 775.082, s. 775.083, or s. 775.084, Florida 1032 Statutes. 1033 Section 14.Paragraph (a) of subsection (1) of section 1034 626.9541, Florida Statutes, is amended to read: 1035 626.9541Unfair methods of competition and unfair or 1036 deceptive acts or practices defined. 1037 (1)UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE 1038 ACTS.The following are defined as unfair methods of competition 1039 and unfair or deceptive acts or practices: 1040 (a)Misrepresentations and false advertising of insurance 1041 policies.Knowingly making, issuing, circulating, or causing to 1042 be made, issued, or circulated, any estimate, illustration, 1043 circular, statement, sales presentation, omission, comparison, 1044 or property and casualty certificate of insurance altered after 1045 being issued, which: 1046 1.Misrepresents the benefits, advantages, conditions, or 1047 terms of any insurance policy. 1048 2.Misrepresents the dividends or share of the surplus to 1049 be received on any insurance policy. 1050 3.Makes any false or misleading statements as to the 1051 dividends or share of surplus previously paid on any insurance 1052 policy. 1053 4.Is misleading, or is a misrepresentation, as to the 1054 financial condition of any person or as to the legal reserve 1055 system upon which any life insurer operates. 1056 5.Uses any name or title of any insurance policy or class 1057 of insurance policies misrepresenting the true nature thereof. 1058 6.Is a misrepresentation for the purpose of inducing, or 1059 tending to induce, the lapse, forfeiture, exchange, conversion, 1060 or surrender of any insurance policy. 1061 7.Is a misrepresentation for the purpose of effecting a 1062 pledge or assignment of, or effecting a loan against, any 1063 insurance policy. 1064 8.Misrepresents any insurance policy as being shares of 1065 stock or misrepresents ownership interest in the company. 1066 9.Uses any advertisement that would mislead or otherwise 1067 cause a reasonable person to believe mistakenly that the state 1068 or the Federal Government is responsible for the insurance sales 1069 activities of any person or stands behind any persons credit or 1070 that any person, the state, or the Federal Government guarantees 1071 any returns on insurance products or is a source of payment of 1072 any insurance obligation of or sold by any person. 1073 10.Fails to disclose a third party that receives 1074 royalties, referral fees, or other remuneration for sponsorship, 1075 marketing, or use of third-party branding for a health insurance 1076 contract as defined in s. 624.603. 1077 Section 15.Paragraph (c) of subsection (2) of section 1078 627.4025, Florida Statutes, is amended, and paragraph (d) is 1079 added to that subsection, to read: 1080 627.4025Residential coverage and hurricane coverage 1081 defined. 1082 (2)As used in policies providing residential coverage: 1083 (c)Hurricane for purposes of paragraphs (a) and (b) 1084 means a storm system that has been declared to be a hurricane by 1085 the National Hurricane Center of the National Weather Service. 1086 The duration of the hurricane includes the time period, in 1087 Florida: 1088 1.Beginning at the time a hurricane watch or hurricane 1089 warning is issued for any part of Florida by the National 1090 Hurricane Center of the National Weather Service; and 1091 2.Continuing for the time period during which the 1092 hurricane conditions exist anywhere in Florida; and 1093 3.Ending 24 72 hours following the termination of the last 1094 hurricane watch or hurricane warning issued for any part of 1095 Florida by the National Hurricane Center of the National Weather 1096 Service. 1097 (d)Hurricane deductible means the deductible applicable 1098 to loss caused by a hurricane. 1099 Section 16.Paragraph (b) of subsection (1) and paragraph 1100 (b) of subsection (2) of section 627.4133, Florida Statutes, are 1101 amended to read: 1102 627.4133Notice of cancellation, nonrenewal, or renewal 1103 premium. 1104 (1)Except as provided in subsection (2): 1105 (b)An insurer issuing a policy providing coverage for 1106 property, casualty, except mortgage guaranty, surety, or marine 1107 insurance, other than motor vehicle insurance subject to s. 1108 627.728 or s. 627.7281, shall give the first-named insured 1109 written notice of cancellation or termination other than 1110 nonrenewal at least 45 days prior to the effective date of the 1111 cancellation or termination, including in the written notice the 1112 reason or reasons for the cancellation or termination, except 1113 that: 1114 1.When cancellation is for nonpayment of premium, at least 1115 10 days written notice of cancellation accompanied by the 1116 reason therefor shall be given. As used in this subparagraph and 1117 s. 440.42(3), the term nonpayment of premium means failure of 1118 the named insured to discharge when due any of her or his 1119 obligations in connection with the payment of premiums on a 1120 policy or any installment of such premium, whether the premium 1121 is payable directly to the insurer or its agent or indirectly 1122 under any premium finance plan or extension of credit, or 1123 failure to maintain membership in an organization if such 1124 membership is a condition precedent to insurance coverage. 1125 Nonpayment of premium also means the failure of a financial 1126 institution to honor an insurance applicants check after 1127 delivery to a licensed agent for payment of a premium, even if 1128 the agent has previously delivered or transferred the premium to 1129 the insurer. If a dishonored check represents the initial 1130 premium payment, the contract and all contractual obligations 1131 shall be void ab initio unless the nonpayment is cured within 1132 the earlier of 5 days after actual notice by certified mail is 1133 received by the applicant or 15 days after notice is sent to the 1134 applicant by certified mail or registered mail, and if the 1135 contract is void, any premium received by the insurer from a 1136 third party shall be refunded to that party in full; and 1137 2.When such cancellation or termination occurs during the 1138 first 90 days during which the insurance is in force and the 1139 insurance is canceled or terminated for reasons other than 1140 nonpayment of premium, at least 20 days written notice of 1141 cancellation or termination accompanied by the reason therefor 1142 shall be given except where there has been a material 1143 misstatement or misrepresentation or failure to comply with the 1144 underwriting requirements established by the insurer. 1145 1146 After the policy has been in effect for 60 90 days, no such 1147 policy shall be canceled by the insurer except when there has 1148 been a material misstatement, a nonpayment of premium, a failure 1149 to comply with underwriting requirements established by the 1150 insurer within 90 days of the date of effectuation of coverage, 1151 or a substantial change in the risk covered by the policy or 1152 when the cancellation is for all insureds under such policies 1153 for a given class of insureds. This subsection does not apply to 1154 individually rated risks having a policy term of less than 90 1155 days. 1156 (2)With respect to any personal lines or commercial 1157 residential property insurance policy, including, but not 1158 limited to, any homeowner, mobile home owner, farmowner, 1159 condominium association, condominium unit owner, apartment 1160 building, or other policy covering a residential structure or 1161 its contents: 1162 (b)The insurer shall give the first-named insured written 1163 notice of nonrenewal, cancellation, or termination at least 120 1164 days before the effective date of the nonrenewal, cancellation, 1165 or termination. The notice must include the reason for the 1166 nonrenewal, cancellation, or termination, except that: 1167 1.If cancellation is for nonpayment of premium, at least 1168 10 days written notice of cancellation accompanied by the 1169 reason therefor must be given. As used in this subparagraph, the 1170 term nonpayment of premium means failure of the named insured 1171 to discharge when due her or his obligations for paying the 1172 premium on a policy or an installment of such premium, whether 1173 the premium is payable directly to the insurer or its agent or 1174 indirectly under a premium finance plan or extension of credit, 1175 or failure to maintain membership in an organization if such 1176 membership is a condition precedent to insurance coverage. The 1177 term also means the failure of a financial institution to honor 1178 an insurance applicants check after delivery to a licensed 1179 agent for payment of a premium even if the agent has previously 1180 delivered or transferred the premium to the insurer. If a 1181 dishonored check represents the initial premium payment, the 1182 contract and all contractual obligations are void ab initio 1183 unless the nonpayment is cured within the earlier of 5 days 1184 after actual notice by certified mail is received by the 1185 applicant or 15 days after notice is sent to the applicant by 1186 certified mail or registered mail. If the contract is void, any 1187 premium received by the insurer from a third party must be 1188 refunded to that party in full. 1189 2.If cancellation or termination occurs during the first 1190 90 days the insurance is in force and the insurance is canceled 1191 or terminated for reasons other than nonpayment of premium, at 1192 least 20 days written notice of cancellation or termination 1193 accompanied by the reason therefor must be given unless there 1194 has been a material misstatement or misrepresentation or a 1195 failure to comply with the underwriting requirements established 1196 by the insurer. 1197 3.After the policy has been in effect for 60 90 days, the 1198 policy may not be canceled by the insurer unless there has been 1199 a material misstatement; a nonpayment of premium; a failure to 1200 comply, within 90 days after the date of effectuation of 1201 coverage, with underwriting requirements established by the 1202 insurer before the date of effectuation of coverage; or a 1203 substantial change in the risk covered by the policy or unless 1204 the cancellation is for all insureds under such policies for a 1205 given class of insureds. This subparagraph does not apply to 1206 individually rated risks that have a policy term of less than 90 1207 days. 1208 4.After a policy or contract has been in effect for more 1209 than 90 days, the insurer may not cancel or terminate the policy 1210 or contract based on credit information available in public 1211 records. 1212 5.A policy that is nonrenewed by Citizens Property 1213 Insurance Corporation, pursuant to s. 627.351(6), for a policy 1214 that has been assumed by an authorized insurer offering 1215 replacement coverage to the policyholder is exempt from the 1216 notice requirements of paragraph (a) and this paragraph. In such 1217 cases, the corporation must give the named insured written 1218 notice of nonrenewal at least 45 days before the effective date 1219 of the nonrenewal. 1220 6.Notwithstanding any other provision of law, an insurer 1221 may cancel or nonrenew a property insurance policy after at 1222 least 45 days notice if the office finds that the early 1223 cancellation of some or all of the insurers policies is 1224 necessary to protect the best interests of the public or 1225 policyholders and the office approves the insurers plan for 1226 early cancellation or nonrenewal of some or all of its policies. 1227 The office may base such finding upon the financial condition of 1228 the insurer, lack of adequate reinsurance coverage for hurricane 1229 risk, or other relevant factors. The office may condition its 1230 finding on the consent of the insurer to be placed under 1231 administrative supervision pursuant to s. 624.81 or to the 1232 appointment of a receiver under chapter 631. 1233 7.A policy covering both a home and a motor vehicle may be 1234 nonrenewed for any reason applicable to the property or motor 1235 vehicle insurance after providing 90 days notice. 1236 Section 17.Section 627.4554, Florida Statutes, is amended 1237 to read: 1238 627.4554Annuity investments. 1239 (1)PURPOSE.The purpose of this section is to require 1240 agents to act in the best interest of the consumer when making a 1241 recommendation of an annuity and to require insurers to 1242 establish and maintain a system to supervise so set forth 1243 standards and procedures for making recommendations to consumers 1244 which result in transactions involving annuity products, and to 1245 establish a system for supervising such recommendations in order 1246 to ensure that the insurance needs and financial objectives of 1247 consumers are effectively appropriately addressed at the time of 1248 the transaction. 1249 (2)SCOPE.This section applies to any sale or 1250 recommendation of made to a consumer to purchase, exchange, or 1251 replace an annuity by an insurer or its agent, and which results 1252 in the purchase, exchange, or replacement recommended. 1253 (3)DEFINITIONS.As used in this section, the term: 1254 (a)Agent means a person or entity required to be 1255 licensed under the laws of this state to sell, solicit, or 1256 negotiate insurance, including annuities. For purposes of this 1257 section, the term includes an insurer where no agent is involved 1258 has the same meaning as provided in s. 626.015. 1259 (b)Annuity means an insurance product under state law 1260 which is individually solicited, whether classified as an 1261 individual or group annuity. 1262 (c)Cash compensation means any discount, concession, 1263 fee, service fee, commission, sales charge, loan, override, or 1264 cash benefit received by an agent from an insurer, intermediary, 1265 or directly from the consumer in connection with the 1266 recommendation or sale of an annuity. 1267 (d)Consumer profile information means information that 1268 is reasonably appropriate to determine whether a recommendation 1269 addresses the consumers financial situation, insurance needs, 1270 and financial objectives, including, at a minimum, the 1271 following: 1272 1.Age. 1273 2.Annual income. 1274 3.Financial situation and needs, including debts and other 1275 obligations. 1276 4.Financial experience. 1277 5.Insurance needs. 1278 6.Financial objectives. 1279 7.Intended use of the annuity. 1280 8.Financial time horizon. 1281 9.Existing assets or financial products, including 1282 investment, annuity, and insurance holdings. 1283 10.Liquidity needs. 1284 11.Liquid net worth. 1285 12.Risk tolerance, including, but not limited to, 1286 willingness to accept nonguaranteed elements in the annuity. 1287 13.Financial resources used to fund the annuity. 1288 14.Tax status. 1289 (e)(c)FINRA means the Financial Industry Regulatory 1290 Authority or a succeeding agency. 1291 (f)(d)Insurer has the same meaning as provided in s. 1292 624.03. 1293 (g)Intermediary means an entity contracted directly with 1294 an insurer or with another entity contracted with an insurer to 1295 facilitate the sale of the insurers annuities by agents. 1296 (h)Material conflict of interest means a financial 1297 interest of the agent in the sale of an annuity which a 1298 reasonable person would expect to influence the impartiality of 1299 a recommendation. The term does not include cash compensation or 1300 noncash compensation. 1301 (i)Noncash compensation means any form of compensation 1302 that is not cash compensation, including, but not limited to, 1303 health insurance, office rent, office support, and retirement 1304 benefits. 1305 (j)Nonguaranteed elements means the premiums; credited 1306 interest rates, including any bonus; benefits; values; 1307 dividends; noninterest based credits; charges; or elements of 1308 formulas used to determine any of these, that are subject to 1309 company discretion and are not guaranteed at issue. An element 1310 is considered nonguaranteed if any of the underlying 1311 nonguaranteed elements are used in its calculation. 1312 (k)(e)Recommendation means advice provided by an insurer 1313 or its agent to an individual a consumer which was intended to 1314 result or does result which would result in a the purchase, an 1315 exchange, or a replacement of an annuity in accordance with that 1316 advice. The term does not include general communication to the 1317 public, generalized customer services, assistance or 1318 administrative support, general educational information and 1319 tools, prospectuses, or other product and sales material. 1320 (l)(f)Replacement means a transaction in which a new 1321 annuity policy or contract is to be purchased and it is known or 1322 should be known to the proposing insurer or its agent, or to the 1323 proposing insurer whether or not an agent is involved, that by 1324 reason of such transaction an existing annuity or other 1325 insurance policy has been or is to be any of the following or 1326 contract will be: 1327 1.Lapsed, forfeited, surrendered or partially surrendered, 1328 assigned to the replacing insurer, or otherwise terminated; 1329 2.Converted to reduced paid-up insurance, continued as 1330 extended term insurance, or otherwise reduced in value due to 1331 the use of nonforfeiture benefits or other policy values; 1332 3.Amended so as to effect a reduction in benefits or the 1333 term for which coverage would otherwise remain in force or for 1334 which benefits would be paid; 1335 4.Reissued with a reduction in cash value; or 1336 5.Used in a financed purchase. 1337 (m)SEC means the United States Securities and Exchange 1338 Commission. 1339 (g)Suitability information means information related to 1340 the consumer which is reasonably appropriate to determine the 1341 suitability of a recommendation made to the consumer, including 1342 the following: 1343 1.Age; 1344 2.Annual income; 1345 3.Financial situation and needs, including the financial 1346 resources used for funding the annuity; 1347 4.Financial experience; 1348 5.Financial objectives; 1349 6.Intended use of the annuity; 1350 7.Financial time horizon; 1351 8.Existing assets, including investment and life insurance 1352 holdings; 1353 9.Liquidity needs; 1354 10.Liquid net worth; 1355 11.Risk tolerance; and 1356 12.Tax status. 1357 (4)EXEMPTIONS.Unless otherwise specifically included, 1358 this section does not apply to transactions involving: 1359 (a)Direct-response solicitations where there is no 1360 recommendation based on information collected from the consumer 1361 pursuant to this section; 1362 (b)Contracts used to fund: 1363 1.An employee pension or welfare benefit plan that is 1364 covered by the federal Employee Retirement and Income Security 1365 Act; 1366 2.A plan described by s. 401(a), s. 401(k), s. 403(b), s. 1367 408(k), or s. 408(p) of the Internal Revenue Code, if 1368 established or maintained by an employer; 1369 3.A government or church plan defined in s. 414 of the 1370 Internal Revenue Code, a government or church welfare benefit 1371 plan, or a deferred compensation plan of a state or local 1372 government or tax-exempt organization under s. 457 of the 1373 Internal Revenue Code; or 1374 4.A nonqualified deferred compensation arrangement 1375 established or maintained by an employer or plan sponsor; 1376 (c)5.Settlements or assumptions of liabilities associated 1377 with personal injury litigation or a dispute or claim-resolution 1378 process; or 1379 (d)6.Formal prepaid funeral contracts. 1380 (5)DUTIES OF INSURERS AND AGENTS. 1381 (a)An agent, when making a recommendation of an annuity, 1382 shall act in the best interest of the consumer under the 1383 circumstances known at the time the recommendation is made, 1384 without placing the financial interest of the agent or insurer 1385 ahead of the consumers interest. An agent has acted in the best 1386 interest of the consumer if the agent has satisfied the 1387 following obligations regarding care, disclosure, conflict of 1388 interest, and documentation: 1389 1.a.The agent, in making a recommendation, shall exercise 1390 reasonable diligence, care, and skill to: 1391 (I)Know the financial situation, insurance needs, and 1392 financial objectives of the customer. 1393 (II)Understand the available options after making a 1394 reasonable inquiry into options available to the agent. 1395 (III)Have a reasonable basis to believe the recommended 1396 option effectively addresses the consumers financial situation, 1397 insurance needs, and financial objectives over the life of the 1398 product, as evaluated in light of the consumer profile 1399 information. 1400 (IV)Communicate the reason or reasons for the 1401 recommendation. 1402 b.The requirements of sub-subparagraph a. include: 1403 (I)Making reasonable efforts to obtain consumer profile 1404 information from the consumer before the recommendation of an 1405 annuity. 1406 (II)Requiring an agent to consider the types of products 1407 the agent is authorized and licensed to recommend or sell which 1408 address the consumers financial situation, insurance needs, and 1409 financial objectives. This does not require analysis or 1410 consideration of any products outside the authority and license 1411 of the agent or other possible alternative products or 1412 strategies available in the market at the time of the 1413 recommendation. Agents shall be held to standards applicable to 1414 agents with similar authority and licensure. 1415 (III)Having a reasonable basis to believe the consumer 1416 would benefit from certain features of the annuity, such as 1417 annuitization, death or living benefit, or other insurance 1418 related features. 1419 c.The requirements of this subsection do not create a 1420 fiduciary obligation or relationship and only create a 1421 regulatory obligation as provided in this section. 1422 d.The consumer profile information, characteristics of the 1423 insurer, and product costs, rates, benefits, and features are 1424 those factors generally relevant in making a determination 1425 whether an annuity effectively addresses the consumers 1426 financial situation, insurance needs, and financial objectives, 1427 but the level of importance of each factor under the care 1428 obligation of this paragraph may vary depending on the facts and 1429 circumstances of a particular case. However, each factor may not 1430 be considered in isolation. 1431 e.The requirements under sub-subparagraph a. apply to the 1432 particular annuity as a whole and the underlying subaccounts to 1433 which funds are allocated at the time of purchase or exchange of 1434 an annuity, and riders and similar product enhancements, if any. 1435 f.Sub-subparagraph a. does not require that the annuity 1436 with the lowest one-time occurrence compensation structure or 1437 multiple occurrence compensation structure shall necessarily be 1438 recommended. 1439 g.Sub-subparagraph a. does require the agent to have 1440 ongoing monitoring obligations under the care obligation, 1441 although such an obligation may be separately owed under the 1442 terms of a fiduciary, consulting, investment, advising, or 1443 financial planning agreement between the consumer and the agent. 1444 h.In the case of an exchange or replacement of an annuity, 1445 the agent shall consider the whole transaction, which includes 1446 taking into consideration whether: 1447 (I)The consumer will incur a surrender charge; be subject 1448 to the commencement of a new surrender period; lose existing 1449 benefits, such as death, living, or other contractual benefits; 1450 or be subject to increased fees, investment advisory fees, or 1451 charges for riders and similar product enhancements. 1452 (II)The replacing product would substantially benefit the 1453 consumer in comparison to the replaced product over the life of 1454 the product. 1455 (III)The consumer has had another annuity exchange or 1456 replacement and, in particular, an exchange or replacement 1457 within the preceding 60 months. 1458 i.This section does not require an agent to obtain any 1459 license other than an agent license with the appropriate line of 1460 authority to sell, solicit, or negotiate insurance in this 1461 state, including, but not limited to, any securities license, in 1462 order to fulfill the duties and obligations contained in this 1463 section; provided, the agent does not give advice or provide 1464 services that are otherwise subject to securities laws or engage 1465 in any other activity requiring other professional licenses. 1466 2.Disclosure obligation. 1467 a.Before the recommendation or sale of an annuity, the 1468 agent shall prominently disclose to the consumer on a form 1469 substantially similar to that posted on the office website as 1470 Appendix A: 1471 (I)A description of the scope and terms of the 1472 relationship with the consumer and the role of the agent in the 1473 transaction. 1474 (II)An affirmative statement on whether the agent is 1475 licensed and authorized to sell the following products: 1476 (A)Fixed annuities. 1477 (B)Fixed indexed annuities. 1478 (C)Variable annuities. 1479 (D)Life insurance. 1480 (E)Mutual funds. 1481 (F)Stocks and bonds. 1482 (G)Certificates of deposit. 1483 (III)An affirmative statement describing the insurers for 1484 which the agent is authorized, contracted, or appointed, or 1485 otherwise able to sell insurance products, using the following 1486 descriptions: 1487 (A)From one insurer; 1488 (B)From two or more insurers; or 1489 (C)From two or more insurers, although primarily 1490 contracted with one insurer. 1491 (IV)A description of the sources and types of cash 1492 compensation and noncash compensation to be received by the 1493 agent, including whether the agent is to be compensated for the 1494 sale of a recommended annuity by commission as part of premium 1495 or other remuneration received from the insurer, intermediary, 1496 or other agent, or by fee as a result of a contract for advice 1497 or consulting services; and 1498 (V)A notice of the consumers right to request additional 1499 information regarding cash compensation described in sub 1500 subparagraph b. 1501 b.Upon request of the consumer or the consumers 1502 designated representative, the agent shall disclose: 1503 (I)A reasonable estimate of the amount of cash 1504 compensation to be received by the agent, which may be stated as 1505 a range of amounts or percentages. 1506 (II)Whether the cash compensation is a one-time or 1507 multiple occurrence amount; and if a multiple occurrence amount, 1508 the frequency and amount of the occurrence, which may be stated 1509 as a range of amounts or percentages. When recommending the 1510 purchase or exchange of an annuity to a consumer which results 1511 in an insurance transaction or series of insurance transactions, 1512 the agent, or the insurer where no agent is involved, must have 1513 reasonable grounds for believing that the recommendation is 1514 suitable for the consumer, based on the consumers suitability 1515 information, and that there is a reasonable basis to believe all 1516 of the following: 1517 c.1.Before or at the time of the recommendation or sale of 1518 an annuity, the agent shall have a reasonable basis to believe 1519 the consumer has been reasonably informed of various features of 1520 the annuity, such as the potential surrender period and 1521 surrender charge; potential tax penalty if the consumer sells, 1522 exchanges, surrenders, or annuitizes the annuity; mortality and 1523 expense fees; any annual fees; investment advisory fees; 1524 potential charges for and features of riders or other options of 1525 the annuity; limitations on interest returns; potential changes 1526 in nonguaranteed elements of the annuity; insurance and 1527 investment components; and market risk. 1528 3.2.The consumer would benefit from certain features of 1529 the annuity, such as tax-deferred growth, annuitization, or the 1530 death or living benefit. 1531 4.An agent shall identify and avoid or reasonably manage 1532 and disclose material conflicts of interest, including material 1533 conflicts of interest related to an ownership interest. 1534 5.An agent shall at the time of the recommendation or 1535 sale: 1536 a.Make a written record of any recommendation and the 1537 basis for the recommendation, subject to this section. 1538 b.Obtain a consumer signed statement on a form 1539 substantially similar to that posted on the office website as 1540 Appendix B, documenting: 1541 (I)A customers refusal to provide the consumer profile 1542 information, if any. 1543 (II)A customers understanding of the ramifications of not 1544 providing his or her consumer profile information or providing 1545 insufficient consumer profile information. 1546 c.Obtain a consumer signed statement on a form 1547 substantially similar to that posted on the office website as 1548 Appendix C, acknowledging the annuity transaction is not 1549 recommended if a customer decides to enter into an annuity 1550 transaction that is not based on the agents recommendation. 1551 6.Application of the best interest obligation. Any 1552 requirement applicable to an agent under this subsection shall 1553 apply to every agent who has exercised material control or 1554 influence in the making of a recommendation and has received 1555 direct compensation as a result of the recommendation or sale, 1556 regardless of whether the agent has had any direct contact with 1557 the consumer. Activities such as providing or delivering 1558 marketing or education materials, product wholesaling or other 1559 back office product support, and general supervision of an agent 1560 do not, in and of themselves, constitute material control or 1561 influence. 1562 3.The particular annuity as a whole, the underlying 1563 subaccounts to which funds are allocated at the time of purchase 1564 or exchange of the annuity, and riders and similar product 1565 enhancements, if any, are suitable; and, in the case of an 1566 exchange or replacement, the transaction as a whole is suitable 1567 for the particular consumer based on his or her suitability 1568 information. 1569 4.In the case of an exchange or replacement of an annuity, 1570 the exchange or replacement is suitable after considering 1571 whether the consumer: 1572 a.Will incur a surrender charge; be subject to the 1573 commencement of a new surrender period; lose existing benefits, 1574 such as death, living, or other contractual benefits; or be 1575 subject to increased fees, investment advisory fees, or charges 1576 for riders and similar product enhancements; 1577 b.Would benefit from product enhancements and 1578 improvements; and 1579 c.Has had another annuity exchange or replacement, 1580 including an exchange or replacement within the preceding 36 1581 months. 1582 (b)Before executing a purchase, exchange, or replacement 1583 of an annuity resulting from a recommendation, an insurer or its 1584 agent must make reasonable efforts to obtain the consumers 1585 suitability information. The information shall be collected on 1586 form DFS-H1-1980, which is hereby incorporated by reference, and 1587 completed and signed by the applicant and agent. Questions 1588 requesting this information must be presented in at least 12 1589 point type and be sufficiently clear so as to be readily 1590 understandable by both the agent and the consumer. A true and 1591 correct executed copy of the form must be provided by the agent 1592 to the insurer, or to the person or entity that has contracted 1593 with the insurer to perform this function as authorized by this 1594 section, within 10 days after execution of the form, and shall 1595 be provided to the consumer no later than the date of delivery 1596 of the contract or contracts. 1597 (c)Except as provided under paragraph (d), an insurer may 1598 not issue an annuity recommended to a consumer unless there is a 1599 reasonable basis to believe the annuity is suitable based on the 1600 consumers suitability information. 1601 (b)(d)1.Except as provided under subparagraph 2., An 1602 insurers issuance of an annuity must be reasonable based on all 1603 the circumstances actually known to the insurer at the time the 1604 annuity is issued. However, an insurer or its agent shall not 1605 have does not have an obligation to a consumer related to an 1606 annuity transaction under subparagraph (a)1. paragraph (a) or 1607 paragraph (c) if: 1608 a.1.A recommendation has not been made; 1609 b.2.A recommendation was made and is later found to have 1610 been based on materially inaccurate information provided by the 1611 consumer; 1612 c.3.A consumer refuses to provide relevant suitability 1613 information and the annuity transaction is not recommended; or 1614 d.4.A consumer decides to enter into an annuity 1615 transaction that is not based on a recommendation of an insurer 1616 or its agent. 1617 2.An insurers issuance of an annuity subject to 1618 subparagraph 1. shall be reasonable under all the circumstances 1619 actually known to the insurer at the time the annuity is issued. 1620 (c)1.Except as permitted under paragraph (b), an insurer 1621 may not issue an annuity recommended to a consumer unless there 1622 is a reasonable basis to believe the annuity would effectively 1623 address the particular consumers financial situation, insurance 1624 needs, and financial objectives based on the consumers consumer 1625 profile information. 1626 (e)At the time of sale, the agent or the agents 1627 representative must: 1628 1.Make a record of any recommendation made to the consumer 1629 pursuant to paragraph (a); 1630 2.Obtain the consumers signed statement documenting his 1631 or her refusal to provide suitability information, if 1632 applicable; and 1633 3.Obtain the consumers signed statement acknowledging 1634 that an annuity transaction is not recommended if he or she 1635 decides to enter into an annuity transaction that is not based 1636 on the insurers or its agents recommendation, if applicable. 1637 (f)Before executing a replacement or exchange of an 1638 annuity contract resulting from a recommendation, the agent must 1639 provide on form DFS-H1-1981, which is hereby incorporated by 1640 reference, information that compares the differences between the 1641 existing annuity contract and the annuity contract being 1642 recommended in order to determine the suitability of the 1643 recommendation and its benefit to the consumer. A true and 1644 correct executed copy of this form must be provided by the agent 1645 to the insurer, or to the person or entity that has contracted 1646 with the insurer to perform this function as authorized by this 1647 section, within 10 days after execution of the form, and must be 1648 provided to the consumer no later than the date of delivery of 1649 the contract or contracts. 1650 2.(g)An insurer shall establish and maintain a supervision 1651 system that is reasonably designed to achieve the insurers and 1652 its agents compliance with this section, including, but not 1653 limited to, the following:. 1654 1.Such system must include, but is not limited to: 1655 a.The insurer shall establish and maintain Maintaining 1656 reasonable procedures to inform its agents of the requirements 1657 of this section and incorporating those requirements into 1658 relevant agent training manuals.; 1659 b.The insurer shall establish and maintain Establishing 1660 standards for agent product training and shall establish and 1661 maintain reasonable procedures to require its agents to comply 1662 with the requirements of subsection (6).; 1663 c.The insurer shall provide Providing product-specific 1664 training and training materials that explain all material 1665 features of its annuity products to its agents.; 1666 d.The insurer shall establish and maintain Maintaining 1667 procedures for the review of each recommendation before issuance 1668 of an annuity which are designed to ensure that there is a 1669 reasonable basis to determine the recommended annuity would 1670 effectively address the particular consumers financial 1671 situation, insurance needs, and financial objectives for 1672 determining that a recommendation is suitable. Such review 1673 procedures may use a screening system for identifying selected 1674 transactions for additional review and may be accomplished 1675 electronically or through other means, including, but not 1676 limited to, physical review. Such electronic or other system may 1677 be designed to require additional review only of those 1678 transactions identified for additional review using established 1679 selection criteria.; 1680 e.The insurer shall establish and maintain Maintaining 1681 reasonable procedures to detect recommendations that are not in 1682 compliance with paragraphs (a), (b), (d), and (e). This may 1683 include, but is not limited to, suitable, such as confirmation 1684 of consumer suitability information, systematic customer 1685 surveys, agent and consumer interviews, confirmation letters, 1686 agent statements or attestations, and internal monitoring 1687 programs. This sub-subparagraph does not prevent an insurer from 1688 using sampling procedures or from confirming the consumer 1689 profile suitability information after the issuance or delivery 1690 of the annuity.; and 1691 f.The insurer shall establish and maintain reasonable 1692 procedures to assess, prior to or upon issuance or delivery of 1693 an annuity, whether an agent has provided to the consumer the 1694 information required to be provided under this subsection. 1695 g.The insurer shall establish and maintain reasonable 1696 procedures to identify and address suspicious consumer refusals 1697 to provide consumer profile information. 1698 h.The insurer shall establish and maintain reasonable 1699 procedures to identify and eliminate any sales contests, sales 1700 quotas, bonuses, and noncash compensation that are based on the 1701 sales of specific annuities within a limited period of time. The 1702 requirements of this sub-subparagraph are not intended to 1703 prohibit the receipt of health insurance, office rents, office 1704 support, retirement benefits, or other employee benefits by 1705 employees, as long as those benefits are not based upon the 1706 volume of sales of a specific annuity within a limited period of 1707 time. 1708 i.f.The insurer shall annually provide providing a written 1709 report to senior managers, including the senior manager who is 1710 responsible for audit functions, which details a review, along 1711 with appropriate testing, which is reasonably designed to 1712 determine the effectiveness of the supervision system, the 1713 exceptions found, and corrective action taken or recommended, if 1714 any. 1715 3.2.An insurer is not required to include in its 1716 supervision system: 1717 a.Agent recommendations to consumers of products other 1718 than the annuities offered by the insurer; or 1719 b.Consideration of or comparison to options available to 1720 the agent or compensation relating to those options other than 1721 annuities or other products offered by the insurer. 1722 4.3.An insurer may contract for performance of a function, 1723 including maintenance of procedures, required under subparagraph 1724 1. 1725 a.An insurers supervision system under this subsection 1726 shall include supervision of contractual performance under this 1727 subsection If an insurer contracts for the performance of a 1728 function, the insurer must include the supervision of 1729 contractual performance as part of those procedures listed in 1730 subparagraph 1. These include, but are not limited to: 1731 (I)Monitoring and, as appropriate, conducting audits to 1732 ensure that the contracted function is properly performed; and 1733 (II)Annually obtaining a certification from a senior 1734 manager who has responsibility for the contracted function that 1735 the manager has a reasonable basis to represent, and does not 1736 represent for representing that the function is being properly 1737 performed. 1738 b.An insurer is responsible for taking appropriate 1739 corrective action and may be subject to sanctions and penalties 1740 pursuant to subsection (8) (7) regardless of whether the insurer 1741 contracts for performance of a function and regardless of the 1742 insurers compliance with sub-subparagraph a. 1743 (d)(h)Neither an agent nor an insurer shall may not 1744 dissuade, or attempt to dissuade, a consumer from: 1745 1.Truthfully responding to an insurers request for 1746 confirmation of consumer profile suitability information; 1747 2.Filing a complaint; or 1748 3.Cooperating with the investigation of a complaint. 1749 (e)1.(i)Recommendations and sales made in compliance with 1750 comparable standards shall FINRA requirements pertaining to the 1751 suitability and supervision of annuity transactions satisfy the 1752 requirements of this section. This applies to all 1753 recommendations and FINRA broker-dealer sales of variable 1754 annuities made by financial professionals in compliance with 1755 business rules, controls, and procedures that satisfy a 1756 comparable standard even if such standard would not otherwise 1757 apply to the product or recommendation at issue and fixed 1758 annuities if the suitability and supervision is similar to those 1759 applied to variable annuity sales. However, this paragraph does 1760 not limit the ability of the office or the department to 1761 investigate and enforce, including investigate, the provisions 1762 of this section. 1763 2.Subparagraph 1. shall not limit the insurers obligation 1764 to comply with subparagraph (c)1., although the insurer may base 1765 its analysis on information received from either the financial 1766 professional or the entity supervising the financial 1767 professional. 1768 3.For this paragraph to apply, an insurer shall must: 1769 a.1.Monitor relevant conduct of the financial professional 1770 seeking to rely on subparagraph 1. or the entity responsible for 1771 supervising the financial professional, such as the financial 1772 professionals broker-dealer or an investment adviser registered 1773 under federal or state securities law, the FINRA member broker 1774 dealer using information collected in the normal course of an 1775 insurers business; and 1776 b.2.Provide to the entity responsible for supervising the 1777 financial professional seeking to rely on subparagraph 1., such 1778 as the financial professionals broker-dealer or investment 1779 adviser registered under federal or state securities laws, FINRA 1780 member broker-dealer information and reports that are reasonably 1781 appropriate to assist such entity the FINRA member broker-dealer 1782 in maintaining its supervision system. 1783 4.For purposes of this paragraph, the term: 1784 a.Comparable standards means: 1785 (I)With respect to broker-dealers and registered 1786 representatives of broker-dealers, applicable SEC and FINRA 1787 rules pertaining to best interest obligations and supervision of 1788 annuity recommendations and sales including, but not limited to, 1789 Regulation Best Interest, 17 C.F.R. s. 240.15l1, and any 1790 amendments or successor regulations thereto; 1791 (II)With respect to investment advisers registered under 1792 federal or state securities laws or investment adviser 1793 representatives, the fiduciary duties and all other requirements 1794 imposed on such investment advisers or investment adviser 1795 representatives by contract or under the Investment Advisers Act 1796 of 1940 or applicable state securities laws, including, but not 1797 limited to, Form ADV and interpretations; and 1798 (III)With respect to plan fiduciaries or fiduciaries, the 1799 duties, obligations, prohibitions and all other requirements 1800 attendant to such status under the Employee Retirement Income 1801 Security Act of 1974 or the Internal Revenue Code and any 1802 amendments or successor statutes thereto. 1803 b.Financial professional means an agent that is 1804 regulated and acting as: 1805 (I)A broker-dealer registered under federal or state 1806 securities laws or a registered representative of a broker 1807 dealer; 1808 (II)An investment adviser registered under federal or 1809 state securities laws or an investment adviser representative 1810 associated with the federal or state registered investment 1811 adviser; or 1812 (III)A plan fiduciary under s. 3(21) of the Employee 1813 Retirement Income Security Act of 1974 or fiduciary under s. 1814 4975(e)(3) of the Internal Revenue Code or any amendments or 1815 successor statutes thereto. 1816 (6)AGENT TRAINING. 1817 (a)An agent shall not solicit the sale of an annuity 1818 product unless the agent has adequate knowledge of the product 1819 to recommend the annuity and the agent is in compliance with the 1820 insurers standards for product training. An agent may rely on 1821 insurer-provided product-specific training standards and 1822 materials to comply with this subsection. 1823 (b)1.a.An agent who engages in the sale of annuity 1824 products shall complete a one-time 4-hour training course. This 1825 requirement is not part of an agents continuing education 1826 requirement in s. 626.2815; however, if a course provider 1827 submits and receives approval from the department, the course is 1828 eligible for continuing education credit pursuant to s. 1829 626.2815. 1830 b.Agents who hold a life insurance line of authority on 1831 the effective date of this act and who desire to sell annuities 1832 shall complete the requirements of this subsection within 6 1833 months after the effective date of this act. Individuals who 1834 obtain a life insurance line of authority after the effective 1835 date of this act may not engage in the sale of annuities until 1836 the annuity training course required under this subsection has 1837 been completed. 1838 2.The minimum length of the training required under this 1839 subsection is 4 hours. 1840 3.The training required under this subsection shall 1841 include information on the following topics: 1842 a.The types of annuities and various classifications of 1843 annuities. 1844 b.Identification of the parties to an annuity. 1845 c.How product-specific annuity contract features affect 1846 consumers. 1847 d.The application of income taxation of qualified and 1848 nonqualified annuities. 1849 e.The primary uses of annuities. 1850 f.The appropriate standard of conduct, sales practices, 1851 replacement, and disclosure requirements. 1852 4.Providers of courses intended to comply with this 1853 subsection shall cover all topics listed in the prescribed 1854 outline and shall not present any marketing information or 1855 provide training on sales techniques or provide specific 1856 information about a particular insurers products. Additional 1857 topics may be offered in conjunction with and in addition to the 1858 required outline. 1859 5.A provider of an annuity training course intended to 1860 comply with this subsection shall register as a continuing 1861 education provider in this state and comply with the rules and 1862 guidelines applicable to agent continuing education courses as 1863 set forth in s. 626.2815. 1864 6.An agent who has completed an annuity training course 1865 approved by the office prior to the effective date of this act 1866 shall, within 6 months after the effective date of this act, 1867 complete either: 1868 a.A new 4-hour credit training course approved by the 1869 office after the effective date of this act; or 1870 b.An additional one-time one credit training course 1871 approved by the office and provided by an office-approved 1872 education provider on appropriate sales practices, replacement, 1873 and disclosure requirements under this section. 1874 7.Annuity training courses may be conducted and completed 1875 by classroom or self-study methods in accordance with s. 1876 626.2815. 1877 8.Providers of annuity training shall comply with the 1878 reporting requirements and shall issue certificates of 1879 completion in accordance with s. 626.2815. 1880 9.The satisfaction of the training requirements of another 1881 state that are substantially similar to the provisions of this 1882 subsection shall be deemed to satisfy the training requirements 1883 of this subsection in this state. 1884 10.The satisfaction of the training requirements of any 1885 course or courses with components substantially similar to the 1886 provisions of this subsection shall be deemed to satisfy the 1887 training requirements of this subsection in this state. 1888 11.An insurer shall verify that an agent has completed the 1889 annuity training course required under this subsection before 1890 allowing the agent to sell an annuity product for that insurer. 1891 An insurer may satisfy its responsibility under this subsection 1892 by obtaining certificates of completion of the training course 1893 or obtaining reports provided by commissioner-sponsored database 1894 systems or vendors or from a reasonably reliable commercial 1895 database vender that has a reporting arrangement with approved 1896 insurance education providers. 1897 (7)(6)RECORDKEEPING. 1898 (a)Insurers and agents must maintain or be able to make 1899 available to the office or department records of the information 1900 collected from the consumer and other information used in making 1901 the recommendations that were the basis for insurance 1902 transactions for 5 years after the insurance transaction is 1903 completed by the insurer. An insurer may maintain the 1904 documentation on behalf of its agent. 1905 (b)Records required to be maintained under this subsection 1906 may be maintained in paper, photographic, microprocess, 1907 magnetic, mechanical, or electronic media, or by any process 1908 that accurately reproduces the actual document. 1909 (8)(7)COMPLIANCE MITIGATION; PENALTIES. 1910 (a)An insurer is responsible for compliance with this 1911 section. If a violation occurs because of the action or inaction 1912 of the insurer or its agent which results in harm to a consumer, 1913 the office may order the insurer to take reasonably appropriate 1914 corrective action for the consumer and may impose appropriate 1915 penalties and sanctions. 1916 (b)The department may order: 1917 1.An insurance agent to take reasonably appropriate 1918 corrective action for a consumer harmed by a violation of this 1919 section by the insurance agent, including monetary restitution 1920 of penalties or fees incurred by the consumer, and impose 1921 appropriate penalties and sanctions. 1922 2.A managing general agency or insurance agency that 1923 employs or contracts with an insurance agent to sell or solicit 1924 the sale of annuities to consumers to take reasonably 1925 appropriate corrective action for a consumer harmed by a 1926 violation of this section by the insurance agent. 1927 (c)In addition to any other penalty authorized under 1928 chapter 626, the department shall order an insurance agent to 1929 pay restitution to a consumer who has been deprived of money by 1930 the agents misappropriation, conversion, or unlawful 1931 withholding of moneys belonging to the consumer in the course of 1932 a transaction involving annuities. The amount of restitution 1933 required to be paid may not exceed the amount misappropriated, 1934 converted, or unlawfully withheld. This paragraph does not limit 1935 or restrict a persons right to seek other remedies as provided 1936 by law. 1937 (d)Any applicable penalty under the Florida Insurance Code 1938 for a violation of this section shall be reduced or eliminated 1939 according to a schedule adopted by the office or the department, 1940 as appropriate, if corrective action for the consumer was taken 1941 promptly after a violation was discovered. 1942 (e)A violation of this section does not create or imply a 1943 private cause of action. 1944 (9)(8)PROHIBITED CHARGES.An annuity contract issued to a 1945 senior consumer age 65 or older may not contain a surrender or 1946 deferred sales charge for a withdrawal of money from an annuity 1947 exceeding 10 percent of the amount withdrawn. The charge shall 1948 be reduced so that no surrender or deferred sales charge exists 1949 after the end of the 10th policy year or 10 years after the date 1950 of each premium payment if multiple premiums are paid, whichever 1951 is later. This subsection does not apply to annuities purchased 1952 by an accredited investor, as defined in Regulation D as adopted 1953 by the United States Securities and Exchange Commission, or to 1954 those annuities specified in paragraph (4)(b). 1955 (10)(9)RULES.The department and the commission may adopt 1956 rules to administer this section. 1957 Section 18.Paragraph (b) of subsection (8) of section 1958 634.041, Florida Statutes, is amended to read: 1959 634.041Qualifications for license.To qualify for and hold 1960 a license to issue service agreements in this state, a service 1961 agreement company must be in compliance with this part, with 1962 applicable rules of the commission, with related sections of the 1963 Florida Insurance Code, and with its charter powers and must 1964 comply with the following: 1965 (8) 1966 (b)A service agreement company does not have to establish 1967 and maintain an unearned premium reserve if it secures and 1968 maintains contractual liability insurance in accordance with the 1969 following: 1970 1.Coverage of 100 percent of the claim exposure is 1971 obtained from an insurer approved by the office, which holds a 1972 certificate of authority under s. 624.401 to do business within 1973 this state, or secured through a risk retention group, which is 1974 authorized to do business within this state under s. 627.943 or 1975 s. 627.944. Such insurer or risk retention group must maintain a 1976 surplus as regards policyholders of at least $15 million. 1977 2.If the service agreement company does not meet its 1978 contractual obligations, the contractual liability insurance 1979 policy binds its issuer to pay or cause to be paid to the 1980 service agreement holder all legitimate claims and cancellation 1981 refunds for all service agreements issued by the service 1982 agreement company while the policy was in effect. This 1983 requirement also applies to those service agreements for which 1984 no premium has been remitted to the insurer. 1985 3.If the issuer of the contractual liability policy is 1986 fulfilling the service agreements covered by the contractual 1987 liability policy and the service agreement holder cancels the 1988 service agreement, the issuer must make a full refund of 1989 unearned premium to the consumer, subject to the cancellation 1990 fee provisions of s. 634.121(3). The sales representative and 1991 agent must refund to the contractual liability policy issuer 1992 their unearned pro rata commission. 1993 4.The policy may not be canceled, terminated, or 1994 nonrenewed by the insurer or the service agreement company 1995 unless a 90-day written notice thereof has been given to the 1996 office by the insurer before the date of the cancellation, 1997 termination, or nonrenewal. 1998 5.The service agreement company must provide the office 1999 with the claims statistics. 2000 6.A policy issued in compliance with this subparagraph may 2001 either pay 100 percent of claims as they are incurred, or 100 2002 percent of claims due in the event of the failure of the service 2003 agreement company to pay such claims when due. 2004 2005 All funds or premiums remitted to an insurer by a motor vehicle 2006 service agreement company under this part shall remain in the 2007 care, custody, and control of the insurer and shall be counted 2008 as an asset of the insurer; provided, however, this requirement 2009 does not apply when the insurer and the motor vehicle service 2010 agreement company are affiliated companies and members of an 2011 insurance holding company system. If the motor vehicle service 2012 agreement company chooses to comply with this paragraph but also 2013 maintains a reserve to pay claims, such reserve shall only be 2014 considered an asset of the covered motor vehicle service 2015 agreement company and may not be simultaneously counted as an 2016 asset of any other entity. 2017 Section 19.The Division of Law Revision is directed to 2018 replace the phrase the effective date of this act wherever it 2019 occurs in this act with the date this act becomes a law. 2020 Section 20.This act shall take effect upon becoming a law.