Florida Senate - 2023 CS for SB 7052 By the Committees on Fiscal Policy; and Banking and Insurance 594-04106-23 20237052c1 1 A bill to be entitled 2 An act relating to insurer accountability; amending s. 3 624.307, F.S.; authorizing electronic responses to 4 certain requests from the Division of Consumer 5 Services of the Department of Financial Services 6 concerning consumer complaints; revising the timeframe 7 in which responses must be made; revising 8 administrative penalties; amending s. 624.315, F.S.; 9 requiring the Office of Insurance Regulation to 10 annually and quarterly create and publish specified 11 reports relating to the enforcement of insurer 12 compliance; requiring the office to submit such 13 reports to the Financial Services Commission and the 14 Legislature by specified dates; amending s. 624.316, 15 F.S.; requiring the office to create a specified 16 methodology for scheduling examinations of insurers; 17 specifying requirements for such methodology; 18 providing construction; authorizing the commission to 19 adopt rules; amending s. 624.3161, F.S.; revising 20 requirements and conditions for certain insurer market 21 conduct examinations after a hurricane; providing 22 construction; requiring the office to create, and the 23 commission to adopt by rule, a specified selection 24 methodology for examinations; specifying requirements 25 for such methodology; specifying rulemaking 26 requirements; amending s. 624.4211, F.S.; revising 27 administrative fines the office may impose in lieu of 28 revocation or suspension; creating s. 624.4301, F.S.; 29 specifying requirements for residential property 30 insurers temporarily suspending writing new policies 31 in notifying the office; authorizing the commission to 32 adopt rules; creating s. 624.805, F.S.; specifying 33 factors the office may consider in determining whether 34 the continued operation of an insurer may be deemed to 35 be hazardous to its policyholders or creditors or to 36 the general public; specifying actions the office may 37 take in determining an insurers financial condition; 38 authorizing the office to issue an order requiring a 39 hazardous insurer to take specified actions; providing 40 construction; authorizing the office to issue 41 immediate final orders; amending s. 624.81, F.S.; 42 deleting certain rulemaking authority of the 43 commission; creating s. 624.865, F.S.; authorizing the 44 commission to adopt certain rules; amending s. 45 628.8015, F.S.; conforming provisions to changes made 46 by the act; amending s. 626.207, F.S.; revising a 47 condition for disqualification of an insurance 48 representative applicant or licensee; amending s. 49 626.9521, F.S.; revising and specifying applicable 50 fines for unfair methods of competition and unfair or 51 deceptive acts or practices; amending s. 626.9541, 52 F.S.; adding an unfair claim settlement practice by an 53 insurer; prohibiting an officer or a director of an 54 impaired insurer from receiving a bonus from such 55 insurer or from certain holding companies or 56 affiliates; defining the term bonus; providing a 57 criminal penalty; amending s. 626.989, F.S.; revising 58 a reporting requirement for the departments Division 59 of Investigative and Forensic Services; requiring the 60 division to submit an annual performance report to the 61 Legislature; specifying requirements for the report; 62 amending s. 627.0629, F.S.; specifying requirements 63 for residential property insurers in providing certain 64 hurricane mitigation discount information to 65 policyholders in a specified manner; specifying 66 requirements for the office in reevaluating and 67 updating certain fixtures and construction techniques; 68 deleting obsolete dates; amending s. 627.351, F.S.; 69 prohibiting Citizens Property Insurance Corporation 70 from determining that a risk is ineligible for 71 coverage solely on a specified basis; providing 72 applicability; amending s. 627.410, F.S.; prohibiting 73 the office from exempting specified insurers from form 74 filing requirements for a specified period; providing 75 construction; creating s. 627.4108, F.S.; specifying 76 requirements for residential property insurers in 77 creating and using claims-handling manuals; 78 authorizing the office to request submission of such 79 manuals; providing requirements for such submissions; 80 requiring authorized insurers to annually submit a 81 certified attestation to the office; authorizing the 82 commission to adopt emergency rules; amending s. 83 627.4133, F.S.; revising prohibitions on insurers 84 against the cancellation or nonrenewal of property 85 insurance policies; revising applicability; providing 86 construction; defining the term insurer; amending s. 87 627.426, F.S.; specifying duties of a liability 88 insurer upon receiving actual notice of certain 89 incidents or losses; defining the term actual 90 notice; providing construction; specifying penalties; 91 amending s. 627.701, F.S.; providing that if a roof 92 deductible is applied under a personal lines 93 residential property insurance policy, no other 94 deductible under the policy may be applied to any 95 other loss to the property caused by the same covered 96 peril; amending s. 627.70132, F.S.; providing for the 97 tolling of certain timeframes for filing notices of 98 property insurance claims for servicemembers under 99 specified circumstances; providing construction 100 relating to chapter 2022-271, Laws of Florida; 101 requiring residential property insurers and motor 102 vehicle insurer rate filings to reflect certain 103 projected savings and reductions in expenses; 104 specifying requirements for the office in reviewing 105 rate filings; authorizing the office to develop 106 certain methodology and data and contract with a 107 vendor for a certain purpose; providing applicability; 108 providing appropriations; providing an effective date. 109 110 Be It Enacted by the Legislature of the State of Florida: 111 112 Section 1.Paragraph (b) of subsection (10) of section 113 624.307, Florida Statutes, is amended to read: 114 624.307General powers; duties. 115 (10) 116 (b)Any person licensed or issued a certificate of 117 authority by the department or the office shall respond, in 118 writing or electronically, to the division within 14 20 days 119 after receipt of a written request for documents and information 120 from the division concerning a consumer complaint. The response 121 must address the issues and allegations raised in the complaint 122 and include any requested documents concerning the consumer 123 complaint not subject to attorney-client or work-product 124 privilege. The division may impose an administrative penalty for 125 failure to comply with this paragraph of up to $5,000 $2,500 per 126 violation upon any entity licensed by the department or the 127 office and $250 for the first violation, $500 for the second 128 violation, and up to $1,000 per for the third or subsequent 129 violation by upon any individual licensed by the department or 130 the office. 131 Section 2.Present subsection (4) of section 624.315, 132 Florida Statutes, is redesignated as subsection (5), and a new 133 subsection (4) is added to that section, to read: 134 624.315Annual reports; quarterly reports report. 135 (4)(a)The office shall create a report detailing all 136 actions of the office to enforce insurer compliance with this 137 code and all rules and orders of the office or department during 138 the previous year. For each of the following, the report must 139 detail the insurer or other licensee or registrant against whom 140 such action was taken; whether the office found any violation of 141 law or rule by such party, and, if so, detail such violation; 142 and the resolution of such action, including any penalties 143 imposed by the office. The report must be published on the 144 website of the office and submitted to the commission, the 145 President of the Senate, the Speaker of the House of 146 Representatives, and the legislative committees with 147 jurisdiction over matters of insurance on or before January 31 148 of each year. The report must include, but need not be limited 149 to: 150 1.The revocation, denial, or suspension of any license or 151 registration issued by the office. 152 2.All actions taken pursuant to s. 624.310. 153 3.Fines imposed by the office for violations of this code. 154 4.Consent orders entered into by the office. 155 5.Examinations and investigations conducted and completed 156 by the office pursuant to ss. 624.316 and 624.3161. 157 6.Investigations conducted and completed, by line of 158 insurance, for which the office found violations of law or rule 159 but did not take enforcement action. 160 (b)Each quarter, the office shall create a report 161 detailing all actions of the office to enforce insurer 162 compliance during the previous quarter. The report must include, 163 but not be limited to, the subjects that must be included in the 164 annual report under paragraph (a). The report must be submitted 165 to the commission, the President of the Senate, the Speaker of 166 the House of Representatives, and the legislative committees 167 with jurisdiction over matters of insurance. The report is due 168 on or before April 30, July 31, October 31, and January 31, 169 respectively, for the immediately preceding quarter. The report 170 due January 31 may be included within the annual report required 171 under paragraph (a). 172 (c)The office need not include within any report required 173 under this subsection information that would violate any 174 confidentiality provision included within any agreement, order, 175 or consent order entered into or promulgated by the office. 176 Section 3.Subsections (3) and (4) are added to section 177 624.316, Florida Statutes, to read: 178 624.316Examination of insurers. 179 (3)The office shall create, and the commission shall adopt 180 by rule, a risk-based selection methodology for scheduling 181 examinations of insurers subject to this section. This 182 requirement does not restrict the authority of the office to 183 conduct examinations under this section as often as it deems 184 advisable. Such methodology must include all of the following: 185 (a)Use of a risk-focused analysis to prioritize financial 186 examinations of insurers when such reporting indicates a decline 187 in the insurers financial condition. 188 (b)Consideration of: 189 1.Level of capitalization and identification of 190 unfavorable trends; 191 2.Negative trends in profitability or cash flow from 192 operations; 193 3.National Association of Insurance Commissioners 194 Insurance Regulatory Information System ratio results; 195 4.Risk-based capital and risk-based capital trend test 196 results; 197 5.The structure and complexity of the insurer; 198 6.Changes in the insurers officers or board of directors; 199 7.Changes in the insurers business strategy or 200 operations; 201 8.Findings and recommendations from an examination made 202 pursuant to s. 624.316 or s. 624.3161; 203 9.Current or pending regulatory actions by the office or 204 the department; 205 10.Information obtained from other regulatory agencies or 206 independent organization ratings and reports; and 207 11.The impact of an insurers insolvency on policyholders 208 of the insurer and the public generally. 209 (c)Prioritization of property insurers for which the 210 office identifies significant concerns about an insurers 211 solvency pursuant to s. 627.7154. 212 (d)Any other matters the office deems necessary to 213 consider for the protection of the public. 214 (4)To facilitate the development of the methodology for 215 scheduling examinations pursuant to this section, the commission 216 may adopt by rule the National Association of Insurance 217 Commissioners Financial Analysis Handbook, to the extent that 218 the handbook is consistent with and does not negate the 219 requirements of this section. 220 Section 4.Subsection (7) of section 624.3161, Florida 221 Statutes, is amended, and subsection (8) is added to that 222 section, to read: 223 624.3161Market conduct examinations. 224 (7)Notwithstanding subsection (1), any authorized insurer 225 transacting residential property insurance business in this 226 state: 227 (a)May be subject to an additional market conduct 228 examination after a hurricane if, at any time more than 90 days 229 after the end of the hurricane, the insurer: 230 (a)is among the top 20 percent of insurers based upon a 231 calculation of the ratio of hurricane-related property insurance 232 claims filed to the number of property insurance policies in 233 force; 234 (b)Must be subject to a market conduct examination after a 235 hurricane if, at any time more than 90 days after the end of the 236 hurricane, the insurer: 237 1.Is among the top 20 percent of insurers based upon a 238 calculation of the ratio of hurricane claim-related consumer 239 complaints made about that insurer to the department to the 240 insurers total number of hurricane-related claims; 241 2.Is among the top 20 percent of insurers based upon a 242 calculation of the ratio of hurricane claims closed without 243 payment to the insurers total number of hurricane claims; 244 3.(c)Has made significant payments to its managing general 245 agent since the hurricane; or 246 4.(d)Is identified by the office as necessitating a market 247 conduct exam for any other reason. 248 249 All relevant criteria under this section and s. 624.316 shall be 250 applied to the market conduct examination under this subsection. 251 Such an examination must be initiated within 18 months after the 252 landfall of a hurricane that results in an executive order or a 253 state of emergency issued by the Governor. The requirements of 254 this subsection do not limit the authority of the office to 255 conduct at any time a market conduct examination of a property 256 insurer in the aftermath of a hurricane. This subsection does 257 not require the office to conduct multiple market conduct 258 examinations of the same insurer when multiple hurricanes make 259 landfall in this state in a single calendar year. An examination 260 of an insurer under this subsection must also include an 261 examination of its managing general agent as if it were the 262 insurer. 263 (8)The office shall create, and the commission shall adopt 264 by rule, a selection methodology for scheduling and conducting 265 market conduct examinations of insurers and other entities 266 regulated by the office. This requirement does not restrict the 267 authority of the office to conduct market conduct examinations 268 as often as it deems necessary. Such selection methodology must 269 prioritize market conduct examinations of insurers and other 270 entities regulated by the office to whom any of the following 271 conditions applies: 272 (a)An insurance regulator in another state has initiated 273 or taken regulatory action against the insurer or entity 274 regarding an act or omission of such insurer which, if committed 275 in this state, would constitute a violation of the laws of this 276 state or any rule or order of the office or department. 277 (b)Given the insurers market share in this state, the 278 department or the office has received a disproportionate number 279 of the following types of claims-handling complaints against the 280 insurer: 281 1.Failure to timely communicate with respect to claims; 282 2.Failure to timely pay claims; 283 3.Untimely payments giving rise to the payment of 284 statutory interest; 285 4.Failure to adjust and pay claims in accordance with the 286 terms and conditions of the policy or contract and in compliance 287 with state law; 288 5.Violations of part IX of chapter 626, the Unfair 289 Insurance Trade Practices Act; 290 6.Failure to use licensed and duly appointed claims 291 adjusters; 292 7.Failure to maintain reasonable claims records; or 293 8.Failure to adhere to the companys claims-handling 294 manual. 295 (c)The results of a National Association of Insurance 296 Commissioners Market Conduct Annual Statement indicate that the 297 insurer is a negative outlier with regard to particular metrics. 298 (d)There is evidence that the insurer is violating or has 299 violated the Unfair Insurance Trade Practices Act. 300 (e)The insurer meets the criteria in subsection (7). 301 (f)Any other conditions the office deems necessary for the 302 protection of the public. 303 304 The office shall present the proposed rule required by this 305 subsection to the commission no later than October 1, 2023. In 306 addition to the methodology required by this subsection, the 307 rule must provide criteria for how the office, in coordination 308 with the department, will determine what constitutes a 309 disproportionate number of claims-handling complaints described 310 in paragraph (b). 311 Section 5.Section 624.4211, Florida Statutes, is amended 312 to read: 313 624.4211Administrative fine in lieu of suspension or 314 revocation. 315 (1)If the office finds that one or more grounds exist for 316 the discretionary revocation or suspension of a certificate of 317 authority issued under this chapter, the office may, in lieu of 318 such revocation or suspension, impose a fine upon the insurer. 319 (2)(a)With respect to a any nonwillful violation, such 320 fine may not exceed: 321 1.Twenty-five thousand dollars per violation, up to an 322 aggregate amount of $100,000 for all nonwillful violations 323 arising out of the same action, related to a covered loss or 324 claim caused by an emergency for which the Governor declared a 325 state of emergency pursuant to s. 252.36. 326 2.Twelve thousand five hundred dollars $5,000 per 327 violation, up to. In no event shall such fine exceed an 328 aggregate amount of $50,000 $20,000 for all other nonwillful 329 violations arising out of the same action. 330 (b)If an insurer discovers a nonwillful violation, the 331 insurer shall correct the violation and, if restitution is due, 332 make restitution to all affected persons. Such restitution shall 333 include interest at 12 percent per year from either the date of 334 the violation or the date of inception of the affected persons 335 policy, at the insurers option. The restitution may be a credit 336 against future premiums due, provided that interest accumulates 337 until the premiums are due. If the amount of restitution due to 338 any person is $50 or more and the insurer wishes to credit it 339 against future premiums, it shall notify such person that she or 340 he may receive a check instead of a credit. If the credit is on 341 a policy that is not renewed, the insurer shall pay the 342 restitution to the person to whom it is due. 343 (3)(a)With respect to a any knowing and willful violation 344 of a lawful order or rule of the office or commission or a 345 provision of this code, the office may impose a fine upon the 346 insurer in an amount not to exceed: 347 1.Two hundred thousand dollars for each such violation, up 348 to an aggregate amount of $1 million for all knowing and willful 349 violations arising out of the same action, related to a covered 350 loss or claim caused by an emergency for which the Governor 351 declared a state of emergency pursuant to s. 252.36. 352 2.One hundred thousand dollars $40,000 for each such 353 violation, up to. In no event shall such fine exceed an 354 aggregate amount of $500,000 $200,000 for all other knowing and 355 willful violations arising out of the same action. 356 (b)In addition to such fines, the insurer shall make 357 restitution when due in accordance with subsection (2). 358 (4)The failure of an insurer to make restitution when due 359 as required under this section constitutes a willful violation 360 of this code. However, if an insurer in good faith is uncertain 361 as to whether any restitution is due or as to the amount of such 362 restitution, it shall promptly notify the office of the 363 circumstances; and the failure to make restitution pending a 364 determination thereof shall not constitute a violation of this 365 code. 366 Section 6.Section 624.4301, Florida Statutes, is created 367 to read: 368 624.4301Notice of temporary discontinuance of writing new 369 residential property insurance policies. 370 (1)Any authorized insurer, before temporarily suspending 371 writing new residential property insurance policies in this 372 state, must give notice to the office of the insurers reasons 373 for such action, the effective dates of the temporary 374 suspension, and the proposed communication to its agents. Such 375 notice must be provided on a form approved by the office and 376 adopted by the commission. The insurer shall submit such notice 377 to the office the earlier of 20 business days before the 378 effective date of the temporary suspension of writing or 5 379 business days before notifying its agents of the temporary 380 suspension of writing. The insurer must provide any other 381 information requested by the office related to the insurers 382 temporary suspension of writing. The requirements of this 383 section do not apply to a temporary suspension of writing new 384 business made in response to a hurricane that may make landfall 385 in this state if such temporary suspension ceases within 72 386 hours after hurricane conditions are no longer present in this 387 state. 388 (2)The commission may adopt rules to administer this 389 section. 390 Section 7.Section 624.805, Florida Statutes, is created to 391 read: 392 624.805Hazardous insurer standards; offices evaluation 393 and enforcement authority; immediate final order. 394 (1)In determining whether the continued operation of any 395 insurer transacting business in this state may be deemed to be 396 hazardous to its policyholders or creditors or to the general 397 public, the office may consider, in the totality of the 398 circumstances of such insurer, any of the following: 399 (a)Adverse findings reported in financial condition or 400 market conduct examination reports, audit reports, or actuarial 401 opinions, reports, or summaries. 402 (b)The National Association of Insurance Commissioners 403 Insurance Regulatory Information System and its other financial 404 analysis solvency tools and reports. 405 (c)Whether the insurer has made adequate provisions, 406 according to presently accepted actuarial standards of practice, 407 for the anticipated cash flows required to cover its contractual 408 obligations and related expenses. 409 (d)The ability of an assuming reinsurer to perform and 410 whether the insurers reinsurance program provides sufficient 411 protection for the insurers remaining surplus after taking into 412 account the insurers cash flow and the classes of business 413 written, as well as the financial condition of the assuming 414 reinsurer. 415 (e)Whether the insurers operating loss in the last 12 416 month period, including, but not limited to, net capital gain or 417 loss, change in nonadmitted assets, and cash dividends paid to 418 shareholders is greater than 50 percent of the insurers 419 remaining surplus as regards policyholders in excess of the 420 minimum required. 421 (f)Whether the insurers operating loss in the last 12 422 month period, excluding net capital gains, is greater than 20 423 percent of the insurers remaining surplus as regards 424 policyholders in excess of the minimum required. 425 (g)Whether a reinsurer, an obligor, or any entity within 426 the insurers insurance holding company system is insolvent, 427 threatened with insolvency, or delinquent in payment of its 428 monetary or other obligations, and which in the opinion of the 429 office may affect the solvency of the insurer. 430 (h)Contingent liabilities, pledges, or guaranties that 431 individually or collectively involve a total amount that in the 432 opinion of the office may affect the solvency of the insurer. 433 (i)Whether any affiliate, as defined in s. 624.10(1), of 434 the insurer is delinquent in the transmitting to, or payment of, 435 net premiums to the insurer. 436 (j)The age and collectability of receivables. 437 (k)Whether the management of the insurer, including 438 officers, directors, or any other person who directly or 439 indirectly controls the operation of the insurer, fails to 440 possess and demonstrate the competence, fitness, and reputation 441 deemed necessary to serve the insurer in such position. 442 (l)Whether management of the insurer has failed to respond 443 to inquiries relative to the condition of the insurer or has 444 furnished false or misleading information to the office 445 concerning an inquiry. 446 (m)Whether the insurer has failed to meet financial and 447 holding company filing requirements in the absence of a reason 448 satisfactory to the office. 449 (n)Whether management of the insurer has filed any false 450 or misleading sworn financial statement, has released a false or 451 misleading financial statement to lending institutions or to the 452 general public, has made a false or misleading entry, or has 453 omitted an entry of material amount in the books of the insurer. 454 (o)Whether the insurer has grown so rapidly and to such an 455 extent that it lacks adequate financial and administrative 456 capacity to meet its obligations in a timely manner. 457 (p)Whether the insurer has experienced, or will experience 458 in the foreseeable future, cash flow or liquidity problems. 459 (q)Whether management has established reserves that do not 460 comply with minimum standards established by state insurance 461 laws and regulations, statutory accounting standards, sound 462 actuarial principles, and standards of practice. 463 (r)Whether management persistently engages in material 464 under-reserving that results in adverse development. 465 (s)Whether transactions among affiliates, subsidiaries, or 466 controlling persons for which the insurer receives assets or 467 capital gains, or both, do not provide sufficient value, 468 liquidity, or diversity to assure the insurers ability to meet 469 its outstanding obligations as they mature. 470 (t)The ratio of the annual premium volume to surplus or of 471 its liabilities to surplus in relation to loss experience, the 472 kinds of risks insured, or both. 473 (u)Whether the insurers asset portfolio, when viewed in 474 light of current economic conditions and indications of 475 financial or operational leverage, is of sufficient value, 476 liquidity, or diversity to assure the companys ability to meet 477 its outstanding obligations as they mature. 478 (v)Whether the excess of surplus as regards policyholders 479 above the insurers statutorily required surplus as regards 480 policyholders has decreased by more than 50 percent in the 481 preceding 12-month period. 482 (w)As to a residential property insurer, whether it has 483 sufficient capital, surplus, and reinsurance to withstand 484 significant weather events, including, but not limited to, 485 hurricanes. 486 (x)Whether the insurers required surplus, capital, or 487 capital stock is impaired to an extent prohibited by law. 488 (y)Whether the insurer continues to write new business 489 when it has not maintained the required surplus or capital. 490 (z)Whether the insurer moves to dissolve or liquidate 491 without first having made provisions satisfactory to the office 492 for liabilities arising from insurance policies issued by the 493 insurer. 494 (aa)Whether the insurer has incurred substantial new debt, 495 has had to rely on frequent or substantial capital infusions, 496 has a highly leveraged balance sheet, or relies increasingly on 497 other entities, including, but not limited to, affiliates, 498 third-party administrators, managing general agents, or 499 management companies. 500 (bb)Whether the insurer meets one or more of the grounds 501 in s. 631.051 for the appointment of the department as receiver. 502 (cc)Any other finding determined by the office to be 503 hazardous to the insurers policyholders or creditors or to the 504 general public. 505 (2)For the purposes of making a determination of an 506 insurers financial condition under the Florida Insurance Code, 507 the office may: 508 (a)Disregard any credit or amount receivable resulting 509 from transactions with a reinsurer that is insolvent, impaired, 510 or otherwise subject to a delinquency proceeding; 511 (b)Make appropriate adjustments, including disallowance to 512 asset values attributable to investments in or transactions with 513 parents, subsidiaries, or affiliates, consistent with the 514 National Association of Insurance Commissioners Accounting 515 Practices and Procedures Manual and state laws and rules; 516 (c)Refuse to recognize the stated value of accounts 517 receivable if the ability to collect receivables is highly 518 speculative in view of the age of the account or the financial 519 condition of the debtor; or 520 (d)Increase the insurers liability, in an amount equal to 521 any contingent liability, pledge, or guarantee not otherwise 522 included, if there is a substantial risk that the insurer will 523 be called upon to meet the obligation undertaken within the next 524 12-month period. 525 (3)If the office determines that the continued operations 526 of an insurer authorized to transact business in this state may 527 be hazardous to its policyholders or creditors or to the general 528 public, the office may issue an order requiring the insurer to 529 do any of the following: 530 (a)Reduce the total amount of present and potential 531 liability for policy benefits by procuring additional 532 reinsurance. 533 (b)Reduce, suspend, or limit the volume of business being 534 accepted or renewed. 535 (c)Reduce general insurance and commission expenses by 536 specified methods or amounts. 537 (d)Increase the insurers capital and surplus. 538 (e)Suspend or limit the declaration and payment of 539 dividends by an insurer to its stockholders or to its 540 policyholders. 541 (f)File reports in a form acceptable to the office 542 concerning the market value of the insurers assets. 543 (g)Limit or withdraw from certain investments or 544 discontinue certain investment practices to the extent the 545 office deems necessary. 546 (h)Document the adequacy of premium rates in relation to 547 the risks insured. 548 (i)File, in addition to regular annual statements, interim 549 financial reports on a form prescribed by the commission and 550 adopted by the National Association of Insurance Commissioners. 551 (j)Correct corporate governance practice deficiencies and 552 adopt and use governance practices acceptable to the office. 553 (k)Provide a business plan to the office in order to 554 continue to transact business in this state. 555 (l)Notwithstanding any other law limiting the frequency or 556 amount of rate adjustments, adjust rates for any non-life 557 insurance product written by the insurer which the office 558 considers necessary to improve the financial condition of the 559 insurer. 560 (4)This section may not be interpreted to limit the powers 561 granted to the office by any laws of this state, nor may it be 562 interpreted to supersede any laws of this state. 563 (5)The office may, pursuant to ss. 120.569 and 120.57, in 564 its discretion and without advance notice or hearing, issue an 565 immediate final order to any insurer requiring the actions 566 listed in subsection (3). 567 Section 8.Subsection (11) of section 624.81, Florida 568 Statutes, is amended to read: 569 624.81Notice to comply with written requirements of 570 office; noncompliance. 571 (11)The commission may adopt rules to define standards of 572 hazardous financial condition and corrective action 573 substantially similar to that indicated in the National 574 Association of Insurance Commissioners 1997 Model Regulation 575 to Define Standards and Commissioners Authority for Companies 576 Deemed to be in Hazardous Financial Condition, which are 577 necessary to implement the provisions of this part. 578 Section 9.Section 624.865, Florida Statutes, is created to 579 read: 580 624.865Rulemaking.The commission may adopt rules to 581 administer ss. 624.80-624.87. Such rules must protect the 582 interests of insureds, claimants, insurers, and the public. 583 Section 10.Paragraph (d) of subsection (2) and paragraph 584 (b) of subsection (3) of section 628.8015, Florida Statutes, are 585 amended to read: 586 628.8015Own-risk and solvency assessment; corporate 587 governance annual disclosure. 588 (2)OWN-RISK AND SOLVENCY ASSESSMENT. 589 (d)Exemption. 590 1.An insurer is exempt from the requirements of this 591 subsection if: 592 a.The insurer has annual direct written and unaffiliated 593 assumed premium, including international direct and assumed 594 premium, but excluding premiums reinsured with the Federal Crop 595 Insurance Corporation and the National Flood Insurance Program, 596 of less than $500 million; or 597 b.The insurer is a member of an insurance group and the 598 insurance group has annual direct written and unaffiliated 599 assumed premium, including international direct and assumed 600 premium, but excluding premiums reinsured with the Federal Crop 601 Insurance Corporation and the National Flood Insurance Program, 602 of less than $1 billion. 603 2.If an insurer is: 604 a.Exempt under sub-subparagraph 1.a., but the insurance 605 group of which the insurer is a member is not exempt under sub 606 subparagraph 1.b., the ORSA summary report must include every 607 insurer within the insurance group. The insurer may satisfy this 608 requirement by submitting more than one ORSA summary report for 609 any combination of insurers if any combination of reports 610 includes every insurer within the insurance group. 611 b.Not exempt under sub-subparagraph 1.a., but the 612 insurance group of which it is a member is exempt under sub 613 subparagraph 1.b., the insurer must submit to the office the 614 ORSA summary report applicable only to that insurer. 615 3.The office may require an exempt insurer to maintain a 616 risk management framework, conduct an ORSA, and file an ORSA 617 summary report: 618 a.Based on unique circumstances, including, but not 619 limited to, the type and volume of business written, ownership 620 and organizational structure, federal agency requests, and 621 international supervisor requests; 622 b.If the insurer has risk-based capital for a company 623 action level event pursuant to s. 624.4085(3), meets one or more 624 of the standards of an insurer deemed to be in hazardous 625 financial condition under s. 624.805 as defined in rules adopted 626 by the commission pursuant to s. 624.81(11), or exhibits 627 qualities of an insurer in hazardous financial condition as 628 determined by the office; or 629 c.If the office determines it is in the best interest of 630 the state. 631 4.If an exempt insurer becomes disqualified for an 632 exemption because of changes in premium as reported on the most 633 recent annual statement of the insurer or annual statements of 634 the insurers within the insurance group of which the insurer is 635 a member, the insurer must comply with the requirements of this 636 section effective 1 year after the year in which the insurer 637 exceeded the premium thresholds. 638 (3)CORPORATE GOVERNANCE ANNUAL DISCLOSURE. 639 (b)Disclosure requirement. 640 1.a.An insurer, or insurer member of an insurance group, 641 of which the office is the lead state regulator, as determined 642 by the procedures in the most recent National Association of 643 Insurance Commissioners Financial Analysis Handbook, shall 644 submit a corporate governance annual disclosure to the office by 645 June 1 of each calendar year. The initial corporate governance 646 annual disclosure must be submitted by December 31, 2018. 647 b.An insurer or insurance group not required to submit a 648 corporate governance annual disclosure under sub-subparagraph a. 649 shall do so at the request of the office, but not more than once 650 per calendar year. The insurer or insurance group shall notify 651 the office of the proposed submission date within 30 days after 652 the request of the office. 653 c.Before December 31, 2018, the office may require an 654 insurer or insurance group to provide a corporate governance 655 annual disclosure: 656 (I)Based on unique circumstances, including, but not 657 limited to, the type and volume of business written, the 658 ownership and organizational structure, federal agency requests, 659 and international supervisor requests; 660 (II)If the insurer has risk-based capital for a company 661 action level event pursuant to s. 624.4085(3), meets one or more 662 of the standards of an insurer deemed to be in hazardous 663 financial condition under s. 624.805 as defined in rules adopted 664 pursuant to s. 624.81(11), or exhibits qualities of an insurer 665 in hazardous financial condition as determined by the office; 666 (III)If the insurer is the member of an insurer group of 667 which the office acts as the lead state regulator as determined 668 by the procedures in the most recent National Association of 669 Insurance Commissioners Financial Analysis Handbook; or 670 (IV)If the office determines that it is in the best 671 interest of the state. 672 2.The chief executive officer or corporate secretary of 673 the insurer or the insurance group must sign the corporate 674 governance annual disclosure attesting that, to the best of his 675 or her knowledge and belief, the insurer has implemented the 676 corporate governance practices and provided a copy of the 677 disclosure to the board of directors or the appropriate board 678 committee. 679 3.a.Depending on the structure of its system of corporate 680 governance, the insurer or insurance group may provide corporate 681 governance information at one of the following levels: 682 (I)The ultimate controlling parent level; 683 (II)An intermediate holding company level; or 684 (III)The individual legal entity level. 685 b.The insurer or insurance group may make the corporate 686 governance annual disclosure at: 687 (I)The level used to determine the risk appetite of the 688 insurer or insurance group; 689 (II)The level at which the earnings, capital, liquidity, 690 operations, and reputation of the insurer are collectively 691 overseen and the supervision of those factors is coordinated and 692 exercised; or 693 (III)The level at which legal liability for failure of 694 general corporate governance duties would be placed. 695 696 An insurer or insurance group must indicate the level of 697 reporting used and explain any subsequent changes in the 698 reporting level. 699 4.The review of the corporate governance annual disclosure 700 and any additional requests for information shall be made 701 through the lead state as determined by the procedures in the 702 most recent National Association of Insurance Commissioners 703 Financial Analysis Handbook. 704 5.An insurer or insurance group may comply with this 705 paragraph by cross-referencing other existing relevant and 706 applicable documents, including, but not limited to, the ORSA 707 summary report, Holding Company Form B or F filings, Securities 708 and Exchange Commission proxy statements, or foreign regulatory 709 reporting requirements, if the documents contain information 710 substantially similar to the information described in paragraph 711 (c). The insurer or insurance group shall clearly identify and 712 reference the specific location of the relevant and applicable 713 information within the corporate governance annual disclosure 714 and attach the referenced document if it has not already been 715 filed with, or made available to, the office. 716 6.Each year following the initial filing of the corporate 717 governance annual disclosure, the insurer or insurance group 718 shall file an amended version of the previously filed corporate 719 governance annual disclosure indicating changes that have been 720 made. If changes have not been made in the previously filed 721 disclosure, the insurer or insurance group should so indicate. 722 Section 11.Paragraph (c) of subsection (3) of section 723 626.207, Florida Statutes, is amended to read: 724 626.207Disqualification of applicants and licensees; 725 penalties against licensees; rulemaking authority. 726 (3)An applicant who has been found guilty of or has 727 pleaded guilty or nolo contendere to a crime not included in 728 subsection (2), regardless of adjudication, is subject to: 729 (c)A 7-year disqualifying period for all misdemeanors 730 directly related to the financial services business or any 731 violation of the Florida Insurance Code. 732 Section 12.Subsections (2) and (3) of section 626.9521, 733 Florida Statutes, are amended to read: 734 626.9521Unfair methods of competition and unfair or 735 deceptive acts or practices prohibited; penalties. 736 (2)Except as provided in subsection (3), any person who 737 violates any provision of this part is subject to a fine in an 738 amount not greater than $12,500 $5,000 for each nonwillful 739 violation and not greater than $100,000 $40,000 for each willful 740 violation. Fines under this subsection imposed against an 741 insurer may not exceed an aggregate amount of $50,000 $20,000 742 for all nonwillful violations arising out of the same action or 743 an aggregate amount of $500,000 $200,000 for all willful 744 violations arising out of the same action. The fines may be 745 imposed in addition to any other applicable penalty. 746 (3)(a)If a person violates s. 626.9541(1)(l), the offense 747 known as twisting, or violates s. 626.9541(1)(aa), the offense 748 known as churning, the person commits a misdemeanor of the 749 first degree, punishable as provided in s. 775.082, and an 750 administrative fine not greater than $12,500 $5,000 shall be 751 imposed for each nonwillful violation or an administrative fine 752 not greater than $187,500 $75,000 shall be imposed for each 753 willful violation. To impose an administrative fine for a 754 willful violation under this paragraph, the practice of 755 churning or twisting must involve fraudulent conduct. 756 (b)If a person violates s. 626.9541(1)(ee) by willfully 757 submitting fraudulent signatures on an application or policy 758 related document, the person commits a felony of the third 759 degree, punishable as provided in s. 775.082, and an 760 administrative fine not greater than $12,500 $5,000 shall be 761 imposed for each nonwillful violation or an administrative fine 762 not greater than $187,500 $75,000 shall be imposed for each 763 willful violation. 764 (c)If a person violates any provision of this part and 765 such violation is related to a covered loss or covered claim 766 caused by an emergency for which the Governor declared a state 767 of emergency pursuant to s. 252.36, such person is subject to a 768 fine in an amount not greater than $25,000 for each nonwillful 769 violation and not greater than $200,000 for each willful 770 violation. Fines imposed under this paragraph against an insurer 771 may not exceed an aggregate amount of $100,000 for all 772 nonwillful violations arising out of the same action or an 773 aggregate amount of $1 million for all willful violations 774 arising out of the same action. 775 (d)Administrative fines under paragraphs (a) and (b) this 776 subsection may not exceed an aggregate amount of $125,000 777 $50,000 for all nonwillful violations arising out of the same 778 action or an aggregate amount of $625,000 $250,000 for all 779 willful violations arising out of the same action. 780 Section 13.Paragraphs (i) and (w) of subsection (1) of 781 section 626.9541, Florida Statutes, are amended to read: 782 626.9541Unfair methods of competition and unfair or 783 deceptive acts or practices defined. 784 (1)UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE 785 ACTS.The following are defined as unfair methods of competition 786 and unfair or deceptive acts or practices: 787 (i)Unfair claim settlement practices. 788 1.Attempting to settle claims on the basis of an 789 application, when serving as a binder or intended to become a 790 part of the policy, or any other material document which was 791 altered without notice to, or knowledge or consent of, the 792 insured; 793 2.A material misrepresentation made to an insured or any 794 other person having an interest in the proceeds payable under 795 such contract or policy, for the purpose and with the intent of 796 effecting settlement of such claims, loss, or damage under such 797 contract or policy on less favorable terms than those provided 798 in, and contemplated by, such contract or policy; 799 3.Committing or performing with such frequency as to 800 indicate a general business practice any of the following: 801 a.Failing to adopt and implement standards for the proper 802 investigation of claims; 803 b.Misrepresenting pertinent facts or insurance policy 804 provisions relating to coverages at issue; 805 c.Failing to acknowledge and act promptly upon 806 communications with respect to claims; 807 d.Denying claims without conducting reasonable 808 investigations based upon available information; 809 e.Failing to affirm or deny full or partial coverage of 810 claims, and, as to partial coverage, the dollar amount or extent 811 of coverage, or failing to provide a written statement that the 812 claim is being investigated, upon the written request of the 813 insured within 30 days after proof-of-loss statements have been 814 completed; 815 f.Failing to promptly provide a reasonable explanation in 816 writing to the insured of the basis in the insurance policy, in 817 relation to the facts or applicable law, for denial of a claim 818 or for the offer of a compromise settlement; 819 g.Failing to promptly notify the insured of any additional 820 information necessary for the processing of a claim; 821 h.Failing to clearly explain the nature of the requested 822 information and the reasons why such information is necessary; 823 or 824 i.Failing to pay personal injury protection insurance 825 claims within the time periods required by s. 627.736(4)(b). The 826 office may order the insurer to pay restitution to a 827 policyholder, medical provider, or other claimant, including 828 interest at a rate consistent with the amount set forth in s. 829 55.03(1), for the time period within which an insurer fails to 830 pay claims as required by law. Restitution is in addition to any 831 other penalties allowed by law, including, but not limited to, 832 the suspension of the insurers certificate of authority; or 833 j.Altering or amending an insurance adjusters report 834 without: 835 (I)Providing a detailed explanation as to why any change 836 that has the effect of reducing the estimate of the loss was 837 made; and 838 (II)Including on the report or as an addendum to the 839 report a detailed list of all changes made to the report and the 840 identity of the person who ordered each change; or 841 (III)Retaining all versions of the report, and including 842 within each such version, for each change made within such 843 version of the report, the identity of each person who made or 844 ordered such change; or 845 4.Failing to pay undisputed amounts of partial or full 846 benefits owed under first-party property insurance policies 847 within 60 days after an insurer receives notice of a residential 848 property insurance claim, determines the amounts of partial or 849 full benefits, and agrees to coverage, unless payment of the 850 undisputed benefits is prevented by factors beyond the control 851 of the insurer as defined in s. 627.70131(5). 852 (w)Soliciting or accepting new or renewal insurance risks 853 by insolvent or impaired insurer or receipt of certain bonuses 854 by an officer or director of an insolvent insurer prohibited; 855 penalty. 856 1.Whether or not delinquency proceedings as to the insurer 857 have been or are to be initiated, but while such insolvency or 858 impairment exists, no director or officer of an insurer, except 859 with the written permission of the office, shall authorize or 860 permit the insurer to solicit or accept new or renewal insurance 861 risks in this state after such director or officer knew, or 862 reasonably should have known, that the insurer was insolvent or 863 impaired. 864 2.Regardless of whether delinquency proceedings as to the 865 insurer have been or are to be initiated, but while such 866 insolvency or impairment exists, a director or an officer of an 867 impaired insurer may not receive a bonus from such insurer, nor 868 may such director or officer receive a bonus from a holding 869 company or an affiliate that shares common ownership or control 870 with such insurer. 871 3.As used in this paragraph, the term: 872 a.Bonus means a payment, in addition to an officers or 873 a directors usual compensation, which is in addition to any 874 amounts contracted for or otherwise legally due. 875 b.Impaired includes impairment of capital or surplus, as 876 defined in s. 631.011(12) and (13). 877 4.2.Any such director or officer, upon conviction of a 878 violation of this paragraph, commits is guilty of a felony of 879 the third degree, punishable as provided in s. 775.082, s. 880 775.083, or s. 775.084. 881 Section 14.Subsection (6) of section 626.989, Florida 882 Statutes, is amended, and subsection (10) is added to that 883 section, to read: 884 626.989Investigation by department or Division of 885 Investigative and Forensic Services; compliance; immunity; 886 confidential information; reports to division; division 887 investigators power of arrest. 888 (6)(a)Any person, other than an insurer, agent, or other 889 person licensed under the code, or an employee thereof, having 890 knowledge or who believes that a fraudulent insurance act or any 891 other act or practice which, upon conviction, constitutes a 892 felony or a misdemeanor under the code, or under s. 817.234, is 893 being or has been committed may send to the Division of 894 Investigative and Forensic Services a report or information 895 pertinent to such knowledge or belief and such additional 896 information relative thereto as the department may request. Any 897 professional practitioner licensed or regulated by the 898 Department of Business and Professional Regulation, except as 899 otherwise provided by law, any medical review committee as 900 defined in s. 766.101, any private medical review committee, and 901 any insurer, agent, or other person licensed under the code, or 902 an employee thereof, having knowledge or who believes that a 903 fraudulent insurance act or any other act or practice which, 904 upon conviction, constitutes a felony or a misdemeanor under the 905 code, or under s. 817.234, is being or has been committed shall 906 send to the Division of Investigative and Forensic Services a 907 report or information pertinent to such knowledge or belief and 908 such additional information relative thereto as the department 909 may require. 910 (b)The Division of Investigative and Forensic Services 911 shall review such information or reports and select such 912 information or reports as, in its judgment, may require further 913 investigation. It shall then cause an independent examination of 914 the facts surrounding such information or report to be made to 915 determine the extent, if any, to which a fraudulent insurance 916 act or any other act or practice which, upon conviction, 917 constitutes a felony or a misdemeanor under the code, or under 918 s. 817.234, is being committed. 919 (c)The Division of Investigative and Forensic Services 920 shall report any alleged violations of law which its 921 investigations disclose to the appropriate licensing agency and 922 state attorney or other prosecuting agency having jurisdiction, 923 including, but not limited to, the statewide prosecutor for 924 crimes that impact two or more judicial circuits in this state, 925 with respect to any such violation, as provided in s. 624.310. 926 If prosecution by the state attorney or other prosecuting agency 927 having jurisdiction with respect to such violation is not begun 928 within 60 days of the divisions report, the state attorney or 929 other prosecuting agency having jurisdiction with respect to 930 such violation shall inform the division of the reasons for the 931 lack of prosecution. 932 (10)The Division of Investigative and Forensic Services 933 Bureau of Insurance Fraud shall prepare and submit a performance 934 report to the President of the Senate and the Speaker of the 935 House of Representatives by January 1 of each year. The annual 936 report must include, but need not be limited to: 937 (a)The total number of initial referrals received, cases 938 opened, cases presented for prosecution, cases closed, and 939 convictions resulting from cases presented for prosecution by 940 the Bureau of Insurance Fraud, by type of insurance fraud and 941 circuit. 942 (b)The number of referrals received from insurers, the 943 office, and the Division of Consumer Services of the department, 944 and the outcome of those referrals. 945 (c)The number of investigations undertaken by the Bureau 946 of Insurance Fraud which were not the result of a referral from 947 an insurer and the outcome of those referrals. 948 (d)The number of investigations that resulted in a 949 referral to a regulatory agency and the disposition of those 950 referrals. 951 (e)The number of cases presented by the Bureau of 952 Insurance Fraud which local prosecutors or the statewide 953 prosecutor declined to prosecute and the reasons provided for 954 declining prosecution. 955 (f)A summary of the annual report required under s. 956 626.9896. 957 (g)The total number of employees assigned to the Bureau of 958 Insurance Fraud, delineated by location of staff assigned, and 959 the number and location of employees assigned to the Bureau of 960 Insurance Fraud who were assigned to work other types of fraud 961 cases. 962 (h)The average caseload and turnaround time by type of 963 case for each investigator. 964 (i)The training provided during the year to insurance 965 fraud investigators. 966 Section 15.Subsections (1), (3), and (4) of section 967 627.0629, Florida Statutes, are amended to read: 968 627.0629Residential property insurance; rate filings. 969 (1)It is the intent of the Legislature that insurers 970 provide savings to consumers who install or implement windstorm 971 damage mitigation techniques, alterations, or solutions to their 972 properties to prevent windstorm losses. A rate filing for 973 residential property insurance must include actuarially 974 reasonable discounts, credits, or other rate differentials, or 975 appropriate reductions in deductibles, for properties on which 976 fixtures or construction techniques demonstrated to reduce the 977 amount of loss in a windstorm have been installed or 978 implemented. The fixtures or construction techniques must 979 include, but are not limited to, fixtures or construction 980 techniques that enhance roof strength, roof covering 981 performance, roof-to-wall strength, wall-to-floor-to-foundation 982 strength, opening protection, and window, door, and skylight 983 strength. Credits, discounts, or other rate differentials, or 984 appropriate reductions in deductibles, for fixtures and 985 construction techniques that meet the minimum requirements of 986 the Florida Building Code must be included in the rate filing. 987 The office shall determine the discounts, credits, other rate 988 differentials, and appropriate reductions in deductibles that 989 reflect the full actuarial value of such revaluation, which may 990 be used by insurers in rate filings. Effective October 1, 2023, 991 each insurer subject to the requirements of this section must 992 provide information on the insurers website describing the 993 hurricane mitigation discounts available to policyholders. Such 994 information must be accessible on, or through a hyperlink 995 located on, the home page of the insurers website or the 996 primary page of the insurers website for property insurance 997 policyholders or applicants for such coverage in this state. On 998 or before January 1, 2025, and every 5 years thereafter, the 999 office shall reevaluate and update the fixtures or construction 1000 techniques demonstrated to reduce the amount of loss in a 1001 windstorm and the discounts, credits, other rate differentials, 1002 and appropriate reductions in deductibles that reflect the full 1003 actuarial value of such fixtures or construction techniques. The 1004 office shall adopt rules and forms necessitated by such 1005 reevaluation. 1006 (3)A rate filing made on or after July 1, 1995, for mobile 1007 home owner insurance must include appropriate discounts, 1008 credits, or other rate differentials for mobile homes 1009 constructed to comply with American Society of Civil Engineers 1010 Standard ANSI/ASCE 7-88, adopted by the United States Department 1011 of Housing and Urban Development on July 13, 1994, and that also 1012 comply with all applicable tie-down requirements provided by 1013 state law. 1014 (4)The Legislature finds that separate consideration and 1015 notice of hurricane insurance premiums will assist consumers by 1016 providing greater assurance that hurricane premiums are lawful 1017 and by providing more complete information regarding the 1018 components of property insurance premiums. Effective January 1, 1019 1997, A rate filing for residential property insurance shall be 1020 separated into two components, rates for hurricane coverage and 1021 rates for all other coverages. A premium notice reflecting a 1022 rate implemented on the basis of such a filing shall separately 1023 indicate the premium for hurricane coverage and the premium for 1024 all other coverages. 1025 Section 16.Paragraph (ll) is added to subsection (6) of 1026 section 627.351, Florida Statutes, to read: 1027 627.351Insurance risk apportionment plans. 1028 (6)CITIZENS PROPERTY INSURANCE CORPORATION. 1029 (ll)The corporation may not determine that a risk is 1030 ineligible for coverage with the corporation solely because such 1031 risk has unrepaired damage caused by a covered loss that is the 1032 subject of a claim that has been filed with the Florida 1033 Insurance Guaranty Association. This paragraph applies to a risk 1034 until the earlier of 36 months after the date the Florida 1035 Insurance Guaranty Association began servicing such claim or the 1036 Florida Insurance Guaranty Association closes the claim. 1037 Section 17.Subsection (4) of section 627.410, Florida 1038 Statutes, is amended to read: 1039 627.410Filing, approval of forms. 1040 (4)The office may, by order, exempt from the requirements 1041 of this section for so long as it deems proper any insurance 1042 document or form or type thereof as specified in such order, to 1043 which, in its opinion, this section may not practicably be 1044 applied, or the filing and approval of which are, in its 1045 opinion, not desirable or necessary for the protection of the 1046 public. The office may not exempt from the requirements of this 1047 section the insurance documents or forms of any insurer, against 1048 whom the office enters a final order determining that such 1049 insurer violated any provision of this code, for a period of 36 1050 months after the date of such order, and may not be deemed 1051 approved under subsection (2). 1052 Section 18.Section 627.4108, Florida Statutes, is created 1053 to read: 1054 627.4108Claims-handling manuals; submission; attestation. 1055 (1)Each authorized residential property insurer conducting 1056 business in this state must create and use a claims-handling 1057 manual that provides guidelines and procedures and that complies 1058 with the requirements of this code and comports to usual and 1059 customary industry claims-handling practices. Such manual must 1060 include guidelines and procedures for: 1061 (a)Initially receiving and acknowledging initial receipt 1062 of the claim and reviewing and evaluating the claim; 1063 (b)Communicating with policyholders, beginning with the 1064 receipt of the claim and continuing until closure of the claim; 1065 (c)Setting the claim reserve; 1066 (d)Investigating the claim, including conducting 1067 inspections of the property that is the subject of the claim; 1068 (e)Making preliminary estimates and estimates of the 1069 covered damages to the insured property and communicating such 1070 estimates to the policyholder; 1071 (f)The payment, partial payment, or denial of the claim 1072 and communicating such claim decision to the policyholder; 1073 (g)Closing claims; and 1074 (h)Any aspect of the claims-handling process which the 1075 office determines should be included in the claims-handling 1076 manual in order to: 1077 1.Comply with the laws of this state or rules or orders of 1078 the office or department; 1079 2.Ensure the claims-handling manual comports with usual 1080 and customary industry claims-handling guidelines; or 1081 3.Protect policyholders of the insurer or the general 1082 public. 1083 (2)At any time, the office may request that a residential 1084 property insurer submit a physical or electronic copy of the 1085 insurers currently applicable, or otherwise specifically 1086 requested, claims-handling manuals. Upon receiving such a 1087 request, a residential property insurer must submit to the 1088 office within 5 business days: 1089 (a)A true and correct copy of each claims-handling manual 1090 requested; and 1091 (b)An attestation, on a form prescribed by the commission, 1092 that certifies: 1093 1.That the insurer has provided a true and correct copy of 1094 each currently applicable, or otherwise specifically requested, 1095 claims-handling manual; and 1096 2.The timeframe for which each submitted claims-handling 1097 manual was or is in effect. 1098 (3)(a)Annually, each authorized residential property 1099 insurer must certify and attest, on a form prescribed by the 1100 commission, that: 1101 1.Each of the insurers current claims-handling manuals 1102 complies with the requirements of this code and comports to 1103 usual and customary industry claims-handling practices; and 1104 2.The insurer maintains adequate resources available to 1105 implement the requirements of each of its claims-handling 1106 manuals at all times, including during natural disasters and 1107 catastrophic events. 1108 (b)Such attestation must be submitted to the office: 1109 1.On or before August 1, 2023; and 1110 2.Annually thereafter, on or before May 1 of each calendar 1111 year. 1112 (4)The commission is authorized, and all conditions are 1113 deemed met, to adopt emergency rules under s. 120.54(4), for the 1114 purpose of implementing this section. Notwithstanding any other 1115 law, emergency rules adopted under this section are effective 1116 for 6 months after adoption and may be renewed during the 1117 pendency of procedures to adopt permanent rules addressing the 1118 subject of the emergency rules. 1119 Section 19.Paragraph (d) of subsection (2) of section 1120 627.4133, Florida Statutes, is amended to read: 1121 627.4133Notice of cancellation, nonrenewal, or renewal 1122 premium. 1123 (2)With respect to any personal lines or commercial 1124 residential property insurance policy, including, but not 1125 limited to, any homeowner, mobile home owner, farmowner, 1126 condominium association, condominium unit owner, apartment 1127 building, or other policy covering a residential structure or 1128 its contents: 1129 (d)1.Upon a declaration of an emergency pursuant to s. 1130 252.36 and the filing of an order by the Commissioner of 1131 Insurance Regulation, An authorized insurer may not cancel or 1132 nonrenew a personal residential or commercial residential 1133 property insurance policy covering a dwelling or residential 1134 property located in this state: 1135 a.For a period of 90 days after the dwelling or 1136 residential property has been repaired, if such property which 1137 has been damaged as a result of a hurricane or wind loss that is 1138 the subject of the declaration of emergency pursuant to s. 1139 252.36 and the filing of an order by the Commissioner of 1140 Insurance Regulation for a period of 90 days after the dwelling 1141 or residential property has been repaired. A structure is deemed 1142 to be repaired when substantially completed and restored to the 1143 extent that it is insurable by another authorized insurer that 1144 is writing policies in this state. 1145 b.Until the earlier of when the dwelling or residential 1146 property has been repaired or 1 year after the insurer issues 1147 the final claim payment, if such property was damaged by any 1148 covered peril and sub-subparagraph a. does not apply. 1149 2.However, an insurer or agent may cancel or nonrenew such 1150 a policy prior to the repair of the dwelling or residential 1151 property: 1152 a.Upon 10 days notice for nonpayment of premium; or 1153 b.Upon 45 days notice: 1154 (I)For a material misstatement or fraud related to the 1155 claim; 1156 (II)If the insurer determines that the insured has 1157 unreasonably caused a delay in the repair of the dwelling; or 1158 (III)If the insurer has paid policy limits. 1159 3.If the insurer elects to nonrenew a policy covering a 1160 property that has been damaged, the insurer shall provide at 1161 least 90 days notice to the insured that the insurer intends to 1162 nonrenew the policy 90 days after the dwelling or residential 1163 property has been repaired. Nothing in this paragraph shall 1164 prevent the insurer from canceling or nonrenewing the policy 90 1165 days after the repairs are complete for the same reasons the 1166 insurer would otherwise have canceled or nonrenewed the policy 1167 but for the limitations of subparagraph 1. The Financial 1168 Services Commission may adopt rules, and the Commissioner of 1169 Insurance Regulation may issue orders, necessary to implement 1170 this paragraph. 1171 4.This paragraph shall also apply to personal residential 1172 and commercial residential policies covering property that was 1173 damaged as the result of Hurricane Ian or Hurricane Nicole 1174 Tropical Storm Bonnie, Hurricane Charley, Hurricane Frances, 1175 Hurricane Ivan, or Hurricane Jeanne. 1176 5.For purposes of this paragraph: 1177 a.A structure is deemed to be repaired when substantially 1178 completed and restored to the extent that it is insurable by 1179 another authorized insurer writing policies in this state. 1180 b.The term insurer means an authorized insurer. 1181 Section 20.Subsection (3) is added to section 627.426, 1182 Florida Statutes, to read: 1183 627.426Claims administration. 1184 (3)(a)Upon receiving actual notice of an incident or a 1185 loss that could give rise to a covered liability claim under an 1186 insurance policy, each liability insurer must do all of the 1187 following: 1188 1.Assign a licensed and appointed insurance adjuster to 1189 investigate the extent of the insureds probable exposure and 1190 diligently attempt to resolve any questions concerning the 1191 existence or extent of the insureds coverage. 1192 2.Evaluate the claim fairly, honestly, and with due regard 1193 for the interests of the insured based on available information; 1194 consider the extent of the claimants recoverable damages; and 1195 consider the information in a reasonable and prudent manner. 1196 3.Request from the insured or claimant additional relevant 1197 information the insurer reasonably deems necessary to evaluate 1198 whether to settle a claim. 1199 4.Conduct all oral and written communications with the 1200 insured with honesty and candor. 1201 5.Make reasonable efforts to explain to persons not 1202 represented by counsel matters requiring expertise beyond the 1203 level normally expected of a layperson with no training in 1204 insurance or claims-handling issues. 1205 6.Retain all written and recorded communications and 1206 create and retain a summary of all verbal communications in a 1207 reasonable manner for a period of not less than 5 years after 1208 the later of the entry of a judgment against the insured in 1209 excess of policy limits becoming final or the conclusion of the 1210 extracontractual claim, if any, including any related appeals. 1211 7.Within 30 days after a request, provide the insured with 1212 all communications related to the insurers handling of the 1213 claim which are not privileged as to the insured. 1214 8.Provide, upon request and at the insurers expense, 1215 reasonable accommodations necessary to communicate effectively 1216 with an insured covered under the Americans with Disabilities 1217 Act. 1218 9.Communicate to an insured all of the following within 15 1219 days after notice of the existence of a third-party claim: 1220 a.The identity of any other person or entity the insurer 1221 has reason to believe may be liable. 1222 b.The insurers evaluation of the claim, given the facts 1223 known by the insurer at that time. 1224 c.The likelihood and possible extent of an excess 1225 judgment. 1226 d.Steps the insured can take to avoid exposure to an 1227 excess judgment, including the right to secure personal counsel 1228 at the insureds expense. 1229 e.The insureds duty to cooperate with the insurer, 1230 including any specific requests required because of a settlement 1231 opportunity or by the insurer in accordance with the policy, the 1232 purpose of the required cooperation, and the consequences of 1233 refusing to cooperate. 1234 f.Any settlement demands or offers. 1235 10.Initiate settlement negotiations by tendering its 1236 policy limits to the claimant in exchange for a general release 1237 of the insured if the facts available to the insurer indicate 1238 that the insureds liability is likely to exceed the policy 1239 limits. 1240 11.Give fair consideration to a settlement offer that is 1241 not unreasonable under the facts available to the insurer and 1242 settle in exchange for a general release of the insured, if 1243 possible, when a reasonably prudent person, faced with the 1244 prospect of paying the total probable exposure of the insured, 1245 would do so. The insurer shall provide reasonable assistance to 1246 the insured to comply with the insureds obligations to 1247 cooperate and act reasonably to attempt to satisfy any 1248 conditions of a claimants settlement offer. If it is not 1249 possible to settle a liability claim within the available policy 1250 limits in exchange for a general release of the insured, the 1251 insurer shall act reasonably to attempt to minimize the excess 1252 exposure to the insured. 1253 12.Attempt to minimize the magnitude of possible excess 1254 judgments against the insured when multiple claims arise out of 1255 a single occurrence and the combined value of all claims exceeds 1256 the total of all applicable policy limits. The insurer is 1257 entitled to great discretion to decide how much to offer each 1258 respective claimant in its attempt to settle with such claimant 1259 in exchange for a general release of the insured. This 1260 subparagraph may not be interpreted to prevent an insurer from 1261 using either process provided under s. 624.155(6). An insurer 1262 does not violate this subsection simply because it is unable to 1263 settle all claims in a multiple claimant case. 1264 13.Attempt to settle the claim in exchange for a general 1265 release of all insureds against whom a claim may be presented if 1266 a loss creates the potential for a third-party claim against 1267 more than one insured. If it is not possible to settle in 1268 exchange for a general release of all insureds, the insurer, in 1269 consultation with the insureds, must attempt to enter into 1270 reasonable settlements of claims against certain insureds in 1271 exchange for a general release of such insureds to the exclusion 1272 of other insureds. 1273 14.Respond to any request for insurance information in 1274 compliance with s. 626.9372 or s. 627.4137, as applicable. 1275 15.Take reasonable measures to preserve evidence, for a 1276 reasonable period of time, which is needed for the defense of 1277 the liability claim if it appears the insureds probable 1278 exposure is greater than policy limits. 1279 16.Comply with subsections (1) and (2), if applicable. 1280 17.Comply with the Unfair Insurance Trade Practices Act. 1281 (b)As used in this subsection, the term actual notice 1282 means the insurers receipt of notice of an incident or a loss 1283 that could give rise to a covered claim that is communicated to 1284 the insurer or an agent of the insurer: 1285 1.By any manner permitted by the policy or other documents 1286 provided to the insured by the insurer; 1287 2.Through the claims link on the insurers website; or 1288 3.Through the e-mail address designated by the insurer 1289 under s. 624.422. 1290 (c)In determining whether an insurer violated this 1291 subsection, it is relevant whether the insured, claimant, and 1292 any representative of the insured or claimant was acting in good 1293 faith toward the insurer in furnishing information regarding the 1294 claim, in making demands of the insurer, in setting deadlines, 1295 and in attempting to settle the claim. Such matters include 1296 whether: 1297 1.The insured met its duty to cooperate with the insurer 1298 in the defense of the claim and in making settlements by taking 1299 reasonable actions requested by the claimant or required by the 1300 policy which are necessary to assist the insurer in settling a 1301 covered claim, including: 1302 a.Executing affidavits regarding the facts within the 1303 insureds knowledge regarding the covered loss; and 1304 b.Providing documents, including if reasonably necessary 1305 to settle a covered claim valued in excess of policy limits and 1306 upon the request of the claimant, a summary of the insureds 1307 assets, liabilities, obligations, other insurance policies that 1308 may provide coverage for the claim, and the name and contact 1309 information of the insureds employer when the insured is a 1310 natural person who was acting in the course and scope of 1311 employment when the incident giving rise to the claim occurred. 1312 2.The claimant and any claimants representative: 1313 a.Acted honestly in furnishing information regarding the 1314 claim; 1315 b.Acted reasonably in setting deadlines; and 1316 c.Refrained from taking actions that may be reasonably 1317 expected to prevent an insurer from accepting the settlement 1318 demand, such as providing insufficient detail within the demand, 1319 providing unreasonable deadlines for acceptance of the demand, 1320 or including unreasonable conditions to settlement. 1321 (d)Any violation of this subsection, when found by the 1322 office in any investigation or examination, constitutes a 1323 violation of the Florida Insurance Code and is subject to any 1324 applicable enforcement provisions therein. Administrative fines 1325 imposed for violations of this subsection are subject to a 2.0 1326 multiplier and may exceed the limits on fine amounts and 1327 aggregate fine amounts provided for under this code. 1328 (e)This subsection does not create a civil cause of 1329 action, nor does it abrogate or diminish any civil cause of 1330 action currently existing in statutory or common law. 1331 (f)Any proceedings, determinations, or enforcement actions 1332 taken by the office against an insurer for violations of this 1333 subsection are not admissible in any civil action. 1334 Section 21.Paragraph (a) of subsection (10) of section 1335 627.701, Florida Statutes, is amended to read: 1336 627.701Liability of insureds; coinsurance; deductibles. 1337 (10)(a)Notwithstanding any other provision of law, an 1338 insurer issuing a personal lines residential property insurance 1339 policy may include in such policy a separate roof deductible 1340 that meets all of the following requirements: 1341 1.The insurer has complied with the offer requirements 1342 under subsection (7) regarding a deductible applicable to losses 1343 from perils other than a hurricane. 1344 2.The roof deductible may not exceed the lesser of 2 1345 percent of the Coverage A limit of the policy or 50 percent of 1346 the cost to replace the roof. 1347 3.The premium that a policyholder is charged for the 1348 policy includes an actuarially sound credit or premium discount 1349 for the roof deductible. 1350 4.The roof deductible applies only to a claim adjusted on 1351 a replacement cost basis. 1352 5.The roof deductible does not apply to any of the 1353 following events: 1354 a.A total loss to a primary structure in accordance with 1355 the valued policy law under s. 627.702 which is caused by a 1356 covered peril. 1357 b.A roof loss resulting from a hurricane as defined in s. 1358 627.4025(2)(c). 1359 c.A roof loss resulting from a tree fall or other hazard 1360 that damages the roof and punctures the roof deck. 1361 d.A roof loss requiring the repair of less than 50 percent 1362 of the roof. 1363 1364 If a roof deductible is applied, no other deductible under the 1365 policy may be applied to the loss or to any other loss to the 1366 property caused by the same covered peril. 1367 Section 22.Subsection (2) of section 627.70132, Florida 1368 Statutes, is amended to read: 1369 627.70132Notice of property insurance claim. 1370 (2)A claim or reopened claim, but not a supplemental 1371 claim, under an insurance policy that provides property 1372 insurance, as defined in s. 624.604, including a property 1373 insurance policy issued by an eligible surplus lines insurer, 1374 for loss or damage caused by any peril is barred unless notice 1375 of the claim was given to the insurer in accordance with the 1376 terms of the policy within 1 year after the date of loss. A 1377 supplemental claim is barred unless notice of the supplemental 1378 claim was given to the insurer in accordance with the terms of 1379 the policy within 18 months after the date of loss. The time 1380 limitations of this subsection are tolled during any term of 1381 deployment to a combat zone or combat support posting which 1382 materially affects the ability of a servicemember as defined in 1383 s. 250.01 to file a claim, supplemental claim, or reopened 1384 claim. 1385 Section 23.Chapter 2022-271, Laws of Florida, shall not be 1386 construed to impair any right under an insurance contract in 1387 effect on or before the effective date of that chapter law. To 1388 the extent that chapter 2022-271, Laws of Florida, affects a 1389 right under an insurance contract, that chapter law applies to 1390 an insurance contract issued or renewed after the effective date 1391 of that chapter law. This section is intended to clarify 1392 existing law and is remedial in nature. 1393 Section 24.(1)Every residential property insurer and 1394 every motor vehicle insurer rate filing made or pending with the 1395 Office of Insurance Regulation on or after July 1, 2023, must 1396 reflect the projected savings or reduction in claim frequency, 1397 claim severity, and loss adjustment expenses, including for 1398 attorney fees, payment of attorney fees to claimants, and any 1399 other reduction actuarially indicated, due to the combined 1400 effect of the applicable provisions of chapters 2021-77, 2022 1401 268, 2022-271, and 2023-15, Laws of Florida, in order to ensure 1402 that rates for such insurance accurately reflect the risk of 1403 providing such insurance. 1404 (2)The Office of Insurance Regulation must consider in its 1405 review of such rate filings the projected savings or reduction 1406 in claim frequency, claim severity, and loss adjustment 1407 expenses, including for attorney fees, payment of attorney fees 1408 to claimants, and any other reduction actuarially indicated, due 1409 to the combined effect of the applicable provisions of chapters 1410 2021-77, 2022-268, 2022-271, and 2023-15, Laws of Florida. The 1411 office may develop methodology and data that incorporate 1412 generally accepted actuarial techniques and standards to be used 1413 in its review of rate filings governed by this section. The 1414 office may contract with an appropriate vendor to advise the 1415 office in developing such methodology and data to consider. Such 1416 methodology and data are not intended to create a mandatory 1417 minimum rate decrease for all motor vehicle insurers and 1418 property insurers, respectively, but rather to ensure that the 1419 rates for such coverage meet the requirements of s. 627.062, 1420 Florida Statutes, and thus are not excessive, inadequate, or 1421 unfairly discriminatory and allow such insurers a reasonable 1422 rate of return. 1423 (3)This section does not apply to rate filings made 1424 pursuant to s. 627.062(2)(k), Florida Statutes. 1425 (4)For the 2023-2024 fiscal year, the sum of $500,000 in 1426 nonrecurring funds is appropriated from the Insurance Regulatory 1427 Trust Fund in the Department of Financial Services to the Office 1428 of Insurance Regulation to implement this section. 1429 Section 25.For the 2023-2024 fiscal year, 18 full-time 1430 equivalent positions with associated salary rate of 1,116,500 1431 are authorized and the sum of $1,879,129 in recurring funds and 1432 $185,086 in nonrecurring funds is appropriated from the 1433 Insurance Regulatory Trust Fund to the Office of Insurance 1434 Regulation to implement this act. 1435 Section 26.For the 2023-2024 fiscal year, seven full-time 1436 equivalent positions with associated salary rate of 350,000 are 1437 authorized and the sum of $574,036 in recurring funds and 1438 $33,467 in nonrecurring funds is appropriated from the Insurance 1439 Regulatory Trust Fund to the Department of Financial Services to 1440 implement this act. 1441 Section 27.This act shall take effect July 1, 2023.