Florida Senate - 2023 SB 1688 By Senator Jones 34-01351-23 20231688__ 1 A bill to be entitled 2 An act relating to insurance; creating s. 11.91, F.S.; 3 creating the Property Insurance Commission; providing 4 membership of the commission; providing powers and 5 duties of the commission; amending s. 20.121, F.S.; 6 providing for the election of the Commissioner of 7 Insurance Regulation; providing terms for the 8 commissioner; conforming provisions to changes made by 9 the act; creating s. 112.3134, F.S.; prohibiting the 10 commissioner from engaging in certain activities or 11 employment for a specified period after leaving 12 office; providing sanctions for violations; 13 authorizing specified entities to collect penalties; 14 amending s. 215.5586, F.S.; revising homeowners 15 eligibility criteria for mitigation grants under the 16 My Safe Florida Home Program; amending s. 494.0026, 17 F.S.; requiring interest earned on insurance proceeds 18 received by mortgagees and assignees to be paid to 19 insureds; amending s. 624.401, F.S.; prohibiting 20 property insurers from claiming insolvency under 21 specified circumstances; specifying a condition on 22 insurance activities engaged in this state by a person 23 who engages in property insurance activities in 24 another state; amending s. 627.0629, F.S.; requiring 25 residential property insurers to release specified 26 information to insureds upon request; amending s. 27 627.701, F.S.; prohibiting property insurers from 28 using certain defenses for claims denials; amending s. 29 627.715, F.S.; requiring insurance agents to advise 30 insurance applicants of flood risk; amending s. 31 627.7152, F.S.; revising requirements for assignment 32 agreements; creating s. 627.7155, F.S.; requiring the 33 Office of Insurance Regulation to adopt certain rules; 34 requiring the Department of Financial Services to 35 adopt rules regarding allegations of insurance fraud 36 made by insurers or their employees or contractors; 37 providing requirements for such rules; providing 38 fines; requiring the Office of Program Policy Analysis 39 and Government Accountability to conduct a study of 40 the effectiveness of the property insurance mediation 41 program; providing requirements for the study; 42 requiring a report to the Legislature; amending 43 chapter 2022-268, Laws of Florida; extending the My 44 Safe Florida Home Program and specifying 45 appropriations for a certain fiscal year; providing an 46 effective date. 47 48 Be It Enacted by the Legislature of the State of Florida: 49 50 Section 1.Section 11.91, Florida Statutes, is created to 51 read: 52 11.91Property Insurance Commission. 53 (1)(a)There is created the Property Insurance Commission, 54 which shall consist of six members: 55 1.Two members appointed by the President of the Senate. 56 2.One member appointed by the Minority Leader of the 57 Senate. 58 3.Two members appointed by the Speaker of the House of 59 Representatives. 60 4.One member appointed by the House Minority Leader. 61 (b)Each member shall serve at the pleasure of the officer 62 who appointed the member. A vacancy on the commission shall be 63 filled in the same manner as the original appointment. From 64 November of each odd-numbered year through October of each even 65 numbered year, the chair of the commission shall be appointed by 66 the President of the Senate, and the vice chair of the 67 commission shall be appointed by the Speaker of the House of 68 Representatives. From November of each even-numbered year 69 through October of each odd-numbered year, the chair of the 70 commission shall be appointed by the Speaker of the House of 71 Representatives, and the vice chair of the commission shall be 72 appointed by the President of the Senate. The terms of members 73 shall be for 2 years and shall run from the organization of one 74 Legislature to the organization of the next Legislature. 75 (2)The commission shall be governed by joint rules of the 76 Senate and the House of Representatives, which shall remain in 77 effect until repealed or amended by concurrent resolution. 78 (3)The commission may conduct its meetings through 79 teleconferences or other similar means. 80 (4)The commission shall be staffed by legislative staff 81 members, as assigned by the President of the Senate and the 82 Speaker of the House of Representatives. 83 (5)The commission has the power and duty to: 84 (a)Review and evaluate the insurance marketplace and 85 studies of the various insurance markets. 86 (b)Review and comment on market data produced by the 87 Office of Insurance Regulation. 88 (c)Review and comment on the setting of reserve 89 requirements for insurers. 90 (d)Exercise all other powers and perform any other duties 91 prescribed by the Legislature. 92 Section 2.Paragraphs (a) and (d) of subsection (3) of 93 section 20.121, Florida Statutes, are amended to read: 94 20.121Department of Financial Services.There is created a 95 Department of Financial Services. 96 (3)FINANCIAL SERVICES COMMISSION.Effective January 7, 97 2003, there is created within the Department of Financial 98 Services the Financial Services Commission, composed of the 99 Governor, the Attorney General, the Chief Financial Officer, and 100 the Commissioner of Agriculture, which shall for purposes of 101 this section be referred to as the commission. Commission 102 members shall serve as agency head of the Financial Services 103 Commission. The commission shall be a separate budget entity and 104 shall be exempt from the provisions of s. 20.052. Commission 105 action shall be by majority vote consisting of at least three 106 affirmative votes. The commission shall not be subject to 107 control, supervision, or direction by the Department of 108 Financial Services in any manner, including purchasing, 109 transactions involving real or personal property, personnel, or 110 budgetary matters. 111 (a)Structure.The major structural unit of the commission 112 is the office. Each office shall be headed by a director. The 113 following offices are established: 114 1.The Office of Insurance Regulation, which shall be 115 responsible for all activities concerning insurers and other 116 risk bearing entities, including licensing, rates, policy forms, 117 market conduct, claims, issuance of certificates of authority, 118 solvency, viatical settlements, premium financing, and 119 administrative supervision, as provided under the insurance code 120 or chapter 636. The head of the Office of Insurance Regulation 121 is the Director of the Office of Insurance Regulation, who may 122 also be known as the Commissioner of Insurance Regulation. 123 Beginning with the General Election in 2024, the Commissioner of 124 Insurance Regulation shall be elected. The commissioner elected 125 in 2024 shall serve a term of 2 years; thereafter, the 126 commissioner shall serve a term of 4 years. 127 2.The Office of Financial Regulation, which shall be 128 responsible for all activities of the Financial Services 129 Commission relating to the regulation of banks, credit unions, 130 other financial institutions, finance companies, and the 131 securities industry. The head of the office is the Director of 132 the Office of Financial Regulation, who may also be known as the 133 Commissioner of Financial Regulation. The Office of Financial 134 Regulation shall include a Bureau of Financial Investigations, 135 which shall function as a criminal justice agency for purposes 136 of ss. 943.045-943.08 and shall have a separate budget. The 137 bureau may conduct investigations within or outside this state 138 as the bureau deems necessary to aid in the enforcement of this 139 section. If, during an investigation, the office has reason to 140 believe that any criminal law of this state has or may have been 141 violated, the office shall refer any records tending to show 142 such violation to state or federal law enforcement or 143 prosecutorial agencies and shall provide investigative 144 assistance to those agencies as required. 145 (d)Appointment and qualification qualifications of the 146 Director of the Office of Financial Regulation directors.The 147 commission shall appoint or remove the each Director of the 148 Office of Financial Regulation by a majority vote consisting of 149 at least three affirmative votes, with both the Governor and the 150 Chief Financial Officer on the prevailing side. The minimum 151 qualifications of the directors are as follows: 152 1.Prior to appointment as director, the Director of the 153 Office of Insurance Regulation must have had, within the 154 previous 10 years, at least 5 years of responsible private 155 sector experience working full time in areas within the scope of 156 the subject matter jurisdiction of the Office of Insurance 157 Regulation or at least 5 years of experience as a senior 158 examiner or other senior employee of a state or federal agency 159 having regulatory responsibility over insurers or insurance 160 agencies. 161 Before 2.Prior to appointment as director, the Director of 162 the Office of Financial Regulation must have had, within the 163 previous 10 years, at least 5 years of responsible private 164 sector experience working full time in areas within the subject 165 matter jurisdiction of the Office of Financial Regulation or at 166 least 5 years of experience as a senior examiner or other senior 167 employee of a state or federal agency having regulatory 168 responsibility over financial institutions, finance companies, 169 or securities companies. 170 Section 3.Section 112.3134, Florida Statutes, is created 171 to read: 172 112.3134Commissioner of Insurance Regulation; Office of 173 Insurance Regulation. 174 (1)A person who has served as Commissioner of Insurance 175 Regulation may not: 176 (a)Personally represent another person or entity for 177 compensation before the Office of Insurance Regulation; or 178 (b)Serve as an employee or contractor of an entity 179 regulated by the Office of Insurance Regulation 180 181 for a period of 7 years after vacating that office. 182 (2)A person who violates subsection (1) may be punished 183 by: 184 (a)Public censure and reprimand; 185 (b)A civil penalty not to exceed $10,000; or 186 (c)Forfeiture of any pecuniary benefits received for 187 conduct that violates this section. The amount of the pecuniary 188 benefits must be paid to the General Revenue Fund. 189 (3)The Attorney General and Chief Financial Officer are 190 independently authorized to collect any penalty imposed under 191 this section. 192 Section 4.Paragraph (a) of subsection (2) of section 193 215.5586, Florida Statutes, is amended to read: 194 215.5586My Safe Florida Home Program.There is established 195 within the Department of Financial Services the My Safe Florida 196 Home Program. The department shall provide fiscal 197 accountability, contract management, and strategic leadership 198 for the program, consistent with this section. This section does 199 not create an entitlement for property owners or obligate the 200 state in any way to fund the inspection or retrofitting of 201 residential property in this state. Implementation of this 202 program is subject to annual legislative appropriations. It is 203 the intent of the Legislature that the My Safe Florida Home 204 Program provide trained and certified inspectors to perform 205 inspections for owners of site-built, single-family, residential 206 properties and grants to eligible applicants as funding allows. 207 The program shall develop and implement a comprehensive and 208 coordinated approach for hurricane damage mitigation that may 209 include the following: 210 (2)MITIGATION GRANTS.Financial grants shall be used to 211 encourage single-family, site-built, owner-occupied, residential 212 property owners to retrofit their properties to make them less 213 vulnerable to hurricane damage. 214 (a)For a homeowner to be eligible for a grant, the 215 following criteria must be met: 216 1.The homeowner must have been granted a homestead 217 exemption on the home under chapter 196. 218 2.The home must be a dwelling with an insured value of 219 $500,000 or less. Homeowners who are low-income persons, as 220 defined in s. 420.0004(11), are exempt from this requirement. 221 3.The home must have undergone an acceptable hurricane 222 mitigation inspection after July 1, 2008. 223 4.The home must be located in the wind-borne debris 224 region as that term is defined in the Florida Building Code. 225 4.5.The building permit application for initial 226 construction of the home must have been made before January 1, 227 2008. 228 5.6.The homeowner must agree to make his or her home 229 available for inspection once a mitigation project is completed. 230 231 An application for a grant must contain a signed or 232 electronically verified statement made under penalty of perjury 233 that the applicant has submitted only a single application and 234 must have attached documents demonstrating the applicant meets 235 the requirements of this paragraph. 236 Section 5.Subsection (2) of section 494.0026, Florida 237 Statutes, is amended to read: 238 494.0026Disposition of insurance proceeds.The following 239 provisions apply to mortgage loans held by a mortgagee or 240 assignee that is subject to part II or part III of this chapter. 241 (2)(a)Insurance proceeds received by a mortgagee or 242 assignee that relate to compensation for damage to property or 243 contents insurance coverage in which the mortgagee or assignee 244 has a security interest must be promptly deposited into a 245 segregated account of a federally insured financial institution. 246 (b)Any interest earned on insurance proceeds received by a 247 mortgagee or assignee that relate to compensation for damage to 248 property or contents insurance coverage in which the mortgagee 249 or assignee has a security interest must be paid to the insured. 250 251 This section may not be construed to prevent an insurance 252 company from paying the insured directly for additional living 253 expenses or paying the insured directly for contents insurance 254 coverage if the mortgagee or assignee does not have a security 255 interest in the contents. 256 Section 6.Subsection (5) is added to section 624.401, 257 Florida Statutes, to read: 258 624.401Certificate of authority required. 259 (5)(a)A property insurer may not claim insolvency in this 260 state if the insurer still acts as an insurer, transacts 261 insurance, or otherwise engages in insurance activities in any 262 state other than this state, regardless of whether these 263 insurance activities are property insurance activities. 264 (b)Effective January 1, 2024, any person who acts as a 265 property insurer, transacts property insurance, or otherwise 266 engages in property insurance activities in any state other than 267 this state may act as an insurer, transact insurance, or 268 otherwise engage in insurance activities in this state only if 269 that person does not exclude property insurance from the 270 persons insurance transactions or activities. 271 Section 7.Subsection (9) is added to section 627.0629, 272 Florida Statutes, to read: 273 627.0629Residential property insurance; rate filings. 274 (9)An insurer must release to an insured all information 275 relating to an inspection or an underwriting report upon the 276 insureds request. 277 Section 8.Subsection (11) is added to section 627.701, 278 Florida Statutes, to read: 279 627.701Liability of insureds; coinsurance; deductibles; 280 prohibited denials of claims. 281 (11)A property insurer that issues or renews an insurance 282 policy or contract covering real property in this state on or 283 after January 1, 2024, may not use a propertys preexisting 284 condition, a date of loss that predates the date of a claim, or 285 faulty installation or workmanship as a defense for denying a 286 claim. 287 Section 9.Subsection (8) of section 627.715, Florida 288 Statutes, is amended to read: 289 627.715Flood insurance.An authorized insurer may issue an 290 insurance policy, contract, or endorsement providing personal 291 lines residential coverage for the peril of flood or excess 292 coverage for the peril of flood on any structure or the contents 293 of personal property contained therein, subject to this section. 294 This section does not apply to commercial lines residential or 295 commercial lines nonresidential coverage for the peril of flood. 296 An insurer may issue flood insurance policies, contracts, 297 endorsements, or excess coverage on a standard, preferred, 298 customized, flexible, or supplemental basis. 299 (8)(a)An agent must provide a written notice to be signed 300 by every the applicant advising the applicant of flood risk. 301 (b)If before the agent places flood insurance coverage 302 with an admitted or surplus lines insurer for a property 303 receiving flood insurance under the National Flood Insurance 304 Program, the agent must also provide to the applicant, before 305 placing new flood coverage for the property, a written. the 306 notice notifying must notify the applicant that, if the 307 applicant discontinues coverage under the National Flood 308 Insurance Program which is provided at a subsidized rate, the 309 full risk rate for flood insurance may apply to the property if 310 the applicant later seeks to reinstate coverage under the 311 program. 312 Section 10.Paragraph (a) of subsection (2) of section 313 627.7152, Florida Statutes, is amended to read: 314 627.7152Assignment agreements. 315 (2)(a)An assignment agreement must: 316 1.Be executed under a residential property insurance 317 policy or under a commercial property insurance policy as that 318 term is defined in s. 627.0625(1), issued on or after July 1, 319 2019, and before January 1, 2023. 320 2.Be in writing and executed by and between the assignor 321 and the assignee. 322 3.Contain a provision that allows the assignor to rescind 323 the assignment agreement without a penalty or fee by submitting 324 a written notice of rescission signed by the assignor to the 325 assignee within 14 days after the execution of the agreement, at 326 least 30 days after the date work on the property is scheduled 327 to commence if the assignee has not substantially performed, or 328 at least 30 days after the execution of the agreement if the 329 agreement does not contain a commencement date and the assignee 330 has not begun substantial work on the property. 331 4.Contain a provision requiring the assignee to provide a 332 copy of the executed assignment agreement to the insurer within 333 3 business days after the date on which the assignment agreement 334 is executed or the date on which work begins, whichever is 335 earlier. Delivery of the copy of the assignment agreement to the 336 insurer may be made: 337 a.By personal service, overnight delivery, or electronic 338 transmission, with evidence of delivery in the form of a receipt 339 or other paper or electronic acknowledgment by the insurer; or 340 b.To the location designated for receipt of such 341 agreements as specified in the policy. 342 5.Contain a written, itemized, per-unit cost estimate of 343 the services to be performed by the assignee. 344 6.Relate only to work to be performed by the assignee for 345 services to protect, repair, restore, or replace a dwelling or 346 structure or to mitigate against further damage to such 347 property. 348 7.Contain the following notice in 18-point uppercase and 349 boldfaced type: 350 YOU ARE AGREEING TO GIVE UP CERTAIN RIGHTS YOU HAVE UNDER YOUR 351 INSURANCE POLICY TO A THIRD PARTY, WHICH MAY RESULT IN 352 LITIGATION AGAINST YOUR INSURER. PLEASE READ AND UNDERSTAND THIS 353 DOCUMENT BEFORE SIGNING IT. YOU HAVE THE RIGHT TO CANCEL THIS 354 AGREEMENT WITHOUT PENALTY WITHIN 14 DAYS AFTER THE DATE THIS 355 AGREEMENT IS EXECUTED, AT LEAST 30 DAYS AFTER THE DATE WORK ON 356 THE PROPERTY IS SCHEDULED TO COMMENCE IF THE ASSIGNEE HAS NOT 357 SUBSTANTIALLY PERFORMED, OR AT LEAST 30 DAYS AFTER THE EXECUTION 358 OF THE AGREEMENT IF THE AGREEMENT DOES NOT CONTAIN A 359 COMMENCEMENT DATE AND THE ASSIGNEE HAS NOT BEGUN SUBSTANTIAL 360 WORK ON THE PROPERTY. HOWEVER, YOU ARE OBLIGATED FOR PAYMENT OF 361 ANY CONTRACTED WORK PERFORMED BEFORE THE AGREEMENT IS RESCINDED. 362 THIS AGREEMENT DOES NOT CHANGE YOUR OBLIGATION TO PERFORM THE 363 DUTIES REQUIRED UNDER YOUR PROPERTY INSURANCE POLICY. 364 8.Contain a notice in 18-point uppercase and boldfaced 365 type disclosing that the assignee is prohibited from taking any 366 legal action without the assignors permission, including, but 367 not limited to, making a presuit settlement demand or presuit 368 settlement offer. 369 9.8.Contain a provision requiring the assignee to 370 indemnify and hold harmless the assignor from all liabilities, 371 damages, losses, and costs, including, but not limited to, 372 attorney fees. 373 Section 11.Section 627.7155, Florida Statutes, is created 374 to read: 375 627.7155Office rulemaking.By January 1, 2024, the office 376 must adopt rules: 377 (1)Requiring that, each time legislation creating or 378 amending law to reform property insurance takes effect, property 379 insurers must offer mandatory premium rate reduction for their 380 insureds. 381 (2)Ensuring that insurance fraud committed by any person 382 can be easily reported, investigated, and, if necessary, 383 prosecuted. 384 (3)Redetermining flood zones statewide for use when 385 assigning flood risks. 386 Section 12.The Department of Financial Services shall, no 387 later than October 1, 2024, adopt rules regarding any allegation 388 made by an insurer or an employee or contractor thereof of 389 insurance fraud in violation of any provision listed in s. 390 626.9892(2), Florida Statutes. Such rules must include 391 requirements that: 392 (1)The Division of Investigative and Forensic Services in 393 the Department of Financial Services must be informed by an 394 insurer of any such allegation. 395 (2)The department shall promptly investigate such 396 allegations. 397 (3)If the department determines that there was no fraud, 398 the insurer alleging such fraud may be appropriately sanctioned 399 by a fine of up to $100,000. 400 (4)All documents relating to such sanctions shall be 401 public records. 402 Section 13.(1)The Office of Program Policy Analysis and 403 Government Accountability (OPPAGA) shall conduct a study to 404 evaluate the effectiveness of the property insurance mediation 405 program provided pursuant to s. 627.7015, Florida Statutes. The 406 studys scope must include, but need not be limited to: 407 (a)Improvements in the publics awareness of the program 408 and the advantages of participation in the program. 409 (b)Program resource needs. 410 (2)The study must include recommendations for any changes 411 needed to improve the efficiency of the program to maximize its 412 usefulness as an alternative to litigation. 413 (3)In conducting the study, OPPAGA shall consult with the 414 Department of Financial Services, insurers, and organizations 415 representing insurance consumers. 416 (4)OPPAGA shall submit a report on its findings to the 417 President of the Senate and the Speaker of the House of 418 Representatives by December 1, 2024. 419 Section 14.Section 4 of chapter 2022-268, Laws of Florida, 420 is amended to read: 421 Section 4.(1)For the 2023-2024 2022-2023 fiscal year, the 422 sum of $300 $150 million in nonrecurring funds is appropriated 423 from the General Revenue Fund to the Department of Financial 424 Services for the My Safe Florida Home Program. The funds shall 425 be placed in reserve. The department shall submit budget 426 amendments requesting release of the funds held in reserve 427 pursuant to chapter 216, Florida Statutes. The budget amendments 428 shall include a detailed spending plan. 429 (2)The funds shall be allocated as follows: 430 (a)Fifty Twenty-five million dollars for hurricane 431 mitigation inspections. 432 (b)Two hundred thirty One hundred fifteen million dollars 433 for mitigation grants. 434 (c)Eight Four million dollars for education and consumer 435 awareness. 436 (d)Two One million dollars for public outreach for 437 contractors and real estate brokers and sales associates. 438 (e)Ten Five million dollars for administrative costs. 439 (3)Any unexpended balance of funds from this appropriation 440 remaining on June 30, 2024 2023, shall revert and is 441 appropriated to the Department of Financial Services for the 442 2024-2025 2023-2024 fiscal year for the same purpose. 443 (4)The department may adopt emergency rules pursuant to s. 444 120.54, Florida Statutes, at any time, as are necessary to 445 implement this section and s. 215.5586, Florida Statutes, as 446 amended by this act. The Legislature finds that such emergency 447 rulemaking authority is necessary to address a critical need in 448 the states problematic property insurance market. The 449 Legislature further finds that the uniquely short timeframe 450 needed to effectively implement this section for the 2023-2024 451 2022-2023 fiscal year requires that the department adopt rules 452 as quickly as practicable. Therefore, in adopting such emergency 453 rules, the department need not make the findings required by s. 454 120.54(4)(a), Florida Statutes. Emergency rules adopted under 455 this section are exempt from s. 120.54(4)(c), Florida Statutes, 456 and shall remain in effect until replaced by rules adopted under 457 the nonemergency rulemaking procedures of chapter 120, Florida 458 Statutes, which must occur no later than July 1, 2024 2023. 459 (5)This section shall expire on October 1, 2025 2024. 460 Section 15.This act shall take effect July 1, 2023.