CS for SB 7052 First Engrossed 20237052e1 1 A bill to be entitled 2 An act relating to insurer accountability; creating s. 3 624.115, F.S.; specifying a requirement for the Office 4 of Insurance Regulation in referring criminal 5 violations; amending s. 624.307, F.S.; authorizing 6 electronic responses to certain requests from the 7 Division of Consumer Services of the Department of 8 Financial Services concerning consumer complaints; 9 revising the timeframe in which responses must be 10 made; revising administrative penalties; amending s. 11 624.315, F.S.; requiring the office to annually and 12 quarterly create and publish specified reports 13 relating to the enforcement of insurer compliance; 14 requiring the office to submit such reports to the 15 Financial Services Commission and the Legislature by 16 specified dates; amending s. 624.316, F.S.; revising 17 the minimum intervals in which the office must examine 18 certain insurers; revising periods that examinations 19 must cover; requiring the office to create a specified 20 methodology for scheduling examinations of insurers; 21 specifying requirements for such methodology; 22 providing construction; specifying requirements for 23 the office in proposing rules to the commission; 24 authorizing the commission to adopt rules; amending s. 25 624.3161, F.S.; revising requirements and conditions 26 for certain insurer market conduct examinations after 27 a hurricane; requiring the office to create, and the 28 commission to adopt by rule, a specified selection 29 methodology for examinations; specifying requirements 30 for such methodology; specifying rulemaking 31 requirements; specifying requirements, procedures, and 32 conditions for the offices review of a liability 33 insurers claims-handling practices and the imposition 34 of enhanced enforcement penalties; defining the term 35 actual notice; providing construction; amending s. 36 624.4211, F.S.; revising administrative fines the 37 office may impose in lieu of revocation or suspension; 38 creating s. 624.4301, F.S.; specifying requirements 39 for residential property insurers temporarily 40 suspending writing new policies in notifying the 41 office; providing applicability and construction; 42 authorizing the commission to adopt rules; creating s. 43 624.805, F.S.; specifying factors the office may 44 consider in determining whether the continued 45 operation of an insurer may be deemed to be hazardous 46 to its policyholders or creditors or to the general 47 public; specifying actions the office may take in 48 determining an insurers financial condition; 49 authorizing the office to issue an order requiring a 50 hazardous insurer to take specified actions; providing 51 construction; authorizing the office to issue 52 immediate final orders; amending s. 624.81, F.S.; 53 deleting certain rulemaking authority of the 54 commission; creating s. 624.865, F.S.; authorizing the 55 commission to adopt certain rules; amending s. 56 628.8015, F.S.; conforming provisions to changes made 57 by the act; amending s. 626.207, F.S.; revising a 58 condition for disqualification of an insurance 59 representative applicant or licensee; amending s. 60 626.9521, F.S.; revising and specifying applicable 61 fines for unfair methods of competition and unfair or 62 deceptive acts or practices; amending s. 626.9541, 63 F.S.; adding an unfair claim settlement practice by an 64 insurer; prohibiting an officer or a director of an 65 impaired insurer from receiving a bonus from such 66 insurer or from certain holding companies or 67 affiliates; defining the term bonus; providing a 68 criminal penalty; amending s. 626.989, F.S.; revising 69 a reporting requirement for the departments Division 70 of Investigative and Forensic Services; revising a 71 requirement for state attorneys or other prosecuting 72 agencies having jurisdiction to inform the division 73 under certain circumstances; requiring the division to 74 submit an annual performance report to the 75 Legislature; specifying requirements for the report; 76 amending s. 627.0629, F.S.; specifying requirements 77 for residential property insurers in providing certain 78 hurricane mitigation discount information to 79 policyholders in a specified manner; specifying 80 requirements for the office in reevaluating and 81 updating certain fixtures and construction techniques; 82 deleting obsolete dates; amending s. 627.351, F.S.; 83 prohibiting Citizens Property Insurance Corporation 84 from determining that a risk is ineligible for 85 coverage solely on a specified basis; providing 86 applicability; amending s. 627.410, F.S.; prohibiting 87 the office from exempting specified insurers from form 88 filing requirements for a specified period; providing 89 construction; creating s. 627.4108, F.S.; specifying 90 requirements for residential property insurers in 91 creating and using claims-handling manuals; 92 authorizing the office to request submission of such 93 manuals; providing requirements for such submissions; 94 requiring authorized insurers to annually submit a 95 certified attestation to the office; authorizing the 96 commission to adopt emergency rules; amending s. 97 627.4133, F.S.; revising prohibitions on insurers 98 against the cancellation or nonrenewal of property 99 insurance policies; revising applicability; providing 100 construction; defining the term insurer; amending s. 101 627.701, F.S.; providing that if a roof deductible is 102 applied under a personal lines residential property 103 insurance policy, no other deductible under the policy 104 may be applied to any other loss to the property 105 caused by the same covered peril; amending s. 106 627.70132, F.S.; providing for the tolling of certain 107 timeframes for filing notices of property insurance 108 claims by named insureds who are servicemembers under 109 specified circumstances; providing construction 110 relating to chapter 2022-271, Laws of Florida; 111 requiring residential property insurers and motor 112 vehicle insurer rate filings to reflect certain 113 projected savings and reductions in expenses; 114 specifying requirements for the office in reviewing 115 rate filings; authorizing the office to develop 116 certain methodology and data and contract with a 117 vendor for a certain purpose; providing applicability; 118 providing appropriations; providing an effective date. 119 120 Be It Enacted by the Legislature of the State of Florida: 121 122 Section 1.Section 624.115, Florida Statutes, is created to 123 read: 124 624.115Referral of criminal violations.If, during an 125 investigation or examination, the office has reason to believe 126 that any criminal law of this state has or may have been 127 violated, the office shall refer any relevant records and 128 information to the Division of Investigative and Forensic 129 Services, state or federal law enforcement, or prosecutorial 130 agencies, as applicable, and shall provide investigative 131 assistance to those agencies as required. 132 Section 2.Paragraph (b) of subsection (10) of section 133 624.307, Florida Statutes, is amended to read: 134 624.307General powers; duties. 135 (10) 136 (b)Any person licensed or issued a certificate of 137 authority by the department or the office shall respond, in 138 writing or electronically, to the division within 14 20 days 139 after receipt of a written request for documents and information 140 from the division concerning a consumer complaint. The response 141 must address the issues and allegations raised in the complaint 142 and include any requested documents concerning the consumer 143 complaint not subject to attorney-client or work-product 144 privilege. The division may impose an administrative penalty for 145 failure to comply with this paragraph of up to $5,000 $2,500 per 146 violation upon any entity licensed by the department or the 147 office and $250 for the first violation, $500 for the second 148 violation, and up to $1,000 per for the third or subsequent 149 violation by upon any individual licensed by the department or 150 the office. 151 Section 3.Present subsection (4) of section 624.315, 152 Florida Statutes, is redesignated as subsection (5), and a new 153 subsection (4) is added to that section, to read: 154 624.315Annual reports; quarterly reports report. 155 (4)(a)The office shall create a report detailing all 156 actions of the office to enforce insurer compliance with this 157 code and all rules and orders of the office or department during 158 the previous year. For each of the following, the report must 159 detail the insurer or other licensee or registrant against whom 160 such action was taken; whether the office found any violation of 161 law or rule by such party, and, if so, detail such violation; 162 and the resolution of such action, including any penalties 163 imposed by the office. The report must be published on the 164 website of the office and submitted to the commission, the 165 President of the Senate, the Speaker of the House of 166 Representatives, and the legislative committees with 167 jurisdiction over matters of insurance on or before January 31 168 of each year. The report must include, but need not be limited 169 to: 170 1.The revocation, denial, or suspension of any license or 171 registration issued by the office. 172 2.All actions taken pursuant to s. 624.310. 173 3.Fines imposed by the office for violations of this code. 174 4.Consent orders entered into by the office. 175 5.Examinations and investigations conducted and completed 176 by the office pursuant to ss. 624.316 and 624.3161. 177 6.Investigations conducted and completed, by line of 178 insurance, for which the office found violations of law or rule 179 but did not take enforcement action. 180 (b)Each quarter, the office shall create a report 181 detailing all actions of the office to enforce insurer 182 compliance during the previous quarter. The report must include, 183 but need not be limited to, the subjects that must be included 184 in the annual report under paragraph (a). The report must be 185 submitted to the commission, the President of the Senate, the 186 Speaker of the House of Representatives, and the legislative 187 committees with jurisdiction over matters of insurance. The 188 report is due on or before April 30, July 31, October 31, and 189 January 31, respectively, for the immediately preceding quarter. 190 The report due January 31 may be included within the annual 191 report required under paragraph (a). 192 (c)The office need not include within any report required 193 under this subsection information that would violate any 194 confidentiality provision included within any agreement, order, 195 or consent order entered into or adopted by the office. 196 Section 4.Paragraph (a) of subsection (2) of section 197 624.316, Florida Statutes, is amended, and subsections (3) and 198 (4) are added to that section, to read: 199 624.316Examination of insurers. 200 (2)(a)Except as provided in paragraph (f), the office may 201 examine each insurer as often as may be warranted for the 202 protection of the policyholders and in the public interest, but 203 must, at a minimum, examine: 204 1.High-risk insurers at least once every 3 years. 205 2.Average- and low-risk insurers at least once every and 206 shall examine each domestic insurer not less frequently than 207 once every 5 years. 208 209 The examination shall cover the number of fiscal years since the 210 last examination preceding 5 fiscal years of the insurer, except 211 for examinations of low-risk insurers, in which case the 212 examination need only cover at least the preceding 5 fiscal 213 years, and shall be commenced within 12 months after the end of 214 the most recent fiscal year being covered by the examination. 215 The examination may cover any period of the insurers operations 216 since the last previous examination. The examination may include 217 examination of events subsequent to the end of the most recent 218 fiscal year and the events of any prior period that affect the 219 present financial condition of the insurer. 220 (3)The office shall create, and the commission shall adopt 221 by rule, a risk-based selection methodology for scheduling 222 examinations of insurers subject to this section. Except as 223 otherwise specified in subsection (2), this requirement does not 224 restrict the authority of the office to conduct examinations 225 under this section as often as it deems advisable. Such 226 methodology must include all of the following: 227 (a)Use of a risk-focused analysis to prioritize financial 228 examinations of insurers when such reporting indicates a decline 229 in the insurers financial condition. 230 (b)Consideration of: 231 1.The level of capitalization and identification of 232 unfavorable trends; 233 2.Negative trends in profitability or cash flow from 234 operations; 235 3.National Association of Insurance Commissioners 236 Insurance Regulatory Information System ratio results; 237 4.Risk-based capital and risk-based capital trend test 238 results; 239 5.The structure and complexity of the insurer; 240 6.Changes in the insurers officers or board of directors; 241 7.Changes in the insurers business strategy or 242 operations; 243 8.Findings and recommendations from an examination made 244 pursuant to this section or s. 624.3161; 245 9.Current or pending regulatory actions by the office or 246 the department; 247 10.Information obtained from other regulatory agencies or 248 independent organization ratings and reports; and 249 11.The impact of an insurers insolvency on policyholders 250 of the insurer and the public generally. 251 (c)Prioritization of property insurers for which the 252 office identifies significant concerns about an insurers 253 solvency pursuant to s. 627.7154. 254 (d)Any other matters the office deems necessary to 255 consider for the protection of the public. 256 (4)The office shall present any proposed rules 257 implementing this section to the commission no later than 258 October 1, 2023. In addition to the methodology required by this 259 section, such rule or rules must include a plan to implement the 260 examination schedule in subsection (2). To facilitate the 261 development of the methodology for scheduling examinations 262 pursuant to this section, the commission may also adopt by rule 263 the National Association of Insurance Commissioners Financial 264 Analysis Handbook, to the extent that the handbook is consistent 265 with and does not negate the requirements of this section. 266 Section 5.Subsection (7) of section 624.3161, Florida 267 Statutes, is amended, and subsections (8) and (9) are added to 268 that section, to read: 269 624.3161Market conduct examinations. 270 (7)Notwithstanding subsection (1), any authorized insurer 271 transacting residential property insurance business in this 272 state: 273 (a)May be subject to an additional market conduct 274 examination after a hurricane if, at any time more than 90 days 275 after the end of the hurricane, the insurer: 276 (a)is among the top 20 percent of insurers based upon a 277 calculation of the ratio of hurricane-related property insurance 278 claims filed to the number of property insurance policies in 279 force; 280 (b)Must be subject to a market conduct examination after a 281 hurricane if, at any time more than 90 days after the end of the 282 hurricane, the insurer: 283 1.Is among the top 20 percent of insurers based upon a 284 calculation of the ratio of hurricane claim-related consumer 285 complaints made about that insurer to the department to the 286 insurers total number of hurricane-related claims; 287 2.Is among the top 20 percent of insurers based upon a 288 calculation of the ratio of hurricane claims closed without 289 payment to the insurers total number of hurricane claims on 290 policies providing wind or windstorm coverage; 291 3.(c)Has made significant payments to its managing general 292 agent since the hurricane; or 293 4.(d)Is identified by the office as necessitating a market 294 conduct exam for any other reason. 295 296 All relevant criteria under this section and s. 624.316 shall be 297 applied to the market conduct examination under this subsection. 298 Such an examination must be initiated within 18 months after the 299 landfall of a hurricane that results in an executive order or a 300 state of emergency issued by the Governor. The requirements of 301 this subsection do not limit the authority of the office to 302 conduct at any time a market conduct examination of a property 303 insurer in the aftermath of a hurricane. This subsection does 304 not require the office to conduct multiple market conduct 305 examinations of the same insurer when multiple hurricanes make 306 landfall in this state in a single calendar year. An examination 307 of an insurer under this subsection must also include an 308 examination of its managing general agent as if it were the 309 insurer. 310 (8)The office shall create, and the commission shall adopt 311 by rule, a selection methodology for scheduling and conducting 312 market conduct examinations of insurers and other entities 313 regulated by the office. This requirement does not restrict the 314 authority of the office to conduct market conduct examinations 315 as often as it deems necessary. Such selection methodology must 316 prioritize market conduct examinations of insurers and other 317 entities regulated by the office to whom any of the following 318 conditions applies: 319 (a)An insurance regulator in another state has initiated 320 or taken regulatory action against the insurer or entity 321 regarding an act or omission of such insurer or entity which, if 322 committed in this state, would constitute a violation of the 323 laws of this state or any rule or order of the office or 324 department. 325 (b)Given the insurers market share in this state, the 326 department or the office has received a disproportionate number 327 of the following types of claims-handling complaints against the 328 insurer: 329 1.Failure to timely communicate with respect to claims; 330 2.Failure to timely pay claims; 331 3.Untimely payments giving rise to the payment of 332 statutory interest; 333 4.Failure to adjust and pay claims in accordance with the 334 terms and conditions of the policy or contract and in compliance 335 with state law; 336 5.Violations of part IX of chapter 626, the Unfair 337 Insurance Trade Practices Act; 338 6.Failure to use licensed and duly appointed claims 339 adjusters; 340 7.Failure to maintain reasonable claims records; or 341 8.Failure to adhere to the companys claims-handling 342 manual. 343 (c)The results of a National Association of Insurance 344 Commissioners Market Conduct Annual Statement indicate that the 345 insurer is a negative outlier with regard to particular metrics. 346 (d)There is evidence that the insurer is violating or has 347 violated the Unfair Insurance Trade Practices Act. 348 (e)The insurer meets the criteria in subsection (7). 349 (f)Any other conditions the office deems necessary for the 350 protection of the public. 351 352 The office shall present the proposed rule required by this 353 subsection to the commission no later than October 1, 2023. In 354 addition to the methodology required by this subsection, the 355 rule must provide criteria for how the office, in coordination 356 with the department, will determine what constitutes a 357 disproportionate number of claims-handling complaints described 358 in paragraph (b). 359 (9)If the office concludes through an examination pursuant 360 to this section that an insurer providing liability coverage in 361 this state exhibits a pattern or practice of violations of the 362 Florida Insurance Code during any investigation or examination 363 of the insurer, the office must review the insurers claims 364 handling practices to determine if the insurer should be subject 365 to the enhanced enforcement penalties of this subsection. 366 (a)A liability insurer may be subject to enhanced 367 enforcement penalties if the office reviews the insurers 368 claims-handling practices and finds a pattern or practice of the 369 insurer failing to do the following when responding to covered 370 liability claims under an insurance policy, after receiving 371 actual notice of such claims: 372 1.Assign a licensed and appointed insurance adjuster to 373 investigate whether coverage is provided under the policy and 374 diligently attempt to resolve any questions concerning the 375 extent of the insureds coverage. 376 2.Evaluate the claim fairly, honestly, and with due regard 377 for the interests of the insured based on available information. 378 3.Request from the insured or claimant additional relevant 379 information the insurer reasonably deems necessary to evaluate 380 whether to settle a claim. 381 4.Conduct all oral and written communications with the 382 insured with honesty and candor. 383 5.Make reasonable efforts to explain to persons not 384 represented by counsel matters requiring expertise beyond the 385 level normally expected of a layperson with no training in 386 insurance or claims-handling issues. 387 6.Retain all written and recorded communications and 388 create and retain a summary of all verbal communications in a 389 reasonable manner for a period of not less than 2 years after 390 the later of the entry of a final judgment against the insured 391 in excess of policy limits or, if an extracontractual claim is 392 made, the conclusion of that claim and any related appeals. 393 7.Within 30 days after a request, provide the insured with 394 all communications related to the insurers handling of the 395 claim which are not privileged as to the insured. 396 8.Provide, upon request and at the insurers expense, 397 reasonable accommodations necessary to communicate effectively 398 with an insured covered under the Americans with Disabilities 399 Act. 400 9.When handling a third-party claim, communicate each of 401 the following to the insured: 402 a.The identity of any other person or entity the insurer 403 has reason to believe may be liable. 404 b.The insurers final and completed estimate of the claim. 405 c.The possibility of an excess judgment. 406 d.The insureds right to secure personal counsel at his or 407 her own expense. 408 e.That the insured should cooperate with the insurer, 409 including providing information required by the insurer because 410 of a settlement opportunity or in accordance with the policy. 411 f.Any formal settlement demands or offers to settle by the 412 claimant and any offers to settle on behalf of the insured. 413 10.Respond to any request for insurance information in 414 compliance with s. 626.9372 or s. 627.4137, as applicable. 415 11.Seek to obtain a general release of each insured in 416 making any settlement offer to a third-party claimant. 417 12.Take reasonable measures to preserve any documentary, 418 photographic, and forensic evidence as needed for the defense of 419 the liability claim if it appears likely that the insureds 420 liability exposure is greater than policy limits and the insurer 421 fails to secure a general release in favor of the insured. 422 13.Comply with subsections (1) and (2), if applicable. 423 14.Comply with the Unfair Insurance Trade Practices Act. 424 (b)As used in this subsection, the term actual notice 425 means the insurers receipt of notice of an incident or a loss 426 that could give rise to a covered claim that is communicated to 427 the insurer or an agent of the insurer: 428 1.By any manner permitted by the policy or other documents 429 provided to the insured by the insurer; 430 2.Through the claims link on the insurers website; or 431 3.Through the e-mail address designated by the insurer 432 under s. 624.422. 433 (c)In reviewing claims-handling practices, it is relevant 434 whether the insured, claimant, and any representative of the 435 insured or claimant were acting reasonably toward the insurer in 436 furnishing information regarding the claim, in making demands of 437 the insurer, in setting deadlines, and in attempting to settle 438 the claim. Such matters include whether: 439 1.The insured cooperated with the insurer in the defense 440 of the claim and in making settlements by taking reasonable 441 actions requested by the claimant or required by the policy 442 which are necessary to assist the insurer in settling a covered 443 claim, including: 444 a.Executing affidavits regarding the facts within the 445 insureds knowledge regarding the covered loss; and 446 b.Providing documents, including, if reasonably necessary 447 to settle a covered claim valued in excess of policy limits and 448 upon the request of the claimant, a summary of the insureds 449 assets, liabilities, obligations, and other insurance policies 450 that may provide coverage for the claim and the name and contact 451 information of the insureds employer when the insured is a 452 natural person who was acting in the course and scope of 453 employment when the incident giving rise to the claim occurred. 454 2.The claimant and any claimants representative: 455 a.Acted honestly in furnishing information regarding the 456 claim; 457 b.Acted reasonably in setting deadlines; and 458 c.Refrained from taking actions that may be reasonably 459 expected to prevent an insurer from accepting the settlement 460 demand, such as providing insufficient detail within the demand, 461 providing unreasonable deadlines for acceptance of the demand, 462 or including unreasonable conditions to settlement. 463 (d)In addition to authorized penalties for a liability 464 insurer that the office has determined has a pattern or practice 465 of violations of the Florida Insurance Code at the conclusion of 466 any investigation or examination, the office may impose enhanced 467 enforcement penalties for insurer claims-handling practices that 468 fail to meet the review standards of this subsection. Such 469 enhanced enforcement penalties include, but are not limited to, 470 administrative fines that are subject to a 2.0 multiplier and 471 fines that exceed the limits on fine amounts and aggregate fine 472 amounts provided for under this code. 473 (e)This subsection does not create a civil cause of 474 action, a civil remedy under s. 624.155, or an unfair trade 475 practice under s. 626.9541. 476 Section 6.Section 624.4211, Florida Statutes, is amended 477 to read: 478 624.4211Administrative fine in lieu of suspension or 479 revocation. 480 (1)If the office finds that one or more grounds exist for 481 the discretionary revocation or suspension of a certificate of 482 authority issued under this chapter, the office may, in lieu of 483 such revocation or suspension, impose a fine upon the insurer. 484 (2)(a)With respect to a any nonwillful violation, such 485 fine may not exceed: 486 1.Twenty-five thousand dollars per violation, up to an 487 aggregate amount of $100,000 for all nonwillful violations 488 arising out of the same action, related to a covered loss or 489 claim caused by an emergency for which the Governor declared a 490 state of emergency pursuant to s. 252.36. 491 2.Twelve thousand five hundred dollars $5,000 per 492 violation, up to. In no event shall such fine exceed an 493 aggregate amount of $50,000 $20,000 for all other nonwillful 494 violations arising out of the same action. 495 (b)If an insurer discovers a nonwillful violation, the 496 insurer shall correct the violation and, if restitution is due, 497 make restitution to all affected persons. Such restitution shall 498 include interest at 12 percent per year from either the date of 499 the violation or the date of inception of the affected persons 500 policy, at the insurers option. The restitution may be a credit 501 against future premiums due, provided that interest accumulates 502 until the premiums are due. If the amount of restitution due to 503 any person is $50 or more and the insurer wishes to credit it 504 against future premiums, it shall notify such person that she or 505 he may receive a check instead of a credit. If the credit is on 506 a policy that is not renewed, the insurer shall pay the 507 restitution to the person to whom it is due. 508 (3)(a)With respect to a any knowing and willful violation 509 of a lawful order or rule of the office or commission or a 510 provision of this code, the office may impose a fine upon the 511 insurer in an amount not to exceed: 512 1.Two hundred thousand dollars for each such violation, up 513 to an aggregate amount of $1 million for all knowing and willful 514 violations arising out of the same action, related to a covered 515 loss or claim caused by an emergency for which the Governor 516 declared a state of emergency pursuant to s. 252.36. 517 2.One hundred thousand dollars $40,000 for each such 518 violation, up to. In no event shall such fine exceed an 519 aggregate amount of $500,000 $200,000 for all other knowing and 520 willful violations arising out of the same action. 521 (b)In addition to such fines, the insurer shall make 522 restitution when due in accordance with subsection (2). 523 (4)The failure of an insurer to make restitution when due 524 as required under this section constitutes a willful violation 525 of this code. However, if an insurer in good faith is uncertain 526 as to whether any restitution is due or as to the amount of such 527 restitution, it shall promptly notify the office of the 528 circumstances; and the failure to make restitution pending a 529 determination thereof shall not constitute a violation of this 530 code. 531 Section 7.Section 624.4301, Florida Statutes, is created 532 to read: 533 624.4301Notice of temporary discontinuance of writing new 534 residential property insurance policies. 535 (1)Any authorized insurer, before temporarily suspending 536 writing new residential property insurance policies in this 537 state, must give notice to the office of the insurers reasons 538 for such action, the effective dates of the temporary 539 suspension, and the proposed communication to its agents. Such 540 notice must be provided on a form approved by the office and 541 adopted by the commission. The insurer shall submit such notice 542 to the office the earlier of 20 business days before the 543 effective date of the temporary suspension of writing or 5 544 business days before notifying its agents of the temporary 545 suspension of writing. The insurer must provide any other 546 information requested by the office related to the insurers 547 temporary suspension of writing. The requirements of this 548 section do not: 549 (a)Apply to a temporary suspension of writing new business 550 made in response to: 551 1.A hurricane that may make landfall in this state if such 552 temporary suspension ceases within 72 hours after hurricane 553 conditions are no longer present in this state; or 554 2.Any other natural emergency as defined in s. 252.34(8) 555 which impacts one or more counties and is the subject of a 556 declared state of emergency by any local, state, or federal 557 authority, if such temporary suspension applies only to the 558 affected counties and ceases within 72 hours after such natural 559 emergency is no longer present in those counties. 560 (b)Require such insurers to obtain the approval of the 561 office before temporarily suspending writing new residential 562 property insurance policies in this state. 563 (2)The commission may adopt rules to administer this 564 section. 565 Section 8.Section 624.805, Florida Statutes, is created to 566 read: 567 624.805Hazardous insurer standards; offices evaluation 568 and enforcement authority; immediate final order. 569 (1)In determining whether the continued operation of any 570 authorized insurer transacting business in this state may be 571 deemed to be hazardous to its policyholders or creditors or to 572 the general public, the office may consider, in the totality of 573 the circumstances of such insurer, any of the following: 574 (a)Adverse findings reported in financial condition or 575 market conduct examination reports, audit reports, or actuarial 576 opinions, reports, or summaries. 577 (b)The National Association of Insurance Commissioners 578 Insurance Regulatory Information System and its other financial 579 analysis solvency tools and reports. 580 (c)Whether the insurer has made adequate provisions, 581 according to presently accepted actuarial standards of practice, 582 for the anticipated cash flows required to cover its contractual 583 obligations and related expenses. 584 (d)The ability of an assuming reinsurer to perform and 585 whether the insurers reinsurance program provides sufficient 586 protection for the insurers remaining surplus after taking into 587 account the insurers cash flow and the lines of insurance 588 written, as well as the financial condition of the assuming 589 reinsurer. 590 (e)Whether the insurers operating loss in the last 12 591 month period, including, but not limited to, net capital gain or 592 loss, change in nonadmitted assets, and cash dividends paid to 593 shareholders is greater than 50 percent of the insurers 594 remaining surplus as regards policyholders in excess of the 595 minimum required. 596 (f)Whether the insurers operating loss in the last 12 597 month period, excluding net capital gains, is greater than 20 598 percent of the insurers remaining surplus as regards 599 policyholders in excess of the minimum required. 600 (g)Whether a reinsurer, an obligor, or any entity within 601 the insurers insurance holding company system is insolvent, 602 threatened with insolvency, or delinquent in payment of its 603 monetary or other obligations, and which in the opinion of the 604 office may affect the solvency of the insurer. 605 (h)Contingent liabilities, pledges, or guaranties that 606 individually or collectively involve a total amount that in the 607 opinion of the office may affect the solvency of the insurer. 608 (i)Whether any affiliate, as defined in s. 624.10(1), of 609 the insurer is delinquent in the transmitting to, or payment of, 610 net premiums to the insurer. 611 (j)The age and collectability of receivables. 612 (k)Whether the management of the insurer, including 613 officers, directors, or any other person who directly or 614 indirectly controls the operation of the insurer, fails to 615 possess and demonstrate the competence, fitness, and reputation 616 deemed necessary to serve the insurer in such position. 617 (l)Whether management of the insurer has failed to respond 618 to inquiries relative to the condition of the insurer or has 619 furnished false or misleading information to the office 620 concerning an inquiry. 621 (m)Whether the insurer has failed to meet financial and 622 holding company filing requirements in the absence of a reason 623 satisfactory to the office. 624 (n)Whether management of the insurer has filed any false 625 or misleading sworn financial statement, has released a false or 626 misleading financial statement to lending institutions or to the 627 general public, has made a false or misleading entry, or has 628 omitted an entry of material amount in the books of the insurer. 629 (o)Whether the insurer has grown so rapidly and to such an 630 extent that it lacks adequate financial and administrative 631 capacity to meet its obligations in a timely manner. 632 (p)Whether the insurer has experienced, or will experience 633 in the foreseeable future, cash flow or liquidity problems. 634 (q)Whether management has established reserves that do not 635 comply with minimum standards established by state insurance 636 laws and regulations, statutory accounting standards, sound 637 actuarial principles, and standards of practice. 638 (r)Whether management persistently engages in material 639 under-reserving that results in adverse development. 640 (s)Whether transactions among affiliates, subsidiaries, or 641 controlling persons for which the insurer receives assets or 642 capital gains, or both, do not provide sufficient value, 643 liquidity, or diversity to assure the insurers ability to meet 644 its outstanding obligations as they mature. 645 (t)The ratio of the annual premium volume to surplus or of 646 its liabilities to surplus in relation to loss experience, the 647 kinds of risks insured, or both. 648 (u)Whether the insurers asset portfolio, when viewed in 649 light of current economic conditions and indications of 650 financial or operational leverage, is of sufficient value, 651 liquidity, or diversity to assure the companys ability to meet 652 its outstanding obligations as they mature. 653 (v)Whether the excess of surplus as regards policyholders 654 above the insurers statutorily required surplus as regards 655 policyholders has decreased by more than 50 percent in the 656 preceding 12-month period. 657 (w)As to a residential property insurer, whether it has 658 sufficient capital, surplus, and reinsurance to withstand 659 significant weather events, including, but not limited to, 660 hurricanes. 661 (x)Whether the insurers required surplus, capital, or 662 capital stock is impaired to an extent prohibited by law. 663 (y)Whether the insurer continues to write new business 664 when it has not maintained the required surplus or capital. 665 (z)Whether the insurer moves to dissolve or liquidate 666 without first having made provisions satisfactory to the office 667 for liabilities arising from insurance policies issued by the 668 insurer. 669 (aa)Whether the insurer has incurred substantial new debt, 670 has had to rely on frequent or substantial capital infusions, or 671 has a highly leveraged balance sheet. 672 (bb)Whether the insurer relies increasingly on other 673 entities, including, but not limited to, affiliates, third-party 674 administrators, managing general agents, or management 675 companies. 676 (cc)Whether the insurer meets one or more of the grounds 677 in s. 631.051 for the appointment of the department as receiver. 678 (dd)Any other finding determined by the office to be 679 hazardous to the insurers policyholders or creditors or to the 680 general public. 681 (2)For the purposes of making a determination of an 682 insurers financial condition under the Florida Insurance Code, 683 the office may: 684 (a)Disregard any credit or amount receivable resulting 685 from transactions with a reinsurer that is insolvent, impaired, 686 or otherwise subject to a delinquency proceeding; 687 (b)Make appropriate adjustments, including disallowance to 688 asset values attributable to investments in or transactions with 689 parents, subsidiaries, or affiliates, consistent with the 690 National Association of Insurance Commissioners Accounting 691 Practices and Procedures Manual and state laws and rules; 692 (c)Refuse to recognize the stated value of accounts 693 receivable if the ability to collect receivables is highly 694 speculative in view of the age of the account or the financial 695 condition of the debtor; or 696 (d)Increase the insurers liability, in an amount equal to 697 any contingent liability, pledge, or guarantee not otherwise 698 included, if there is a substantial risk that the insurer will 699 be called upon to meet the obligation undertaken within the next 700 12-month period. 701 (3)If the office determines that the continued operations 702 of an insurer authorized to transact business in this state may 703 be hazardous to its policyholders or creditors or to the general 704 public, the office may issue an order requiring the insurer to 705 do any of the following: 706 (a)Reduce the total amount of present and potential 707 liability for policy benefits by procuring additional 708 reinsurance. 709 (b)Reduce, suspend, or limit the volume of business being 710 accepted or renewed. 711 (c)Reduce expenses by specified methods or amounts. 712 (d)Increase the insurers capital and surplus. 713 (e)Suspend or limit the declaration and payment of 714 dividends by an insurer to its stockholders or to its 715 policyholders. 716 (f)File reports in a form acceptable to the office 717 concerning the market value of the insurers assets. 718 (g)Limit or withdraw from certain investments or 719 discontinue certain investment practices to the extent the 720 office deems necessary. 721 (h)Document the adequacy of premium rates in relation to 722 the risks insured. 723 (i)File, in addition to regular annual statements, interim 724 financial reports on a form prescribed by the commission and 725 adopted by the National Association of Insurance Commissioners. 726 (j)Correct corporate governance practice deficiencies and 727 adopt and use governance practices acceptable to the office. 728 (k)Provide a business plan acceptable to the office in 729 order to continue to transact business in this state. 730 (l)Notwithstanding any other law limiting the frequency or 731 amount of rate adjustments, adjust rates for any non-life 732 insurance product written by the insurer which the office 733 considers necessary to improve the financial condition of the 734 insurer. 735 (4)This section may not be interpreted to limit the powers 736 granted to the office by any laws of this state, nor may it be 737 interpreted to supersede any laws of this state. 738 (5)The office may, pursuant to ss. 120.569 and 120.57, in 739 its discretion and without advance notice or hearing, issue an 740 immediate final order to any insurer requiring the actions 741 listed in subsection (3). 742 Section 9.Subsection (11) of section 624.81, Florida 743 Statutes, is amended to read: 744 624.81Notice to comply with written requirements of 745 office; noncompliance. 746 (11)The commission may adopt rules to define standards of 747 hazardous financial condition and corrective action 748 substantially similar to that indicated in the National 749 Association of Insurance Commissioners 1997 Model Regulation 750 to Define Standards and Commissioners Authority for Companies 751 Deemed to be in Hazardous Financial Condition, which are 752 necessary to implement the provisions of this part. 753 Section 10.Section 624.865, Florida Statutes, is created 754 to read: 755 624.865Rulemaking.The commission may adopt rules to 756 administer ss. 624.80-624.87. Such rules must protect the 757 interests of insureds, claimants, insurers, and the public. 758 Section 11.Paragraph (d) of subsection (2) and paragraph 759 (b) of subsection (3) of section 628.8015, Florida Statutes, are 760 amended to read: 761 628.8015Own-risk and solvency assessment; corporate 762 governance annual disclosure. 763 (2)OWN-RISK AND SOLVENCY ASSESSMENT. 764 (d)Exemption. 765 1.An insurer is exempt from the requirements of this 766 subsection if: 767 a.The insurer has annual direct written and unaffiliated 768 assumed premium, including international direct and assumed 769 premium, but excluding premiums reinsured with the Federal Crop 770 Insurance Corporation and the National Flood Insurance Program, 771 of less than $500 million; or 772 b.The insurer is a member of an insurance group and the 773 insurance group has annual direct written and unaffiliated 774 assumed premium, including international direct and assumed 775 premium, but excluding premiums reinsured with the Federal Crop 776 Insurance Corporation and the National Flood Insurance Program, 777 of less than $1 billion. 778 2.If an insurer is: 779 a.Exempt under sub-subparagraph 1.a., but the insurance 780 group of which the insurer is a member is not exempt under sub 781 subparagraph 1.b., the ORSA summary report must include every 782 insurer within the insurance group. The insurer may satisfy this 783 requirement by submitting more than one ORSA summary report for 784 any combination of insurers if any combination of reports 785 includes every insurer within the insurance group. 786 b.Not exempt under sub-subparagraph 1.a., but the 787 insurance group of which it is a member is exempt under sub 788 subparagraph 1.b., the insurer must submit to the office the 789 ORSA summary report applicable only to that insurer. 790 3.The office may require an exempt insurer to maintain a 791 risk management framework, conduct an ORSA, and file an ORSA 792 summary report: 793 a.Based on unique circumstances, including, but not 794 limited to, the type and volume of business written, ownership 795 and organizational structure, federal agency requests, and 796 international supervisor requests; 797 b.If the insurer has risk-based capital for a company 798 action level event pursuant to s. 624.4085(3), meets one or more 799 of the standards of an insurer deemed to be in hazardous 800 financial condition under s. 624.805 as defined in rules adopted 801 by the commission pursuant to s. 624.81(11), or exhibits 802 qualities of an insurer in hazardous financial condition as 803 determined by the office; or 804 c.If the office determines it is in the best interest of 805 the state. 806 4.If an exempt insurer becomes disqualified for an 807 exemption because of changes in premium as reported on the most 808 recent annual statement of the insurer or annual statements of 809 the insurers within the insurance group of which the insurer is 810 a member, the insurer must comply with the requirements of this 811 section effective 1 year after the year in which the insurer 812 exceeded the premium thresholds. 813 (3)CORPORATE GOVERNANCE ANNUAL DISCLOSURE. 814 (b)Disclosure requirement. 815 1.a.An insurer, or insurer member of an insurance group, 816 of which the office is the lead state regulator, as determined 817 by the procedures in the most recent National Association of 818 Insurance Commissioners Financial Analysis Handbook, shall 819 submit a corporate governance annual disclosure to the office by 820 June 1 of each calendar year. The initial corporate governance 821 annual disclosure must be submitted by December 31, 2018. 822 b.An insurer or insurance group not required to submit a 823 corporate governance annual disclosure under sub-subparagraph a. 824 shall do so at the request of the office, but not more than once 825 per calendar year. The insurer or insurance group shall notify 826 the office of the proposed submission date within 30 days after 827 the request of the office. 828 c.Before December 31, 2018, the office may require an 829 insurer or insurance group to provide a corporate governance 830 annual disclosure: 831 (I)Based on unique circumstances, including, but not 832 limited to, the type and volume of business written, the 833 ownership and organizational structure, federal agency requests, 834 and international supervisor requests; 835 (II)If the insurer has risk-based capital for a company 836 action level event pursuant to s. 624.4085(3), meets one or more 837 of the standards of an insurer deemed to be in hazardous 838 financial condition under s. 624.805 as defined in rules adopted 839 pursuant to s. 624.81(11), or exhibits qualities of an insurer 840 in hazardous financial condition as determined by the office; 841 (III)If the insurer is the member of an insurer group of 842 which the office acts as the lead state regulator as determined 843 by the procedures in the most recent National Association of 844 Insurance Commissioners Financial Analysis Handbook; or 845 (IV)If the office determines that it is in the best 846 interest of the state. 847 2.The chief executive officer or corporate secretary of 848 the insurer or the insurance group must sign the corporate 849 governance annual disclosure attesting that, to the best of his 850 or her knowledge and belief, the insurer has implemented the 851 corporate governance practices and provided a copy of the 852 disclosure to the board of directors or the appropriate board 853 committee. 854 3.a.Depending on the structure of its system of corporate 855 governance, the insurer or insurance group may provide corporate 856 governance information at one of the following levels: 857 (I)The ultimate controlling parent level; 858 (II)An intermediate holding company level; or 859 (III)The individual legal entity level. 860 b.The insurer or insurance group may make the corporate 861 governance annual disclosure at: 862 (I)The level used to determine the risk appetite of the 863 insurer or insurance group; 864 (II)The level at which the earnings, capital, liquidity, 865 operations, and reputation of the insurer are collectively 866 overseen and the supervision of those factors is coordinated and 867 exercised; or 868 (III)The level at which legal liability for failure of 869 general corporate governance duties would be placed. 870 871 An insurer or insurance group must indicate the level of 872 reporting used and explain any subsequent changes in the 873 reporting level. 874 4.The review of the corporate governance annual disclosure 875 and any additional requests for information shall be made 876 through the lead state as determined by the procedures in the 877 most recent National Association of Insurance Commissioners 878 Financial Analysis Handbook. 879 5.An insurer or insurance group may comply with this 880 paragraph by cross-referencing other existing relevant and 881 applicable documents, including, but not limited to, the ORSA 882 summary report, Holding Company Form B or F filings, Securities 883 and Exchange Commission proxy statements, or foreign regulatory 884 reporting requirements, if the documents contain information 885 substantially similar to the information described in paragraph 886 (c). The insurer or insurance group shall clearly identify and 887 reference the specific location of the relevant and applicable 888 information within the corporate governance annual disclosure 889 and attach the referenced document if it has not already been 890 filed with, or made available to, the office. 891 6.Each year following the initial filing of the corporate 892 governance annual disclosure, the insurer or insurance group 893 shall file an amended version of the previously filed corporate 894 governance annual disclosure indicating changes that have been 895 made. If changes have not been made in the previously filed 896 disclosure, the insurer or insurance group should so indicate. 897 Section 12.Paragraph (c) of subsection (3) of section 898 626.207, Florida Statutes, is amended to read: 899 626.207Disqualification of applicants and licensees; 900 penalties against licensees; rulemaking authority. 901 (3)An applicant who has been found guilty of or has 902 pleaded guilty or nolo contendere to a crime not included in 903 subsection (2), regardless of adjudication, is subject to: 904 (c)A 7-year disqualifying period for all misdemeanors 905 directly related to the financial services business or any 906 misdemeanor directly related to any violation of the Florida 907 Insurance Code. 908 Section 13.Subsections (2) and (3) of section 626.9521, 909 Florida Statutes, are amended to read: 910 626.9521Unfair methods of competition and unfair or 911 deceptive acts or practices prohibited; penalties. 912 (2)Except as provided in subsection (3), any person who 913 violates any provision of this part is subject to a fine in an 914 amount not greater than $12,500 $5,000 for each nonwillful 915 violation and not greater than $100,000 $40,000 for each willful 916 violation. Fines under this subsection imposed against an 917 insurer may not exceed an aggregate amount of $50,000 $20,000 918 for all nonwillful violations arising out of the same action or 919 an aggregate amount of $500,000 $200,000 for all willful 920 violations arising out of the same action. The fines may be 921 imposed in addition to any other applicable penalty. 922 (3)(a)If a person violates s. 626.9541(1)(l), the offense 923 known as twisting, or violates s. 626.9541(1)(aa), the offense 924 known as churning, the person commits a misdemeanor of the 925 first degree, punishable as provided in s. 775.082, and an 926 administrative fine not greater than $12,500 $5,000 shall be 927 imposed for each nonwillful violation or an administrative fine 928 not greater than $187,500 $75,000 shall be imposed for each 929 willful violation. To impose an administrative fine for a 930 willful violation under this paragraph, the practice of 931 churning or twisting must involve fraudulent conduct. 932 (b)If a person violates s. 626.9541(1)(ee) by willfully 933 submitting fraudulent signatures on an application or policy 934 related document, the person commits a felony of the third 935 degree, punishable as provided in s. 775.082, and an 936 administrative fine not greater than $5,000 shall be imposed for 937 each nonwillful violation or an administrative fine not greater 938 than $187,500 $75,000 shall be imposed for each willful 939 violation. 940 (c)If a person violates any provision of this part and 941 such violation is related to a covered loss or covered claim 942 caused by an emergency for which the Governor declared a state 943 of emergency pursuant to s. 252.36, such person is subject to a 944 fine in an amount not greater than $25,000 for each nonwillful 945 violation and not greater than $200,000 for each willful 946 violation. Fines imposed under this paragraph against an insurer 947 may not exceed an aggregate amount of $100,000 for all 948 nonwillful violations arising out of the same action or an 949 aggregate amount of $1 million for all willful violations 950 arising out of the same action. 951 (d)Administrative fines under paragraphs (a) and (b) this 952 subsection may not exceed an aggregate amount of $125,000 953 $50,000 for all nonwillful violations arising out of the same 954 action or an aggregate amount of $625,000 $250,000 for all 955 willful violations arising out of the same action. 956 Section 14.Paragraphs (i) and (w) of subsection (1) of 957 section 626.9541, Florida Statutes, are amended to read: 958 626.9541Unfair methods of competition and unfair or 959 deceptive acts or practices defined. 960 (1)UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE 961 ACTS.The following are defined as unfair methods of competition 962 and unfair or deceptive acts or practices: 963 (i)Unfair claim settlement practices. 964 1.Attempting to settle claims on the basis of an 965 application, when serving as a binder or intended to become a 966 part of the policy, or any other material document which was 967 altered without notice to, or knowledge or consent of, the 968 insured; 969 2.A material misrepresentation made to an insured or any 970 other person having an interest in the proceeds payable under 971 such contract or policy, for the purpose and with the intent of 972 effecting settlement of such claims, loss, or damage under such 973 contract or policy on less favorable terms than those provided 974 in, and contemplated by, such contract or policy; 975 3.Committing or performing with such frequency as to 976 indicate a general business practice any of the following: 977 a.Failing to adopt and implement standards for the proper 978 investigation of claims; 979 b.Misrepresenting pertinent facts or insurance policy 980 provisions relating to coverages at issue; 981 c.Failing to acknowledge and act promptly upon 982 communications with respect to claims; 983 d.Denying claims without conducting reasonable 984 investigations based upon available information; 985 e.Failing to affirm or deny full or partial coverage of 986 claims, and, as to partial coverage, the dollar amount or extent 987 of coverage, or failing to provide a written statement that the 988 claim is being investigated, upon the written request of the 989 insured within 30 days after proof-of-loss statements have been 990 completed; 991 f.Failing to promptly provide a reasonable explanation in 992 writing to the insured of the basis in the insurance policy, in 993 relation to the facts or applicable law, for denial of a claim 994 or for the offer of a compromise settlement; 995 g.Failing to promptly notify the insured of any additional 996 information necessary for the processing of a claim; 997 h.Failing to clearly explain the nature of the requested 998 information and the reasons why such information is necessary; 999 or 1000 i.Failing to pay personal injury protection insurance 1001 claims within the time periods required by s. 627.736(4)(b). The 1002 office may order the insurer to pay restitution to a 1003 policyholder, medical provider, or other claimant, including 1004 interest at a rate consistent with the amount set forth in s. 1005 55.03(1), for the time period within which an insurer fails to 1006 pay claims as required by law. Restitution is in addition to any 1007 other penalties allowed by law, including, but not limited to, 1008 the suspension of the insurers certificate of authority; or 1009 j.Altering or amending an insurance adjusters report 1010 without: 1011 (I)Providing a detailed explanation as to why any change 1012 that has the effect of reducing the estimate of the loss was 1013 made; and 1014 (II)Including on the report or as an addendum to the 1015 report a detailed list of all changes made to the report and the 1016 identity of the person who ordered each change; or 1017 (III)Retaining all versions of the report, and including 1018 within each such version, for each change made within such 1019 version of the report, the identity of each person who made or 1020 ordered such change; or 1021 4.Failing to pay undisputed amounts of partial or full 1022 benefits owed under first-party property insurance policies 1023 within 60 days after an insurer receives notice of a residential 1024 property insurance claim, determines the amounts of partial or 1025 full benefits, and agrees to coverage, unless payment of the 1026 undisputed benefits is prevented by factors beyond the control 1027 of the insurer as defined in s. 627.70131(5). 1028 (w)Soliciting or accepting new or renewal insurance risks 1029 by insolvent or impaired insurer or receipt of certain bonuses 1030 by an officer or director of an insolvent insurer prohibited; 1031 penalty. 1032 1.Whether or not delinquency proceedings as to the insurer 1033 have been or are to be initiated, but while such insolvency or 1034 impairment exists, no director or officer of an insurer, except 1035 with the written permission of the office, shall authorize or 1036 permit the insurer to solicit or accept new or renewal insurance 1037 risks in this state after such director or officer knew, or 1038 reasonably should have known, that the insurer was insolvent or 1039 impaired. 1040 2.Regardless of whether delinquency proceedings as to the 1041 insurer have been or are to be initiated, but while such 1042 insolvency or impairment exists, a director or an officer of an 1043 impaired insurer may not receive a bonus from such insurer, nor 1044 may such director or officer receive a bonus from a holding 1045 company or an affiliate that shares common ownership or control 1046 with such insurer. 1047 3.As used in this paragraph, the term: 1048 a.Bonus means a payment, in addition to an officers or 1049 a directors usual compensation, which is in addition to any 1050 amounts contracted for or otherwise legally due. 1051 b.Impaired includes impairment of capital or surplus, as 1052 defined in s. 631.011(12) and (13). 1053 4.2.Any such director or officer, upon conviction of a 1054 violation of this paragraph, commits is guilty of a felony of 1055 the third degree, punishable as provided in s. 775.082, s. 1056 775.083, or s. 775.084. 1057 Section 15.Subsection (6) of section 626.989, Florida 1058 Statutes, is amended, and subsection (10) is added to that 1059 section, to read: 1060 626.989Investigation by department or Division of 1061 Investigative and Forensic Services; compliance; immunity; 1062 confidential information; reports to division; division 1063 investigators power of arrest. 1064 (6)(a)Any person, other than an insurer, agent, or other 1065 person licensed under the code, or an employee thereof, having 1066 knowledge or who believes that a fraudulent insurance act or any 1067 other act or practice which, upon conviction, constitutes a 1068 felony or a misdemeanor under the code, or under s. 817.234, is 1069 being or has been committed may send to the Division of 1070 Investigative and Forensic Services a report or information 1071 pertinent to such knowledge or belief and such additional 1072 information relative thereto as the department may request. Any 1073 professional practitioner licensed or regulated by the 1074 Department of Business and Professional Regulation, except as 1075 otherwise provided by law, any medical review committee as 1076 defined in s. 766.101, any private medical review committee, and 1077 any insurer, agent, or other person licensed under the code, or 1078 an employee thereof, having knowledge or who believes that a 1079 fraudulent insurance act or any other act or practice which, 1080 upon conviction, constitutes a felony or a misdemeanor under the 1081 code, or under s. 817.234, is being or has been committed shall 1082 send to the Division of Investigative and Forensic Services a 1083 report or information pertinent to such knowledge or belief and 1084 such additional information relative thereto as the department 1085 may require. 1086 (b)The Division of Investigative and Forensic Services 1087 shall review such information or reports and select such 1088 information or reports as, in its judgment, may require further 1089 investigation. It shall then cause an independent examination of 1090 the facts surrounding such information or report to be made to 1091 determine the extent, if any, to which a fraudulent insurance 1092 act or any other act or practice which, upon conviction, 1093 constitutes a felony or a misdemeanor under the code, or under 1094 s. 817.234, is being committed. 1095 (c)The Division of Investigative and Forensic Services 1096 shall report any alleged violations of law which its 1097 investigations disclose to the appropriate licensing agency and 1098 state attorney or other prosecuting agency having jurisdiction, 1099 including, but not limited to, the statewide prosecutor for 1100 crimes that impact two or more judicial circuits in this state, 1101 with respect to any such violation, as provided in s. 624.310. 1102 If prosecution by the state attorney or other prosecuting agency 1103 having jurisdiction with respect to such violation is not begun 1104 within 60 days of the divisions report, The state attorney or 1105 other prosecuting agency having jurisdiction with respect to 1106 such violation shall inform the division of any the reasons why 1107 prosecution of such violation was: 1108 1.Not begun within 60 days after the divisions report; or 1109 2.Declined for the lack of prosecution. 1110 (10)The Division of Investigative and Forensic Services 1111 Bureau of Insurance Fraud shall prepare and submit a performance 1112 report to the President of the Senate and the Speaker of the 1113 House of Representatives by September 1 of each year. The annual 1114 report must include, but need not be limited to: 1115 (a)The total number of initial referrals received, cases 1116 opened, cases presented for prosecution, cases closed, and 1117 convictions resulting from cases presented for prosecution by 1118 the Bureau of Insurance Fraud, by type of insurance fraud and 1119 circuit. 1120 (b)The number of referrals received from insurers, the 1121 office, and the Division of Consumer Services of the department, 1122 and the outcome of those referrals. 1123 (c)The number of investigations undertaken by the Bureau 1124 of Insurance Fraud which were not the result of a referral from 1125 an insurer and the outcome of those referrals. 1126 (d)The number of investigations that resulted in a 1127 referral to a regulatory agency and the disposition of those 1128 referrals. 1129 (e)The number of cases presented by the Bureau of 1130 Insurance Fraud which local prosecutors or the statewide 1131 prosecutor declined to prosecute and the reasons provided for 1132 declining prosecution. 1133 (f)A summary of the annual report required under s. 1134 626.9896. 1135 (g)The total number of employees assigned to the Bureau of 1136 Insurance Fraud, delineated by location of staff assigned, and 1137 the number and location of employees assigned to the Bureau of 1138 Insurance Fraud who were assigned to work other types of fraud 1139 cases. 1140 (h)The average caseload and turnaround time by type of 1141 case for each investigator. 1142 (i)The training provided during the year to insurance 1143 fraud investigators. 1144 Section 16.Subsections (1), (3), and (4) of section 1145 627.0629, Florida Statutes, are amended to read: 1146 627.0629Residential property insurance; rate filings. 1147 (1)It is the intent of the Legislature that insurers 1148 provide savings to consumers who install or implement windstorm 1149 damage mitigation techniques, alterations, or solutions to their 1150 properties to prevent windstorm losses. A rate filing for 1151 residential property insurance must include actuarially 1152 reasonable discounts, credits, or other rate differentials, or 1153 appropriate reductions in deductibles, for properties on which 1154 fixtures or construction techniques demonstrated to reduce the 1155 amount of loss in a windstorm have been installed or 1156 implemented. The fixtures or construction techniques must 1157 include, but are not limited to, fixtures or construction 1158 techniques that enhance roof strength, roof covering 1159 performance, roof-to-wall strength, wall-to-floor-to-foundation 1160 strength, opening protection, and window, door, and skylight 1161 strength. Credits, discounts, or other rate differentials, or 1162 appropriate reductions in deductibles, for fixtures and 1163 construction techniques that meet the minimum requirements of 1164 the Florida Building Code must be included in the rate filing. 1165 The office shall determine the discounts, credits, other rate 1166 differentials, and appropriate reductions in deductibles that 1167 reflect the full actuarial value of such revaluation, which may 1168 be used by insurers in rate filings. Effective October 1, 2023, 1169 each insurer subject to the requirements of this section must 1170 provide information on the insurers website describing the 1171 hurricane mitigation discounts available to policyholders. Such 1172 information must be accessible on, or through a hyperlink 1173 located on, the home page of the insurers website or the 1174 primary page of the insurers website for property insurance 1175 policyholders or applicants for such coverage in this state. On 1176 or before January 1, 2025, and every 5 years thereafter, the 1177 office shall reevaluate and update the fixtures or construction 1178 techniques demonstrated to reduce the amount of loss in a 1179 windstorm and the discounts, credits, other rate differentials, 1180 and appropriate reductions in deductibles that reflect the full 1181 actuarial value of such fixtures or construction techniques. The 1182 office shall adopt rules and forms necessitated by such 1183 reevaluation. 1184 (3)A rate filing made on or after July 1, 1995, for mobile 1185 home owner insurance must include appropriate discounts, 1186 credits, or other rate differentials for mobile homes 1187 constructed to comply with American Society of Civil Engineers 1188 Standard ANSI/ASCE 7-88, adopted by the United States Department 1189 of Housing and Urban Development on July 13, 1994, and that also 1190 comply with all applicable tie-down requirements provided by 1191 state law. 1192 (4)The Legislature finds that separate consideration and 1193 notice of hurricane insurance premiums will assist consumers by 1194 providing greater assurance that hurricane premiums are lawful 1195 and by providing more complete information regarding the 1196 components of property insurance premiums. Effective January 1, 1197 1997, A rate filing for residential property insurance shall be 1198 separated into two components, rates for hurricane coverage and 1199 rates for all other coverages. A premium notice reflecting a 1200 rate implemented on the basis of such a filing shall separately 1201 indicate the premium for hurricane coverage and the premium for 1202 all other coverages. 1203 Section 17.Paragraph (ll) is added to subsection (6) of 1204 section 627.351, Florida Statutes, to read: 1205 627.351Insurance risk apportionment plans. 1206 (6)CITIZENS PROPERTY INSURANCE CORPORATION. 1207 (ll)The corporation may not determine that a risk is 1208 ineligible for coverage with the corporation solely because such 1209 risk has unrepaired damage caused by a covered loss that is the 1210 subject of a claim that has been filed with the Florida 1211 Insurance Guaranty Association. This paragraph applies to a risk 1212 until the earlier of 24 months after the date the Florida 1213 Insurance Guaranty Association began servicing such claim or the 1214 Florida Insurance Guaranty Association closes the claim. 1215 Section 18.Subsection (4) of section 627.410, Florida 1216 Statutes, is amended to read: 1217 627.410Filing, approval of forms. 1218 (4)The office may, by order, exempt from the requirements 1219 of this section for so long as it deems proper any insurance 1220 document or form or type thereof as specified in such order, to 1221 which, in its opinion, this section may not practicably be 1222 applied, or the filing and approval of which are, in its 1223 opinion, not desirable or necessary for the protection of the 1224 public. The office may not exempt from the requirements of this 1225 section the insurance documents or forms of any insurer, against 1226 whom the office enters a final order determining that such 1227 insurer violated any provision of this code, for a period of 36 1228 months after the date of such order, and may not be deemed 1229 approved under subsection (2). 1230 Section 19.Section 627.4108, Florida Statutes, is created 1231 to read: 1232 627.4108Claims-handling manuals; submission; attestation. 1233 (1)Each authorized residential property insurer conducting 1234 business in this state must create and use a claims-handling 1235 manual that provides guidelines and procedures and that complies 1236 with the requirements of this code and, at a minimum, comports 1237 to usual and customary industry claims-handling practices. Such 1238 manual must include guidelines and procedures for: 1239 (a)Initially receiving and acknowledging initial receipt 1240 of the claim and reviewing and evaluating the claim; 1241 (b)Communicating with policyholders, beginning with the 1242 receipt of the claim and continuing until closure of the claim; 1243 (c)Setting the claim reserve; 1244 (d)Investigating the claim, including conducting 1245 inspections of the property that is the subject of the claim; 1246 (e)Making preliminary estimates and estimates of the 1247 covered damages to the insured property and communicating such 1248 estimates to the policyholder; 1249 (f)The payment, partial payment, or denial of the claim 1250 and communicating such claim decision to the policyholder; 1251 (g)Closing claims; and 1252 (h)Any aspect of the claims-handling process which the 1253 office determines should be included in the claims-handling 1254 manual in order to: 1255 1.Comply with the laws of this state or rules or orders of 1256 the office or department; 1257 2.Ensure that the claims-handling manual, at a minimum, 1258 comports with usual and customary industry claims-handling 1259 guidelines; or 1260 3.Protect policyholders of the insurer or the general 1261 public. 1262 (2)At any time, the office may request that a residential 1263 property insurer submit a physical or electronic copy of the 1264 insurers currently applicable, or otherwise specifically 1265 requested, claims-handling manuals. Upon receiving such a 1266 request, a residential property insurer must submit to the 1267 office within 5 business days: 1268 (a)A true and correct copy of each claims-handling manual 1269 requested; and 1270 (b)An attestation, on a form prescribed by the commission, 1271 that certifies: 1272 1.That the insurer has provided a true and correct copy of 1273 each currently applicable, or otherwise specifically requested, 1274 claims-handling manual; and 1275 2.The timeframe for which each submitted claims-handling 1276 manual was or is in effect. 1277 (3)(a)Annually, each authorized residential property 1278 insurer must certify and attest, on a form prescribed by the 1279 commission, that: 1280 1.Each of the insurers current claims-handling manuals 1281 complies with the requirements of this code and comports to, at 1282 a minimum, usual and customary industry claims-handling 1283 practices; and 1284 2.The insurer maintains adequate resources available to 1285 implement the requirements of each of its claims-handling 1286 manuals at all times, including during natural disasters and 1287 catastrophic events. 1288 (b)Such attestation must be submitted to the office: 1289 1.On or before August 1, 2023; and 1290 2.Annually thereafter, on or before May 1 of each calendar 1291 year. 1292 (4)The commission is authorized, and all conditions are 1293 deemed met, to adopt emergency rules under s. 120.54(4), for the 1294 purpose of implementing this section. Notwithstanding any other 1295 law, emergency rules adopted under this section are effective 1296 for 6 months after adoption and may be renewed during the 1297 pendency of procedures to adopt permanent rules addressing the 1298 subject of the emergency rules. 1299 Section 20.Paragraph (d) of subsection (2) of section 1300 627.4133, Florida Statutes, is amended to read: 1301 627.4133Notice of cancellation, nonrenewal, or renewal 1302 premium. 1303 (2)With respect to any personal lines or commercial 1304 residential property insurance policy, including, but not 1305 limited to, any homeowner, mobile home owner, farmowner, 1306 condominium association, condominium unit owner, apartment 1307 building, or other policy covering a residential structure or 1308 its contents: 1309 (d)1.Upon a declaration of an emergency pursuant to s. 1310 252.36 and the filing of an order by the Commissioner of 1311 Insurance Regulation, An authorized insurer may not cancel or 1312 nonrenew a personal residential or commercial residential 1313 property insurance policy covering a dwelling or residential 1314 property located in this state: 1315 a.For a period of 90 days after the dwelling or 1316 residential property has been repaired, if such property which 1317 has been damaged as a result of a hurricane or wind loss that is 1318 the subject of the declaration of emergency pursuant to s. 1319 252.36 and the filing of an order by the Commissioner of 1320 Insurance Regulation for a period of 90 days after the dwelling 1321 or residential property has been repaired. A structure is deemed 1322 to be repaired when substantially completed and restored to the 1323 extent that it is insurable by another authorized insurer that 1324 is writing policies in this state. 1325 b.Until the earlier of when the dwelling or residential 1326 property has been repaired or 1 year after the insurer issues 1327 the final claim payment, if such property was damaged by any 1328 covered peril and sub-subparagraph a. does not apply. 1329 2.However, an insurer or agent may cancel or nonrenew such 1330 a policy prior to the repair of the dwelling or residential 1331 property: 1332 a.Upon 10 days notice for nonpayment of premium; or 1333 b.Upon 45 days notice: 1334 (I)For a material misstatement or fraud related to the 1335 claim; 1336 (II)If the insurer determines that the insured has 1337 unreasonably caused a delay in the repair of the dwelling; or 1338 (III)If the insurer has paid policy limits. 1339 3.If the insurer elects to nonrenew a policy covering a 1340 property that has been damaged, the insurer shall provide at 1341 least 90 days notice to the insured that the insurer intends to 1342 nonrenew the policy 90 days after the dwelling or residential 1343 property has been repaired. Nothing in this paragraph shall 1344 prevent the insurer from canceling or nonrenewing the policy 90 1345 days after the repairs are complete for the same reasons the 1346 insurer would otherwise have canceled or nonrenewed the policy 1347 but for the limitations of subparagraph 1. The Financial 1348 Services Commission may adopt rules, and the Commissioner of 1349 Insurance Regulation may issue orders, necessary to implement 1350 this paragraph. 1351 4.This paragraph shall also apply to personal residential 1352 and commercial residential policies covering property that was 1353 damaged as the result of Hurricane Ian or Hurricane Nicole 1354 Tropical Storm Bonnie, Hurricane Charley, Hurricane Frances, 1355 Hurricane Ivan, or Hurricane Jeanne. 1356 5.For purposes of this paragraph: 1357 a.A structure is deemed to be repaired when substantially 1358 completed and restored to the extent that it is insurable by 1359 another authorized insurer writing policies in this state. 1360 b.The term insurer means an authorized insurer. 1361 Section 21.Paragraph (a) of subsection (10) of section 1362 627.701, Florida Statutes, is amended to read: 1363 627.701Liability of insureds; coinsurance; deductibles. 1364 (10)(a)Notwithstanding any other provision of law, an 1365 insurer issuing a personal lines residential property insurance 1366 policy may include in such policy a separate roof deductible 1367 that meets all of the following requirements: 1368 1.The insurer has complied with the offer requirements 1369 under subsection (7) regarding a deductible applicable to losses 1370 from perils other than a hurricane. 1371 2.The roof deductible may not exceed the lesser of 2 1372 percent of the Coverage A limit of the policy or 50 percent of 1373 the cost to replace the roof. 1374 3.The premium that a policyholder is charged for the 1375 policy includes an actuarially sound credit or premium discount 1376 for the roof deductible. 1377 4.The roof deductible applies only to a claim adjusted on 1378 a replacement cost basis. 1379 5.The roof deductible does not apply to any of the 1380 following events: 1381 a.A total loss to a primary structure in accordance with 1382 the valued policy law under s. 627.702 which is caused by a 1383 covered peril. 1384 b.A roof loss resulting from a hurricane as defined in s. 1385 627.4025(2)(c). 1386 c.A roof loss resulting from a tree fall or other hazard 1387 that damages the roof and punctures the roof deck. 1388 d.A roof loss requiring the repair of less than 50 percent 1389 of the roof. 1390 1391 If a roof deductible is applied, no other deductible under the 1392 policy may be applied to the loss or to any other loss to the 1393 property caused by the same covered peril. 1394 Section 22.Subsection (2) of section 627.70132, Florida 1395 Statutes, is amended to read: 1396 627.70132Notice of property insurance claim. 1397 (2)A claim or reopened claim, but not a supplemental 1398 claim, under an insurance policy that provides property 1399 insurance, as defined in s. 624.604, including a property 1400 insurance policy issued by an eligible surplus lines insurer, 1401 for loss or damage caused by any peril is barred unless notice 1402 of the claim was given to the insurer in accordance with the 1403 terms of the policy within 1 year after the date of loss. A 1404 supplemental claim is barred unless notice of the supplemental 1405 claim was given to the insurer in accordance with the terms of 1406 the policy within 18 months after the date of loss. The time 1407 limitations of this subsection are tolled during any term of 1408 deployment to a combat zone or combat support posting which 1409 materially affects the ability of a named insured who is a 1410 servicemember as defined in s. 250.01 to file a claim, 1411 supplemental claim, or reopened claim. 1412 Section 23.Chapter 2022-271, Laws of Florida, shall not be 1413 construed to impair any right under an insurance contract in 1414 effect on or before the effective date of that chapter law. To 1415 the extent that chapter 2022-271, Laws of Florida, affects a 1416 right under an insurance contract, that chapter law applies to 1417 an insurance contract issued or renewed after the applicable 1418 effective date provided by the chapter law. This section is 1419 intended to clarify existing law and is remedial in nature. 1420 Section 24.(1)Every residential property insurer and 1421 every motor vehicle insurer rate filing made or pending with the 1422 Office of Insurance Regulation on or after July 1, 2023, must 1423 reflect the projected savings or reduction in claim frequency, 1424 claim severity, and loss adjustment expenses, including for 1425 attorney fees, payment of attorney fees to claimants, and any 1426 other reduction actuarially indicated, due to the combined 1427 effect of the applicable provisions of chapters 2021-77, 2022 1428 268, 2022-271, and 2023-15, Laws of Florida, in order to ensure 1429 that rates for such insurance accurately reflect the risk of 1430 providing such insurance. 1431 (2)The Office of Insurance Regulation must consider in its 1432 review of such rate filings the projected savings or reduction 1433 in claim frequency, claim severity, and loss adjustment 1434 expenses, including for attorney fees, payment of attorney fees 1435 to claimants, and any other reduction actuarially indicated, due 1436 to the combined effect of the applicable provisions of chapters 1437 2021-77, 2022-268, 2022-271, and 2023-15, Laws of Florida. The 1438 office may develop methodology and data that incorporate 1439 generally accepted actuarial techniques and standards to be used 1440 in its review of rate filings governed by this section. The 1441 office may contract with an appropriate vendor to advise the 1442 office in developing such methodology and data to consider. Such 1443 methodology and data are not intended to create a mandatory 1444 minimum rate decrease for all residential property insurers and 1445 motor vehicle insurers, respectively, but rather to ensure that 1446 the rates for such coverage meet the requirements of s. 627.062, 1447 Florida Statutes, and thus are not excessive, inadequate, or 1448 unfairly discriminatory and allow such insurers a reasonable 1449 rate of return. 1450 (3)This section does not apply to rate filings made 1451 pursuant to s. 627.062(2)(k), Florida Statutes. 1452 (4)For the 2023-2024 fiscal year, the sum of $500,000 in 1453 nonrecurring funds is appropriated from the Insurance Regulatory 1454 Trust Fund in the Department of Financial Services to the Office 1455 of Insurance Regulation to implement this section. 1456 Section 25.For the 2023-2024 fiscal year, 18 full-time 1457 equivalent positions with associated salary rate of 1,116,500 1458 are authorized and the sum of $1,879,129 in recurring funds and 1459 $185,086 in nonrecurring funds is appropriated from the 1460 Insurance Regulatory Trust Fund to the Office of Insurance 1461 Regulation to implement this act. 1462 Section 26.For the 2023-2024 fiscal year, seven full-time 1463 equivalent positions with associated salary rate of 350,000 are 1464 authorized and the sum of $574,036 in recurring funds and 1465 $33,467 in nonrecurring funds is appropriated from the Insurance 1466 Regulatory Trust Fund to the Department of Financial Services to 1467 implement this act. 1468 Section 27.This act shall take effect July 1, 2023.