Florida Senate Bill S1398 Analysis / Analysis

                    The Florida Senate 
BILL ANALYSIS AND FISCAL IMPACT STATEMENT 
(This document is based on the provisions contained in the legislation as of the latest date listed below.) 
Prepared By: The Professional Staff of the Appropriations Committee on Agriculture, Environment, and General 
Government  
BILL: CS/SB 1398 
INTRODUCER:  Banking and Insurance Committee and Senator DiCeglie 
SUBJECT:  Consumer Protection 
DATE: April 17, 2023 
 
 ANALYST STAFF DIRECTOR  REFERENCE  	ACTION 
1. Moody Knudson BI Fav/CS 
2. Sanders Betta AEG  Pre-meeting 
3.     FP  
 
Please see Section IX. for Additional Information: 
COMMITTEE SUBSTITUTE - Substantial Changes 
 
I. Summary: 
CS/SB 1398 revises consumer protection laws, including, but not limited to, those related to 
public adjusters, annuity investments, and mortgage loan regulations.  
 
As it relates to adjusters, the bill: 
 Provides adjusting firms must comply with the same requirements an insurance agency must 
comply with regarding firm names; 
 Restricts a public adjuster’s compensation to 10 percent of the difference between the initial 
insurance claim payment offer and the final insurance claim payment; 
 Further restricts public adjuster compensation to no more than $1,000 when an insurer pays 
or agrees to pay the policy limit within 14 days after the date of the reported loss;  
 Allows the insured or claimant to cancel a contract with a public adjuster that was entered 
into based on events that are the subject to a state of emergency for up to 30 days after the 
event or 10 days after the date on which the contract is executed, whichever is longer; 
 Specifies an insured may cancel a public adjuster’s contract without penalty or obligation if a 
written estimate is not received within 60 days, and requires the contract to provide notice of 
such right;  
 Prohibits a public adjuster from contracting with anyone other than the named insured with 
unless written consent is obtained from the insured; 
 Requires public adjusters to pay third party fees unless the named insured’s consent to 
contract is obtained; 
REVISED:   BILL: CS/SB 1398   	Page 2 
 
 Clarifies the exemption which allows attorneys to participate in the adjustment of any claim 
without an adjuster’s license does not apply to certain staff of an attorney or a law firm; 
 Requires an independent or public adjuster to post their license in the principal place of 
business or have it in the public adjuster’s actual possession in certain circumstances; 
 Specifies independent adjusters and public adjusters must retain certain records for five years 
and requires such records must be available for inspection by the Department of Financial 
Services (“Department”) at all times; 
 Amends public adjuster contract requirements to include certain contact details and 
compensation; amends the font type with respect to certain provisions in the contract and 
proof-of-loss statement; and requires initials of the insured to be on each page that does not 
contain the insured’s signature; 
 Provides that a public adjuster must provide the insured with an unaltered copy of the 
contract at the time of execution and a copy provided to the insurer within 10 days, and 
prohibits a public adjuster from providing services until such copies are remitted; and 
amends the contacts details required to be included in an affidavit that satisfies this 
requirement in certain circumstances; 
 Requires the public adjuster to provide to and obtain a signed separate disclosure statement 
from the insured with specified information;  
 Provides that a public adjuster contract which does not comply with s. 626.8796, F.S., 
regarding public adjuster contracts, is invalid and unenforceable; 
 Authorizes the Department to have rulemaking authority to implement s. 626.8796, F.S.; and 
 Amends the definition of “public adjuster.” 
 
As it relates to annuity investments, the bill: 
 Amends s. 627.4554, F.S., to adopt, with minimal exceptions, the National Association of 
Insurance Commissioners (NAIC) Suitability in Annuity Transactions Model Regulation 
(2020); 
 Broadens the scope of the section to apply to any sale or recommendation of an annuity; 
 Amends the duties of insurers and agents to require the agent to act in the consumer’s best 
interest which includes satisfying obligations regarding care, disclosure, conflict of interest, 
and recordkeeping; 
 Specifies transactions for which an agent does not have an obligation to a consumer; 
 Revises an insurer’s obligation to establish a supervision system to provide additional 
consumer protections;  
 Prohibits insurers from dissuading, or attempting to dissuade, a consumer from providing 
truthful information, filing complaints, or cooperating with a complaint investigation; 
 Provides any sale in compliance with comparable standards satisfies the requirements of the 
section, and provides this provision does not limit an insurer’s care obligation; and 
 Provides for training requirements for agents who engage in the sale of annuities; 
 
As it relates to other insurance provisions, the bill: 
 Amends the timeframe for which a licensee must notify the Department after the change of 
name or other specified contact details from 30 days to five days; 
 Provides it is an unfair method of trade for an agent to fail to disclose a third party that 
receives certain remuneration for specified marketing practices for policy of health 
insurance;  BILL: CS/SB 1398   	Page 3 
 
 Shortens the timeframe in which the hurricane deductible on an insurance policy can be 
applied to a claim; amends the definition of “hurricane;” and defines the term “hurricane 
deductible;” and 
 Reduces the underwriting timeframe on property insurance from nine days to 60 days. 
 
As it relates to mortgage loan regulations, the bill: 
 Expands the options of where a mortgage lender may transact business; 
 Specifies a remote location must be operated under the full charge, control, and supervision 
of the licensee; 
 Provides when a licensee may allow loan originators to work from a remote location; and 
 Amends the definition of “branch office” and defines the term “remote location.” 
 
As it relates to money services businesses, the bill: 
 Specifies a licensee may not cash corporate checks where the aggregate face amount of all 
corporate checks cashed for each payee exceeds 200 percent of the payee’s workers’ 
compensation policy coverage amount during the same policy coverage period; and 
 Provides a person who violates this provision commits a felony of the third degree. 
 
As it relates to crowd-funding campaigns, the bill: 
 Requires organizers of crowd-funding campaigns related to disasters to assemble and provide 
accounting of all donations received and expended by the campaign; 
 Requires the crowd-funding platform to publish all received accountings; and 
 Defines several terms, including “crowd-funding campaign,” “crowd-funding platform,” 
“disaster,” and “organizer.” 
 
As it relates to distributed energy generation platform, the bill: 
 Adds three disclosures related to the sale or lease of a distributed energy generation system 
which must be separate from the agreement between the seller or lessor and buyer and lessee; 
and 
 Requires a sale or lease agreement to include the customer contact center phone number for 
the Department of Business and Professional Regulation. 
 
The bill provides motor vehicle service agreements that maintain a contractual liability insurance 
policy in lieu of maintaining unearned premium reserve may have a policy with certain terms. 
 
The bill revises the definition of the term “manufacturer” for purposes of part III of ch. 634, F.S., 
to exclude a business that maintains outstanding debt obligations, if any, rated in the top four 
rating categories by a recognized rating service, and makes conforming changes to 
s. 634.406, F.S. 
 
The bill creates a new third degree felony, which is punishable by a term of imprisonment not to 
exceed five years,
1
 a fine not to exceed $5,000,
2
 or in the case of a habitual offender, a term of 
imprisonment not to exceed ten to fifteen years.
3
 The new third degree felony may increase state 
                                                
1
 Section 775.082, F.S. 
2
 Section 775.083, F.S. 
3
 Section 775.084, F.S.  BILL: CS/SB 1398   	Page 4 
 
court revenues and expenditures. In addition, the bill may have an indeterminate negative state 
prison bed impact. The Criminal Justice Impact Conference, which provides the final, official 
estimate of the prison bed impact, if any, of legislation, has not yet reviewed the bill. 
 
The bill, except as otherwise provided, is effective July 1, 2023. 
II. Present Situation: 
Insurance 
In January 2003, the Financial Services Commission (“Commission”) was created within the 
Department of Financial Services (Department).
4
 The Commission is composed of the Governor, 
the Attorney General, the Chief Financial Officer, and the Commissioner of Agriculture.
5
 The 
Commission consists of the Office of Insurance Regulation (OIR) and the Office of Financial 
Regulation (OFR).
6
  
 
The OIR is responsible for the regulation of activities related to insurers and other risk bearing 
entities, including, amongst other things, licensing, rates, policy forms market conduct, claims, 
issuance of certificates of authority.
7
 A person may not act, advertise, or hold himself or herself 
out as an insurance agent,
8
 insurance adjuster,
9
 or customer representative unless he or she is 
licensed by the Department and appointed by an appropriate appointing entity or person.
10
 To 
obtain a license, such individuals must comply with certain requirements, including submit an 
application which contains specified information such as the applicant’s name, address, and other 
contact information.
11
 A licensee has an obligation to notify the Department, in writing, within 
30 days after a change of name, residence address, principal business street, address, mailing 
                                                
4
 Section 20.121(3), F.S. 
5
 Id. 
6
 Section 20.121(3)(a), F.S. 
7
 Section 20.121(3)(a), F.S. 
8
 Section 626.015(3), F.S., defines “agent” as a general lines agent, life agent, health agent, or title agent, or all such agents, 
as indicated by context. The term “agent” includes an insurance producer or producer, but does not include a customer 
representative, limited customer representative, or service representative. Section 626.015(6), F.S., defines “customer 
representative” as an individual appointed by a general lines agent or agency to assist that agent or agency in transacting the 
business of insurance from the office of the agent or agency. Section 626.015(13), F.S., defines “limited customer 
representative” as a customer representative appointed by a general lines agent or agency to assist that agent or agency in 
transacting only the business of private passenger motor vehicle insurance from the office of that agent or agency. 
Section 626.015(19), F.S., defines “service representative” as an individual employed by an insurer or managing general 
agent for the purpose of assisting a general lines agent in negotiating and effecting insurance contracts when accompanied by 
a licensed general lines agent. 
9
 Section 626.015(2), F.S., defines “adjuster” as a public adjuster as defined in s. 626.854, F.S., or an all-lines adjuster as 
defined in s. 626.8548, F.S. which defines the term as a person who, for money, commission, or any other thing of value, 
directly or indirectly undertakes on behalf of a public adjuster or an insurer to ascertain and determine the amount of any 
claim, loss, or damage payable under an insurance contract or undertakes to effect settlement of such claim, loss, or damage. 
The term also includes any person who, for money, commission, and any other thing of value, directly or indirectly solicits 
claims on behalf of a public adjuster, but does not include a paid spokesperson used as part of a written or an electronic 
advertisement or a person who photographs or inventories damaged property or business personal property if such person 
does not otherwise adjust, investigate, or negotiate for or attempt to effect the settlement of a claim.  
10
 Section 626.112(1)(a), F.S. 
11
 Section 626.171, F.S.  BILL: CS/SB 1398   	Page 5 
 
address, contract telephone numbers, including a business telephone number, or e-mail address.
12
 
A licensee who failure to notify the Department of such change within the 30 days is subject to a 
fine not to exceed $250 for a first offence and a fine of at least $500 or suspension or revocation 
of certain licenses for a subsequent offense.
13
 
 
Public Adjusters 
A public adjuster is any person, except a duly licensed attorney-at-law as exempted under 
s. 626.860, F.S., who, for money, commission, or any other things of value, directly or indirectly 
prepares, completes, or files an insurance claim for an insured
14
 or third-party claimant, or who, 
for money, commission, or any other thing of value, acts on behalf of, or aids an insured or third-
party claimant in negotiating for or effecting the settlement of a claim or claims for loss or 
damage covered by an insurance contract, or who, advertises for employment as an adjuster of 
such claims.
15
 The term also includes any person who, for money, commission, or any other 
thing of value, directly or indirectly solicits, investigates, or adjusts such claims on behalf of the 
public adjuster, as insured, or a third-party claimant.
16
 The term excludes several categories of 
persons who do not fall within the definition, such as licensed health care providers or employees 
thereof who prepares or files health insurance claim forms on behalf of a patient.
17
 
 
Prohibited acts 
Section 626.854, F.S., prohibits public adjusters from engaging in certain conduct, including 
giving legal advice or acting on behalf of any person negotiating or settling certain claims.
18
 An 
attorney who is licensed to practice law in Florida and in good standing with The Florida Bar is 
not required to hold a separate license under ch. 626, F.S., to adjust or participate in the 
adjustment of any claim, loss, or damage arising under policies or insurance contracts.
19
 
 
Public adjusters are also prohibited from directly or indirectly soliciting an insured or claimant 
except for during specified times.
20
 A public adjuster or any other person who circulates or 
disseminates any advertisement, announcement, or statement containing any assertion, 
representation, or statement about the business of insurance that is untrue, deceptive, or 
misleading commits an unfair and deceptive insurance trade practice, and Florida law sets out 
specific statements which are considered deceptive or misleading.
21
 
 
                                                
12
 Section 626.551, F.S. 
13
 Id. 
14
 Section 626.854(4), F.S., defines “insured,” for purposes of this section, as only the policyholder and any beneficiaries 
named or similarly identified in the policy.  
15
 Section 626.854(1), F.S.  
16
 Id. 
17
 Section 626.854(2)(a), F.S. 
18
 Section 626.854(3), F.S. 
19
 Section 626.860, F.S. 
20
 Section 626.854(5), F.S. 
21
 Section 626.854(7), F.S. Section 626.9541, F.S., provides for unfair methods of competition and unfair or deceptive acts or 
practices.  BILL: CS/SB 1398   	Page 6 
 
Contracts and Disclosures 
All contracts for public adjuster services and proof-of-loss statements must be in writing and 
include a disclosure relating to injuring, defrauding, or deceiving an insurer or insured and 
committing a crime if proof of loss or estimate of claims is based on false, incomplete, or 
misleading information.
22
 A public adjuster contract for a property and casualty claim must 
contain certain information, such as the full name and certain contact details of the public 
adjuster and insured.
23
 Such contract must state the percentage of compensation for the public 
adjuster’s services, type of claim, and signatures of the public adjuster and named insureds.
24
 An 
unaltered copy of the executed contract must be provided to the insurer within 30 days after the 
execution. Public adjusting firms that adjust claims primarily for commercial entities that meet 
certain requirements is deemed to comply with these provisions if the public adjusting firm 
remits to the insurer a signed affidavit that contains specified information relating to: 
 The name and contact details of the public adjuster, public adjuster apprentice, and insured; 
 The name of the public adjusting firm; 
 An attestation the compensation will not exceed the limits provided by law; and 
 The type of claim.
25
 
 
An insured or claimant may cancel a contract with a public adjuster without penalty within 
10 days after the date on which the contract is executed.
26
 The reason for providing the 10 day 
period is to allow the consumer to have time to make an informed decision in the wake of a 
storm.
27
 A public adjuster’s contract must contain the following statement in minimum 18-point 
bold type which states: 
“You, the insured, may cancel this contract for any reason without penalty or 
obligation to you within 10 days after the date of this contract by providing notice 
to (name of public adjuster), submitted in writing and sent by certified mail, 
return receipt requested, or other form of mailing that provides proof thereof, at 
the address specified in the contract.”
28
 
 
A public adjuster is required to provide to the insured or claimant a written estimate of the loss to 
assist in any claim for insurance proceeds within 60 days after the date of the contract.
29
 
 
Charges, Fees, and Gifts 
Florida law prohibits a public adjuster from charging a fee unless a written contract is entered 
into prior to the payment of the claim, and restricts certain fees and charges of a public adjuster 
who enter into contracts with an insured or claimant.
30
 For instance, a public adjuster’s 
compensation may not exceed twenty percent of the amount of insurance claim payments or 
                                                
22
 Section 626.8796(1), F.S.; Section 626.8797, F.S. 
23
 Section 626.8796(2), F.S. 
24
 Id. 
25
 Section 626.8796(2), F.S. 
26
 Section 626.854(10), F.S. 
27
 The Department of Financial Services, 2023 Legislative Bill Analysis for SB 1398, p. 3 (Mar. 16, 2023) (on file with Senate 
Committee on Banking and Insurance). 
28
 Section 626.854(6), F.S. 
29
 Section 626.854(14), F.S. 
30
 Section 626.854(10), F.S.  BILL: CS/SB 1398   	Page 7 
 
settlements for claims that are not based on an emergency, and ten percent based on events that 
are based on an emergency.
31
 A public adjuster may not give or offer to give a client or 
prospective client a loan or advance, or give or offer to give any merchandise worth more than 
$25 to any individual for the purpose of advertising or inducing such individual to enter into a 
contract.
32
 
 
Office and Records 
Independent or public adjusters must maintain a place of business in Florida which is accessible 
to the public but may be a home office.
33
 Such adjusters must keep the “usual and customary 
records” relating to the transactions covered under the license. Records related to a specific claim 
must be retained in the adjuster’s place of business for not less than five years after completion 
of the adjustment.
34
 An adjuster is not prohibited from returning or delivering certain documents 
to the insurer or insured.
35
 
 
Annuity Investments 
The purpose of s. 627.4554, F.S., annuity
36
 investments, is to set out requirements for which 
insurers
37
 must comply when making recommendations
38
 to consumers regarding annuity 
products, and to establish a system for supervising such recommendations to ensure consumers’ 
insurance needs and financial objectives are met at the time of the transaction.
39
 The section 
applies to any recommendation made by an insurer or agent
40
 to a consumer to purchase, 
exchange, or replace an annuity which results in the consumer purchasing, exchanging, or 
replacing the recommended product.
41
 The section, however, does not apply to the following: 
 Direct-response solicitation where there is no recommendation based on information 
collected from the consumer; 
 Contracts used to fund: 
o An employee pension or welfare benefit plan that is covered by the federal Employee 
Retirement and Income Security Act; 
                                                
31
 Section 626.854(10)(b), F.S. 
32
 Section 626.854(8) and (9), F.S. 
33
 Section 626.875(1), F.S. 
34
 Section 626.875(2), F.S. 
35
 Id. 
36
 Section 627.4554, F.S., defines “annuity” as an insurance product under state law which is individually solicited, whether 
classified as an individual or group annuity. 
37
 The term “insurer” has the same meaning as provided in s. 624.03, F.S. Section 627.4554(3)(d), F.S.  
38
 Section 627.4554(3)(e), F.S., defines “recommendation” as advice provided by an insurer or its agent to a consumer which 
would result in the purchase, exchange, or replacement of an annuity in accordance with that advice. 
Section 627.4554(3)(f), F.S., defines “replacement” as a transaction in which a new policy or contract is to be purchased and 
it is known or should be known to the proposing insurer or its agent that by reason of such transaction an existing policy or 
contract will be: 1. Lapsed, forfeited, surrendered or partially surrendered, assigned to the replacing insurer, or otherwise 
terminated; 2. Converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value 
due to the use of nonforfeiture benefits or other policy values; 3. Amended so as to effect a reduction in benefits or the term 
for which coverage would otherwise remain in force or for which benefits would be paid; 4. Reissued with a reduction in 
cash value; or 5. Used in a financed purchase. 
39
 Section 627.4554(1), F.S. 
40
 The term “agent” has the same meaning as provided in s. 626.015, F.S. Section 627.4554(3)(a), F.S.  
41
 Section 627.4554(2), F.S.  BILL: CS/SB 1398   	Page 8 
 
o Certain plans of the Internal Revenue Code, if established or maintained by an 
employer;
42
  
o A government or church plan,
43
 a government or church welfare benefit plan, or a 
deferred compensation plan of a state or local government or tax-exempt organization;
44
  
o A nonqualified deferred compensation arrangement established or maintained by an 
employer or plan sponsor; 
o Settlements or assumptions of liabilities associated with personal injury litigation or a 
dispute or claim-resolution process; or 
o Formal prepaid funeral contracts.
45
 
 
When making a recommendation to purchase or exchange an annuity product which results in an 
insurance transaction or series of insurance transactions, the insurer or agent must have a 
reasonable basis to believe, based on the consumer’s suitability information,
46
 the 
recommendation is suitable for the consumer and a reasonable basis to believe all of the 
following: 
 The consumer has been reasonably informed of various features of the annuity;
47
  
 The consumer would benefit from certain features of the annuity;
48
 
 The particular annuity as a whole, underlying subaccounts to which funds are allocated, 
riders or similar enhancements are suitable; and, in respect of exchange or replacement, the 
transaction as a whole is suitable for the consumer based on his or her suitability information; 
 An exchange or replacement is suitable after considering whether the consumer: 
o Will incur a surrender charge, be subject to a new surrender period, lose existing benefits, 
be subject to increased fees; 
o Would benefit from product enhancements and improvements; and 
o Has had another annuity exchange or replacement within the preceding 36 months.
49
  
 
Before executing a transaction for an annuity resulting from a recommendation, an insurer or its 
agent must make reasonable efforts to obtain the consumer’s suitability information.
50
 The 
information must be collected on a specified form that must be signed by the applicant and 
agent.
51
 Such form must be in at least 12-point type and be readily understandable by the agent 
                                                
42
 Section 627.4554(4)(b)2., F.S., specifies the plans that are exempt from this section includes s. 401(a), s. 401(k), s. 403(b), 
s. 408(k), or s. 408(p) of the Internal Revenue Code. 
43
 Section 414, I.R.C. 
44
 Section 457, I.R.C. 
45
 Section 627.4554(4), F.S. 
46
 Section 627.4554(3)(g), F.S., defines “suitability information” as information related to the consumer which is reasonably 
appropriate to determine the suitability of a recommendation made to the consumer, including the following: 1. Age; 
2. Annual income; 3. Financial situation and needs, including the financial resources used for funding the annuity; 
4. Financial experience; 5. Financial objective; 6. Intended use of the annuity; 7. Financial time horizon; 8. Existing assets, 
including investment and life insurance holdings; 9. Liquidity needs; 10. Liquid net worth; 11. Risk tolerance; and 12. Tax 
status. 
47
 Section 627.4554(5)(a)1., F.S. provides examples such as the potential surrender period and charge, potential tax liability, 
mortality and expense fees, investment advisory fees, potential charges for and features of riders, limitations on interest 
returns, insurance and investment components, and market risk. 
48
 Section 627.4554(5)(a)2., F.S., provides examples such as tax-deferred growth, annuitization, or the death or living benefit. 
49
 Section 627.4554(5)(a), F.S. 
50
 Section 627.4554(5)(b), F.S. 
51
 Id.  BILL: CS/SB 1398   	Page 9 
 
and consumer.
52
 A true and correct copy of the executed form must be provided to the insurer by 
the responsible party within 10 days after execution of the form, and must be provided to the 
consumer no later than the date of delivery of the contract.
53
 
 
An insurer may not issue a recommended annuity to a consumer unless the insurer has 
reasonable basis to believe the annuity is suitable based on the consumer’s suitability 
information.
54
 An insurer’s issuance of an annuity must be reasonable based on all of the 
circumstances known at the time of the issuance, but an insurer does not have an obligation to a 
consumer under certain provisions of the section if: 
 A recommendation has not been made; 
 A recommendation was made and is later found to be based on materially inaccurate 
information provided by the consumer; 
 A consumer refuses to provide relevant suitability information and the annuity transaction is 
not recommended; or 
 A consumer decides to enter into an annuity transaction that is not based on a 
recommendation of an insurer or its agent.
55
 
 
At the time of the sale, the agent and the agent’s representative must: 
 Make a record of any recommendation to the consumer; 
 Obtain the consumer’s signed statement documenting his or her refusal to provide suitability 
information, if applicable; and  
 Obtain the consumer’s signed statement acknowledging an annuity transaction is not 
recommended, if applicable. 
 
Before executing an exchange or a replacement of an annuity contract resulting from a 
recommendation, the agent must provide the consumer with a specified form which compares the 
difference between the existing annuity contract and the annuity contract being recommended to 
determine the suitability and benefits to the consumer.
56
 Such form needs to be signed by the 
agent and the insured, and must be to the insurer within 10 days after execution of the form and 
to the consumer no later than the date of delivery of the contract.
57
  
 
An insurer must establish a supervision system that is reasonably designed to ensure the insurer 
and agent’s compliance with s. 627.4554, F.S., and must include, but is not limited to: 
 Maintaining reasonable procedures to inform its agents of the requirements under Florida law 
and incorporating them into training manuals; 
 Establishing standards for agent product training;  
 Providing product-specific training and training materials that explain all material features of 
its annuity products to its agents; 
                                                
52
 Id. 
53
 Id. 
54
 Section 627.4554(5)(c), F.S. 
55
 Section 627.4554(5)(d), F.S. 
56
 Section 627.4554(5)(f), F.S. 
57
 Id.  BILL: CS/SB 1398   	Page 10 
 
 Maintaining procedures for the review of each recommendation before issuance of an annuity 
to ensure there is reasonable basis for determining that the recommendation is suitable, such 
as review procedures;  
 Maintaining reasonable procedures to detect recommendations that are not suitable, such as 
confirmation of consumer suitability information, systematic customer surveys, and customer 
interviews; and 
 Annually providing a report to senior managers which details a review, along with 
appropriate testing to determine the effectiveness of the supervision system, the exceptions 
found, and any corrective action taken or recommended.
58
 
 
An insurer is not required to include in its supervision system agent recommendations to 
consumers of products other than annuities offered by the insurer.
59
 An insurer may contract with 
a third-party to perform any function required with respect to the supervisory system,
60
 but the 
insurer must include the supervision of such function as part of the procedures required to be 
conducted as part of the system which include, but are not limited to: 
 Monitoring and, as appropriate, conducting audits to ensure the contracted function is 
properly performed; and 
 Annually obtaining a certification from a senior manager who has responsibility for the 
contracted function that the manager has a reasonable basis for representing the function is 
being properly performed.
61
 
 
An insurer is responsible for taking appropriate corrective action and may be subject to penalties 
notwithstanding any contract for the performance of a function by a third-party and regardless of 
the insurer’s compliance with these provisions in this paragraph regarding contracting with third-
parties to perform functions.
62
 
 
An insurer may not dissuade, or attempt to dissuade, a consumer from: 
 Truthfully responding to an insurer’s request for confirmation of suitability information; 
 Filing a complaint; or  
 Cooperating with the investigation of a complaint.
63
 
 
Sales made in compliance with Financial Industry Regulatory Authority (FINRA) or a 
succeeding agency requirements relating to the suitability and supervision of annuity transactions 
satisfy the requirements of s. 627.4554, F.S. This applies to FINRA broker-dealer sales of 
variable annuities and fixed annuities if the suitability and supervision is similar to those applied 
to variable annuity sales.
64
 These provisions do not limit the Department’s or the OIR’s ability to 
investigate or take any enforcement actions against insurers or agents.
65
 For this paragraph to 
apply, the insurer must: 
                                                
58
 Section 627.4554(5)(g)1., F.S. 
59
 Section 627.4554(5)(g)2., F.S. 
60
 Section 627.4554(5)(g)3., F.S. 
61
 Section 627.4554(5)(g)3., F.S. 
62
 Section 627.4554(5)(g)3.b., F.S. 
63
 Section 627.4554(h), F.S. 
64
 Section 627.4554(i), F.S. 
65
 Id.  BILL: CS/SB 1398   	Page 11 
 
 Monitor the FINRA member broker-dealer using information collected in the normal course 
of an insurer’s business; and  
 Provide to the FINRA member broker-dealer information and reports that are reasonably 
appropriate to assist the FINRA member broker-dealer in maintaining its supervision 
system.
66
 
 
Insurers and agents are required to maintain or be able to make available to the Department or 
the OIR records of the information collected from the consumer with respect to an annuity 
insurance transaction, and other information relied upon in making the recommendation, for five 
years after the insurance transaction is completed.
67
 An insurer may retain records on behalf of 
its agent.
68
 Records may be maintained in various specified forms or by any process that 
accurately produces the actual document.
69
 
 
An insurer is responsible for compliance with s. 627.4554, F.S., and, if violated because of action 
or inaction by the insurer or its agent that causes harm to the consumer, the OIR may order the 
insurer to take reasonably appropriate corrective action and may impose appropriate sanctions 
and penalties.
70
 The Department may order: 
 An agent to take reasonably appropriate corrective action for a consumer harmed by a 
violation, including monetary restitution of penalties or fees incurred by the consumer and 
impose appropriate penalties and sanctions; 
 A managing general agency or insurance agency that employs or contracts with an agent to 
sell or solicit the sale of annuities to consumers to take reasonably appropriate corrective 
action for a consumer harmed by a violation.
71
  
 
The Department must order an agent to pay restitution to a consumer who has been deprived of 
money by the agent’s misappropriation, conversion, or unlawful withholding of money 
belonging to the consumer, and the amount may not exceed the amount misappropriated, 
converted, or unlawfully withheld.
72
 This provision does not limit the consumer’s right to seek 
other remedies. To the extent that corrective action for the consumer is taken promptly after a 
violation is discovered, any applicable penalty under the Florida Insurance Code for a violation 
must be reduced or eliminated, as appropriate, according to a schedule adopted by the 
Department or the OIR.
73
 
 
In 2003, the National Association of Insurance Commissioners (NAIC) created the Suitability in 
Annuity Transactions Model Regulations in 2003 which were revised with updated standards 
in 2020 (“NAIC Model Regulation”).
74
 According to the NAIC, as of 2022, 27 states have 
                                                
66
 Id. 
67
 Section 627.4554(6), F.S. 
68
 Id. 
69
 Id. 
70
 Section 627.4554(7)(a), F.S. 
71
 Section 627.4554(7)(a)1. and 2., F.S. 
72
 Section 627.4554(7)(c), F.S. 
73
 Section 627.4554(7)(d), F.S. 
74
 Zimmermann, S., NAI Annuity Suitability Training Requirements, Annuity.Org, Feb. 20, 2023, available at 
https://www.annuity.org/annuities/regulations/naic/training/ (last visited April 13, 2023).  BILL: CS/SB 1398   	Page 12 
 
adopted either the 2003 or 2020 version of the NAIC Model Regulation.
75
 The NAIC Model 
Regulation requires agents to act in the best interest of consumers when making 
recommendations regarding annuities, and requires insurers to establish and maintain a system to 
supervise procedures to ensure compliance with the regulation.
76
 It also contains, amongst other 
things, duties for which insurers and agents must comply, training requirements, recordkeeping, 
and compliance mitigation provisions.
77
 
 
Insurance Agency Firm Name 
An insurance agency’s
78
 firm name must comply with certain provisions under Florida law.
79
 
The Department may disapprove the use of any true or fictitious name, except the bona fide 
natural name of an individual, by an insurance agency for any of the following reasons: 
 The name interferes with or is too similar to a name already in use by another agency or 
insurer; 
 The use of the name may mislead the public; 
 The name states or implies the agency is an insurer, motor club, hospital service plan, state or 
federal agency, charitable organization, or entity that primarily provides advice and counsel 
rather than sells or solicits insurance, or is entitled to engage in insurance activities not 
permitted under the license held or applied for by the licensee. This provision does not 
prohibit the use of the terms “state” or “states,” and use of such terms does not imply the 
agency is a state agency. 
 The name contains the term “Medicare” or “Medicaid.” An insurance agency whose name 
contains such terms and is licensed as of July 1, 2021 may continue to use that name until 
June 30, 2023 as long as the license remains valid. Insurance agencies whose names contain 
such terms will automatically expire on July 1, 2023, unless the terms are removed from the 
name before that date.
80
 
 
Notice of Cancellation for Certain Policies 
Insurers must inform the first-named policyholder for coverage of property, casualty (except for 
mortgage guaranty), surety, or marine insurance (except for certain motor vehicle insurance) 
with 45 days’ advance written notice of cancellation or termination with when otherwise 
specified in certain provisions.
81
 When cancellation is due to failure to pay a premium, at least 
10 days’ written notice of cancellation and the reason for the cancellation must be provided to 
                                                
75
 Silvestrini, E., Annuity Regulations, Annuity.Org, Feb. 20, 2023, https://www.annuity.org/annuities/regulations/ (last 
visited April 13, 2023). 
76
 The NAIC Model Laws, Regulations, Guidelines and Other Resources – Spring 2020, Suitability in Annuity Transactions 
Model Regulation, Spring 2020, available at https://content.naic.org/sites/default/files/inline-files/MDL-275.pdf (last visited 
April 13, 2023). 
77
 Id. 
78
 Section 626.015(10), F.S., defines “insurance agency” as a business location at which an individual, firm, partnership, 
corporation, association, or other entity, other than an employee of the individual, firm, partnership, corporation, association, 
or other entity other than an insurer as defined by s. 624.03, F.S., or an adjuster, engages in any activity or employs 
individuals to engage in any activity which by law may be performed only by a licensed insurance agent. 
79
 Section 626.602, F.S. 
80
 Id. 
81
 Section 627.4133(1)(a), F.S.  BILL: CS/SB 1398   	Page 13 
 
the insured.
82
 When cancellation or termination occurs during the first 90 days and is not a result 
of nonpayment of premium, at least 20 days’ written notice and the reason for cancellation or 
termination must be given to the insured except where there has been a material misstatement, 
misrepresentation, or failure to comply with the underwriting requirements.
83
 After 90 days, no 
such policy may be cancelled by the insurer unless there has been a material misstatement, a 
failure to pay the premium, a failure to comply with underwriting requirement within a specified 
time, or a substantial change in the risk covered by the policy or when cancellation is given for a 
class of insureds.
84
  
 
With respect to personal lines or commercial residential property insurance policies, such as any 
homeowner, mobile home owner, farm owner, condominium association, condominium unit 
owner, apartment building, the insurer must give the first-named insured written notice at least 
120 days before the effective date of the nonrenewal, cancellation, or termination.
85
 Such 
insurers must receive 10 days’ advance notice of cancellation for a failure to pay a premium, or 
20 days’ notice for a reason other than nonpayment if cancellation occurs within the first 90 days 
of coverage.
86
 An insurer may not cancel the policy after it has been in effect for 90 days unless 
there has been a material misstatement, nonpayment, a failure to comply within underwriting 
within a specified time, a substantial change in the risk covered by the policy or unless the 
cancellation is for a given class of insureds.
87
 
 
Unfair Methods of Competition and Unfair or Deceptive Acts 
The Unfair Insurance Trade Practices Act
88
 provides no person may engage in any unfair method 
of competition or an unfair or deceptive act or practice in relation to the business of insurance.
89
 
Section 626.9541, F.S., sets out several acts or practices that constitute unfair methods of 
competition and unfair or deceptive acts, such as: 
 Misrepresentations and false advertising of insurance policies; 
 False information and advertising; 
 Defamation; 
 Boycott, Coercion, and intimidation; 
 False statements and entries; 
 Unfair discrimination; 
 Unlawful rebates; and  
 Unfair claim settlement practices. 
 
Misrepresentations and false advertising of insurance policies means knowingly making, issuing, 
circulating, or causing to be made, issued, or circulated, any estimate, illustration, circular, 
statement, sales presentation, omission, comparison, or property and casualty certificate of 
insurance altered after being issued, which, for instance, misrepresents the benefits, advantages, 
                                                
82
 Section 627.4133(1)(b)1., F.S. 
83
 Section 627.4133(1)(b)2., F.S. 
84
 Id. 
85
 Section 627.4133(2)(b), F.S. 
86
 Section 627.4133(2)(b)1. and 2., F.S. 
87
 Section 627.4133(2)(b)3., F.S. 
88
 Section 626.951(2), F.S. 
89
 Section 626.9521(1), F.S.  BILL: CS/SB 1398   	Page 14 
 
conditions, or terms of any insurance policy or is misleading, or is a misrepresentation, as to the 
financial condition of any person or as to the legal reserve system upon which any life insurer 
operates.
90
 
 
Except for specified penalties to the contrary and subject to any other applicable penalties, a 
person who violates any provision of the Unfair Insurance Trade Practices Act may be fined an 
amount not greater than $5,000 for each non-willful violation and not greater than $40,000 for 
each willful violation.
91
 An insurer may not be fined more than an aggregate amount of 
$20,000 for all non-willful violations, or $200,000 for all willful violations, arising out of the 
same action.
92
  
 
Hurricane Deductibles 
Residential coverage includes both personal lines residential coverage
93
 and commercial lines 
residential coverage,
94
 and includes policies that provide coverage for particular perils such as 
windstorm
95
 and hurricane.
96
 “Hurricane coverage” is the loss or damage caused by the peril of 
windstorm during a hurricane, which includes damage to the interior of a building or to property 
inside a building caused by rain, snow, sleet, hail, sand, or dust if the direct force of a windstorm 
first damages the building, causing an opening through which rain, snow, sleet, hail, sand, or 
dust enters and causes damage.
97
 The term “hurricane,” as used in this paragraph, is a storm 
system that has been declared to be a hurricane by the National Hurricane Center of the National 
Weather Service. The duration of the hurricane includes the time period, in Florida: 
 Beginning at the time a hurricane watch or hurricane warning is issued for any part of Florida 
by the National Hurricane Center of the National Weather Service;  
 Continuing for the time period during which the hurricane conditions exist anywhere in 
Florida; and 
 Ending 72 hours following the termination of the last hurricane watch or hurricane warning 
issued for any part of Florida by the National Hurricane Center of the National Weather 
Service.
98
 
 
According to the Insurance Services Office, there has been $159.1 billion in insured losses 
caused by hurricanes between 1993 and 2013.
99
 In 1992, after Hurricane Andrew hit South 
                                                
90
 Section 626.9541(1)(a), F.S. 
91
 Section 626.9521(2), F.S. 
92
 Id. 
93
 Types of personal lines residential coverage include homeowner, mobile home owner, dwelling, tenant, condominium unit 
owner, or cooperative unit owner. Section 627.4025(1), F.S. 
94
 Types of commercial lines residential coverage includes condominium association, cooperative association, apartment 
building, and similar policies, including policies covering the common elements of a homeowners association. 
Section 627.4025(1), F.S. 
95
 Section 627.4025(2)(b), F.S., defines “windstorm,” for purposes of defining the term “hurricane coverage,” means wind, 
wind gusts, hail, rain, tornadoes, or cyclones caused by or resulting from a hurricane which results in direct physical loss or 
damage to property. 
96
 Section 627.4025(1), F.S. 
97
 Section 627.4025(2)(a), F.S. 
98
 Section 627.4025(2)(c), F.S. 
99
 The National Association of Insurance Commissioners (NAIC), Hurricane Deductibles, May 11, 2022, available at 
https://content.naic.org/cipr-topics/hurricane-deductibles (hereinafter cited as “NAIC Hurricane Deductible”) (last visited 
April 14, 2023).  BILL: CS/SB 1398   	Page 15 
 
Florida, hurricane deductibles were introduced to deal with the major losses caused by the major 
storms.
100
 Florida law does not define “hurricane deductible,” but according to the NAIC, a 
deductible is the amount of loss for which the policyholder is responsible to pay before any loss 
is covered by the insurer.
101
 Hurricane deductibles may be a fixed amount but usually are a 
percentage of the insured’s home value.
102
 Hurricane deductibles are usually higher than other 
peril deductibles because of the catastrophic damage caused by hurricanes,
103
 and typically range 
from between one percent to 10 percent of the home value.
104
 Laws in nineteen states, including 
Florida, and the District of Columbia contain to some form of hurricane or storm deductible.
105
  
 
Motor Vehicle Service Agreements 
A person may not transact, administer, market, or attempt any of these activities with respect to a 
service agreement
106
 business in Florida without a license.
107
 To qualify for and maintain a 
license, a service agreement company (“company”) must comply with applicable Florida laws 
(including the Florida Insurance Code), rules and charter powers, and comply with specified 
requirements, including, in part: 
 Being a solvent corporation; 
 Furnishing the OIR with evidence the management of the company is competent and 
trustworthy, and can successfully and lawfully manage its affairs; 
 Making a deposit required under s. 634.052, F.S.; 
 Maintaining the required reserves and the required ratio of liquid assets to the required 
reserves; 
 Having and maintaining net assets of $500,000; and 
 Establishing and maintaining an unearned premium reserve that meets certain requirements, 
including: 
o The unearned premium reserve consists of unencumbered assets equal to a minimum of 
50 percent of the unearned gross written premium of each service agreement and must 
amortize this reserve pro rata over the duration of the service agreement; 
                                                
100
 Id.  
101
 Id. 
102
 The NAIC Hurricane Deductible. 
103
 The Department of Financial Services, 2023 Legislative Bill Analysis for SB 1398, p. 3 (Mar. 16, 2023) (on file with 
Senate Committee on Banking and Insurance); The NAIC Hurricane Deductible. 
104
 The NAIC Hurricane Deductible. 
105
 Id.; Howard, P., and Gimbel, J., Hurricane Deductibles in 2023: Your State-by-State Guide, Policygenius, Dec. 30, 2022, 
available at https://www.policygenius.com/homeowners-insurance/hurricane-deductible-guide/ (last visited April 14, 2023) 
(summarizing the laws on hurricane deductibles in 19 states). 
106
 Section 634.011(8), F.S., defines “motor vehicle service agreement” or “service agreement” as a contract or agreement 
indemnifying the service agreement holder for the motor vehicle listed on the service agreement and arising out of the 
ownership, operation, and use of the motor vehicle against loss caused by failure of any mechanical or other component part, 
or any mechanical or other component part that does not function as it was originally intended; however, nothing in this part 
shall prohibit or affect the giving, free of charge, of the usual performance guarantees by manufacturers or dealers in 
connection with the sale of motor vehicles. Transactions exempt under s. 624.125, F.S., are expressly excluded from this 
definition and are exempt from the provisions of this part. The term “motor vehicle service agreement” includes any contract 
or agreement that provides: (a) for the coverage or protection and which is issued or provided in conjunction with an 
addictive produce applied to the motor vehicle that is the subject of such contract or agreement; (b) For payment of vehicle 
protection expenses as defined in s. 634.011(8)(b)1.a., F.S.  
107
 Section 634.031(1), F.S.   BILL: CS/SB 1398   	Page 16 
 
o A company utilizing the 50-percent reserve must not allow its ratio of gross written 
premium to net assets to exceed 10 to one; and 
o The company must deposit with the DFS securities of the type eligible for deposit by 
insurers under s. 625.52, F.S., equal to 15 percent of the unearned premium reserve; or  
 Does not establish and maintain an unearned premium reserve if the company secures and 
maintains contractual liability insurance in accordance with the following: 
o Coverage of 100 percent of the claim exposure is obtained from an insurer approved by 
the OIR which meets certain criteria; 
o The contractual liability insurance policy binds its issuer to pay or cause to be paid to the 
service agreement holder all legitimate claims and cancellation refunds if the company 
does not meet its contractual obligations;  
o If the issuer of the contractual liability policy is fulfilling the service agreements covered 
by contractual liability policy and the holder cancels the service agreement, the issuer 
must make a full refund of the unearned premium to the consumer in certain 
circumstances; 
o The policy’s cancellation, termination, or nonrenewal is subject to 90 days written notice 
by the insurer to the OIR; and 
o The company must provide the OIR with the claims statistics.
108
 
 
Mortgage Loan Regulations 
The OFR is responsible for the regulation of banks, credit unions, other financial institutions, 
finance companies, and securities.
109
 The OFR has a Division of Consumer Finance which is 
responsible for the administration and enforcement of ch. 494, F.S.
110
 that licenses and regulates 
the individuals and businesses in the mortgage business, including loan originators,
111
 mortgage 
brokers,
112
 and mortgage lenders.
113
 A person who acts in any of these capacities must be 
licensed.
114
  
 
A mortgage broker and mortgage lender who makes loans in Florida must transact business from 
a principal place of business.
115
 Mortgage brokers and mortgage lenders may separately license 
branch offices.
116
 A “branch office” is a location, other than a mortgage broker’s or mortgage 
lender’s principal place of business: 
                                                
108
 Section 634.041, F.S. 
109
 Section 20.121(3)(a)2., F.S. 
110
 Section 494.0011(1), F.S. 
111
 Section 494.001(18), F.S., defines “loan originator” as an individual who, directly or indirectly, solicits or offers to solicit 
a mortgage loan, accepts, or offers to accept an application for a mortgage loan, negotiates or offers to negotiate the terms or 
conditions of a new or existing mortgage loan on behalf of a borrower or lender, or negotiates or offers to negotiate the sale 
of an existing mortgage loan to a noninstitutional investor for compensation or gain. 
112
 Section 494.001(23), F.S. defines “mortgage broker” as a person conducting loan originator activities through one or more 
licensed loan originators employed by the mortgage broker or as independent contractors to the mortgage broker. 
113
 Section 494.001(24), F.S., defines “mortgage lender” as a person making a mortgage loan or servicing mortgage loan for 
others, or, for compensation or gain, directly or indirectly, selling or offering to sell a mortgage loan to a noninstitutional 
investor. A mortgage lender may act as a mortgage broker. Section 494.0073, F.S. 
114
 Sections 494.00312, 494.00321, and 494.00611, F.S. 
115
 Sections 494.0039 and 494.0067(1), F.S. Section 494.001(31), F.S., defines “principal place of business” as a mortgage’s 
broker’s or mortgage lender’s primary business office, the street address, or physical location that is designated on the 
application for licensure or any amendment to such application. 
116
 Sections 494.0036(1) and 494.0066(1), F.S.  BILL: CS/SB 1398   	Page 17 
 
 The address of which appears on business cards, stationary, or advertising used by the 
licensee in connection with business conducted under ch. 494, F.S.; 
 At which the licensee’s name, advertising or promotional materials, or signage suggests that 
mortgage loans are originated, negotiated, funded, or services; or 
 At which mortgage loans are originated, negotiated, funded, or services by a licensee.
117
 
 
The OFR must issue a branch office license after determining that the mortgage broker or 
mortgage lender has submitted a completed branch office application form, which must contain 
specified information, and an initial nonrefundable fee of $225.
118
 Branch office licenses must be 
renewed at the same time as mortgage broker or mortgage lender licenses.
119
 Each branch office 
must be operated by the “full charge, control, and supervision” of a principal loan originator and 
branch manager.
120
 Operating a branch office without the required license, designated principal 
loan originator, or branch manager is grounds for disciplinary action.
121
 
 
Licensees are required to maintain books, accounts, records and documents necessary to 
determine compliance with ch. 494, F.S., at their principal place of business,
122
 but the OFR may 
authorize a licensee to maintain such records at an alternative location.
123
 
 
Conduct of Money Services Businesses 
Ch. 560, F.S., sets out provisions on the conduct of money services businesses (MSB), 
specifying, in part: 
 A licensee may transact MSB only under the legal name under which the person is licensed; 
 The payment instrument must be endorsed using the legal name under which the licensee is 
licensed in certain circumstances; 
 A licensee may not accept or cash a payment instrument from a person who is not the 
original payee with limited exception; and 
 A licensee must report all suspicious activity to the OIR.
124
 
 
Pursuant to s. 560.310, F.S., the OIR must require a licensee to submit certain information to the 
check cashing database or electronic log, before entering into each check cashing transaction for 
each payment instrument being cashed.
125
 A person who knowingly violates this section commits 
a felony of the third degree.
126
 
 
                                                
117
 Section 494.001(3), F.S. 
118
 Sections 494.0036(2) and 494.0066(2), F.S. 
119
 Section 494.0036(3) and 494.0066(3), F.S. 
120
 Sections 494.0035 and 494.00665, F.S. 
121
 Section 494.00255(1)(q) and (r), F.S. 
122
 Section 494.0016(1), F.S. 
123
 Section 494.0016(2), F.S. 
124
 Section 560.309, F.S. 
125
 Section 560.310(2)(d), F.S. 
126
 Section 560.111(6), F.S. A third degree felony is punishable by up to five years imprisonment and up to a $5,000 fine. 
Sections 775.082, 775.083, and 775.084, F.S.  BILL: CS/SB 1398   	Page 18 
 
Crowd-funding Campaigns 
Crowd-funding is a recent method used to raise funds online from a large number of people who 
are interested in a campaign.
127
 Campaigns may support a wide range of ideas and ventures, and 
usually share information about the project, cause, or idea to decide whether to invest in the 
campaign based on the “collective wisdom of the crowd.”
128
 Some of the top crowd-funding sites 
include GoFundMe, StartEngine, Indiegogo, and SeedInvest Technology.
129
 
 
Florida statutes have limited provisions related to crowd-funding campaigns that relate to 
intrastate crowd-funding for securities transactions.
130
 There are no other provisions that address 
crowd-funding explicitly, but crowd-funding campaigns must comply with all other relevant 
laws, such as the Florida Deceptive and Unfair Trade Practices Act (FDUTPA).
131
 For instance, 
it is unlawful to engage in any unconscionable acts or practices, and unfair or deceptive acts or 
practices in the conduct of any trade or commerce.
132
 Three are also provisions on unlawful acts 
and practices by social media platforms which, if applicable, a crowd-funding campaign 
organizer would need to comply.
133
  
 
The state attorney in the judicial circuit which a violation occurs or affects, or the Department of 
Legal Affairs if a violation occurs or affects more than one judicial circuit,
134
 has authority to 
conduct investigations if certain conditions are met.
135
 Such authority may seek specified 
remedies, such as a declaratory judgment or an action to enjoin,
136
 and a violator may be liable 
for a civil penalty of not more than $10,000.
137
 Further, an aggrieved party may bring an 
individual cause of action in certain circumstances and seek actual damages, plus attorney fees 
and court costs.
138
 
 
                                                
127
 The Securities and Exchange Commission, 24D Securities Pub. & Priv. Offerings Appendix C13 (2d ed.) (Nov. 2022) 
available at Appendix C13. SEC Crowdfunding Rule | Secondary Sources | National | Westlaw Edge (last visited 
March 18, 2023). 
128
 Id. 
129
 Kearl, M., Crowdfunding Platforms, Investopedia, Dec. 28, 2022, https://www.investopedia.com/best-crowdfunding-
platforms-5079933 (last visited April 14, 2023). 
130
 Section 517.0611, F.S. 
131
 Sections 501.201, F.S. to 501.213, F.S. 
132
 Section 501.204(1), F.S. “Trade or commerce” is defined as the advertising, soliciting, providing, offering, or distributing, 
whether by sale, rental, or otherwise, of any good or service, or any property, whether tangible or intangible, or any other 
article, commodity, or thing of value, wherever situated. The terms includes the conduct of any trade or commerce, however 
denominated, including any nonprofit or not-for-profit person or activity. Section 501.203(8), F.S. “Thing of value” may 
include, without limitation, any moneys, donation, membership, credential, certificate, prize, award, benefit, license, interest, 
professional opportunity, or chance of winning. Section 501.203(9), F.S. 
133
 Section 501.2041, F.S. 
134
 Section 501.203(2), F.S. 
135
 Section 501.206, F.S. 
136
 Section 501.207(1), F.S. 
137
 Section 501.2075, F.S. 
138
 Section 501.211(1), F.S.  BILL: CS/SB 1398   	Page 19 
 
Distributed Energy Generation Systems 
A distributed energy generation system (DEGS), such as a solar panel or a wind-turbine,
139
 is a 
device or system that is used to generate or store electricity, that has an electric delivery capacity, 
individually or in connection with other similar devices or systems, of greater than one kilowatt 
or one kilowatt-hour; and that is used primarily for on-site consumption.
140
 According to the 
United States Environmental Protection Agency (EPA), the use of DEGS has increased for 
several reasons, for instance because they have become cost-effective.
141
 There are benefits to 
using DEGS, such as reducing the amount of electricity generated which can reduce the 
environmental impact, but it can also have negative impacts, such as a system that involves 
combustion.
142
 Most solar installations on residences are installed on a roof, and DEGS may be 
best suited for new roofs as they can last up to 25 years or longer.
143
 
 
In 2017, the Florida Legislature adopted laws related to the retail installment sales of DEGS in 
Part II of ch. 520, F.S. (Part II)
144
 Part II applies to agreements
145
 to sell or lease a DEGS and is 
supplemental to the provisions on retail installment contracts contained in Part III, F.S.,
146
 and 
any sale of a DEGS must comply with applicable safety standards under chs. 489 and 
553, F.S.
147
 A written statement, separate from the agreement, must be acknowledged by the 
buyer or lessee, and must meet certain minimum requirements and must contain specified 
information, including, in part: 
 The name and certain contact details of the buyer, the person responsible for installing the 
DEGS, and the DEGS’s maintenance providers; 
 A statement indicating whether the DEGS is being purchased or leased; 
 The total cost to be paid by the buyer or lease; 
 A payment schedule;  
 Each state or federal tax incentive or rebate relied upon by the seller; 
 A description of any roof warranties; 
 A disclosure notifying the lessee whether the seller will insure a leased DEGS against 
damage or loss; and 
                                                
139
 United States Environmental Protection Agency, Distributed Generation of Electricity and its Environmental Impacts, 
https://www.epa.gov/energy/distributed-generation-electricity-and-its-environmental-impacts (last visited April 14, 2023) 
(hereinafter cited as “EPA Website”). 
140
 Section 520.20(3), F.S. 
141
 EPA Website. 
142
 Id. 
143
 The Department of Financial Services, 2023 Legislative Bill Analysis for SB 1398, p. 3 (Mar. 16, 2023) (on file with 
Senate Committee on Banking and Insurance). 
144
 Ch. 2017-118, Laws of Fla. 
145
 Section 520.20(1), F.S. defines “agreement” as a contract executed between a buyer or lessee and a seller that leases or 
sells a DEGS. For purposes of this part, the term includes retail installment contracts. Section 520.20(2), F.S., defines 
“buyer” as a person that enters into an agreement to buy a DEGS from a seller. Section 520.20(6), F.S., defines “seller” as a 
person who regularly engaged in, and whose business substantially consists of, selling or leasing goods, including DEGS, to 
buyers or lessees. A seller that is also an installer must be licensed under ch. 489, F.S. Section 520.20(5), F.S., defines “retail 
installment contract” as an agreement executed in this state between a buyer and a seller in which the title to, or a lien upon, a 
DEGS is retained or taken by the seller from the buyer as security, in whole or in part, for the buyer’s obligations to make 
specified payments over time. 
146
 Section 520.21, F.S. 
147
 Section 520.22, F.S.  BILL: CS/SB 1398   	Page 20 
 
 A prescribed statement about the buyer’s or lessee’s responsibility to obtain insurance.
148
 
 
This requirement to produce a written statement may be satisfied by the electronic delivery of a 
document that contains the requirement information provided the intended recipient 
acknowledges its receipt.
149
 A seller who willfully violates the Part II commits a noncriminal 
violation punishable by a fine.
150
 The owner may recover against certain person specified 
charges under the agreement, attorney fees and costs.
151
 
 
Warranty Associations 
Chapter 634, F.S., provides for the regulation of warranty associations. There are three parts to 
the chapter; Part I for motor vehicle service agreement companies; Part II for home warranty 
associations; and Part III for service warranty associations. 
 
Service Warranty Associations 
A service warranty association is any business other than an authorized insurer that issues service 
warranties.
152
 A service warranty includes, in return for the payment of a segregated charge by 
the consumer, any warranty, guaranty, or maintenance service contract equal to or greater than 
one year in length; an agreement for a specific duration to perform the repair, replacement, or 
maintenance of a consumer product; for indemnification for repair, replacement, or maintenance, 
for failure due to a defect in materials or workmanship, normal wear and tear, power surge, or 
accidental damage from handling.
153
 The regulation of the association and the warranties is 
administered by the OIR; the regulation of the sales representatives is by the DFS.
154
 
III. Effect of Proposed Changes: 
Public Adjusters 
Section 9 amends s. 626.854, F.S., by revising the definition of public adjuster to apply to any 
person who acts as a public adjuster regardless of how that person described or presents his or 
her services. When entering into a contract after July 1, 2023, a public adjuster is prohibited from 
contracting with anyone other than the named insured unless the insured gives written consent 
after he or she enters into a contract for public adjusting services. If a public adjuster contracts 
with a third party to assist in settling the claim before obtaining written consent from the insured, 
the public adjuster is responsible for the third-party’s fees. 
 
Public Adjuster Compensation 
No later than 14 days from the date of the reported loss, if the insurer either pays or commits in 
writing to pay the policy limit to the insured, the public adjuster must: 
 Inform the insured the loss recovery amount might not be increased by the insurer; 
                                                
148
 Section 520.23, F.S. 
149
 Id. 
150
 Section 520.25(1), F.S. 
151
 Section 520.25(2), F.S. 
152
 Section 634.401(14), F.S. 
153
 Section 634.401(13), F.S. 
154
 Section 634.402, F.S.  BILL: CS/SB 1398   	Page 21 
 
 Not receive a commission based on a percentage of the total amount timely paid or 
committed policy limits; and 
 Be entitled only up to $1,000 from the insured for the time spent and expenses incurred on 
the claim by the public adjuster, until the claim is paid or the insured receives a written 
commitment to pay from the insurer. 
 
Except as otherwise provided, if the public adjuster enters into a contract after the insured or 
claimant is unsuccessful at negotiating a payment and the public adjuster is successful in 
obtaining a higher insurance claim payment, the public adjuster must receive a commission 
totaling ten percent of the difference between the initial insurance claim payment offer made to 
the insured and the final insurance claim payment.  
 
Right of Rescission 
When an insured or claimant enters into a contract with a public adjuster as a result of an 
emergency, an insured or claimant may cancel the contract without penalty or obligation within 
30 days after the date of the event, or 10 days after the date on which the contract is executed, 
whichever is longer. The public adjuster’s contract to adjust must contain the following language 
in a minimum 18-point bold type immediately before the space reserved in the contract for the 
signature of the insured or claimant:  
“You, the insured, may cancel this contract for any reason without penalty 
or obligation to you within 10 days after the date of this contract. If this 
contract was entered into based on events that are the subject of a 
declaration of a state of emergency by the Governor, you may cancel this 
contract for any reason without penalty or obligation to you within 30 days 
after the date of the event or 10 days after the date on which the contract is 
executed, whichever is longer. You may also cancel the contract without 
penalty or obligation to you if I, as your public adjuster, fail to provide 
you and your insurer a copy of the written estimate within 60 days of the 
execution of the contract in accordance with s. 626.854(14)(b), Florida 
Statutes.” 
 
The insured may rescind a public adjuster services contract if the public adjuster has not 
provided the insurer with a written estimate within 60 days after executing the contract. 
 
Sections 12 and 13 amend ss. 626.8796 and 626.8797, F.S., respectively, and provides the fraud 
statement that must be contained in the contract and proof-of-loss statement must be in a 
minimum 18-point bold type before the space in the contract reserved for the insured’s signature.  
 
Public Adjuster Contracts 
Section 12 amends s. 626.8796, F.S., and provides all contracts for public adjuster services must 
be in at least 12-point font, and be titled “Public Adjuster Contract.” The provision on public 
adjuster contracts relating to property and casualty claims must include the public adjuster’s and 
insured’s phone number and e-mail addresses, and requires these details for the affidavit remitted 
by public adjusting firms in eligible circumstances. The bill specifies contract language must 
state the percentage of compensation in a minimum of 18-point bold type before the space 
reserved for the insured’s signature. The bill provides the insured is required to initial each page  BILL: CS/SB 1398   	Page 22 
 
that does not have his or her signature. Further, the bill specifies the unaltered copy of the 
contract must be remitted to the insured at the time of execution and to the insurer within 10 days 
after execution.  
 
The notice that must be included in the contract, regarding an insured’s right to cancel the 
contract without penalty within 10 days after the date of the contract, must be immediately 
before the space reserved for the signature of the insured or claimant in the contract.  
 
The bill provides the public adjuster may not provide services until the insured and the insurer 
have been provided with the unaltered copies of the executed contract. Furthermore, an insured 
may rescind the contract for public adjuster services if the public adjuster has not submitted a 
written estimate to the insurer within 60 day after executing the contract. 
 
Prior to executing the contract, the public adjuster must provide the insured with a separate 
disclosure document on a form adopted by the Department regarding the claim process and must:  
 Define the type of adjusters who may be involved in the claim process as either a company 
adjuster, independent adjuster, and public adjuster; 
 Explain the public adjuster is not a representative or employee of the insurer;  
 Explain the insured is not required to hire a public adjuster, but has a right to do so; 
 Explain an insured has a right to initiate direct communications with the insured’s attorney, 
the insurer, the company adjuster, the insurer’s attorney, or any person regarding the 
settlement of the insured’s claim; 
 Explain the public adjuster’s salary, fee, commission, or other consideration to be paid is the 
insured’s responsibility; 
 Explain the public adjuster is required to provide the insured an unaltered copy of the 
executed contract at the time of execution;  
 Explain if the contract was entered into based on events subject to a declaration of a state of 
emergency, the insured has a right to rescind the contract within 30 days after the date of the 
event, or 10 days after the date on which the contract is executed, whichever is longer; and  
 The public adjuster must provide an unaltered copy of the executed disclosure document at 
the time of execution.  
 
A contract that does not comply with these disclosure requirements is invalid and unenforceable. 
 
Rulemaking 
Section 12 also provides the Department with authority to adopt rules to implement 
s. 626.8796, F.S., including rules to adopt forms required under the section. 
 
Exemption from Public Adjuster Licensure 
Section 10 amends s. 626.860, F.S., to clarify that the exemption for attorneys from needing a 
license under ch. 626, F.S., to adjust claims does not apply to the employees, interns, volunteers, 
or contractors of any attorney or law firm. 
  BILL: CS/SB 1398   	Page 23 
 
Display of Adjuster License 
Section 11 amends s. 626.875, F.S., and requires an independent or public adjuster to display 
their license in a conspicuous place in the license holder’s principal place of business, but carry 
the license in his or her actual possession if the licensee is conducting business away from their 
place of business and cannot post the license. 
 
Adjuster Records Retention 
The bill requires records of specific claims or losses, that are required to be retained by the 
adjuster, must be retained in the adjuster’s place of business for a period of not less than five 
years and must be made available for inspection by the Department at all times. The bill further 
specifies documents which must be maintained for a period not less than five years, including: 
 Name, address, telephone number, and e-mail address of the insured, and the name of the 
attorney representing the insured, if applicable; 
 The date, location, and amount of the loss; 
 An unaltered copy of the executed disclosure document required and public adjuster contract;  
 A copy of the estimate of damages provided to the insurer; 
 The name of the insurer, the name of the insurer’s claims representative, and the amount, 
expiration date, and number of each policy under which the loss is covered;  
 An itemized statement of recoveries by the insured from the sources known to the adjuster; 
 An itemized statement of the compensation received by the public adjuster from any source; 
and 
 A register of all money received, deposited, disbursed, and withdrawn in connection with a 
transaction with the insured, including fees, transfers, and disbursements in connection with 
the loss. 
 
Annuities 
Section 17 amends s. 627.4554, F.S., and largely adopts the National Association of Insurance 
Commissioners (NAIC) Model Regulation with some modifications to synthesize the provisions 
with current law. The Department and Financial Services Commission (Commission) is 
authorized to adopt by rule the forms prescribed in the NAIC Suitability in Annuity Transaction 
Model Regulation Appendix A – Insurance Agent (Producer), Appendix B – Consumer Refusal 
to Provide Information, and Appendix C – Consumer Decision to Purchase an Annuity Not 
Based on a Recommendation. 
 
The bill renames the title of s. 627.4554, F.S., to “Suitability in Annuity Transactions,” and 
makes the section effective January 1, 2024. The bill amends the purpose of s. 627.4554(1), F.S., 
which, unlike current law, requires agents to act in the best interest of the consumer when 
making a recommendation about an annuity. The purpose also requires insurers to establish and 
maintain a supervisory system to ensure that the insurance needs and financial objectives of the 
consumer are effectively, rather than appropriately, addressed at the time of the transaction. The 
scope of the section is also amended to apply to any sale or recommendation of an annuity but is 
no longer limited to apply to transactions which result in the purchase, exchange or replacement 
recommended. The bill modifies the exemptions provision under current law to state the 
exemptions do not apply to s. 627.4554, F.S., “unless otherwise specifically included.”  BILL: CS/SB 1398   	Page 24 
 
 
The bill defines, deletes or revises the following terms: 
 “Agent” is revised, from the same meaning as provided in s. 626.015, F.S., to mean a person 
or entity required to be licensed under the laws of Florida to sell, solicit, or negotiate 
insurance, including annuities. For purposes of this section, the terms include an insurer 
where no agent is involved; 
 “Cash compensation” means as any discount, concession, fee, service fee, commission, sales 
charge, loan, override, or cash benefit received by an agent from an insurer, intermediary, or 
directly from the consumer in connection with the recommendation or sale of an annuity; 
 “Consumer profile information” means information that is reasonably appropriate to 
determine whether a recommendation addresses the consumer’s financial situation, insurance 
needs, and financial objectives, including, at a minimum, the following: 
o Age; 
o Annual income; 
o Financial situation and needs, including debts and other obligations; 
o Financial experience; 
o Insurance needs; 
o Financial objectives;  
o Intended use of the annuity; 
o Financial time horizon; 
o Existing assets or financial products, including investment, annuity, and insurance 
holdings; 
o Liquidity needs; 
o Liquid net worth; 
o Risk tolerance, including, but not limited to, willingness to accept nonguaranteed 
elements in the annuity; 
o Financial resources used to fund the annuity; and 
o Tax status. 
 “Intermediary” means an entity contracted directly with an insurer or with another entity 
contracted with an insurer to facilitate the sale of the insurer’s annuities by agents; 
 “Material conflict of interest” means a financial interest of the agent in the sale of an annuity 
which a reasonable person would expect to influence the impartiality of a recommendation. 
The term expressly does not include cash compensation or noncash compensation; 
 “Noncash compensation” means any form of compensation that is not cash compensation, 
including, but not limited to, health insurance, office rent, office support, and retirement 
benefits; 
 “Nonguaranteed elements” means the premiums; credited interest rates, including any bonus; 
benefits; values; dividends; noninterest-based credits; charges; or elements of formulas used 
to determine any of these, which are subject to company discretion and are not guaranteed at 
issue. An element is considered nonguaranteed if any of the underlying nonguaranteed 
elements are used in its calculation; 
 “Recommendation” is revised to mean advice provided by an agent to an individual 
consumer which was intended to result or does result in a purchase, an exchange, or a 
replacement of an annuity in accordance with that advice. New language was added to 
specify the term does not include general communication to the public, generalized customer  BILL: CS/SB 1398   	Page 25 
 
services, assistance or administrative support, general educational information and tools, 
prospectuses, or other product and sales material; 
 “Replacement” is revised to mean a transaction in which a new annuity is to be purchased 
and it is known or should be known to the proposing agent, or to the proposing insurer 
whether or not an agent is involved, that by reason of such transaction an existing annuity or 
other insurance policy has been or is to be any of the criteria contained in the 
subsection (l)1- 5 of the bill; 
 “SEC” means the United States Securities and Exchange Commission;  
 “Suitability information” is deleted and replaced with the definition of “consumer profile 
information”; 
 “Comparable standard” means, for purposes of paragraph 4.a., with respect to: 
o Broker-dealers and registered representatives of broker-dealers, applicable Securities and 
Exchange Commission and FINRA rules pertaining to best interest obligations and 
supervision of rules pertaining to best interest obligations and supervision of annuity 
recommendations and sales including, but not limited to, Regulation Best Interest, 
17 C.F.R. s. 240.15101, and any amendments or successor regulations thereto;  
o Investment advisers registered under federal or state securities laws or investment adviser 
representatives by contract or under the Investment Advisers Act 1940 or applicable state 
securities laws, including, but not limited to, Form ADV and interpretations; and  
o Plan fiduciaries or fiduciaries, the duties, obligations, prohibitions and all other 
requirements attendant to such status under the Employee Retirement Income Security 
Act of 1974 of the Internal Revenue Code and any amendments or successor statutes 
thereto; and 
 “Financial professional” means, for purposes of paragraph 4.a., an agent that is regulated and 
acting as: (a) A broker-dealer registered under federal or state securities laws or a registered 
representative of a broker-dealer; (b) An investment adviser registered under federal or state 
securities laws or an investment adviser representative associated with the federal or state 
registered investment adviser; or (c) A plan fiduciary under s. 3(21) of the Employee 
Retirement Income Security Act of 1974 or fiduciary under s. 4975(e)(3) of the Internal 
Revenue Code or any amendments or successor statutes thereto. 
 
The bill replaces, or amends as specified below, the duties of insurers and agents under current 
law to incorporate the best interest standards contained in the NAIC Model Regulation:  
 When making a recommendation of an annuity, an agent must act in the best interest of the 
consumer under the circumstances known at the time the recommendation is made, without 
placing the insurer or agent’s financial interest ahead of the consumers’ interests.  
 Provides an agent has acted in the best interest of the consumer if the agent has satisfied the 
following obligations regarding care, disclosure, conflicts of interest, and documentation. 
 In making a recommendation, the agent must exercise reasonable diligence, care, and skill 
(“care obligation”) to: 
o Know the customer’s financial situation, insurance needs, and financial objectives; 
o Understand the available options after making a reasonable inquiry into options available 
to the agent; 
o Have a reasonable basis to believe the recommended option effectively addresses the 
consumer’s financial situation, insurance needs, and financial objectives over the life of 
the product, in light of the consumer’s profile information; and  BILL: CS/SB 1398   	Page 26 
 
o Communicate the reason or reasons for the recommendation. 
 The requirements of the care obligation include:  
o Making reasonable efforts to obtain consumer profile information from the consumer 
before the recommendation of an annuity; 
o Requiring an agent to consider the types of products the agent is authorized and licensed 
to recommend or sell which address the consumer’s financial situation, insurance needs, 
and financial objectives. An insurer or agent are not required to analyze or consider 
products outside the authority and license of the agent or other possible alternative 
products or strategies available in the market at the time of the recommendation. Agents 
must be held to standards applicable to agents with similar authority and license; and 
o Having a reasonable basis to believe the consumer would benefit from certain features of 
the annuity, such as annuitization,
155
 death or living benefit, or other insurance-related 
features. 
 The care obligation does not create a fiduciary duty or relationship and only establishes a 
regulatory duty. 
 Consumer profile information, characteristics of the insurer and product costs, rates, benefits, 
and features are those factors generally relevant in making a determination whether an 
annuity effectively addresses the consumer’s financial situation, insurance needs, and 
financial objectives but the level of importance of each factor under the care obligation may 
vary depending on the factors and circumstances of a particular case. However, each factor 
may not be considered in isolation. 
 The requirements of the care obligation apply to the particular annuity as a whole and the 
underlying subaccounts to which funds are allocated at the time of purchase or exchange of 
an annuity, and riders and similar product enhancements, if any. 
 The care obligation does not require that the annuity with the lowest one-time occurrence 
compensation structure or multiple occurrence compensation structure must necessarily be 
recommended. 
 The agent does not have ongoing monitoring obligations under the care obligation, although 
such obligation may be separately owed under the terms of a fiduciary, consulting, 
investment, advising, or financial planning agreement between the consumer and agent. 
 In a case of an exchange or replacement of an annuity, the agent must consider the whole 
transaction, which includes considering whether: 
o The consumer will incur a surrender charge, be subject to a new surrender period, lose 
existing benefits, be subject to increased fees; 
o Would benefit from product enhancements and improvements; and 
o Has had another annuity exchange or replacement within the preceding 60 months. 
 An agent is not required to obtain any license other than an agent license with the appropriate 
line of authority to sell, solicit, or negotiate insurance in this state, including, but not limited 
to, any securities license, in order to fulfill the duties and obligations contained in this 
section; provided, the agent does not give advice or provide services that are otherwise 
subject to securities laws or engage in any other activity requiring other professional licenses. 
 Before the recommendation or sale of an annuity, the agent must prominently disclose to the 
consumer on a form substantially similar to the NAIC Model Regulation Appendix A, titled 
INSURANCE AGENT (PRODUCER) DISCLOSURE FOR ANNUITIES , including: 
                                                
155
 Annuitization is the process of converting investment into a series of periodic income payments. Investopedia.com, 
Annuitization Definition, https://www.investopedia.com/terms/a/annuitization.asp (last visited April 14, 2023).  BILL: CS/SB 1398   	Page 27 
 
o A description of the scope and terms of the relationship with the consumer and the role of 
the agent in the transaction; 
o An affirmative statement on whether the agent is licensed and authorized to sell the 
certain products, including certain types of annuities, life insurance, mutual funds, stocks 
and bonds, or certificates of deposits; 
o An affirmative statement describing the insurers for which the agent is authorized, 
contracted, or appointed, or otherwise able to sell insurance products, using the following 
descriptions specified descriptions regarding the number of insurers and, if two or more, 
whether the agent is primarily contracted with one insurer; 
o A description of the sources and types of cash compensation and noncash compensation 
to be received by the agent, including certain information about the type of compensation 
received for the sale of a recommended annuity; and 
o A notice of the consumer’s right to request additional information regarding cash 
compensation. 
 Upon request of the consumer or the consumer’s designated representative, the agent must 
disclose: 
o A reasonable estimate of the amount, stated as a range of amounts or percentages, of cash 
compensation to be received by the agent. 
o Whether the cash compensation is a one-time or multiple occurrence amount; if a 
multiple occurrence amount then the disclosure must contain certain information. 
 Before or at the time of the recommendation or sale of an annuity, the agent must have a 
reasonable basis to believe the consumer has been informed, rather than the consumer being 
reasonably informed under current law, of various features of the annuity, and additional 
features have been added to the specified list, including any annual fees, other options of the 
annuity, and potential changes in nonguaranteed elements of the annuity. 
 The agent must identify and avoid, or reasonably manage and disclose, material conflicts of 
interest, including material conflicts of interest related to an ownership interest. 
 An agent must at the time of the recommendation or sale: 
o Make a written record of any recommendation and the basis for the recommendation; 
o Obtain a consumer signed statement on a form substantially similar to NAIC Model 
Regulation Appendix B, titled CONSUMER REFUSAL TO PROVIDE 
INFORMATION: 
 A customer’s refusal to provide the consumer profile information, if any; or 
 A customer’s understanding of the ramifications of not providing his or her consumer 
profile information or providing insufficient consumer profile information.  
o Obtain a customer signed on a form substantially similar to NAIC Model Regulation 
Appendix C, titled Consumer Decision to Purchase an Annuity NOT Based on a 
Recommendation, acknowledging the annuity transaction is not recommended, if 
applicable. 
 Any requirement applicable to an agent under this subsection must apply to every agent who 
has exercised material control or influence in the making of a recommendation and has 
received direct compensation as a result of the recommendation or sale, regardless of whether 
the agent has had direct contact with the consumer. Certain activities, such as providing or 
delivering marketing or educational materials, are specified as not constituting material 
control or influence. 
 The first sentence of s. 627.4554(5)(d), F.S., relating to the requirement that an insurer’s 
issuance of an annuity being reasonable in all of the circumstances, is relocated to a separate  BILL: CS/SB 1398   	Page 28 
 
subparagraph, and clarifies that an insurer to does have a care obligation with respect to 
specified transactions. 
 An insurer is prohibited from recommending an annuity to a consumer unless there is 
reasonable basis to believe that it would effectively address the particular consumer’s 
financial situation, insurance needs, and financial objectives based on the consumer’s profile 
information. 
 An insurer must establish and maintain, not only establish as provided under current law, a 
supervision system that is reasonably designed to ensure the insurer and agent’s compliance 
with s. 627.4554, F.S., and must include, but is not limited to, the insurer must: 
o Establish and maintain, not only maintain as provided under current law, reasonable 
procedures to inform its agents of the requirements of the section and incorporating them 
into training manuals; 
o Establish and maintain, not only establish as provided under current law, standards for 
agent product training, and establish and maintain reasonable procedures to require its 
agent to comply with the training requirements;  
o Provide product-specific training and training materials that explain all material features 
of its annuity products to its agents; 
o Establish and maintain, not only maintain as provided under current law, procedures for 
the review of each recommendation before issuance of an annuity to ensure there is 
reasonable basis to determine the recommended annuity would effectively address the 
particular consumer’s financial situation, insurance needs, and financial objectives, rather 
than for determining that the recommendation is suitable;  
o Establish and maintain, not only maintain as provided under current law, reasonable 
procedures to detect recommendations that are not in compliance with paragraphs (a), (b), 
(d), and (e), rather than detecting recommendations that are not suitable. Two examples 
of procedures are added to the list in current law which are: agent interviews and agent 
statements or attestations;  
o Annually providing a report to senior managers which details a review, along with 
appropriate testing to determine the effectiveness of the supervision system, the 
exceptions found, and any corrective action taken or recommended; 
o Establish and maintain reasonable procedures to assess, prior to the issuance or delivery 
of the annuity, whether an agent has provided the consumer with required information, 
which is not a requirement under current law;  
o Establish and maintain reasonable procedures to identify and address suspicious 
consumer refusals to provide consumer profile information, which is not a requirement 
under current law; and 
o Establish and maintain reasonable procedures to identify and eliminate any sales contests, 
sales quotas, and other noncash compensation that are based on the sales of specific 
annuities within a limited period of time. The requirements under this provision do not 
prohibit the receipt of health insurance, office rents, office support and other employee 
benefits by employees as long as they are not based on the volume of sales of a specific 
annuity within a limited period of time. 
 Amends the list of requirements that do not need to be included in an insurer’s supervision 
system to add consideration of or comparison to options available to the agents or 
compensation relating to those options other than annuities or other products offered by the 
insurer.  BILL: CS/SB 1398   	Page 29 
 
 Provides an insurer may contract for the maintenance of procedures relating to the 
supervisory system. 
 An insurer’s supervision system must include supervision of any contractual performances; 
 The annual certificate from a senior manager must state that the manager has a reasonable 
basis to represent and does represent, rather than just representing as provided under current 
law, that the function is being properly performed.  
 Provides neither an agent nor an insurer shall dissuade or attempt to dissuade a consumer 
from certain acts including recommendation and sales of annuities made by financial 
professionals in compliance with FINRA standards, even if such standard would not 
otherwise apply to the product or recommendation at issue. 
 Does not limit the insurer’s obligation to have a reasonable basis to believe the annuity 
would effectively address the particular consumer’s financial situation, insurance needs, and 
financial objectives.  
o The insurer: 
 May base its analysis on information received from either the financial professional 
or the entity supervising the financial professional and is amended to conform to this 
change; 
 Must monitor relevant conduct of the financial professional or an entity responsible 
for supervising the financial professional; and  
o The entity responsible for supervising the financial professional, information and reports 
that are reasonably appropriate to assist such entity in maintaining its supervision system. 
 
The bill creates s. 627.4554(6), F.S., relating to agent training. This section provides: 
 An agent must not solicit the sale of an annuity product unless the agent has adequate 
knowledge of the product to recommend the annuity and the agent is in compliance with the 
insurer’s standards for product training. An agent may rely on insurer-provided product-
specific training standards and materials to comply the training requirements. 
 An agent who engages in the sale of annuity products must complete a one-time four hour 
training course, which is not part of the agent’s continuing education requirement in 
s. 626.2815, F.S., however, if the course provider submits and receives approval from the 
Department, the course is eligible for continuing education credit pursuant to 
s. 626.2815, F.S. 
 Agents who hold a life insurance line of authority on January 1, 2024, and who desire to sell 
annuities must complete the training requirements by July 1, 2024. Individuals who obtain a 
life insurance line of authority after the effective date of this act may not engage in the sale of 
annuities until the annuity training course has been completed. 
 The minimum length of training required is four hours. 
 The required training must include information on the following topics: 
o The types of annuities and various classifications of annuities;  
o Identification of the parties to the annuity; 
o How product-specific annuity contract features affect consumers; 
o The application of income taxation of qualified and nonqualified annuities; 
o The primary uses of annuities; and 
o The appropriate standard of conduct, sales practices, replacement, and disclosure 
requirements.  BILL: CS/SB 1398   	Page 30 
 
 Providers of courses intended to comply with this subsection must cover all of these topics 
and must not present any marketing information or provide training on sales techniques or 
provide specific information about a particular insurer’s products. Additional topics may be 
offered in conjunction with and in addition to the required outline. 
 An agent who has completed an annuity training course before January 1, 2024, must, by 
July 1, 2024 complete either: 
o A new four hour training course; or  
o An additional one hour training course on appropriate sales practices, replacement, and 
disclosure requirements under this subsection. 
 Annuity training courses may be conducted and completed by classroom or self-study 
methods. 
 Providers of annuity training must issue certificates of completion. 
 The satisfaction of the training requirements of another state that are substantially similar to 
the provisions of this subsection must be deemed to satisfy the training requirements of this 
subsection in Florida. 
 The satisfaction of the training requirements of any course or courses with components 
substantially similar to the provisions of this subsection must be deemed to satisfy the 
training requirements of the subsection in Florida. 
 An insurer must verify that an agent has completed the annuity training course before 
allowing the agent to sell an annuity product for that insurer. 
 
Change of Contact Details 
Section 7 amends s. 626.551, F.S., relating to notice of change of address or name. The bill 
amends the required timeframe from 30 days, to five days, for which a licensee must notify the 
Department after a change of name, residence address, principal business street address, mailing 
address, contact telephone numbers, or email address. 
 
Insurance Agency Firm Name 
Section 8 amends s. 626.602, F.S., to expand the Department’s authority to disapprove, under 
certain circumstances, the use of any true or fictitious name, other than a bona fide natural name 
of an individual, by an adjusting firm. Finally, this section repeals the provision authorizing the 
Department to disapprove names that contain the terms “Medicare” or “Medicaid” on 
July 1, 2023, as the grace period allowed for insurance agencies who were already using the 
terms in their firm names as of July 1, 2021, expires on June 30, 2023. 
 
Notice of Cancellation of Certain Policies 
Section 16 amends s. 627.4133, F.S., relating to notice of cancellation, nonrenewal or renewal 
premium, to revise the cancellation or termination timeframe from 90 to 60 days. After such 
policies have been in effect for 60 days, no policy may be cancelled by the insurer except when 
there has been a material misstatement, a nonpayment of premium, a failure to comply with 
underwriting requirements by the insurer within 60 days of the effective date of coverage, a 
substantial change of risk covered by the policy, or when cancellation is for a class of insured.  
  BILL: CS/SB 1398   	Page 31 
 
The same provisions relating to personal lines or commercial residential property insurance 
policies are also amended to: (1) require 20 days’ written notice for cancellation within 60 days 
from the date the policy is in force, and (2) prohibit the policy from being cancelled after 60 days 
for such reasons. The bill amends current law to provide that an insurer may not cancel or 
terminate a contract after a policy or contract has been in effect for more than 60 days, rather 
than 90 days, based on credit information available in public records. 
 
Unfair Methods of Competition and Unfair or Deceptive Acts  
Section 14 amends s. 626.9541, F.S., to provide another ground for misrepresentations and false 
advertising of insurance policies to include failure to disclose a third party that receives royalties, 
referral fees, or other remuneration for sponsorship, marketing, or use of third-party branding for 
a policy of health insurance.
156
  
 
Hurricane Deductibles 
Section 15 amends s. 627.4025, F.S., to revise the definition of “hurricane” to shorten the 
duration in which a hurricane deductible may be applied to a claim by modifying the start time of 
a hurricane to begin at the time of a hurricane warning and not when a hurricane watch or 
warning is issued. The bill removes from the definition “continuing for the time period during 
which the hurricane conditions exist anywhere in Florida,” and changes the end of a hurricane to 
mean 24 hours, rather than 72 hours, after the last hurricane watch or warning is issued for any 
part of Florida. 
 
The bill defines “hurricane deductible” as the deductible applicable to loss caused by a hurricane. 
 
Motor Vehicle Service Agreements 
Section 18 amends s. 634.041, F.S., to provide a service agreement company that maintains a 
contractual liability insurance policy in lieu of maintaining unearned premium reserve may have 
a policy that either pays 100 percent of claims as they are incurred or 100 percent of claims in 
the event of the failure of the service agreement company to pay claims when due. 
 
Mortgage Loan Regulations 
Section 1 amends s. 494.001, F.S., relating to definitions. The section amends the definition of 
“branch office” to include “a remote location” and defines the term “remote location” to mean a 
location other than a principal place of business or a branch office, at which a loan originator or a 
licensee may conduct business.  
 
The bill provides a licensee may allow loan originators to work from remote locations if: 
 The licensee has written policies and procedures for supervision of loan originators working 
from remote locations; 
                                                
156
 Section 624.603, F.S., defines “health insurance,” also known as “disability insurance,” is insurance of human beings 
against bodily injury, disablement, or death by accident or accidental means, or the expense thereof, or against disablement or 
expense resulting from sickness, and every insurance appertaining thereto. Health insurance does not include workers’ 
compensation coverage, except as provided in s. 624.406(4), F.S.  BILL: CS/SB 1398   	Page 32 
 
 Access to company platforms and customer information is in accordance with the licensee’s 
comprehensive written information security plan; 
 An in-person customer interaction does not occur at a loan originator’s residence unless such 
residence is a licensed location; 
 Physical records are not maintained at a remote location; 
 Customer interactions and conversations about consumers will be in compliance with federal 
and state information security requirements, including applicable provisions under the 
Gramm-Leach-Bliley Act and the Safeguards Rule established by the Federal Trade 
Commission, set forth at 16 C.F.R. part 314, F.S., as such requirements may be amended 
from time to time; 
 A loan originator working at a remote location accesses the company’s secure systems, 
including a cloud-based system, directly from any out-of-office device such as a laptop, 
phone, desktop computer, or tablet, through a virtual private network or comparable system 
that ensures secure connectivity and that requires passwords or other forms of authentication 
to access; 
 The licensee ensures that appropriate security updates, patches, or other altercations to the 
security of all devices used at remote locations are installed and maintained; 
 The licensee is able to remotely look or erase company-related contents of any device or 
otherwise remotely limit all access to a company’s secure systems; and 
 The registry’s record of a loan originators who works from a remote location designates the 
principal place of business as a loan originator’s registered location, or the loan originator 
has elected a licensed branch office as a registered location. 
 
Section 2 amends s. 494.0067, F.S., to expand Florida law to authorize mortgage lenders to 
transact business from a branch location and remote location, in addition to the principal place of 
business provided for under current law. In addition to a principal place of business and branch 
office, a remote location must also operate under the full charge, control, and supervision of the 
licensee.  
 
Conduct of Money Services Businesses 
Section 6 amends s. 560.309, F.S., to provide a licensee may not cash corporate checks where 
the aggregate face amount of all corporate checks cashed for each payee exceeds 200 percent of 
the payee’s workers’ compensation policy coverage amount during the same dates as the 
workers’ compensation policy coverage period. A person who knowingly and willfully violates 
this provision commits a felony of the third degree under s. 560.111(6), F.S. 
 
Section 5 amends s. 560.111, F.S., relating to prohibited acts, to provide anyone who knowingly 
or willfully commits a violation of s. 560.309(11), F.S., commits a third degree felony. 
 
Crowd-funding 
Section 3 creates s. 501.2042, F.S., to provide for unlawful acts and practices by online crowd-
funding campaigns. The section provides the following definitions: 
 “Crowd-funding campaign” means an online fundraising initiative that is intended to receive 
monetary donations from donors and is created by an organizer in the interest of a 
beneficiary.   BILL: CS/SB 1398   	Page 33 
 
 “Crowd-funding platform” means an entity doing business in this state which provides an 
online medium for the creation and facilitation of a crowd-funding campaign. 
 “Disaster” means any natural, technological, or civil emergency that occurs in this state and 
that causes damage of sufficient severity and magnitude to result in a declaration of a state of 
emergency by a county, the Governor, or the President of the United States. 
 “Organizer” means a person who resides or is domiciled in this state and has an account on a 
crowd-funding platform and has created a crowd-funding campaign either as a beneficiary or 
on behalf of a beneficiary, regardless of whether the beneficiary or the crowd-funding 
campaign has received donations. 
 
When an organizer arranges a crowd-funding campaign for a disaster, a complete and accurate 
accounting of all the donations received and expended by the campaign must be produce to the 
crowd-funding platform. A crowd-funding platform must publish the accountings received on its 
website.  
 
Distributed Energy Generation System 
Section 4 amends s. 520.23, F.S., relating to disclosures, to add an additional disclosure 
requirement and statements that must be included in an agreement to sell or lease a DEGS, 
including: 
 The customer contact center phone number for the Department of Business and Professional 
Regulation;  
 A statement in substantially the following form:  
“You should consider the age and remaining life of your roof prior to installing a 
distributed energy generation system. Replacement of your roof may require re-
installment of the distributed energy generation system;” and 
 A statement in substantially the following form: 
“Placing a distributed energy generation system on your roof may impact your future 
insurance premiums. You are responsible for contacting your insurance carrier, prior to 
entering into a purchase or lease agreement, to confirm whether your current policy or 
coverage will need to be modified upon installing the distributed energy generation 
system onto your dwelling.” 
 
The bill specifies such statements may be satisfied by electronic delivery of a document within 
24 hours after execution of the written statement.  
 
Warranty Associations 
Section 19 amends s. 634.401, F.S., to revise the definition of the term “manufacturer” for 
purposes of part III of ch. 634, F.S., to exclude a business that maintains outstanding debt 
obligations, if any, rated in the top four rating categories by a recognized rating service. 
 
Section 20 amends s. 634.406, F.S., to conform to the change made by section 19 of the bill. 
 
Section 21 provides, except as otherwise provided, the bill is effective July 1, 2023.  BILL: CS/SB 1398   	Page 34 
 
IV. Constitutional Issues: 
A. Municipality/County Mandates Restrictions: 
None. 
B. Public Records/Open Meetings Issues: 
None. 
C. Trust Funds Restrictions: 
None. 
D. State Tax or Fee Increases: 
None. 
E. Other Constitutional Issues: 
None. 
V. Fiscal Impact Statement: 
A. Tax/Fee Issues: 
None. 
B. Private Sector Impact: 
Public adjusters’ compensation may be reduced due to the provisions in the bill.
157
 The 
ability to utilize to contractual liability insurance policy that will service policies when a 
service agreement company fails to do so should reduce the costs of the policy.
158
 
C. Government Sector Impact: 
The bill creates a new third degree felony, which is punishable by a term of imprisonment 
not to exceed five years,
159
 a fine not to exceed $5,000,
160
 or in the case of a habitual 
offender, a term of imprisonment not to exceed ten to fifteen years.
161
 The new third 
degree felony may increase state court revenues and expenditures. In addition, the bill 
may have an indeterminate negative state prison bed impact. The Criminal Justice Impact 
Conference, which provides the final, official estimate of the prison bed impact, if any, of 
legislation, has not yet reviewed the bill. 
                                                
157
 The Department of Financial Services, 2023 Legislative Bill Analysis for SB 1398, p. 12 (Mar. 16, 2023) (on file with 
Senate Committee on Banking and Insurance). 
158
 Id. 
159
 Section 775.082, F.S. 
160
 Section 775.083, F.S. 
161
 Section 775.084, F.S.  BILL: CS/SB 1398   	Page 35 
 
VI. Technical Deficiencies: 
None. 
VII. Related Issues: 
None. 
VIII. Statutes Affected: 
This bill substantially amends the following sections of the Florida Statutes: 494.001, 494.0067, 
520.23, 560.111, 560.309. 626.551, 626.602, 626.854, 626.860, 626.865, 626.875, 626.8796, 
626.8797, 626.9541, 627.4025, 627.4133, 627.4554, 634.041, 634.401, and 634.406. 
 
This bill creates sections 501.2042 and 626.8751 of the Florida Statutes. 
IX. Additional Information: 
A. Committee Substitute – Statement of Substantial Changes:  
(Summarizing differences between the Committee Substitute and the prior version of the bill.) 
CS by Banking and Insurance Committee on March 22, 2023: 
 Clarifies the definition of “branch location” to mean a location other than specified 
locations, including a remote location; 
 Provides that a person who violates s. 560.309, F.S., relating to cashing corporate 
checks that exceed certain amounts of workers’ compensation policy coverage 
amounts, commits a third degree felony punishable by up to 5 years imprisonment, 
$5,000 fine, or enhanced penalties under habitual offender provisions; 
 Prohibits a licensee from cashing corporate checks where the aggregate face amount 
for each payee exceeds 200 percent of the payee’s workers’ compensation policy 
coverage amount during the policy coverage period; 
 Amends the revocation period for which an insured or claimant may cancel a public 
adjuster’s contract without penalty during a state of emergency in certain 
circumstances from “within 30 days after the date on which the contract is executed,” 
to “within 30 days after the date of the event, or 10 days after the date on which the 
contract is executed, whichever is longer,” and makes conforming changes to the 
notice that must be given to insureds; 
 Authorizes an insured to cancel a contract with a public adjuster with no additional 
penalties if an estimate is not provided within 60 days, rather than 45 days provided 
in the bill, after executing the contract; and makes conforming changes to: (a) the 
notice that must be given to insureds on this issue and (b) provisions required in 
public adjuster’s contracts;  
 Clarifies that, in circumstances when a public adjuster must not receive a 
commission, it is based on the amount “timely paid or committed policy limits,” 
rather than “paid by the insurer to resolve the claim” that is provided in bill; 
 Provides public adjusters are entitled to $1,000, instead of “reasonable compensation” 
from the insured when an insurer either pays or commits to pay the policy limit 
within 14 days from the date of the reported loss;  BILL: CS/SB 1398   	Page 36 
 
 Removes Section 9 relating to public adjuster’s errors and omissions insurance;  
 Requires the settlement of claims to be made by “payment,” rather than “check,” and 
specifies that the first payment must be made “solely” to the public adjuster;  
 Amends the time within which an unaltered copy of the public adjuster’s executed 
contract must be provided to the insurer from three days in the bill (30 days in current 
law) to 10 days after execution of the contract; 
 Amends the disclosure a public adjuster must provide to an insured to explain that an 
insured has 60 days, rather than 30 days provided in the bill, after executing a 
contract resulting from a state of emergency to rescind it; 
 Amends the new provision under FDUPTA, relating to misrepresentations and false 
advertising of insurance, for failure to disclose that a third party receives certain 
remuneration for sponsorship, marketing, or branding for a “policy of health 
insurance,” rather than “health insurance contract”;  
 Amends the title of s. 627.4554, F.S., from “Annuity Investments” to “Suitability in 
Annuity Transactions”;  
 Clarifies that the provision requiring an agent to exercise reasonable diligence, care, 
and skill in making recommendations does “not” require, rather than “does” require, 
the agent to have ongoing monitoring obligations; 
 With respect to an insurer’s supervision system, clarifies that the annual certification 
obtained from a senior manager “does represent,” rather than “does not represent,” 
that the function is being properly performed;  
 Deletes from the agent training provisions the requirements:  
o To register as a continuing education provider and to comply with the rules and 
guidelines provided in s. 626.2815, F.S.; 
o That the office approve the specified training courses;  
o For classroom or self-study methods, and the issuance of certificates of 
completion, to be in accordance with s. 626.2815, F.S.,;  
o For compliance with reporting requirements; 
 Deletes the provision that authorizes an insurer to satisfy the requirement to verify 
training compliance in certain ways, such as by obtaining certificates from certain 
databases;  
 Amends s. 634.401, F.S., to revise the definition of the term “manufacturer” relating 
to the regulation of service warranty associations to exclude a business that maintains 
outstanding debt obligations, if any, rated in the top four rating categories by a 
recognized rating service, and makes conforming changes in s. 634.406, F.S.; 
 Amends the effective date to, except as otherwise provided, July 1, 2023;  
 Makes conforming changes by changing “suitability information” to “consumer 
profile information” (which is newly defined to replace “suitability information” in 
the bill); and 
 Makes technical amendments. 
B. Amendments: 
None. 
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.