Florida 2024 Regular Session

Florida House Bill H1015 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
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3	3	HB 1015 2024
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7	7	CODING: Words stricken are deletions; words underlined are additions.
8	8	hb1015-00
9	9	Page 1 of 95
10	10	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
11	11
12	12
13	13
14	14	A bill to be entitled 1
15	15	An act relating to insurance; amending s. 624.424, 2
16	16	F.S.; requiring insurers and insurer groups in the 3
17	17	state to file certain supplemental reports monthly, 4
18	18	rather than quarterly; revising the information 5
19	19	required to be included in such reports; amending s. 6
20	20	624.4305, F.S.; providing rulemaking authority; 7
21	21	amending s. 626.9201, F.S.; prohibiting insurers from 8
22	22	cancelling and nonrenewing certain personal 9
23	23	residential and commercial residential property 10
24	24	insurance policies for a specified period under 11
25	25	certain circumstances; providing exceptions; providing 12
26	26	construction; providing rulemaking authority; 13
27	27	authorizing orders to be issued for a specified 14
28	28	purpose; amending s. 627.062, F.S.; providing 15
29	29	requirements for averaged models if such models are 16
30	30	used for insurance rates ; amending s. 627.351, F.S.; 17
31	31	revising the property insurance policies issued by 18
32	32	Citizens Property Insurance Corporation which are not 19
33	33	subject to rate increase limitations; amending s. 20
34	34	628.011, F.S.; revising the scope of provisions 21
35	35	relating to insurance st ock insurers, mutual insurers, 22
36	36	and captive insurers; amending s. 628.061, F.S.; 23
37	37	revising the circumstances under which the Office of 24
38	38	Insurance Regulation investigate certain entities; 25
39	39
40	40	HB 1015 2024
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42	42
43	43
44	44	CODING: Words stricken are deletions; words underlined are additions.
45	45	hb1015-00
46	46	Page 2 of 95
47	47	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
48	48
49	49
50	50
51	51	amending s. 628.801, F.S.; updating the source for 26
52	52	requirement and stand ards for certain insurance 27
53	53	registration and regulation rules; removing obsolete 28
54	54	dates; providing rulemaking authority; creating part I 29
55	55	of ch. 629, F.S., entitled "Reciprocal Insurers"; 30
56	56	amending s. 629.011, F.S.; providing definitions; 31
57	57	repealing s. 629.021, F.S., relating to the definition 32
58	58	of "reciprocal insurer"; amending s. 629.051, F.S.; 33
59	59	removing a nonapplicability provision; repealing s. 34
60	60	629.061, F.S., relating to attorney in fact of 35
61	61	reciprocal insurers; amending s. 629.071, F.S.; 36
62	62	providing requirements for surplus for reciprocal 37
63	63	insurers, rather than requirements for surplus for 38
64	64	domestic reciprocal insurers; amending s. 629.081, 39
65	65	F.S.; providing requirements for applications to 40
66	66	organize domestic reciprocal insurers; requiring the 41
67	67	office to review such app lications in accordance with 42
68	68	specified provisions; authorizing a minimum number of 43
69	69	people to apply for a reciprocal certificate of 44
70	70	authority under certain circumstances; revising the 45
71	71	requirements for the declarations for such 46
72	72	applications; requiring applic ation fees; amending s. 47
73	73	629.091, F.S.; requiring that reciprocal certificates 48
74	74	of authority, rather than certificates of authority, 49
75	75	be issued to certain entities; amending s. 629.101, 50
76	76
77	77	HB 1015 2024
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79	79
80	80
81	81	CODING: Words stricken are deletions; words underlined are additions.
82	82	hb1015-00
83	83	Page 3 of 95
84	84	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
85	85
86	86
87	87
88	88	F.S.; providing additional information that certain 51
89	89	powers of attorney mu st provide; amending s. 629.111, 52
90	90	F.S.; conforming a provision to changes made by the 53
91	91	act; amending s. 629.121, F.S.; conforming a provision 54
92	92	to changes made by the act; increasing the amount of 55
93	93	bond that attorneys of reciprocal insurers must file 56
94	94	with the office; amending s. 629.161, F.S.; 57
95	95	authorizing reciprocal insurers to borrow money for 58
96	96	specified purposes; providing construction for loan 59
97	97	interests; prohibiting such loans and interests from 60
98	98	forming a part of the insurers' legal liabilities; 61
99	99	requiring such loans and interests to be shown in 62
100	100	financial statements; requiring such loans to be 63
101	101	approved by the office; providing requirements for the 64
102	102	approval process; requiring the office to disapprove 65
103	103	proposed loans and agreements under certain 66
104	104	circumstances; providing circumstances under which 67
105	105	such loans must be repaid; requiring such repayments 68
106	106	to be approved by the office; providing 69
107	107	nonapplicability; removing provisions relating to 70
108	108	attorneys and other parties advancing funds to 71
109	109	domestic reciprocal insurers; amen ding s. 629.171, 72
110	110	F.S.; providing requirements for annual statements of 73
111	111	reciprocal insurers to be made and filed; amending s. 74
112	112	629.191, F.S.; providing that rights for certain 75
113	113
114	114	HB 1015 2024
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116	116
117	117
118	118	CODING: Words stricken are deletions; words underlined are additions.
119	119	hb1015-00
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121	121	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
122	122
123	123
124	124
125	125	applications, contracts, and memberships are for 76
126	126	reciprocal insurers, rather than domestic, foreign and 77
127	127	alien reciprocal insurers; amending s. 629.201, F.S.; 78
128	128	conforming a provision to changes made by the act; 79
129	129	creating s. 629.225, F.S.; prohibiting specified 80
130	130	acquisitions of certain voting securities under 81
131	131	certain circumstances; providing exceptions; providing 82
132	132	requirements for acquisition notices and applications 83
133	133	with the office; prohibiting acquiring persons from 84
134	134	making material changes during the pendency of the 85
135	135	office's review; authorizing requests for proceedings; 86
136	136	providing circumstanc es under which the office may 87
137	137	disapprove or approve acquisitions; providing that 88
138	138	votes in contravention of specified provisions are not 89
139	139	valid; providing that acquisitions contrary to 90
140	140	specified provisions are void; authorizing circuit 91
141	141	courts to enforce spec ified provisions under certain 92
142	142	circumstances; providing that certain entities are 93
143	143	deemed to have submit themselves to the administrative 94
144	144	jurisdiction of the office and the jurisdiction of the 95
145	145	circuit court under certain circumstances; providing 96
146	146	construction; authorizing filing of disclaimers of 97
147	147	control; authorizing the office to order certain 98
148	148	persons to cease acquisition and divest themselves of 99
149	149	stocks and ownership interests under certain 100
150	150
151	151	HB 1015 2024
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153	153
154	154
155	155	CODING: Words stricken are deletions; words underlined are additions.
156	156	hb1015-00
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158	158	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
159	159
160	160
161	161
162	162	circumstances; providing penalties; creating s. 101
163	163	629.227, F.S.; provi ding requirements for background 102
164	164	information for applications with the office to 103
165	165	organize domestic reciprocal insurers or to request 104
166	166	approval for securities acquisitions; amending s. 105
167	167	629.231, F.S.; conforming provisions to changes made 106
168	168	by the act; authoriz ing the office to revoke the 107
169	169	authorization for assessable reciprocal insurers to 108
170	170	convert to nonassessable reciprocal insurers; amending 109
171	171	ss. 629.241, 629.251, 629.271, and 629.281; conforming 110
172	172	provisions to changes made by the act; amending s. 111
173	173	629.291, F.S.; conforming provisions to changes made 112
174	174	by the act; prohibiting domestic stock insurers from 113
175	175	converting to reciprocal insurers; requiring certain 114
176	176	merging and conversion plans to be filed on forms 115
177	177	adopted by the office; authorizing assessable 116
178	178	reciprocal insurers to convert to nonassessable 117
179	179	reciprocal insurers under certain circumstances; 118
180	180	prohibiting insurers from issuing nonassessable 119
181	181	policies and converting assessable policies to 120
182	182	nonassessable policies under a specified circumstance; 121
183	183	providing applicability; amending s. 629.301, F.S.; 122
184	184	conforming a provision to changes made by the act; 123
185	185	providing that certain insurers are proceeded against 124
186	186	in a specified manner under certain circumstances; 125
187	187
188	188	HB 1015 2024
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190	190
191	191
192	192	CODING: Words stricken are deletions; words underlined are additions.
193	193	hb1015-00
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195	195	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
196	196
197	197
198	198
199	199	repealing ss. 629.401 and 629.520, F.S., relating to 126
200	200	insurance exchange and authority of limited reciprocal 127
201	201	insurer, respectively; creating s. 629.525, F.S.; 128
202	202	providing rulemaking authority; creating part II of 129
203	203	ch. 629, F.S., entitled "Insurance Exchanges"; 130
204	204	creating s. 629.601, F.S.; providing purposes for the 131
205	205	creation of one or more insurance exchanges; creating 132
206	206	s. 629.602, F.S.; providing definitions; creating s. 133
207	207	629.603, F.S.; requiring a committee to be appointed 134
208	208	for a specified purpose; providing membership and 135
209	209	duties of the committee; creating s. 629.604, F.S.; 136
210	210	providing initial Board of Governors and subsequent 137
211	211	Board of Governors; providing memberships; creating s. 138
212	212	629.605, F.S.; providing the constitution and bylaws 139
213	213	of the exchange; providing the establishment of a 140
214	214	security fund; providing requirements for the security 141
215	215	fund; providing construction; requiring that any 142
216	216	amendments to the constitution and bylaws of the 143
217	217	exchange be approved by the office; creating s. 144
218	218	629.606, F.S.; providing that certain insurance 145
219	219	exchanges are not subject to taxation; providing 146
220	220	exceptions; creating s. 629.607, F.S.; requiring the 147
221	221	exchange to reimburse the office for certain expenses; 148
222	222	requiring the office and the department to conduct 149
223	223	certain examinations under certain circumstances; 150
224	224
225	225	HB 1015 2024
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227	227
228	228
229	229	CODING: Words stricken are deletions; words underlined are additions.
230	230	hb1015-00
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232	232	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
233	233
234	234
235	235
236	236	providing penalties; creating s. 629.608, F.S.; 151
237	237	providing authority of examiners appointed by the 152
238	238	office for specified purposes; providing penalties for 153
239	239	refusing or failing to testify or for falsely 154
240	240	testifying under certain circumstances; providing that 155
241	241	certain persons are not exempt from certain 156
242	242	prosecution and pena lties; authorizing certain persons 157
243	243	to expressly waive certain immunity and privilege; 158
244	244	providing manners of serving subpoenas service and 159
245	245	making proof of service; providing witness fees and 160
246	246	mileage; amending s. 629.609, F.S.; requiring the 161
247	247	office and its examiners to make written reports of 162
248	248	examinations; providing requirements for such reports; 163
249	249	requiring that such reports be admissible in evidence; 164
250	250	authorizing the office to publish examinations results 165
251	251	under certain circumstances; requiring underwriting 166
252	252	members to file with the office certain affidavit; 167
253	253	providing requirements for such affidavits; creating 168
254	254	s. 629.611, F.S.; authorizing the office to employ 169
255	255	experts to reconstruct, rewrite, post, and balance 170
256	256	accounts and records of examined persons and entities 171
257	257	under certain circumstances; creating s. 629.612, 172
258	258	F.S.; providing applicability; requiring underwriting 173
259	259	members to maintain a minimum policyholder surplus; 174
260	260	providing investment requirements for paid -in capitals 175
261	261
262	262	HB 1015 2024
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264	264
265	265
266	266	CODING: Words stricken are deletions; words underlined are additions.
267	267	hb1015-00
268	268	Page 8 of 95
269	269	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
270	270
271	271
272	272
273	273	and such surpluses; requiring underwriting me mbers to 176
274	274	be members of the security fund of an exchange; 177
275	275	creating s. 629.613, F.S.; providing requirements for 178
276	276	the establishment and operation of underwriting 179
277	277	members; creating s. 629.614, F.S.; providing 180
278	278	requirements for notices of changes in management, 181
279	279	ownerships, and assets of underwriting members; 182
280	280	providing duties of the office relating to such 183
281	281	changes; creating s. 629.615, F.S.; providing 184
282	282	requirements for recordkeeping and annual reports for 185
283	283	underwriting members; creating s. 629.616, F.S.; 186
284	284	providing limitations on coverage written by 187
285	285	underwriting members; authorizing the office to 188
286	286	establish maximum gross and net annual premiums to be 189
287	287	written by underwriting members under certain 190
288	288	circumstances; providing a definition; providing 191
289	289	construction; creating s. 629.617, F.S.; providing 192
290	290	requirements for reserves of underwriting members; 193
291	291	providing a definition; creating s. 629.618, F.S.; 194
292	292	prohibiting underwriting members from distributing 195
293	293	profits in the form of cash or other assets; providing 196
294	294	an exception; providin g limits on such payments; 197
295	295	authorizing payments of stock dividends and lawful 198
296	296	dividends under certain circumstances; creating s. 199
297	297	629.619, F.S.; authorizing underwriters to borrow 200
298	298
299	299	HB 1015 2024
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301	301
302	302
303	303	CODING: Words stricken are deletions; words underlined are additions.
304	304	hb1015-00
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306	306	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
307	307
308	308
309	309
310	310	money for specified purposes; authorizing limits on 201
311	311	interests; prohibiting pa yments for commission and 202
312	312	promotion expenses in connection with the loans; 203
313	313	requiring the office's approval of use of surplus nots 204
314	314	and repayments; prohibiting such loans and interests 205
315	315	to form a part of the underwriting members' legal 206
316	316	liabilities; providing an exception; requiring such 207
317	317	loans and interests to be included in financial 208
318	318	statements; creating s. 629.6201, F.S.; providing 209
319	319	construction and applicability of improperly issued 210
320	320	policies, riders, endorsements, and contracts; 211
321	321	creating s. 629.621, F.S.; pro viding timeframes for 212
322	322	the satisfaction of court judgments and decrees for 213
323	323	the recovery of money against underwriting members; 214
324	324	authorizing the office to prohibiting underwriting 215
325	325	members from transacting business under certain 216
326	326	circumstances; providing requir ements for proof of 217
327	327	satisfaction of court judgments and decrees; creating 218
328	328	s. 629.622, F.S.; providing actions that the office 219
329	329	may take in cases of insurer insolvency or for 220
330	330	rehabilitation and liquidation; creating s. 629.623, 221
331	331	F.S.; prohibiting members, ass ociated brokers, and 222
332	332	affiliated persons from engaging in certain conduct; 223
333	333	providing penalties and fines; providing terms and 224
334	334	conditions of such penalties and fines; creating s. 225
335	335
336	336	HB 1015 2024
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340	340	CODING: Words stricken are deletions; words underlined are additions.
341	341	hb1015-00
342	342	Page 10 of 95
343	343	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
344	344
345	345
346	346
347	347	629.624, F.S.; providing disposition of fines; 226
348	348	requiring members and associate brokers to be 227
349	349	suspended under certain circumstances; creating s. 228
350	350	629.625, F.S.; requiring suspended members and 229
351	351	associate brokers to be deprived of all rights and 230
352	352	privileges; authorizing the office to proceed against 231
353	353	such persons for offenses committed or to reinstate 232
354	354	such persons; creating s. 629.626, F.S.; requiring the 233
355	355	office to impose the same material obligations, 234
356	356	prohibitions, and restrictions as those imposed by 235
357	357	other states, jurisdictions, and countries upon the 236
358	358	exchanges and the agents and represen tatives of 237
359	359	exchanges from such states, jurisdictions, and 238
360	360	countries; creating s. 629.627, F.S.; providing 239
361	361	applicability of certain state laws on specified 240
362	362	agents; providing construction and liability for 241
363	363	underwriting members that have assumed risks as to 242
364	364	surplus lines coverage; creating s. 629.628, F.S.; 243
365	365	providing requirements for background information for 244
366	366	notices of changes in management, ownership, or assets 245
367	367	of underwriting members; creating s. 628.629, F.S.; 246
368	368	requiring that actions, requirements, and con straints 247
369	369	imposed by the office reduce and offset similar 248
370	370	actions, requirements, and constraints of exchanges; 249
371	371	creating s. 629.6301, F.S.; restricting member 250
372	372
373	373	HB 1015 2024
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375	375
376	376
377	377	CODING: Words stricken are deletions; words underlined are additions.
378	378	hb1015-00
379	379	Page 11 of 95
380	380	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
381	381
382	382
383	383
384	384	ownerships; creating s. 629.631, F.S.; prohibiting 251
385	385	investments in underwriting managers by certain 252
386	386	persons; creating s. 629.632, F.S.; prohibiting 253
387	387	underwriting members from accepting reinsurance on an 254
388	388	assumed basis from certain entities; prohibiting 255
389	389	broker members and management companies from placing 256
390	390	reinsurance from such entities with underwriting 257
391	391	members; creating s. 629.633, F.S.; providing 258
392	392	rulemaking authority; creating 629.634, F.S.; 259
393	393	prohibiting Florida state security and guaranty funds 260
394	394	from covering the performance of the contractual 261
395	395	obligations of exchanges and their members; amending 262
396	396	ss. 163.01, 624.45, and 626.9531, F.S.; conforming 263
397	397	cross-references; providing effective dates for 264
398	398	certain provisions relating to reciprocal insurer 265
399	399	surpluses and attorney bonds; providing an effective 266
400	400	date. 267
401	401	268
402	402	Be It Enacted by the Legislature of the State of Flori da: 269
403	403	270
404	404	Section 1. Paragraph (a) of subsection (10) of section 271
405	405	624.424, Florida Statutes, is amended to read: 272
406	406	624.424 Annual statement and other information. — 273
407	407	(10)(a) Each insurer or insurer group doing business in 274
408	408	this state shall file on a monthly quarterly basis in 275
409	409
410	410	HB 1015 2024
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412	412
413	413
414	414	CODING: Words stricken are deletions; words underlined are additions.
415	415	hb1015-00
416	416	Page 12 of 95
417	417	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
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419	419
420	420
421	421	conjunction with financial reports required by paragraph (1)(a) 276
422	422	a supplemental report on an individual and group basis on a form 277
423	423	prescribed by the commission with information on personal lines 278
424	424	and commercial lines residential property ins urance policies in 279
425	425	this state. The supplemental report shall include separate 280
426	426	information for personal lines property policies and for 281
427	427	commercial lines property policies and totals for each item 282
428	428	specified, including premiums written for each of the propert y 283
429	429	lines of business as described in ss. 215.555(2)(c) and 284
430	430	627.351(6)(a). The report shall include the following 285
431	431	information for each zip code county on a monthly basis : 286
432	432	1. Total number of policies in force at the end of each 287
433	433	month. 288
434	434	2. Total number of p olicies canceled. 289
435	435	3. Total number of policies nonrenewed. 290
436	436	4. Number of policies canceled due to hurricane risk. 291
437	437	5. Number of policies nonrenewed due to hurricane risk. 292
438	438	6. Number of new policies written. 293
439	439	7. Total dollar value of structure exposure under policies 294
440	440	that include wind coverage. 295
441	441	8. Number of policies that exclude wind coverage. 296
442	442	9. Number of claims open each month. 297
443	443	10. Number of claims closed each month. 298
444	444	11. Number of claims pending each month. 299
445	445	12. Number of claims in which either the insurer or 300
446	446
447	447	HB 1015 2024
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454	454	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
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456	456
457	457
458	458	insured invoked any form of alternative dispute resolution, and 301
459	459	specifying which form of alternative dispute resolution was 302
460	460	used. 303
461	461	Section 2. Section 624.4305, Florida Statutes, is amended 304
462	462	to read: 305
463	463	624.4305 Nonrenewal of residential property insurance 306
464	464	policies.—Any insurer planning to nonrenew more than 10,000 307
465	465	residential property insurance policies in this state within a 308
466	466	12-month period shall give notice in writing to the Office of 309
467	467	Insurance Regulation for informational purposes 90 days before 310
468	468	the issuance of any notices of nonrenewal. The notice provided 311
469	469	to the office must set forth the insurer's reasons for such 312
470	470	action, the effective dates of nonrenewal, and any arrangements 313
471	471	made for other insurers to offer coverage to affected 314
472	472	policyholders. The commission may adopt rules to administer this 315
473	473	section. 316
474	474	Section 3. Subsection (2) of section 626.9201, Florida 317
475	475	Statutes, is amended to read: 318
476	476	626.9201 Notice of cancellation or nonrenewal. — 319
477	477	(2) An insurer issuing a policy providing coverage for 320
478	478	property, casualty, surety, or marine insurance must give the 321
479	479	named insured written notice of cancellation or termination 322
480	480	other than nonrenewal at least 45 days before the effective date 323
481	481	of the cancellation or t ermination, including in the written 324
482	482	notice the reasons for the cancellation or termination, except 325
483	483
484	484	HB 1015 2024
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488	488	CODING: Words stricken are deletions; words underlined are additions.
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491	491	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
492	492
493	493
494	494
495	495	that: 326
496	496	(a) If cancellation is for nonpayment of premium, at least 327
497	497	10 days' written notice of cancellation accompanied by the 328
498	498	reason for cancellation must b e given. As used in this 329
499	499	paragraph, the term "nonpayment of premium" means the failure of 330
500	500	the named insured to discharge when due any of his or her 331
501	501	obligations in connection with the payment of premiums on a 332
502	502	policy or an installment of such a premium, whet her the premium 333
503	503	or installment is payable directly to the insurer or its agent 334
504	504	or indirectly under any plan for financing premiums or extension 335
505	505	of credit or the failure of the named insured to maintain 336
506	506	membership in an organization if such membership is a condition 337
507	507	precedent to insurance coverage. The term also includes the 338
508	508	failure of a financial institution to honor the check of an 339
509	509	applicant for insurance which was delivered to a licensed agent 340
510	510	for payment of a premium, even if the agent previously deliver ed 341
511	511	or transferred the premium to the insurer. If a correctly 342
512	512	dishonored check represents payment of the initial premium, the 343
513	513	contract and all contractual obligations are void ab initio 344
514	514	unless the nonpayment is cured within the earlier of 5 days 345
515	515	after actual notice by certified mail is received by the 346
516	516	applicant or 15 days after notice is sent to the applicant by 347
517	517	certified mail or registered mail, and, if the contract is void, 348
518	518	any premium received by the insurer from a third party shall be 349
519	519	refunded to that party in full; and 350
520	520
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528	528	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
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532	532	(b) If cancellation or termination occurs during the first 351
533	533	90 days during which the insurance is in force and if the 352
534	534	insurance is canceled or terminated for reasons other than 353
535	535	nonpayment, at least 20 days' written notice of cancellation or 354
536	536	termination accompanied by the reason for cancellation or 355
537	537	termination must be given, except if there has been a material 356
538	538	misstatement or misrepresentation or failure to comply with the 357
539	539	underwriting requirements established by the insurer ; and. 358
540	540	(c)1. Upon a declaration of an emergency pursuant to s. 359
541	541	252.36 and the filing of an order by the Commissioner of 360
542	542	Insurance Regulation, an insurer may not cancel or nonrenew a 361
543	543	personal residential or commercial residential property 362
544	544	insurance policy covering a dwel ling or residential property 363
545	545	located in the state which has been damaged as a result of a 364
546	546	hurricane or wind loss that is the subject of the declaration of 365
547	547	emergency for 90 days after the dwelling or residential property 366
548	548	has been repaired. A dwelling or res idential property is deemed 367
549	549	to be repaired when substantially completed and restored to the 368
550	550	extent that the dwelling or residential property is insurable by 369
551	551	another insurer that is writing policies in the state. 370
552	552	2. However, an insurer or agent may cancel or nonrenew 371
553	553	such a policy before the repair of the dwelling or residential 372
554	554	property: 373
555	555	a. Upon 10 days' notice for nonpayment of premium; or 374
556	556	b. Upon 45 days' notice: 375
557	557
558	558	HB 1015 2024
559	559
560	560
561	561
562	562	CODING: Words stricken are deletions; words underlined are additions.
563	563	hb1015-00
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565	565	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
566	566
567	567
568	568
569	569	(I) For a material misstatement or fraud related to the 376
570	570	claim; 377
571	571	(II) If the insurer determines that the insured has 378
572	572	unreasonably caused a delay in the repair of the dwelling or 379
573	573	residential property; or 380
574	574	(III) If the insurer has paid policy limits. 381
575	575	3. If the insurer elects to nonrenew a policy covering a 382
576	576	property that has been damaged, the insurer shall provide at 383
577	577	least 90 days' notice to the insured that the insurer intends to 384
578	578	nonrenew the policy 90 days after the dwelling or residential 385
579	579	property has been repaired. 386
580	580	4. This paragraph does not prevent the insurer from 387
581	581	canceling or nonrenewing the policy 90 days after the repair is 388
582	582	completed for the same reasons the insurer would otherwise have 389
583	583	canceled or nonrenewed the policy but for the limitations of 390
584	584	subparagraph 1. 391
585	585	5. The Financial Services Commission may adopt rules, and 392
586	586	the Commissioner of Insurance Regulation may issue orders, 393
587	587	necessary to implement this paragraph. 394
588	588	Section 4. Paragraph (j) of subsection (2) of section 395
589	589	627.062, Florida Statutes, is amended to read: 396
590	590	627.062 Rate standards. — 397
591	591	(2) As to all such classes of in surance: 398
592	592	(j) With respect to residential property insurance rate 399
593	593	filings, the rate filing: 400
594	594
595	595	HB 1015 2024
596	596
597	597
598	598
599	599	CODING: Words stricken are deletions; words underlined are additions.
600	600	hb1015-00
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602	602	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
603	603
604	604
605	605
606	606	1. Must account for mitigation measures undertaken by 401
607	607	policyholders to reduce hurricane losses and windstorm losses. 402
608	608	2. May use a modeling indication that is t he weighted or 403
609	609	straight average of two or more hurricane loss projection models 404
610	610	found by the Florida Commission on Hurricane Loss Projection 405
611	611	Methodology to be accurate or reliable pursuant to s. 627.0628. 406
612	612	If an averaged model is used under the authority of this 407
613	613	section: 408
614	614	a. The same averaged model must be used throughout the 409
615	615	state; and 410
616	616	b. If a weighted average is used, the insurer must provide 411
617	617	the office with a justification for using the weighted average 412
618	618	which shows that the weighted average results in a rate that is 413
619	619	reasonable, adequate, and fair. 414
620	620	415
621	621	The provisions of this subsection do not apply to workers' 416
622	622	compensation, employer's liability insurance, and motor vehicle 417
623	623	insurance. 418
624	624	Section 5. Paragraph (n) of subsection (6) of section 419
625	625	627.351, Florida Statutes, is amended to read: 420
626	626	627.351 Insurance risk apportionment plans. — 421
627	627	(6) CITIZENS PROPERTY INSURANCE CORPORATION. — 422
628	628	(n)1. Rates for coverage provided by the corporation must 423
629	629	be actuarially sound pursuant to s. 627.062 and not competitive 424
630	630	with approved rates charged in the admitted voluntary market so 425
631	631
632	632	HB 1015 2024
633	633
634	634
635	635
636	636	CODING: Words stricken are deletions; words underlined are additions.
637	637	hb1015-00
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639	639	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
640	640
641	641
642	642
643	643	that the corporation functions as a residual market mechanism to 426
644	644	provide insurance only when insurance cannot be procured in the 427
645	645	voluntary market, except as otherwise provided in this 428
646	646	paragraph. The office shall provide the corporation such 429
647	647	information as would be necessary to determine whether rates are 430
648	648	competitive. The corporation shall file its recommended rates 431
649	649	with the office at least annually. The corporation shall provide 432
650	650	any additional information regarding the rates which the office 433
651	651	requires. The office shall consider the recommendations of the 434
652	652	board and issue a final order establishing the rates for the 435
653	653	corporation within 45 days after the recommended rates are 436
654	654	filed. The corporation may not pursue an administrative 437
655	655	challenge or judicial review of the final order of the office. 438
656	656	2. In addition to the rates otherwise determined pursuant 439
657	657	to this paragraph, the corporation shall impose and collect an 440
658	658	amount equal to the premium tax provi ded in s. 624.509 to 441
659	659	augment the financial resources of the corporation. 442
660	660	3. After the public hurricane loss -projection model under 443
661	661	s. 627.06281 has been found to be accurate and reliable by the 444
662	662	Florida Commission on Hurricane Loss Projection Methodology, the 445
663	663	model shall be considered when establishing the windstorm 446
664	664	portion of the corporation's rates. The corporation may use the 447
665	665	public model results in combination with the results of private 448
666	666	models to calculate rates for the windstorm portion of the 449
667	667	corporation's rates. This subparagraph does not require or allow 450
668	668
669	669	HB 1015 2024
670	670
671	671
672	672
673	673	CODING: Words stricken are deletions; words underlined are additions.
674	674	hb1015-00
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676	676	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
677	677
678	678
679	679
680	680	the corporation to adopt rates lower than the rates otherwise 451
681	681	required or allowed by this paragraph. 452
682	682	4. The corporation must make a recommended actuarially 453
683	683	sound rate filing for each personal and commercial line of 454
684	684	business it writes. 455
685	685	5. Notwithstanding the board's recommended rates and the 456
686	686	office's final order regarding the corporation's filed rates 457
687	687	under subparagraph 1., the corporation shall annually implement 458
688	688	a rate increase which, except fo r sinkhole coverage, does not 459
689	689	exceed the following for any single policy issued by the 460
690	690	corporation, excluding coverage changes and surcharges: 461
691	691	a. Twelve percent for 2023. 462
692	692	b. Thirteen percent for 2024. 463
693	693	c. Fourteen percent for 2025. 464
694	694	d. Fifteen percent for 2026 and all subsequent years. 465
695	695	6. The corporation may also implement an increase to 466
696	696	reflect the effect on the corporation of the cash buildup factor 467
697	697	pursuant to s. 215.555(5)(b). 468
698	698	7. The corporation's implementation of rates as prescribed 469
699	699	in subparagraphs 5. and 8. shall cease for any line of business 470
700	700	written by the corporation upon the corporation's implementation 471
701	701	of actuarially sound rates. Thereafter, the corporation shall 472
702	702	annually make a recommended actuarially sound rate filing that 473
703	703	is not competitive with approved rates in the admitted voluntary 474
704	704	market for each commercial and personal line of business the 475
705	705
706	706	HB 1015 2024
707	707
708	708
709	709
710	710	CODING: Words stricken are deletions; words underlined are additions.
711	711	hb1015-00
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713	713	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
714	714
715	715
716	716
717	717	corporation writes. 476
718	718	8. The following new or renewal personal lines policies 477
719	719	written on or after November 1, 2023, which do not cover a 478
720	720	primary residence are not subject to the rate increase 479
721	721	limitations in subparagraph 5., but may not be charged more than 480
722	722	50 percent above, nor less than, the prior year's established 481
723	723	rate for the corporation .: 482
724	724	a. Policies that do not cover a primary residenc e; 483
725	725	b. New policies under which the coverage for the insured 484
726	726	risk, before the date of application with the corporation, was 485
727	727	last provided by an insurer determined by the office to be 486
728	728	unsound or an insurer placed in receivership under chapter 631; 487
729	729	or 488
730	730	c. Subsequent renewals of those policies, including the 489
731	731	new policies in sub-subparagraph b., under which the coverage 490
732	732	for the insured risk, before the date of application with the 491
733	733	corporation, was last provided by an insurer determined by the 492
734	734	office to be unsound or an insurer placed in receivership under 493
735	735	chapter 631. 494
736	736	9. As used in this paragraph, the term "primary residence" 495
737	737	means the dwelling that is the policyholder's primary home or is 496
738	738	a rental property that is the primary home of the tenant, and 497
739	739	which the policyholder or tenant occupies for more than 9 months 498
740	740	of each year. 499
741	741	Section 6. Section 628.011, Florida Statutes, is amended 500
742	742
743	743	HB 1015 2024
744	744
745	745
746	746
747	747	CODING: Words stricken are deletions; words underlined are additions.
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750	750	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
751	751
752	752
753	753
754	754	to read: 501
755	755	628.011 Scope of part. —This part applies only to domestic 502
756	756	stock insurers, mutual insurers, and captive insurers, except 503
757	757	that s. 628.341(2) applies also as to foreign and alien 504
758	758	insurers. 505
759	759	Section 7. Section 628.061, Florida Statutes, is amended 506
760	760	to read: 507
761	761	628.061 Investigation of proposed organization. —In 508
762	762	connection with any proposal to organize incorporate a domestic 509
763	763	insurer, the office shall make an investigation of: 510
764	764	(1) The character, reputation, financial standing, and 511
765	765	motives of the organizers, incorporators, and subscribers 512
766	766	organizing the proposed insurer. 513
767	767	(2) The character, financial responsibility, insu rance 514
768	768	experience, and business qualifications of its proposed 515
769	769	officers. 516
770	770	(3) The character, financial responsibility, business 517
771	771	experience, and standing of the proposed stockholders and 518
772	772	directors. 519
773	773	Section 8. Subsections (1), (2), and (5) of section 520
774	774	628.801, Florida Statutes, are amended to read: 521
775	775	628.801 Insurance holding companies; registration; 522
776	776	regulation.— 523
777	777	(1) An insurer that is authorized to do business in this 524
778	778	state and that is a member of an insurance holding company 525
779	779
780	780	HB 1015 2024
781	781
782	782
783	783
784	784	CODING: Words stricken are deletions; words underlined are additions.
785	785	hb1015-00
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787	787	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
788	788
789	789
790	790
791	791	shall, on or before April 1 of each year, register with the 526
792	792	office and file a registration statement and be subject to 527
793	793	regulation with respect to its relationship to the holding 528
794	794	company as provided by law or rule. The commission shall adopt 529
795	795	rules establishing the information and sta tement form required 530
796	796	for registration and the manner in which registered insurers and 531
797	797	their affiliates are regulated. The rules apply to domestic 532
798	798	insurers, foreign insurers, and commercially domiciled insurers, 533
799	799	except for foreign insurers domiciled in stat es that are 534
800	800	currently accredited by the NAIC. Except to the extent of any 535
801	801	conflict with this code, the rules must include all requirements 536
802	802	and standards of the Insurance Holding Company System Model 537
803	803	Regulation and ss. 4 and 5 of the Insurance Holding Compa ny 538
804	804	System Regulatory Act and the Insurance Holding Company System 539
805	805	Model Regulation of the NAIC, as adopted in December 2020 2010. 540
806	806	The commission may adopt subsequent amendments thereto if the 541
807	807	methodology remains substantially consistent. The rules may 542
808	808	include a prohibition on oral contracts between affiliated 543
809	809	entities. Material transactions between an insurer and its 544
810	810	affiliates shall be filed with the office as provided by rule. 545
811	811	(2) Effective January 1, 2015, The ultimate controlling 546
812	812	person of every insurer subject to registration shall also file 547
813	813	an annual enterprise risk report on or before April 1. As used 548
814	814	in this subsection, the term "ultimate controlling person" means 549
815	815	a person who is not controlled by any other person. The report, 550
816	816
817	817	HB 1015 2024
818	818
819	819
820	820
821	821	CODING: Words stricken are deletions; words underlined are additions.
822	822	hb1015-00
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824	824	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
825	825
826	826
827	827
828	828	to the best of the ultimate controlling person's knowledge and 551
829	829	belief, must identify the material risks within the insurance 552
830	830	holding company system that could pose enterprise risk to the 553
831	831	insurer. The report shall be filed with the lead state office of 554
832	832	the insurance holding company system as determined by the 555
833	833	procedures within the Financial Analysis Handbook adopted by the 556
834	834	NAIC and is confidential and exempt from public disclosure as 557
835	835	provided in s. 624.4212. 558
836	836	(a) An insurer may sat isfy this requirement by providing 559
837	837	the office with the most recently filed parent corporation 560
838	838	reports that have been filed with the Securities and Exchange 561
839	839	Commission which provide the appropriate enterprise risk 562
840	840	information. 563
841	841	(b) The term "enterprise ris k" means an activity, 564
842	842	circumstance, event, or series of events involving one or more 565
843	843	affiliates of an insurer which, if not remedied promptly, are 566
844	844	likely to have a materially adverse effect upon the financial 567
845	845	condition or liquidity of the insurer or its in surance holding 568
846	846	company system as a whole, including anything that would cause 569
847	847	the insurer's risk-based capital to fall into company action 570
848	848	level as set forth in s. 624.4085 or would cause the insurer to 571
849	849	be in a hazardous financial condition. 572
850	850	(c) The office may adopt rules for filing the annual 573
851	851	enterprise risk report in accordance with the Insurance Holding 574
852	852	Company System Regulatory Act and the Insurance Holding Company 575
853	853
854	854	HB 1015 2024
855	855
856	856
857	857
858	858	CODING: Words stricken are deletions; words underlined are additions.
859	859	hb1015-00
860	860	Page 24 of 95
861	861	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
862	862
863	863
864	864
865	865	System Model Regulation of the NAIC, as adopted in December 576
866	866	2020. 577
867	867	(5) Effective January 1, 2015, The failure to file a 578
868	868	registration statement, or a summary of the registration 579
869	869	statement, or the enterprise risk filing report required by this 580
870	870	section within the time specified for filing is a violation of 581
871	871	this section. 582
872	872	Section 9. Part I of chapter 629, Florida Statutes, 583
873	873	consisting of sections 629.011, 629.051, 629.081, 629.091, 584
874	874	629.111, 629.121, 629.161, 629.171, 629.201, 629.225, 629.227, 585
875	875	629.231, 629.241, 629.251, 629.261, 629.281, 629.291, 629.301, 586
876	876	and 629.525. Florida Statutes, is cre ated and entitled 587
877	877	"Reciprocal Insurers." 588
878	878	Section 10. Section 629.011, Florida Statutes, is amended 589
879	879	to read: 590
880	880	629.011 Definitions "Reciprocal insurance" defined .—As 591
881	881	used in this part, the term: 592
882	882	(1) "Affiliated person" of another person means: 593
883	883	(a) The spouse of the other person; 594
884	884	(b) The parents of the other person, and their lineal 595
885	885	descendants, and the parents of the other person's spouse, and 596
886	886	their lineal descendants; 597
887	887	(c) A person who directly or indirectly owns or controls, 598
888	888	or holds with power to vote, 10 percent or more of the 599
889	889	outstanding voting securities of the other person; 600
890	890
891	891	HB 1015 2024
892	892
893	893
894	894
895	895	CODING: Words stricken are deletions; words underlined are additions.
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898	898	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
899	899
900	900
901	901
902	902	(d) A person who directly or indirectly owns 10 percent or 601
903	903	more of the outstanding voting securities that are directly or 602
904	904	indirectly owned or controlled, or held with p ower to vote, by 603
905	905	the other person; 604
906	906	(e) A person or group of persons who directly or 605
907	907	indirectly control, are controlled by, or are under common 606
908	908	control with the other person; 607
909	909	(f) A director, officer, trustee, partner, owner, manager, 608
910	910	joint venturer, employee, or other person performing duties 609
911	911	similar to those of persons in such positions, of the other 610
912	912	person; 611
913	913	(g) If the other person is an investment company, any 612
914	914	investment adviser of such company or any member of an advisory 613
915	915	board of such company; 614
916	916	(h) If the other person is an unincorporated investment 615
917	917	company not having a board of directors, the depositor of such 616
918	918	company; or 617
919	919	(i) A person who has entered into an agreement, written or 618
920	920	unwritten, to act in concert with the other person in acquiring, 619
921	921	or limiting the disposition of: 620
922	922	1. Securities of an attorney or controlling company that 621
923	923	is a stock corporation; or 622
924	924	2. An ownership interest of an attorney or controlling 623
925	925	company that is not a stock corporation. 624
926	926	(2) "Attorney" the attorney in fact of a reciprocal 625
927	927
928	928	HB 1015 2024
929	929
930	930
931	931
932	932	CODING: Words stricken are deletions; words underlined are additions.
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935	935	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
936	936
937	937
938	938
939	939	insurer. The attorney may be an individual, corporation, or 626
940	940	other person. 627
941	941	(3) "Controlling company" means a person, corporation, 628
942	942	trust, limited liability company, association, or other entity 629
943	943	owning, directly or indirectly, 10 percent or mor e of the voting 630
944	944	securities of one or more attorneys that are stock corporations, 631
945	945	or 10 percent or more of the ownership interest of one or more 632
946	946	attorneys that are not stock corporations. 633
947	947	(4) "Reciprocal insurance" is that resulting from an 634
948	948	interexchange among persons, known as "subscribers," of 635
949	949	reciprocal agreements of indemnity, the interexchange being 636
950	950	effectuated through an "attorney in fact" common to all such 637
951	951	persons. 638
952	952	(5) "Reciprocal insurer" means a domestic insurer that is 639
953	953	an unincorporated aggreg ation of subscribers domiciled in the 640
954	954	state operating individually and collectively through an 641
955	955	attorney in fact to provide reciprocal insurance among 642
956	956	themselves. The term does not include foreign or alien 643
957	957	reciprocal insurers that are licensed and operating in the state 644
958	958	under chapter 624. All reciprocal insurers must be licensed as 645
959	959	an assessable or nonassessable reciprocal insurer. 646
960	960	(a) An assessable reciprocal insurer may require that its 647
961	961	subscribers make up any shortfall in capital and surplus to 648
962	962	cover claims and expenses, jointly or severally. 649
963	963	(b) A nonassessable reciprocal insurer has no recourse 650
964	964
965	965	HB 1015 2024
966	966
967	967
968	968
969	969	CODING: Words stricken are deletions; words underlined are additions.
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972	972	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
973	973
974	974
975	975
976	976	against subscribers for any shortfall in capital and surplus to 651
977	977	cover claims and expenses. 652
978	978	Section 11. Section 629.021, Florida Statutes, is 653
979	979	repealed. 654
980	980	Section 12. Subsection (1) of section 629.051, Florida 655
981	981	Statutes, is amended to read: 656
982	982	629.051 Name; suits. —A reciprocal insurer shall: 657
983	983	(1) Have and use a business name. The name shall include 658
984	984	the word "reciprocal," or "interinsurer," or "interinsurance," 659
985	985	or "exchange," or "underwriters," or "underwriting .," but this 660
986	986	requirement shall not apply as to any insurer holding a 661
987	987	certificate of authority to transact insurance in this state 662
988	988	immediately prior to the effective date of this code. 663
989	989	Section 13. Section 629.061, Florida Statutes, is 664
990	990	repealed. 665
991	991	Section 14. Section 629.071, Florida Statutes, is amended 666
992	992	to read: 667
993	993	629.071 Surplus funds required. —The surplus required of a 668
994	994	reciprocal insurer shall be as required in s. 624.407 as to the 669
995	995	kind or kinds of insurance so proposed. 670
996	996	(1) A domestic reciprocal insurer hereunder formed, if it 671
997	997	has otherwise complied with the applicable provisions of this 672
998	998	code, may be authorized to transact insurance if it has and 673
999	999	thereafter maintains surplus funds of not less than $250,000 . 674
1000	1000	(2) In addition to the surplus required to be maintained 675
1001	1001
1002	1002	HB 1015 2024
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1004	1004
1005	1005
1006	1006	CODING: Words stricken are deletions; words underlined are additions.
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1009	1009	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1010	1010
1011	1011
1012	1012
1013	1013	under subsection (1), the insurer shall have, when first so 676
1014	1014	authorized, an expendable surplus of not less than $750,000. 677
1015	1015	Section 15. Section 629.081, Florida Statutes , is amended 678
1016	1016	to read: 679
1017	1017	629.081 Organization of reciprocal insurer. — 680
1018	1018	(1) Twenty-five or more persons domiciled in this state 681
1019	1019	may file an application with the office for approval to organize 682
1020	1020	a domestic reciprocal insurer and make application to the office 683
1021	1021	pursuant to s. 628.051. The application shall be reviewed in 684
1022	1022	accordance with ss. 628.061 and 628.071 and other relevant 685
1023	1023	provisions of the insurance code for a certificate of authority 686
1024	1024	to transact insurance . 687
1025	1025	(2) Twenty-five or more persons domiciled in t his state 688
1026	1026	who have a valid permit pursuant to this section may file an 689
1027	1027	application with the office for a reciprocal certificate of 690
1028	1028	authority pursuant to s. 624.413. 691
1029	1029	(3)(2) When applying for a reciprocal certificate of 692
1030	1030	authority pursuant to s. 624.413, the proposed attorney shall 693
1031	1031	fulfill the requirements of and shall execute and file with the 694
1032	1032	office, when applying for a certificate of authority, a 695
1033	1033	notarized declaration setting forth: 696
1034	1034	(a) The name of the insurer; 697
1035	1035	(b) The location of the insurer's pri ncipal office, which 698
1036	1036	shall be the same as that of the attorney and shall be 699
1037	1037	maintained within this state; 700
1038	1038
1039	1039	HB 1015 2024
1040	1040
1041	1041
1042	1042
1043	1043	CODING: Words stricken are deletions; words underlined are additions.
1044	1044	hb1015-00
1045	1045	Page 29 of 95
1046	1046	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1047	1047
1048	1048
1049	1049
1050	1050	(c) The kinds of insurance proposed to be transacted; 701
1051	1051	(d) The names and addresses of the original subscribers; 702
1052	1052	(e) The designation and appointme nt of the proposed 703
1053	1053	attorney and a copy of the power of attorney; 704
1054	1054	(f) The names and addresses of the officers and directors 705
1055	1055	of the attorney, if a corporation, or of its members, if other 706
1056	1056	than a corporation; 707
1057	1057	(g) The powers of the subscribers' advisory co mmittee, and 708
1058	1058	the names and terms of office of the members thereof; 709
1059	1059	(h) That all moneys paid to the reciprocal shall, after 710
1060	1060	deducting therefrom any sum payable to the attorney, be held in 711
1061	1061	the name of the insurer and for the purposes specified in the 712
1062	1062	subscribers' agreement; 713
1063	1063	(i) A copy of the subscribers' agreement; 714
1064	1064	(j) A statement that each of the original subscribers has 715
1065	1065	in good faith applied for insurance of a kind proposed to be 716
1066	1066	transacted, and that , upon approval form the office to transact 717
1067	1067	insurance, the insurer will receive has received from each such 718
1068	1068	subscriber the full premium or premium deposit required for the 719
1069	1069	policy applied for, for a term of not less than 6 months at an 720
1070	1070	adequate rate to be theretofore filed with and approved by the 721
1071	1071	office; 722
1072	1072	(k) A statement of the financial condition of the insurer, 723
1073	1073	a schedule of its assets, and a statement that the surplus as 724
1074	1074	required by s. 629.071 is on hand; and 725
1075	1075
1076	1076	HB 1015 2024
1077	1077
1078	1078
1079	1079
1080	1080	CODING: Words stricken are deletions; words underlined are additions.
1081	1081	hb1015-00
1082	1082	Page 30 of 95
1083	1083	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1084	1084
1085	1085
1086	1086
1087	1087	(l) A copy of each policy, endorsement, and application 726
1088	1088	form it then proposes to issue or use. 727
1089	1089	(m) A copy of the bond required under s. 629.121. 728
1090	1090	(3) The filing must be accompanied by the application fee 729
1091	1091	required under s. 624.501(1)(a). 730
1092	1092	731
1093	1093	Such declaration shall be acknowledged by the attorney before an 732
1094	1094	officer authorized to take acknowledgments. 733
1095	1095	Section 16. Section 629.091, Florida Statutes, is amended 734
1096	1096	to read: 735
1097	1097	629.091 Reciprocal certificate of authority. —The 736
1098	1098	reciprocal certificate of authority of a reciprocal insurer 737
1099	1099	shall be issued to its attorney in the name of the reciprocal 738
1100	1100	insurer to its attorney. 739
1101	1101	Section 17. Paragraphs (c), (d), and (e) of subsection (2) 740
1102	1102	of section 629.101, Florida Statutes, are redesignated as 741
1103	1103	paragraphs (d), (e), and (f), respectively, and a new paragraph 742
1104	1104	(c) is added to subsection (2) of that section to read: 743
1105	1105	629.101 Power of attorney. — 744
1106	1106	(2) The power of attorney must set forth: 745
1107	1107	(c) The place at which the office of the attorney shall be 746
1108	1108	maintained; 747
1109	1109	Section 18. Section 629.111, Florida Statutes, is amended 748
1110	1110	to read: 749
1111	1111	629.111 Modifications. —Modifications of the terms of the 750
1112	1112
1113	1113	HB 1015 2024
1114	1114
1115	1115
1116	1116
1117	1117	CODING: Words stricken are deletions; words underlined are additions.
1118	1118	hb1015-00
1119	1119	Page 31 of 95
1120	1120	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1121	1121
1122	1122
1123	1123
1124	1124	subscribers' agreement or of the power of attorney of a domestic 751
1125	1125	reciprocal insurer shall be made jointly by the attorney and the 752
1126	1126	subscribers' advisory committee. No such modification shall be 753
1127	1127	effective retroactively, nor as to any insur ance contract issued 754
1128	1128	prior thereto. 755
1129	1129	Section 19. Subsections (1) and (2) of section 629.121, 756
1130	1130	Florida Statutes, are amended to read: 757
1131	1131	629.121 Attorney's bond. — 758
1132	1132	(1) Concurrently with the filing of the declaration 759
1133	1133	provided for in s. 629.081, the attorne y of a domestic 760
1134	1134	reciprocal insurer shall file with the office a bond in favor of 761
1135	1135	this state for the benefit of all persons damaged as a result of 762
1136	1136	breach by the attorney of the conditions of his or her bond as 763
1137	1137	set forth in subsection (2). The bond shall be executed by the 764
1138	1138	attorney and by an authorized corporate surety and shall be 765
1139	1139	subject to the approval of the office. 766
1140	1140	(2) The bond shall be in the sum of $300,000 $100,000, 767
1141	1141	aggregate in form, the bond conditioned that the attorney will 768
1142	1142	faithfully account fo r all moneys and other property of the 769
1143	1143	insurer coming into his or her hands, and that he or she will 770
1144	1144	not withdraw or appropriate to his or her own use from the funds 771
1145	1145	of the insurer any moneys or property to which he or she is not 772
1146	1146	entitled under the power o f attorney. 773
1147	1147	Section 20. Section 629.161, Florida Statutes, is amended 774
1148	1148	to read: 775
1149	1149
1150	1150	HB 1015 2024
1151	1151
1152	1152
1153	1153
1154	1154	CODING: Words stricken are deletions; words underlined are additions.
1155	1155	hb1015-00
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1157	1157	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1158	1158
1159	1159
1160	1160
1161	1161	629.161 Contributions to insurer. — 776
1162	1162	(1) A reciprocal insurer may borrow money to defray the 777
1163	1163	expenses of its organization, to provide itself with surplus 778
1164	1164	funds, or for any purpose of its business, upon a written 779
1165	1165	agreement that such money is required to be repaid only out of 780
1166	1166	the insurer's surplus in excess of that stipulated in the 781
1167	1167	agreement. Any interest provided for shall or shall not 782
1168	1168	constitute a liability of the insurer as to its funds other than 783
1169	1169	such excess of surplus, as stipulated in the agreement. A 784
1170	1170	commission or promotion expense may not be paid in connection 785
1171	1171	with any such loan. 786
1172	1172	(2) Money so borrowed, together with the interest thereon 787
1173	1173	if so stipulated in the agree ment, may not form a part of the 788
1174	1174	insurer's legal liabilities, except as to its surplus in excess 789
1175	1175	of the amount thereof stipulated in the agreement, or be the 790
1176	1176	basis of any setoff; but until repaid, financial statements 791
1177	1177	filed or published by the insurer must show as a footnote 792
1178	1178	thereto the amount thereof then unpaid together with any 793
1179	1179	interest thereon accrued but unpaid. 794
1180	1180	(3) Any such loan to a reciprocal insurer is subject to 795
1181	1181	the approval of the office for the issue and the rate of 796
1182	1182	interest to be paid. The re ciprocal insurer must, in advance of 797
1183	1183	the loan, file with the office a statement of the purpose of the 798
1184	1184	loan and a copy of the proposed loan agreement. The office shall 799
1185	1185	disapprove any proposed loan or agreement if it finds that the 800
1186	1186
1187	1187	HB 1015 2024
1188	1188
1189	1189
1190	1190
1191	1191	CODING: Words stricken are deletions; words underlined are additions.
1192	1192	hb1015-00
1193	1193	Page 33 of 95
1194	1194	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1195	1195
1196	1196
1197	1197
1198	1198	loan is unnecessary or exc essive for the purpose intended; that 801
1199	1199	the terms of the loan agreement are not fair and equitable to 802
1200	1200	the parties and to other similar lenders, if any, to the 803
1201	1201	reciprocal insurer; or that the information so filed by the 804
1202	1202	reciprocal insurer is inadequate. 805
1203	1203	(4) Any such loan to a reciprocal insurer, or a 806
1204	1204	substantial portion thereof, shall be repaid by the reciprocal 807
1205	1205	insurer when no longer reasonably necessary for the purpose 808
1206	1206	originally intended. A repayment of such a loan may not be made 809
1207	1207	by a reciprocal insurer unless approved in advance by the 810
1208	1208	office. 811
1209	1209	(5) This section does not apply to loans obtained by the 812
1210	1210	reciprocal insurer in the ordinary course of business from banks 813
1211	1211	and other financial institutions, nor to loans secured by pledge 814
1212	1212	or mortgage of assets The attorney or other parties may advance 815
1213	1213	to a domestic reciprocal insurer upon reasonable terms such 816
1214	1214	funds as it may require from time to time in its operations. 817
1215	1215	Sums so advanced shall not be treated as a liability of the 818
1216	1216	insurer and, except upon liquidation of the insurer, shall not 819
1217	1217	be withdrawn or repaid except out of the insurer's realized 820
1218	1218	earned surplus in excess of its minimum required surplus. No 821
1219	1219	such withdrawal or repayment shall be made without the advance 822
1220	1220	approval of the office. This section does not apply as to bank 823
1221	1221	loans or to loans made upon security . 824
1222	1222	Section 21. Subsection (1) of section 629.171, Florida 825
1223	1223
1224	1224	HB 1015 2024
1225	1225
1226	1226
1227	1227
1228	1228	CODING: Words stricken are deletions; words underlined are additions.
1229	1229	hb1015-00
1230	1230	Page 34 of 95
1231	1231	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1232	1232
1233	1233
1234	1234
1235	1235	Statutes, is amended to read: 826
1236	1236	629.171 Annual statement. — 827
1237	1237	(1) The annual statement of a reciprocal insurer shall be 828
1238	1238	made and filed by its attorney in the same manner as domestic 829
1239	1239	stock insurers under s. 624.424 . 830
1240	1240	Section 22. Section 629.191, Florida Statutes, is amended 831
1241	1241	to read: 832
1242	1242	629.191 Who may be subscribers. —Individuals, partnerships, 833
1243	1243	and corporations of this state may make application s for, enter 834
1244	1244	into agreements for, and hold policies or contracts in or with, 835
1245	1245	and be subscribers of, any domestic, foreign, or alien 836
1246	1246	reciprocal insurer. 837
1247	1247	Section 23. Subsection (1) of section 629.201, Florida 838
1248	1248	Statutes, is amended to read: 839
1249	1249	629.201 Subscribers' advisory committee. — 840
1250	1250	(1) The advisory committee of a domestic reciprocal 841
1251	1251	insurer exercising the subscribers' rights shall be selected 842
1252	1252	under such rules as the subscribers adopt. 843
1253	1253	Section 24. Section 629.225, Florida Statutes, is created 844
1254	1254	to read: 845
1255	1255	629.225 Acquisitions. — 846
1256	1256	(1) A person may not, individually or in conjunction with 847
1257	1257	any affiliated person of such person, directly or indirectly, 848
1258	1258	conclude a tender offer or exchange offer for, enter into any 849
1259	1259	agreement to exchange securities for, or othe rwise finally 850
1260	1260
1261	1261	HB 1015 2024
1262	1262
1263	1263
1264	1264
1265	1265	CODING: Words stricken are deletions; words underlined are additions.
1266	1266	hb1015-00
1267	1267	Page 35 of 95
1268	1268	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1269	1269
1270	1270
1271	1271
1272	1272	acquire, 10 percent or more of the outstanding voting securities 851
1273	1273	of an attorney which is a stock corporation or of a controlling 852
1274	1274	company of an attorney which is a stock corporation; or conclude 853
1275	1275	an acquisition of, or otherwise finally acquire, 10 percent or 854
1276	1276	more of the ownership interest of an attorney which is not a 855
1277	1277	stock corporation or of a controlling company of an attorney 856
1278	1278	which is not a stock corporation, unless: 857
1279	1279	(a) The person or affiliated person has filed with the 858
1280	1280	office and sent to t he principal office of the attorney, and any 859
1281	1281	controlling company of the attorney, a reciprocal a letter of 860
1282	1282	notification regarding the transaction or proposed transaction 861
1283	1283	no later than 5 days after any form of tender offer or exchange 862
1284	1284	offer is proposed, or no later than 5 days after the acquisition 863
1285	1285	of the securities or ownership interest if a tender offer or 864
1286	1286	exchange offer is not involved. The notification must be 865
1287	1287	provided on forms prescribed by the commission containing 866
1288	1288	information determined necessary to u nderstand the transaction 867
1289	1289	and identify all purchasers and owners involved; 868
1290	1290	(b) The person or affiliated person has filed with the 869
1291	1291	office an application signed under oath and prepared on forms 870
1292	1292	prescribed by the commission which contains the information 871
1293	1293	specified in subsection (3). The application must be completed 872
1294	1294	and filed within 30 days after any form of tender offer or 873
1295	1295	exchange offer is proposed, or after the acquisition of the 874
1296	1296	securities if a tender offer or exchange offer is not involved; 875
1297	1297
1298	1298	HB 1015 2024
1299	1299
1300	1300
1301	1301
1302	1302	CODING: Words stricken are deletions; words underlined are additions.
1303	1303	hb1015-00
1304	1304	Page 36 of 95
1305	1305	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1306	1306
1307	1307
1308	1308
1309	1309	and 876
1310	1310	(c) The office has approved the tender offer or exchange 877
1311	1311	offer, or acquisition if a tender offer or exchange offer is not 878
1312	1312	involved. 879
1313	1313	(2) The person or affiliated person filing the required 880
1314	1314	notice in paragraph (1)(a) may additionally request the office 881
1315	1315	to waive the requirements of paragraph (1)(b), provided that 882
1316	1316	there is no change in the ultimate controlling shareholders, and 883
1317	1317	no change in the ownership percentages of the ultimate 884
1318	1318	controlling shareholders, and no unaffiliated parties acquire 885
1319	1319	any direct or indirect interest in the attorney. The office may 886
1320	1320	waive the filing required in par agraph (1)(b) if it determines 887
1321	1321	that in fact there is no change in the ultimate controlling 888
1322	1322	shareholders, and no change in the ownership percentages of the 889
1323	1323	ultimate controlling shareholders, and no unaffiliated parties 890
1324	1324	will acquire any direct or indirect in terest in the attorney. 891
1325	1325	(3) The application to be filed with the office and 892
1326	1326	furnished to the attorney must contain the following information 893
1327	1327	and any additional information as the office deems necessary to 894
1328	1328	determine the character, experience, ability, and other 895
1329	1329	qualifications of the person or affiliated person of such person 896
1330	1330	for the protection of the insureds of the insurer and of the 897
1331	1331	public: 898
1332	1332	(a) The identity and background information specified in 899
1333	1333	s. 629.221, of: 900
1334	1334
1335	1335	HB 1015 2024
1336	1336
1337	1337
1338	1338
1339	1339	CODING: Words stricken are deletions; words underlined are additions.
1340	1340	hb1015-00
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1342	1342	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1343	1343
1344	1344
1345	1345
1346	1346	1. Each person by whom, or on whose be half, the 901
1347	1347	acquisition is to be made; and 902
1348	1348	2. Any person who controls, directly or indirectly, such 903
1349	1349	other person, including each director, officer, trustee, 904
1350	1350	partner, owner, manager, or joint venturer, or other person 905
1351	1351	performing duties similar to those of p ersons in such positions, 906
1352	1352	for the person. 907
1353	1353	(b) The source and amount of the funds or other 908
1354	1354	consideration used, or to be used, in making the acquisition. 909
1355	1355	(c) Any plans or proposals which such persons may have 910
1356	1356	made to liquidate the attorney or controlling company, to sell 911
1357	1357	any of their assets or merge or consolidate them with any 912
1358	1358	person, or to make any other major change in their business or 913
1359	1359	corporate structure or management, and any plans or proposals 914
1360	1360	which such persons may have made to liquidate any contr olling 915
1361	1361	company of the attorney, to sell any of its assets or merge or 916
1362	1362	consolidate it with any person, or to make any other major 917
1363	1363	change in its business or corporate structure or management. 918
1364	1364	(d) The nature and the extent of the controlling interest 919
1365	1365	which the person or affiliated person of such person proposes to 920
1366	1366	acquire, the terms of the proposed acquisition, and the manner 921
1367	1367	in which the controlling interest is to be acquired of an 922
1368	1368	attorney or controlling company which is not a stock 923
1369	1369	corporation. 924
1370	1370	(e) The number of shares or other securities which the 925
1371	1371
1372	1372	HB 1015 2024
1373	1373
1374	1374
1375	1375
1376	1376	CODING: Words stricken are deletions; words underlined are additions.
1377	1377	hb1015-00
1378	1378	Page 38 of 95
1379	1379	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1380	1380
1381	1381
1382	1382
1383	1383	person or affiliated person of such person proposes to acquire, 926
1384	1384	the terms of the proposed acquisition, and the manner in which 927
1385	1385	the securities are to be acquired. 928
1386	1386	(f) Information as to any contract, arrangeme nt, or 929
1387	1387	understanding with any party with respect to any of the 930
1388	1388	securities of the attorney or controlling company, including, 931
1389	1389	but not limited to, information relating to the transfer of any 932
1390	1390	of the securities, option arrangements, puts or calls, or the 933
1391	1391	giving or withholding of proxies, which information names the 934
1392	1392	party with whom the contract, arrangement, or understanding has 935
1393	1393	been entered into and gives the details thereof. 936
1394	1394	937
1395	1395	The filing must be accompanied by the fee required under s. 938
1396	1396	624.501(1)(a). 939
1397	1397	(4) If any material change occurs in the facts provided in 940
1398	1398	the application filed with the office pursuant to this section 941
1399	1399	or the background information required under s. 629.227, an 942
1400	1400	amendment specifying such changes shall be filed immediately 943
1401	1401	with the office, and a copy of the amendment shall be sent to 944
1402	1402	the principal office of the attorney and to the principal office 945
1403	1403	of the controlling company. 946
1404	1404	(5)(a) The acquisition application shall be reviewed in 947
1405	1405	accordance with chapter 120. The office may on its own initiate, 948
1406	1406	or, if requested to do so in writing by a substantially affected 949
1407	1407	person, shall conduct, a proceeding to consider the 950
1408	1408
1409	1409	HB 1015 2024
1410	1410
1411	1411
1412	1412
1413	1413	CODING: Words stricken are deletions; words underlined are additions.
1414	1414	hb1015-00
1415	1415	Page 39 of 95
1416	1416	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1417	1417
1418	1418
1419	1419
1420	1420	appropriateness of the proposed filing. Time periods for 951
1421	1421	purposes of chapter 120 shall be tolled during the pendency of 952
1422	1422	the proceeding. Any written request for a proceeding must be 953
1423	1423	filed with the office within 10 days of the date notice of the 954
1424	1424	filing is given. During the pendency of the proceeding or review 955
1425	1425	period by the office, any person or affiliated person complying 956
1426	1426	with the filing requi rements of this section may proceed and 957
1427	1427	take all steps necessary to conclude the acquisition so long as 958
1428	1428	the acquisition becoming final is conditioned upon obtaining 959
1429	1429	office approval. The office shall, however, at any time it finds 960
1430	1430	an immediate danger to the public health, safety, and welfare of 961
1431	1431	the insureds exists, immediately order, pursuant to s. 962
1432	1432	120.569(2)(n), the proposed acquisition disapproved and any 963
1433	1433	further steps to conclude the acquisition ceased. 964
1434	1434	(b) During the pendency of the office's review of any 965
1435	1435	acquisition subject to the provisions of this section, the 966
1436	1436	acquiring person may not make any material change in the 967
1437	1437	operation of the attorney or controlling company unless the 968
1438	1438	office has specifically approved the change, nor shall the 969
1439	1439	acquiring person make any material change in the management of 970
1440	1440	the attorney unless advance written notice of the change in 971
1441	1441	management is furnished to the office. A material change in the 972
1442	1442	operation of the attorney is a transaction which disposes of or 973
1443	1443	obligates 5 percent or more of the capital and surplus of the 974
1444	1444	attorney. A material change in the management of the attorney is 975
1445	1445
1446	1446	HB 1015 2024
1447	1447
1448	1448
1449	1449
1450	1450	CODING: Words stricken are deletions; words underlined are additions.
1451	1451	hb1015-00
1452	1452	Page 40 of 95
1453	1453	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1454	1454
1455	1455
1456	1456
1457	1457	any change in management involving officers or directors of the 976
1458	1458	attorney or any person of the attorney or controlling company 977
1459	1459	having authority to dispo se of or obligate 5 percent or more of 978
1460	1460	the attorney's capital or surplus. The office shall approve a 979
1461	1461	material change in operations if it finds the applicable 980
1462	1462	provisions of subsection (7) have been met. The office may 981
1463	1463	disapprove a material change in managem ent if it finds that the 982
1464	1464	applicable provisions of subsection (7) have not been met and in 983
1465	1465	such case the attorney shall promptly change management as 984
1466	1466	acceptable to the office. 985
1467	1467	(c) If a request for a proceeding is filed, the proceeding 986
1468	1468	shall be conducted w ithin 60 days after the date the written 987
1469	1469	request for a proceeding is received by the office. A 988
1470	1470	recommended order shall be issued within 20 days after the date 989
1471	1471	of the close of the proceedings. A final order shall be issued 990
1472	1472	within 20 days after the date of t he recommended order or, if 991
1473	1473	exceptions to the recommended order are filed, within 20 days 992
1474	1474	after the date the exceptions are filed. 993
1475	1475	(6) The office may disapprove any acquisition subject to 994
1476	1476	this section by any person or any affiliated person of such 995
1477	1477	person who: 996
1478	1478	(a) Willfully violates this section; 997
1479	1479	(b) In violation of an order of the office issued pursuant 998
1480	1480	to subsection (11), fails to divest himself or herself of any 999
1481	1481	stock or ownership interest obtained in violation of this 1000
1482	1482
1483	1483	HB 1015 2024
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1485	1485
1486	1486
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1490	1490	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1491	1491
1492	1492
1493	1493
1494	1494	section or fails to divest him self or herself of any direct or 1001
1495	1495	indirect control of such stock or ownership interest, within 25 1002
1496	1496	days after such order; or 1003
1497	1497	(c) In violation of an order issued by the office pursuant 1004
1498	1498	to subsection (11), acquires an additional stock or ownership 1005
1499	1499	interest in an attorney or controlling company or direct or 1006
1500	1500	indirect control of such stock or ownership interest, without 1007
1501	1501	complying with this section. 1008
1502	1502	(7) The person or persons filing the application required 1009
1503	1503	by this section have the burden of proof. The office sh all 1010
1504	1504	approve any such acquisition if it finds, on the basis of the 1011
1505	1505	record made during any proceeding or on the basis of the filed 1012
1506	1506	application if no proceeding is conducted, that: 1013
1507	1507	(a) The financial condition of the acquiring person or 1014
1508	1508	persons will not jeop ardize the financial stability of the 1015
1509	1509	attorney or prejudice the interests of the reciprocal insurer's 1016
1510	1510	subscribers or the public. 1017
1511	1511	(b) Any plan or proposal which the acquiring person has, 1018
1512	1512	or acquiring persons have, made: 1019
1513	1513	1. To liquidate the attorney, sel l its assets, or merge or 1020
1514	1514	consolidate it with any person, or to make any other major 1021
1515	1515	change in its business or corporate structure or management; or 1022
1516	1516	2. To liquidate any controlling company, sell its assets, 1023
1517	1517	or merge or consolidate it with any person, or to make any major 1024
1518	1518	change in its business or corporate structure or management 1025
1519	1519
1520	1520	HB 1015 2024
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1522	1522
1523	1523
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1527	1527	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1528	1528
1529	1529
1530	1530
1531	1531	which would have an effect upon the attorney, 1026
1532	1532	1027
1533	1533	is fair and free of prejudice to the reciprocal insurer's 1028
1534	1534	subscribers or to the public. 1029
1535	1535	(c) The competence, experience, and integrity of those 1030
1536	1536	persons who will control directly or indirectly the operation of 1031
1537	1537	the attorney indicate that the acquisition is in the best 1032
1538	1538	interest of the reciprocal insurer's subscribers and in the 1033
1539	1539	public interest. 1034
1540	1540	(d) The natural persons for whom ba ckground information is 1035
1541	1541	required to be furnished pursuant to this section have such 1036
1542	1542	backgrounds as to indicate that it is in the best interests of 1037
1543	1543	the reciprocal insurer's subscribers and in the public interest 1038
1544	1544	to permit such persons to exercise control ov er the attorney. 1039
1545	1545	(e) The directors and officers, if such attorney or 1040
1546	1546	controlling company is a stock corporation, or the trustees, 1041
1547	1547	partners, owners, managers, joint venturers, or other persons 1042
1548	1548	performing duties similar to those of persons in such position s, 1043
1549	1549	if such attorney or controlling company is not a stock 1044
1550	1550	corporation, to be employed after the acquisition have 1045
1551	1551	sufficient insurance experience and ability to assure reasonable 1046
1552	1552	promise of successful operation. 1047
1553	1553	(f) The management of the attorney after th e acquisition 1048
1554	1554	will be competent, trustworthy, and will possess sufficient 1049
1555	1555	managerial experience so as to make the proposed operation of 1050
1556	1556
1557	1557	HB 1015 2024
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1559	1559
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1564	1564	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1565	1565
1566	1566
1567	1567
1568	1568	the attorney not hazardous to the insurance -buying public. 1051
1569	1569	(g) The management of the attorney after the acquisition 1052
1570	1570	shall not include any person who has directly or indirectly 1053
1571	1571	through ownership, control, reinsurance transactions, or other 1054
1572	1572	insurance or business relations unlawfully manipulated the 1055
1573	1573	assets, accounts, finances, or books of any insurer or otherwise 1056
1574	1574	acted in bad faith with respect thereto. 1057
1575	1575	(h) The acquisition is not likely to be hazardous or 1058
1576	1576	prejudicial to the reciprocal insurer's subscribers or to the 1059
1577	1577	public. 1060
1578	1578	(i) The effect of the acquisition would not substantially 1061
1579	1579	lessen competition in the line of insuran ce for which the 1062
1580	1580	reciprocal insurer is licensed or certified in this state or 1063
1581	1581	would not tend to create a monopoly therein. 1064
1582	1582	(8) A vote by the stockholder of record, or by any other 1065
1583	1583	person, of any security acquired in contravention of this 1066
1584	1584	section is not valid. Any acquisition contrary to this section 1067
1585	1585	is void. Upon the petition of the attorney, any or the 1068
1586	1586	controlling company, or the reciprocal insurer the circuit court 1069
1587	1587	for the county in which the principal office of the attorney is 1070
1588	1588	located may, without lim iting the generality of its authority, 1071
1589	1589	order the issuance or entry of an injunction or other order to 1072
1590	1590	enforce this section. There shall be a private right of action 1073
1591	1591	in favor of the attorney, or controlling company, to enforce 1074
1592	1592	this section. A demand upon th e office that it performs its 1075
1593	1593
1594	1594	HB 1015 2024
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1596	1596
1597	1597
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1601	1601	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1602	1602
1603	1603
1604	1604
1605	1605	functions may not be required as a prerequisite to any suit by 1076
1606	1606	the attorney or controlling company against any other person, 1077
1607	1607	and in no case shall the office be deemed a necessary party to 1078
1608	1608	any action by the attorney or controll ing company to enforce 1079
1609	1609	this section. Any person who makes or proposes an acquisition 1080
1610	1610	requiring the filing of an application pursuant to this section, 1081
1611	1611	or who files such an application, shall be deemed to have 1082
1612	1612	thereby designated the Chief Financial Officer, or his or her 1083
1613	1613	assistant or deputy or another person in charge of his or her 1084
1614	1614	office, as such person's agent for service of process under this 1085
1615	1615	section and shall thereby be deemed to have submitted himself or 1086
1616	1616	herself to the administrative jurisdiction of the office and to 1087
1617	1617	the jurisdiction of the circuit court. 1088
1618	1618	(9) Any approval by the office under this section does not 1089
1619	1619	constitute a recommendation by the office of the tender offer or 1090
1620	1620	exchange offer, or acquisition, if no tender offer or exchange 1091
1621	1621	offer is involved. It is unlawful for a person to represent that 1092
1622	1622	the office's approval constitutes a recommendation. A person who 1093
1623	1623	violates this subsection commits a felony of the third degree, 1094
1624	1624	punishable as provided in s. 775.082, s. 775.083, or s. 775.084. 1095
1625	1625	The statute-of-limitations period for the prosecution of an 1096
1626	1626	offense committed under this subsection is 5 years. 1097
1627	1627	(10) A person may rebut a presumption of control by filing 1098
1628	1628	a disclaimer of control with the office on a form prescribed by 1099
1629	1629	the commission. The disclaimer must fully disclose all material 1100
1630	1630
1631	1631	HB 1015 2024
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1633	1633
1634	1634
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1638	1638	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1639	1639
1640	1640
1641	1641
1642	1642	relationships and bases for affiliation between the person and 1101
1643	1643	the attorney as well as the basis for disclaiming the 1102
1644	1644	affiliation. In lieu of such form, a person or acquiring party 1103
1645	1645	may file with the office a copy of a Sched ule 13G filed with the 1104
1646	1646	Securities and Exchange Commission pursuant to Rule 13d -1(b) or 1105
1647	1647	(c), 17 C.F.R. s. 240.13d -1, under the Securities Exchange Act 1106
1648	1648	of 1934, as amended. After a disclaimer has been filed, the 1107
1649	1649	attorney is relieved of any duty to register o r report under 1108
1650	1650	this section which may arise out of the attorney's relationship 1109
1651	1651	with the person unless the office disallows the disclaimer. 1110
1652	1652	(11) If the office determines that any person or any 1111
1653	1653	affiliated person of such person has acquired 10 percent or mo re 1112
1654	1654	of the outstanding voting securities of an attorney or 1113
1655	1655	controlling company which is a stock corporation, or 10 percent 1114
1656	1656	or more of the ownership interest of an attorney or controlling 1115
1657	1657	company which is not a stock corporation, without complying with 1116
1658	1658	this section, the office may order that the person and any 1117
1659	1659	affiliated person of such person cease acquisition of the 1118
1660	1660	attorney or controlling company and, if appropriate, divest 1119
1661	1661	itself of any stock or ownership interest acquired in violation 1120
1662	1662	of this section. 1121
1663	1663	(12)(a) The office shall, if necessary to protect the 1122
1664	1664	public interest, suspend or revoke the reciprocal certificate of 1123
1665	1665	authority of the reciprocal insurer whose attorney or 1124
1666	1666	controlling company is acquired in violation of this section. 1125
1667	1667
1668	1668	HB 1015 2024
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1670	1670
1671	1671
1672	1672	CODING: Words stricken are deletions; words underlined are additions.
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1675	1675	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1676	1676
1677	1677
1678	1678
1679	1679	(b) If any reciproca l insurer is subject to suspension or 1126
1680	1680	revocation pursuant to paragraph (a), the attorney shall be 1127
1681	1681	deemed to be in such condition, or to be using or to have been 1128
1682	1682	subject to such methods or practices in the conduct of its 1129
1683	1683	business, as to render its further t ransaction of insurance 1130
1684	1684	presently or prospectively hazardous to its insureds, creditors, 1131
1685	1685	or stockholders or to the public. In such case, the office may 1132
1686	1686	offer the reciprocal insurer, through its subscriber 1133
1687	1687	representatives, the ability to cure any suspension or 1134
1688	1688	revocation by procuring another attorney acceptable to the 1135
1689	1689	office. 1136
1690	1690	Section 25. Section 629.227, Florida Statutes, is created 1137
1691	1691	to read: 1138
1692	1692	629.227 Background information. —The information as to the 1139
1693	1693	background and identity of each person about whom info rmation is 1140
1694	1694	required to be furnished pursuant to s. 629.081 or s. 629.225 1141
1695	1695	must include, but need not be limited to: 1142
1696	1696	(1) Occupations, positions of employment, and offices held 1143
1697	1697	during the past 10 years, including the principal business and 1144
1698	1698	address of any business, corporation, or organization where each 1145
1699	1699	occupation, position of employment, or office occurred. 1146
1700	1700	(2) Whether the person was, at any time during such 10 -1147
1701	1701	year period, convicted of any crime other than a traffic 1148
1702	1702	violation. 1149
1703	1703	(3) Whether the person ha s been, during such 10 -year 1150
1704	1704
1705	1705	HB 1015 2024
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1707	1707
1708	1708
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1712	1712	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1713	1713
1714	1714
1715	1715
1716	1716	period, the subject of any proceeding for the revocation of any 1151
1717	1717	license and, if so, the nature of the proceeding and the 1152
1718	1718	disposition of the proceeding. 1153
1719	1719	(4) Whether, during such 10 -year period, the person has 1154
1720	1720	been the subject of any proceeding under the federal Bankruptcy 1155
1721	1721	Act. 1156
1722	1722	(5) Whether, during such 10 -year period, any person or 1157
1723	1723	other business or organization in which the person was a 1158
1724	1724	director, officer, trustee, partner, owner, manager, or other 1159
1725	1725	official has been subject of any proceeding under the federal 1160
1726	1726	Bankruptcy Act, either during the time of that person's tenure 1161
1727	1727	with the business or organization or within 12 months 1162
1728	1728	thereafter. 1163
1729	1729	(6) Whether, during such 10 -year period, the person has 1164
1730	1730	been enjoined, temporarily or perman ently, by a court of 1165
1731	1731	competent jurisdiction from violating any federal or state law 1166
1732	1732	regulating the business of insurance, securities, or banking, or 1167
1733	1733	from carrying out any particular practice or practices in the 1168
1734	1734	course of the business of insurance, securiti es, or banking, 1169
1735	1735	together with details as to any such event. 1170
1736	1736	(7) Fingerprints of each person. 1171
1737	1737	(8) Any additional information as the office deems 1172
1738	1738	necessary to determine the character, experience, ability, and 1173
1739	1739	other qualifications of the person or affiliated person of such 1174
1740	1740	person for the protection of the insureds of the insurer and of 1175
1741	1741
1742	1742	HB 1015 2024
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1744	1744
1745	1745
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1749	1749	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1750	1750
1751	1751
1752	1752
1753	1753	the public. 1176
1754	1754	Section 26. Subsection (1) of section 629.231, Florida 1177
1755	1755	Statutes, is amended, and subsection (5) is added to that 1178
1756	1756	section, to read: 1179
1757	1757	629.231 Assessments. — 1180
1758	1758	(1) Assessments may from time to time be levied upon 1181
1759	1759	subscribers of an assessable a domestic reciprocal insurer who 1182
1760	1760	are liable therefor under the terms of their policies by the 1183
1761	1761	attorney. Any such assessment must have been approved upon 1184
1762	1762	approval in advance by the subscribers' advisory committee and 1185
1763	1763	the office, or by the department as receiver of the i nsurer. 1186
1764	1764	(5) Upon impairment of surplus of a nonassessable 1187
1765	1765	reciprocal insurer, the office shall revoke the authorization 1188
1766	1766	issued under s. 629.291(5). Such revocation shall not render 1189
1767	1767	subject to contingent liability any policy then in force and for 1190
1768	1768	the remainder of the period for which the premium has 1191
1769	1769	theretofore been paid; but, after such revocation, a policy may 1192
1770	1770	not be issued or renewed without providing for contingent 1193
1771	1771	assessment liability of the subscriber. 1194
1772	1772	Section 27. Section 629.241, Florida Statute s, is amended 1195
1773	1773	to read: 1196
1774	1774	629.241 Time limit for assessments. —Every subscriber of a 1197
1775	1775	domestic reciprocal insurer having contingent liability shall be 1198
1776	1776	liable for, and shall pay his or her share of, any assessment, 1199
1777	1777	as computed and limited in accordance with th is chapter, if: 1200
1778	1778
1779	1779	HB 1015 2024
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1781	1781
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1786	1786	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1787	1787
1788	1788
1789	1789
1790	1790	(1) While his or her policy is in force or within 4 years 1201
1791	1791	after its termination, the subscriber is notified by either the 1202
1792	1792	attorney or the office of its intentions to levy such 1203
1793	1793	assessment; or 1204
1794	1794	(2) An order to show cause why a receiver, conservator, 1205
1795	1795	rehabilitator, or liquidator of the insurer should not be 1206
1796	1796	appointed is issued while the subscriber's policy is in force or 1207
1797	1797	within 4 years after its termination. 1208
1798	1798	Section 28. Section 629.251, Florida Statutes, is amended 1209
1799	1799	to read: 1210
1800	1800	629.251 Aggregate liability.—No one policy or subscriber 1211
1801	1801	as to such policy shall be assessed or charged with an aggregate 1212
1802	1802	of contingent liability as to obligations incurred by a domestic 1213
1803	1803	reciprocal insurer in any one calendar year in excess of the 1214
1804	1804	amount provided for in the power of attorney or in the 1215
1805	1805	subscribers' agreement, computed solely upon premium earned on 1216
1806	1806	such policy during that year. 1217
1807	1807	Section 29. Subsection (2) of section 629.271, Florida 1218
1808	1808	Statutes, is amended to read: 1219
1809	1809	629.271 Distribution of savings. — 1220
1810	1810	(2) In addition to the option provided in subsection (1), 1221
1811	1811	a domestic reciprocal insurer may, upon the prior written 1222
1812	1812	approval of the office, pay to its subscribers a portion of 1223
1813	1813	unassigned funds of up to 10 percent of surplus, with 1224
1814	1814	distribution limited to 50 percent of net income from the 1225
1815	1815
1816	1816	HB 1015 2024
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1818	1818
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1823	1823	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1824	1824
1825	1825
1826	1826
1827	1827	previous calendar year. Such distribution may not unfairly 1226
1828	1828	discriminate between classes of risks or policies, or between 1227
1829	1829	subscribers, but may vary as to classes of subscribers based on 1228
1830	1830	the experience of the classes. 1229
1831	1831	Section 30. Section 629.281, Florida Statutes, is amended 1230
1832	1832	to read: 1231
1833	1833	629.281 Subscribers' share in assets. —Upon the liquidation 1232
1834	1834	of an assessable a domestic reciprocal insurer, its assets 1233
1835	1835	remaining after discharge of its indebtedness and policy 1234
1836	1836	obligations, the return of any contributions of the attorney or 1235
1837	1837	other persons to its surplus made as provided in s. 629.161, and 1236
1838	1838	the return of any unused premium, savings, or credits then 1237
1839	1839	standing on subscribers' accounts shall be distributed to its 1238
1840	1840	subscribers who were such within the 12 months prior to the last 1239
1841	1841	termination of its reciprocal certificate of authority, 1240
1842	1842	according to such reasonable formula as the office approves. 1241
1843	1843	Section 31. Section 629.291, Florida Statutes, is amended 1242
1844	1844	to read: 1243
1845	1845	629.291 Merger or con version.— 1244
1846	1846	(1) A domestic reciprocal insurer, upon affirmative vote 1245
1847	1847	of not less than two -thirds of its subscribers who vote on such 1246
1848	1848	merger pursuant to due notice , and subject to the approval by of 1247
1849	1849	the office of the terms therefor, may merge with another 1248
1850	1850	reciprocal insurer or be converted to a stock or mutual insurer , 1249
1851	1851	to be thereafter governed by the applicable sections of the 1250
1852	1852
1853	1853	HB 1015 2024
1854	1854
1855	1855
1856	1856
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1860	1860	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1861	1861
1862	1862
1863	1863
1864	1864	insurance code. However, a domestic stock insurer may not 1251
1865	1865	convert to a reciprocal insurer . 1252
1866	1866	(2) A plan to merge a reciprocal insure r with another 1253
1867	1867	reciprocal insurer or for conversion of the reciprocal insurer 1254
1868	1868	to a stock or mutual insurer shall be filed on forms adopted by 1255
1869	1869	the office Such a stock or mutual insurer shall be subject to 1256
1870	1870	the same capital or surplus requirements and shall h ave the same 1257
1871	1871	rights as a like domestic insurer transacting like kinds of 1258
1872	1872	insurance. 1259
1873	1873	(3) The office shall not approve any plan for such merger 1260
1874	1874	or conversion which is inequitable to subscribers or which, if 1261
1875	1875	for conversion to a stock insurer, does not give each subscriber 1262
1876	1876	preferential right to acquire stock of the proposed insurer 1263
1877	1877	proportionate to his or her interest in the reciprocal insurer, 1264
1878	1878	as determined in accordance with s. 629.281, and a reasonable 1265
1879	1879	length of time within which to exercise such right. 1266
1880	1880	(4) Reinsurance of all or substantially all of the 1267
1881	1881	insurance in force of a domestic reciprocal insurer in another 1268
1882	1882	insurer shall be deemed to be a merger for the purposes of this 1269
1883	1883	section. 1270
1884	1884	(5)(a) An assessable reciprocal insurer may convert to a 1271
1885	1885	nonassessable reciprocal insurer if: 1272
1886	1886	1. The subscriber's advisory committee approves the 1273
1887	1887	application for conversion; 1274
1888	1888	2. The attorney submits the application on the required 1275
1889	1889
1890	1890	HB 1015 2024
1891	1891
1892	1892
1893	1893
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1897	1897	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1898	1898
1899	1899
1900	1900
1901	1901	application form; and 1276
1902	1902	3. The office finds that the application meets the minimum 1277
1903	1903	statutory requirements. 1278
1904	1904	(b) If the office approves the application, the assessable 1279
1905	1905	reciprocal insurer may convert to a nonassessable reciprocal 1280
1906	1906	insurer by: 1281
1907	1907	1. Extinguishing the contingent liability of subscribers 1282
1908	1908	under all policies then in force in this stat e; 1283
1909	1909	2. Omitting contingent liability provisions in all 1284
1910	1910	policies delivered or issued in this state after the conversion; 1285
1911	1911	and 1286
1912	1912	3. Otherwise extinguishing the contingent liability of all 1287
1913	1913	of its subscribers. However, if the reciprocal insurer is 1288
1914	1914	transacting insurance as an authorized insurer in another state 1289
1915	1915	and that state's laws require the insurer to issue policies with 1290
1916	1916	contingent liability provisions, the insurer may issue 1291
1917	1917	contingent liability policies in that other state. 1292
1918	1918	(c) If the surplus of the reci procal insurer becomes 1293
1919	1919	impaired, the insurer may no longer issue nonassessable policies 1294
1920	1920	or convert assessable policies to nonassessable policies, and 1295
1921	1921	the provisions of s. 629.301 shall apply. 1296
1922	1922	Section 32. Subsections (1) and (2) of section 629.301, 1297
1923	1923	Florida Statutes, are amended to read: 1298
1924	1924	629.301 Impaired reciprocal insurers. — 1299
1925	1925	(1) If the assets of a domestic reciprocal insurer are at 1300
1926	1926
1927	1927	HB 1015 2024
1928	1928
1929	1929
1930	1930
1931	1931	CODING: Words stricken are deletions; words underlined are additions.
1932	1932	hb1015-00
1933	1933	Page 53 of 95
1934	1934	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1935	1935
1936	1936
1937	1937
1938	1938	any time insufficient to discharge its liabilities, other than 1301
1939	1939	any liability on account of funds contributed by the atto rney or 1302
1940	1940	others, and to maintain the required surplus, its attorney shall 1303
1941	1941	forthwith make up the deficiency or levy an assessment upon the 1304
1942	1942	subscribers for the amount needed to make up the deficiency, but 1305
1943	1943	subject to the limitation set forth in the power of at torney or 1306
1944	1944	policy. 1307
1945	1945	(2) If the attorney fails to make up such deficiency or to 1308
1946	1946	make the assessment within 30 days after the office orders him 1309
1947	1947	or her to do so, or if the deficiency is not fully made up 1310
1948	1948	within 60 days after the date the assessment was made, the 1311
1949	1949	insurer shall be deemed insolvent and shall be proceeded against 1312
1950	1950	in the same manner as any other domestic insurer under chapter 1313
1951	1951	631 and the insurance as authorized by this code. 1314
1952	1952	Section 33. Section 629.401, Florida Statutes, is 1315
1953	1953	repealed. 1316
1954	1954	Section 34. Section 629.520, Florida Statutes, is 1317
1955	1955	repealed. 1318
1956	1956	Section 35. Section 629.525, Florida Statutes, is created 1319
1957	1957	to read: 1320
1958	1958	629.525 Rulemaking authority. —The commission shall adopt, 1321
1959	1959	amend, or repeal rules necessary to implement this part. 1322
1960	1960	Section 36. Part II of chapter 629, Florida Statutes, 1323
1961	1961	consisting of sections 629.601, 629.602, 629.603, 629.604, 1324
1962	1962	629.605, 629.606, 629.607, 629.608, 629.609, 629.611, 629.612, 1325
1963	1963
1964	1964	HB 1015 2024
1965	1965
1966	1966
1967	1967
1968	1968	CODING: Words stricken are deletions; words underlined are additions.
1969	1969	hb1015-00
1970	1970	Page 54 of 95
1971	1971	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1972	1972
1973	1973
1974	1974
1975	1975	629.613, 629.614, 629.615, 629.616, 629.617, 629.618, 629.619, 1326
1976	1976	629.6201, 629.621, 629.622, 629.623, 629.624, 629.625, 629.626, 1327
1977	1977	629.627, 629.628, 629.629, 629.6301, 629.631, 629.632, 629.633, 1328
1978	1978	and 629.634, Florida Statutes, is created and entitled 1329
1979	1979	"Insurance Exchanges." 1330
1980	1980	Section 37. Section 629.601, Florida Statutes, is created 1331
1981	1981	to read: 1332
1982	1982	629.601 Purposes.— 1333
1983	1983	(1) There may be created one or more insurance exchanges, 1334
1984	1984	with one or more offices each, subject to such rules as are 1335
1985	1985	adopted by the commission. For the purposes of this part, the 1336
1986	1986	term "exchange" applies to any such insurance ex change proposed 1337
1987	1987	or created under this part. The purposes of the exchange are: 1338
1988	1988	(a) To provide a facility for the underwriting of: 1339
1989	1989	1. Reinsurance of all kinds of insurance. 1340
1990	1990	2. Direct insurance of all kinds on risks located entirely 1341
1991	1991	outside the United S tates. 1342
1992	1992	3. Surplus lines insurance for risks located in this state 1343
1993	1993	eligible for export under s. 626.916 or s. 626.917 and placed 1344
1994	1994	through a licensed Florida surplus lines agent subject to 1345
1995	1995	compliance with the provisions of ss. 626.921, 626.922, 626.923, 1346
1996	1996	626.924, 626.929, 626.9295, 626.930, and 626.931. With respect 1347
1997	1997	to compliance with s. 626.924, the required legend may refer to 1348
1998	1998	any coverage provided for by a security fund. 1349
1999	1999	4. Surplus lines insurance in any other state subject to 1350
2000	2000
2001	2001	HB 1015 2024
2002	2002
2003	2003
2004	2004
2005	2005	CODING: Words stricken are deletions; words underlined are additions.
2006	2006	hb1015-00
2007	2007	Page 55 of 95
2008	2008	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2009	2009
2010	2010
2011	2011
2012	2012	the applicable surplus line s laws of such other state for risks 1351
2013	2013	located entirely outside of this state. 1352
2014	2014	(b) To manage the facility authorized by this section, in 1353
2015	2015	accordance with rules adopted by the commission. 1354
2016	2016	(2) In no event shall the exchange be considered to be an 1355
2017	2017	underwriter or broker with respect to any contract of insurance 1356
2018	2018	or reinsurance written by a member of the exchange, and the 1357
2019	2019	exchange may not incur any liability therefor. 1358
2020	2020	Section 38. Section 629.602, Florida Statutes, is created 1359
2021	2021	to read: 1360
2022	2022	629.602 Definitions. —As used in this part, the term: 1361
2023	2023	(1) "Affiliated person" of another person has the same 1362
2024	2024	meaning as in s. 629.011. 1363
2025	2025	(2) "Controlling company" means a corporation, trust, or 1364
2026	2026	association owning, directly or indirectly, 25 percent or more 1365
2027	2027	of the voting securi ties of one or more underwriting members. 1366
2028	2028	(3) "Premium" means the consideration for insurance, by 1367
2029	2029	whatever name called. The term includes an assessment or a 1368
2030	2030	membership, policy, survey, inspection, service fee or charge, 1369
2031	2031	or similar fee or charge in consid eration for an insurance 1370
2032	2032	contract. 1371
2033	2033	(4) "Underwriting manager" means a person, partnership, 1372
2034	2034	corporation, or organization providing any of the following 1373
2035	2035	services to underwriting members of the exchange: 1374
2036	2036	(a) Office management and allied services, includin g 1375
2037	2037
2038	2038	HB 1015 2024
2039	2039
2040	2040
2041	2041
2042	2042	CODING: Words stricken are deletions; words underlined are additions.
2043	2043	hb1015-00
2044	2044	Page 56 of 95
2045	2045	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2046	2046
2047	2047
2048	2048
2049	2049	correspondence and secretarial services. 1376
2050	2050	(b) Accounting services, including bookkeeping and 1377
2051	2051	financial report preparation. 1378
2052	2052	(c) Investment and banking consultations and services. 1379
2053	2053	(d) Underwriting functions and services, including the 1380
2054	2054	acceptance, rejection, placement, and marketing of risk. 1381
2055	2055	(5) "Underwriting member" means any entity that is a 1382
2056	2056	member of the exchange and is licensed or authorized to 1383
2057	2057	underwrite insurance, including, but not limited to, domestic, 1384
2058	2058	foreign, and alien insurers. The term in cludes underwriting 1385
2059	2059	syndicates. 1386
2060	2060	Section 39. Section 629.603, Florida Statutes, is created 1387
2061	2061	to read: 1388
2062	2062	629.603 Formation of exchanges. — 1389
2063	2063	(1) The operation of this part becomes effective with 1390
2064	2064	respect to any exchange only after a determination by the offi ce 1391
2065	2065	that the exchange may operate in an economic and beneficial 1392
2066	2066	manner. A committee shall be appointed to write the constitution 1393
2067	2067	and bylaws of the proposed exchange, to make such other 1394
2068	2068	recommendations as may be necessary to ensure maximum 1395
2069	2069	coordination of the operations of the exchange with existing 1396
2070	2070	insurance industry operations, and to ensure maximum economic 1397
2071	2071	benefits to the state from the operations of the exchange. 1398
2072	2072	(2) The committee shall consist of 13 members, 6 to be 1399
2073	2073	appointed by the Chief Financial Of ficer, 2 each to be appointed 1400
2074	2074
2075	2075	HB 1015 2024
2076	2076
2077	2077
2078	2078
2079	2079	CODING: Words stricken are deletions; words underlined are additions.
2080	2080	hb1015-00
2081	2081	Page 57 of 95
2082	2082	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2083	2083
2084	2084
2085	2085
2086	2086	by the Speaker of the House of Representatives and the President 1401
2087	2087	of the Senate, 1 each to be appointed by the Minority Leader of 1402
2088	2088	the House of Representatives and the Minority Leader of the 1403
2089	2089	Senate, and 1 to be appointed the Chi ef Financial Officer or his 1404
2090	2090	or her designated representative. The chair shall be elected by 1405
2091	2091	a majority of the committee. 1406
2092	2092	(3) The committee shall transmit such proposed 1407
2093	2093	constitution and bylaws and such other recommendations to the 1408
2094	2094	office and to the Legislature no later than 5 days before the 1409
2095	2095	adjournment of a regular annual legislative session or no later 1410
2096	2096	than 5 days before the commencement of any special or 1411
2097	2097	organizational legislative session. Subject to the disapproval 1412
2098	2098	of the constitution and bylaws by either house of the 1413
2099	2099	Legislature by resolution before the end of such legislative 1414
2100	2100	session, the exchange shall have full authority to function 1415
2101	2101	pursuant to its constitution and bylaws 60 days after the end of 1416
2102	2102	the session. 1417
2103	2103	Section 40. Section 629.604, F lorida Statutes, is created 1418
2104	2104	to read: 1419
2105	2105	629.604 Board of Governors of the exchange. — 1420
2106	2106	(1) The initial Board of Governors of the exchange shall 1421
2107	2107	consist of 14 members, 3 of whom shall be appointed by the Chief 1422
2108	2108	Financial Officer, 3 by the Speaker of the House of 1423
2109	2109	Representatives, 3 by the President of the Senate, 1 by the 1424
2110	2110	Minority Leader of the House of Representatives, 1 by the 1425
2111	2111
2112	2112	HB 1015 2024
2113	2113
2114	2114
2115	2115
2116	2116	CODING: Words stricken are deletions; words underlined are additions.
2117	2117	hb1015-00
2118	2118	Page 58 of 95
2119	2119	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2120	2120
2121	2121
2122	2122
2123	2123	Minority Leader of the Senate, and 3 by the Governor, to serve 1426
2124	2124	until the first election pursuant to the constitution or bylaws. 1427
2125	2125	These appointments shall be made no later than 30 days after the 1428
2126	2126	end of the legislative session referenced in s. 629.603(3). 1429
2127	2127	(2) All subsequent Boards of Governors shall consist of 13 1430
2128	2128	members: 1431
2129	2129	(a) Seven of whom shall be appointed by and serve at the 1432
2130	2130	pleasure of the Chief Financial Officer. Of these members: 1433
2131	2131	1. Five must not be members of the exchange. 1434
2132	2132	2. One of the two remaining members must be a broker 1435
2133	2133	member, and the other must be a representative of an 1436
2134	2134	underwriting member. 1437
2135	2135	(b) Six of whom shall be el ected by the members of the 1438
2136	2136	exchange in accordance with the constitution and bylaws, except 1439
2137	2137	that at least five members shall be elected by the underwriting 1440
2138	2138	members of the exchange. 1441
2139	2139	Section 41. Section 629.605, Florida Statutes, is created 1442
2140	2140	to read: 1443
2141	2141	629.605 Constitution and bylaws of the exchange. —The 1444
2142	2142	constitution and bylaws of the exchange shall provide for, but 1445
2143	2143	shall not be limited to: 1446
2144	2144	(1) The selection and election of 13 governors, as 1447
2145	2145	required by s. 629.604(2). 1448
2146	2146	(2) The location of the principal o ffices of the exchange 1449
2147	2147	and the principal offices of its members to be within this state 1450
2148	2148
2149	2149	HB 1015 2024
2150	2150
2151	2151
2152	2152
2153	2153	CODING: Words stricken are deletions; words underlined are additions.
2154	2154	hb1015-00
2155	2155	Page 59 of 95
2156	2156	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2157	2157
2158	2158
2159	2159
2160	2160	for the purpose of the transaction of the type of business 1451
2161	2161	described in s. 629.601. A principal office shall be one where 1452
2162	2162	officers and qualified personnel who are engag ed in the 1453
2163	2163	administration, underwriting, claims, policyholders' service, 1454
2164	2164	marketing, accounting, recordkeeping, and all supportive 1455
2165	2165	services shall be located. 1456
2166	2166	(3) The submission by members and all applicants for 1457
2167	2167	membership on the exchange of such financial information as may 1458
2168	2168	be required by the office. 1459
2169	2169	(4) The establishment by the exchange of a security fund 1460
2170	2170	in such form and amount as approved by the office. With respect 1461
2171	2171	to contracts of insurance written or renewed on or after July 2, 1462
2172	2172	1987: 1463
2173	2173	(a) The security fund shall pay that amount of each 1464
2174	2174	covered claim which is determined to be payable in accordance 1465
2175	2175	with the constitution and bylaws and is in excess of $300 and 1466
2176	2176	less than $750,000 except that the fund shall not be obligated 1467
2177	2177	to a policyholder or claimant i n an amount in excess of the 1468
2178	2178	obligation of the insolvent underwriting member under the policy 1469
2179	2179	from which the claim arises. 1470
2180	2180	(b) The security fund shall have no obligation and shall 1471
2181	2181	make no payment of any obligation arising under any such 1472
2182	2182	contract or with respect to any contract of reinsurance written 1473
2183	2183	or renewed on or after July 2, 1987, to the extent the payment 1474
2184	2184	or payments exceed, either individually or in the aggregate, 10 1475
2185	2185
2186	2186	HB 1015 2024
2187	2187
2188	2188
2189	2189
2190	2190	CODING: Words stricken are deletions; words underlined are additions.
2191	2191	hb1015-00
2192	2192	Page 60 of 95
2193	2193	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2194	2194
2195	2195
2196	2196
2197	2197	percent of the insolvent underwriting member's surplus as to 1476
2198	2198	policyholders as refl ected on the most recent sworn annual 1477
2199	2199	statement of the insolvent underwriting member filed with the 1478
2200	2200	office prior to issuance of such contract. 1479
2201	2201	(c) For the purposes of this subsection, each reinsurance 1480
2202	2202	treaty and each contract of insurance inuring to the benefit of 1481
2203	2203	multiple parties shall constitute only one contract, and covered 1482
2204	2204	claims include unpaid claims, including claims of unearned 1483
2205	2205	premiums, which arise out of and are within the coverage and are 1484
2206	2206	not in excess of the applicable limits of an insurance policy 1485
2207	2207	issued by an insolvent underwriting member through the 1486
2208	2208	facilities of the exchange. 1487
2209	2209	(5) The voting power of underwriting members. 1488
2210	2210	(6) The voting power and other rights granted under the 1489
2211	2211	provisions of the not -for-profit corporation law, chapter 61 7, 1490
2212	2212	to participate in the conduct and management of the affairs of 1491
2213	2213	the exchange, by brokers, agents, and intermediaries transacting 1492
2214	2214	business on the exchange, each of whom shall be considered 1493
2215	2215	members only under the provisions of such law. 1494
2216	2216	(7) The rights and duties of exchange members, which may 1495
2217	2217	include, but shall not be limited to, the manner and form of 1496
2218	2218	conducting business, financial stability, dues, membership fees, 1497
2219	2219	mandatory arbitration, and all other matters necessary or 1498
2220	2220	appropriate to conduct any busin ess permitted herein. 1499
2221	2221	1500
2222	2222
2223	2223	HB 1015 2024
2224	2224
2225	2225
2226	2226
2227	2227	CODING: Words stricken are deletions; words underlined are additions.
2228	2228	hb1015-00
2229	2229	Page 61 of 95
2230	2230	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2231	2231
2232	2232
2233	2233
2234	2234	Any amendments to the constitution and bylaws are subject to the 1501
2235	2235	approval of the office. 1502
2236	2236	Section 42. Section 629.606, Florida Statutes, is created 1503
2237	2237	to read: 1504
2238	2238	629.606 Taxation.—Any insurance exchange formed under this 1505
2239	2239	part is not subject to any state or local taxes or fees measured 1506
2240	2240	by income, premiums, or gross receipts; except that for purposes 1507
2241	2241	of taxation under s. 624.509, direct premiums written, procured, 1508
2242	2242	or received by a member or members through the exchange on risks 1509
2243	2243	located in this state shall be construed to be written, 1510
2244	2244	procured, or received by the exchange, and the premium tax due 1511
2245	2245	on said premium shall be reported and paid by the exchange. 1512
2246	2246	Section 43. Section 629.607, Florida Statutes, is created 1513
2247	2247	to read: 1514
2248	2248	629.607 Expenses.—The exchange shall reimburse the office 1515
2249	2249	for any expenses incurred by the office relating to the 1516
2250	2250	regulation of the exchange and its members. Each person or 1517
2251	2251	entity examined by the office shall pay the exchange for the 1518
2252	2252	expenses incurred in such examinat ion. 1519
2253	2253	(1) The office shall examine the affairs, transactions, 1520
2254	2254	accounts, records, and assets of any security fund, exchange, 1521
2255	2255	members, and associate brokers as often as it deems advisable. 1522
2256	2256	The examination may be conducted by the accredited examiners of 1523
2257	2257	the office at the offices of the entity or person being 1524
2258	2258	examined. The office shall examine in like manner each 1525
2259	2259
2260	2260	HB 1015 2024
2261	2261
2262	2262
2263	2263
2264	2264	CODING: Words stricken are deletions; words underlined are additions.
2265	2265	hb1015-00
2266	2266	Page 62 of 95
2267	2267	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2268	2268
2269	2269
2270	2270
2271	2271	prospective member or associate broker applying for membership 1526
2272	2272	in an exchange. 1527
2273	2273	(2) If the department has reason to believe that any 1528
2274	2274	agent, as defined in s. 626.015 or s. 626.914, has violated or 1529
2275	2275	is violating any provision of the insurance law, or upon receipt 1530
2276	2276	of a written complaint signed by any interested person 1531
2277	2277	indicating that any such violation may exist, the department 1532
2278	2278	shall conduct such examinat ion as it deems necessary of the 1533
2279	2279	accounts, records, documents, and transactions pertaining to or 1534
2280	2280	affecting the insurance affairs of such agent. 1535
2281	2281	(3) Any person or entity that willfully obstructs the 1536
2282	2282	office or its examiner in an examination commits a misdemeanor 1537
2283	2283	of the second degree, punishable as provided in s. 775.082 or s. 1538
2284	2284	775.083. 1539
2285	2285	Section 44. Section 629.608, Florida Statutes, is created 1540
2286	2286	to read: 1541
2287	2287	629.608 Powers of examiners; subpoenas and testimony. — 1542
2288	2288	(1) Any examiner appointed by the office , as to the 1543
2289	2289	subject of any examination, investigation, or hearing being 1544
2290	2290	conducted by him or her, may administer oaths, examine and 1545
2291	2291	cross-examine witnesses, and receive oral and documentary 1546
2292	2292	evidence, and shall have the power to subpoena witnesses, compel 1547
2293	2293	their attendance and testimony, and require by subpoena the 1548
2294	2294	production of books, papers, records, files, correspondence, 1549
2295	2295	documents, or other evidence which the examiner deems relevant 1550
2296	2296
2297	2297	HB 1015 2024
2298	2298
2299	2299
2300	2300
2301	2301	CODING: Words stricken are deletions; words underlined are additions.
2302	2302	hb1015-00
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2304	2304	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2305	2305
2306	2306
2307	2307
2308	2308	to the inquiry. If any person refuses to comply with any such 1551
2309	2309	subpoena or to testify as to any matter concerning which he or 1552
2310	2310	she may be lawfully interrogated, the Circuit Court of Leon 1553
2311	2311	County or the circuit court of the county wherein such 1554
2312	2312	examination, investigation, or hearing is being conducted, or of 1555
2313	2313	the county wherein such p erson resides, on the office's 1556
2314	2314	application may issue an order requiring such person to comply 1557
2315	2315	with the subpoena and to testify; and any failure to obey such 1558
2316	2316	an order of the court may be punished by the court as a contempt 1559
2317	2317	thereof. 1560
2318	2318	(2) Any person who refu ses or fails, without lawful cause, 1561
2319	2319	to testify relative to the affairs of a member, associate 1562
2320	2320	broker, or other person when subpoenaed and requested by the 1563
2321	2321	office to so testify, as provided in subsection (1), commits a 1564
2322	2322	misdemeanor of the second degree, puni shable as provided in s. 1565
2323	2323	775.082 or s. 775.083, in addition to the penalty provided in 1566
2324	2324	subsection (1). 1567
2325	2325	(3) Any person willfully testifying falsely under oath as 1568
2326	2326	to any matter material to any examination, investigation, or 1569
2327	2327	hearing shall upon conviction th ereof be guilty of perjury and 1570
2328	2328	shall be punished accordingly. 1571
2329	2329	(4)(a) If any person asks to be excused from attending or 1572
2330	2330	testifying or from producing any books, papers, records, 1573
2331	2331	contracts, documents, or other evidence in connection with any 1574
2332	2332	examination, hearing, or investigation being conducted by the 1575
2333	2333
2334	2334	HB 1015 2024
2335	2335
2336	2336
2337	2337
2338	2338	CODING: Words stricken are deletions; words underlined are additions.
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2341	2341	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2342	2342
2343	2343
2344	2344
2345	2345	office or its examiner, on the ground that the testimony or 1576
2346	2346	evidence required of the person may tend to incriminate him or 1577
2347	2347	her or subject him or her to a penalty or forfeiture, and the 1578
2348	2348	person notwithstanding is directed to give such testimony or 1579
2349	2349	produce such evidence, he or she shall, if so directed by the 1580
2350	2350	office and the Department of Legal Affairs, nonetheless comply 1581
2351	2351	with such direction; but the person may not thereafter be 1582
2352	2352	prosecuted or subjected to any pen alty or forfeiture for or on 1583
2353	2353	account of any transaction, matter, or thing concerning which he 1584
2354	2354	or she may have so testified or produced evidence, and no 1585
2355	2355	testimony so given or evidence so produced shall be received 1586
2356	2356	against him or her upon any criminal action , investigation, or 1587
2357	2357	proceeding; except that such person so testifying is not exempt 1588
2358	2358	from prosecution or punishment for any perjury committed by him 1589
2359	2359	or her in such testimony, and the testimony or evidence so given 1590
2360	2360	or produced shall be admissible against him or her upon any 1591
2361	2361	criminal action, investigation, or proceeding concerning such 1592
2362	2362	perjury, nor shall he or she be exempt from the refusal, 1593
2363	2363	suspension, or revocation of any license, permission, or 1594
2364	2364	authority conferred, or to be conferred, pursuant to the 1595
2365	2365	insurance law. 1596
2366	2366	(b) Any such individual may execute, acknowledge, and file 1597
2367	2367	with the office a statement expressly waiving such immunity or 1598
2368	2368	privilege in respect to any transaction, matter, or thing 1599
2369	2369	specified in such statement, and thereupon the testimony of such 1600
2370	2370
2371	2371	HB 1015 2024
2372	2372
2373	2373
2374	2374
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2378	2378	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2379	2379
2380	2380
2381	2381
2382	2382	individual or such evidence in relation to such transaction, 1601
2383	2383	matter, or thing may be received or produced before any judge or 1602
2384	2384	justice, court, tribunal, grand jury, or otherwise; and if such 1603
2385	2385	testimony or evidence is so received or produced, such 1604
2386	2386	individual shall not be entitled to any immunity or privileges 1605
2387	2387	on account of any testimony so given or evidence so produced. 1606
2388	2388	(5) Subpoenas shall be served, and proof of such service 1607
2389	2389	made, in the same manner as if issued by a circuit court. 1608
2390	2390	(6) Witness fees and mi leage, if claimed, shall be allowed 1609
2391	2391	the same as for testimony in a circuit court. 1610
2392	2392	Section 45. Section 629.609, Florida Statutes, is created 1611
2393	2393	to read: 1612
2394	2394	629.609 Written examination reports. — 1613
2395	2395	(1) The office or its examiner shall make a full and true 1614
2396	2396	written report of any examination. The report must contain only 1615
2397	2397	information obtained from examination of the records, accounts, 1616
2398	2398	files, and documents of or relative to the person or entity 1617
2399	2399	examined or from testimony of individuals under oath, together 1618
2400	2400	with relevant conclusions and recommendations of the examiner 1619
2401	2401	based thereon. The office shall furnish a copy of the report to 1620
2402	2402	the person or entity examined not less than 30 days prior to 1621
2403	2403	filing the report in its office. If such person or entity so 1622
2404	2404	requests in writing within such 30-day period, the office shall 1623
2405	2405	grant a hearing with respect to the report and shall not file 1624
2406	2406	the report until after the hearing and after such modifications 1625
2407	2407
2408	2408	HB 1015 2024
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2415	2415	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2416	2416
2417	2417
2418	2418
2419	2419	have been made therein as the office deems proper. 1626
2420	2420	(2) The report of an examinat ion when filed shall be 1627
2421	2421	admissible in evidence in any action or proceeding brought by 1628
2422	2422	the office against the person or entity examined, or against his 1629
2423	2423	or her or its officers, employees, or agents. The office or its 1630
2424	2424	examiners may at any time testify and off er other proper 1631
2425	2425	evidence as to information secured or matters discovered during 1632
2426	2426	the course of an examination, whether or not a written report of 1633
2427	2427	the examination has been either made, furnished, or filed in the 1634
2428	2428	office. 1635
2429	2429	(3) After an examination report has been filed, the office 1636
2430	2430	may publish the results of any such examination in one or more 1637
2431	2431	newspapers published in this state, or on its website, whenever 1638
2432	2432	it deems it to be in the public interest. 1639
2433	2433	(4) After the examination report of an underwriting member 1640
2434	2434	has been filed, an affidavit shall be filed with the office, not 1641
2435	2435	more than 30 days after the report has been filed, on a form 1642
2436	2436	furnished by the office and signed by the person or a 1643
2437	2437	representative of any entity examined, stating that the report 1644
2438	2438	has been read and that the recommendations made in the report 1645
2439	2439	will be considered within a reasonable time. 1646
2440	2440	Section 46. Section 629.611, Florida Statutes, is created 1647
2441	2441	to read: 1648
2442	2442	629.611 Correction and reconstruction of records. —If the 1649
2443	2443	office finds any accounts or record s to be inadequate, or 1650
2444	2444
2445	2445	HB 1015 2024
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2452	2452	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2453	2453
2454	2454
2455	2455
2456	2456	inadequately kept or posted, it may employ experts to 1651
2457	2457	reconstruct, rewrite, post, or balance them at the expense of 1652
2458	2458	the person or entity being examined if such person or entity has 1653
2459	2459	failed to maintain, complete, or correct such record s or 1654
2460	2460	accounts after the office has given him or her or it notice and 1655
2461	2461	reasonable opportunity to do so. 1656
2462	2462	Section 47. Section 629.612, Florida Statutes, is created 1657
2463	2463	to read: 1658
2464	2464	629.612 Underwriting members of the exchange. - 1659
2465	2465	(1) The provisions of ss. 625.0 12, 625.031, and 625.302 -1660
2466	2466	625.338 shall be applicable to the underwriting members of an 1661
2467	2467	exchange in the same manner as those sections apply to domestic 1662
2468	2468	insurers authorized to do business in this state. 1663
2469	2469	(2) All underwriting members must maintain a minimum 1664
2470	2470	policyholder surplus of $5 million to write insurance. Except 1665
2471	2471	for that portion of the paid -in capital and surplus which shall 1666
2472	2472	be maintained in a security fund of an exchange, the paid -in 1667
2473	2473	capital and surplus shall be invested by an underwriting member 1668
2474	2474	in a manner consistent with ss. 625.301 -625.340. The portion of 1669
2475	2475	the paid-in capital and surplus in any security fund of an 1670
2476	2476	exchange shall be invested in a manner limited to investments 1671
2477	2477	for life insurance companies under the Florida insurance laws. 1672
2478	2478	(3) All underwriting members must be members of the 1673
2479	2479	security fund of any exchange. 1674
2480	2480	Section 48. Section 629.613, Florida Statutes, is created 1675
2481	2481
2482	2482	HB 1015 2024
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2484	2484
2485	2485
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2489	2489	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2490	2490
2491	2491
2492	2492
2493	2493	to read: 1676
2494	2494	629.613 Establishment of underwriting members. — 1677
2495	2495	(1) An underwriting member may not commence operation 1678
2496	2496	without the approval of the office. Before commencing operation, 1679
2497	2497	an underwriting member must provide a written application on a 1680
2498	2498	form adopted by the commission which contains: 1681
2499	2499	(a) The name, type, and purpose of the underwriting 1682
2500	2500	member. An underwriting member m ay not be formed or authorized 1683
2501	2501	to transact insurance in this state under a name that is the 1684
2502	2502	same as that of any authorized insurer or is so nearly similar 1685
2503	2503	thereto as to cause or tend to cause confusion or under a name 1686
2504	2504	that would tend to mislead as to the t ype of organization of the 1687
2505	2505	insurer. Before incorporating under or using any name, the 1688
2506	2506	underwriting syndicate or proposed underwriting syndicate must 1689
2507	2507	submit its name or proposed name to the office for the approval 1690
2508	2508	of the office. 1691
2509	2509	(b) The name, residence ad dress, business background, and 1692
2510	2510	qualifications of each person associated or to be associated in 1693
2511	2511	the formation or financing of the underwriting member. 1694
2512	2512	(c) A full disclosure of the terms of all understandings 1695
2513	2513	and agreements existing or proposed among pers ons so associated 1696
2514	2514	relative to the underwriting member, or the formation or 1697
2515	2515	financing thereof, accompanied by a copy of each such agreement 1698
2516	2516	or understanding. 1699
2517	2517	(d) A full disclosure of the terms of all understandings 1700
2518	2518
2519	2519	HB 1015 2024
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2526	2526	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2527	2527
2528	2528
2529	2529
2530	2530	and agreements existing or proposed for management or exclusive 1701
2531	2531	agency contracts. 1702
2532	2532	(2) In connection with any proposal to establish an 1703
2533	2533	underwriting member, the office shall investigate: 1704
2534	2534	(a) The character, reputation, financial standing, and 1705
2535	2535	motives of the organizers, incorporators, or subscri bers 1706
2536	2536	organizing the proposed underwriting member. 1707
2537	2537	(b) The character, financial responsibility, insurance 1708
2538	2538	experience, and business qualifications of its proposed 1709
2539	2539	officers. 1710
2540	2540	(c) The character, financial responsibility, business 1711
2541	2541	experience, and standing of the proposed stockholders and 1712
2542	2542	directors, or owners. 1713
2543	2543	Section 49. Section 629.614, Florida Statutes, is created 1714
2544	2544	to read: 1715
2545	2545	629.614 Notice of changes in management, ownership, or 1716
2546	2546	assets.— 1717
2547	2547	(1) An underwriting member shall promptly give the office 1718
2548	2548	written notice of any change among the directors or principal 1719
2549	2549	officers of the underwriting member within 30 days after such 1720
2550	2550	change. The office shall investigate the new directors or 1721
2551	2551	principal officers of the underwriting member. The office's 1722
2552	2552	investigation shall include an investigation of the character, 1723
2553	2553	financial responsibility, insurance experience, and business 1724
2554	2554	qualifications of any new directors or principal officers. As a 1725
2555	2555
2556	2556	HB 1015 2024
2557	2557
2558	2558
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2563	2563	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2564	2564
2565	2565
2566	2566
2567	2567	result of the investigation, the office may require the 1726
2568	2568	underwriting member to replace a ny new directors or principal 1727
2569	2569	officers. 1728
2570	2570	(2) A person may not conclude a tender offer or an 1729
2571	2571	exchange offer or otherwise acquire 5 percent or more of the 1730
2572	2572	outstanding voting securities of an underwriting member or 1731
2573	2573	controlling company or purchase 5 percent o r more of the 1732
2574	2574	ownership of an underwriting member or controlling company 1733
2575	2575	unless such person has filed with, and obtained the approval of, 1734
2576	2576	the office and sent to such underwriting member a statement, on 1735
2577	2577	a form adopted by the commission, providing: 1736
2578	2578	(a) The identity of, and background information on, each 1737
2579	2579	person by whom, or on whose behalf, the acquisition is to be 1738
2580	2580	made; and, if the acquisition is to be made by or on behalf of a 1739
2581	2581	corporation, association, or trust, the identity of and 1740
2582	2582	background information o n each director, officer, trustee, or 1741
2583	2583	other natural person performing duties similar to those of a 1742
2584	2584	director, officer, or trustee for the corporation, association, 1743
2585	2585	or trust. 1744
2586	2586	(b) The source and amount of the funds or other 1745
2587	2587	consideration used, or to be used , in making the acquisition. 1746
2588	2588	(c) Any plan or proposal which such person may have to 1747
2589	2589	liquidate such member, to sell its assets, or to merge or 1748
2590	2590	consolidate it. 1749
2591	2591	(d) The percentage of ownership which such person proposes 1750
2592	2592
2593	2593	HB 1015 2024
2594	2594
2595	2595
2596	2596
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2600	2600	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2601	2601
2602	2602
2603	2603
2604	2604	to acquire and the terms of the off er or exchange, as the case 1751
2605	2605	may be. 1752
2606	2606	(e) Information as to any contracts, arrangements, or 1753
2607	2607	understandings with any party with respect to any securities of 1754
2608	2608	such member or controlling company, including, but not limited 1755
2609	2609	to, information relating to the trans fer of any securities, 1756
2610	2610	option arrangements, or puts or calls or the giving or 1757
2611	2611	withholding of proxies, naming the party with whom such 1758
2612	2612	contract, arrangements, or understandings have been entered and 1759
2613	2613	giving the details thereof. 1760
2614	2614	(3) The office may disapprov e any acquisition subject to 1761
2615	2615	this section by any person or any affiliated person of such 1762
2616	2616	person who: 1763
2617	2617	(a) Willfully violates this section; 1764
2618	2618	(b) In violation of an order of the office issued pursuant 1765
2619	2619	to (8), fails to divest himself or herself of any stock obtained 1766
2620	2620	in violation of this section, or fails to divest himself or 1767
2621	2621	herself of any direct or indirect control of such stock, within 1768
2622	2622	25 days after such order; or 1769
2623	2623	(c) In violation of an order issued by the office pursuant 1770
2624	2624	to (8), acquires additional stoc k of the underwriting member or 1771
2625	2625	controlling company, or direct or indirect control of such 1772
2626	2626	stock, without complying with this subsection. 1773
2627	2627	(4) The person or persons filing the statements required 1774
2628	2628	by this section have the burden of proof. 1775
2629	2629
2630	2630	HB 1015 2024
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2637	2637	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2638	2638
2639	2639
2640	2640
2641	2641	(5) The office shall approve any such acquisition if it 1776
2642	2642	finds, on the basis of the record made during any proceeding or 1777
2643	2643	on the basis of the filed statement if no proceeding is 1778
2644	2644	conducted, that: 1779
2645	2645	(a) Upon completion of the acquisition, the underwriting 1780
2646	2646	member will be able to satisfy the requirements for the approval 1781
2647	2647	to write the line or lines of insurance for which it is 1782
2648	2648	presently approved; 1783
2649	2649	(b) The financial condition of the acquiring person or 1784
2650	2650	persons will not jeopardize the financial stability of the 1785
2651	2651	underwriting member or prejudice the interests of its 1786
2652	2652	policyholders or the public; 1787
2653	2653	(c) Any plan or proposal of the acquiring party is fair 1788
2654	2654	and free of prejudice to the policyholders of the underwriting 1789
2655	2655	member and the public, if the plan or proposal will: 1790
2656	2656	1. Liquidate the insurer, sell its assets, or merge or 1791
2657	2657	consolidate it with any person, or to make any other major 1792
2658	2658	change in its business or corporate structure or management; or 1793
2659	2659	2. Liquidate any controlling company, sell its assets, or 1794
2660	2660	merge or consolidate it with any person, or to make any major 1795
2661	2661	change in its business or corporate structure or management 1796
2662	2662	which would have an effect upon the underwriting member; 1797
2663	2663	(d) The competence, experience, and integrity of those 1798
2664	2664	persons who will control directly or indirectly the o peration of 1799
2665	2665	the underwriting member indicate that the acquisition is in the 1800
2666	2666
2667	2667	HB 1015 2024
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2674	2674	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2675	2675
2676	2676
2677	2677
2678	2678	best interest of the policyholders of the underwriting member 1801
2679	2679	and in the public interest; 1802
2680	2680	(e) The natural persons for whom background information is 1803
2681	2681	required to be furnished purs uant to this section have such 1804
2682	2682	backgrounds as to indicate that it is in the best interests of 1805
2683	2683	the policyholders of the underwriting member, and in the public 1806
2684	2684	interest, to permit such persons to exercise control over such 1807
2685	2685	underwriting member; 1808
2686	2686	(f) The officers and directors to be employed after the 1809
2687	2687	acquisition have sufficient insurance experience and ability to 1810
2688	2688	assure reasonable promise of successful operation; 1811
2689	2689	(g) The management of the underwriting member after the 1812
2690	2690	acquisition will be competent and trust worthy and will possess 1813
2691	2691	sufficient managerial experience so as to make the proposed 1814
2692	2692	operation of the underwriting member not hazardous to the 1815
2693	2693	insurance-buying public; 1816
2694	2694	(h) The management of the underwriting member after the 1817
2695	2695	acquisition will not include any person who has directly or 1818
2696	2696	indirectly through ownership, control, reinsurance transactions, 1819
2697	2697	or other insurance or business relations unlawfully manipulated 1820
2698	2698	the assets, accounts, finances, or books of any insurer or 1821
2699	2699	underwriting member or otherwise acte d in bad faith with respect 1822
2700	2700	thereto; 1823
2701	2701	(i) The acquisition is not likely to be hazardous or 1824
2702	2702	prejudicial to the underwriting member's policyholders or the 1825
2703	2703
2704	2704	HB 1015 2024
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2711	2711	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2712	2712
2713	2713
2714	2714
2715	2715	public; and 1826
2716	2716	(j) The effect of the acquisition of control would not 1827
2717	2717	substantially lessen competition in insurance in this state or 1828
2718	2718	would not tend to create a monopoly therein. 1829
2719	2719	(6) A vote by the stockholder of record, or by any other 1830
2720	2720	person, of any security acquired in contravention of this 1831
2721	2721	section is not valid. Any acquisition of any security contrary 1832
2722	2722	to this section is void. Upon the petition of the underwriting 1833
2723	2723	member or controlling company, the circuit court for the county 1834
2724	2724	in which the principal office of such underwriting member is 1835
2725	2725	located may, without limiting the generality of its authority, 1836
2726	2726	order the issuance or entry of an injunction or other order to 1837
2727	2727	enforce this section. There shall be a private right of action 1838
2728	2728	in favor of the underwriting member or controlling company to 1839
2729	2729	enforce this subsection. A demand upon the office that it 1840
2730	2730	performs its functions may not be required as a prerequisite to 1841
2731	2731	any suit by the underwriting member or controlling company 1842
2732	2732	against any other person, and in no case shall the office be 1843
2733	2733	deemed a necessary party to any action by such underwriting 1844
2734	2734	member or controlling compa ny to enforce this section. Any 1845
2735	2735	person who makes or proposes an acquisition requiring the filing 1846
2736	2736	of a statement pursuant to this section, or who files such a 1847
2737	2737	statement, shall be deemed to have thereby designated the Chief 1848
2738	2738	Financial Officer as such person's agent for service of process 1849
2739	2739	under this section and shall thereby be deemed to have submitted 1850
2740	2740
2741	2741	HB 1015 2024
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2748	2748	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2749	2749
2750	2750
2751	2751
2752	2752	himself or herself to the administrative jurisdiction of the 1851
2753	2753	office and to the jurisdiction of the circuit court. 1852
2754	2754	(7) Any approval by the office under this sec tion does not 1853
2755	2755	constitute a recommendation by the office for an acquisition, 1854
2756	2756	tender offer, or exchange offer. It is unlawful for a person to 1855
2757	2757	represent that the office's approval constitutes a 1856
2758	2758	recommendation. A person who violates the provisions of this 1857
2759	2759	section commits a felony of the third degree, punishable as 1858
2760	2760	provided in s. 775.082, s. 775.083, or s. 775.084. The statute -1859
2761	2761	of-limitations period for the prosecution of an offense 1860
2762	2762	committed under this section is 5 years. 1861
2763	2763	(8) Upon notification to the office by the underwriting 1862
2764	2764	member or a controlling company that any person or any 1863
2765	2765	affiliated person of such person has acquired 5 percent or more 1864
2766	2766	of the outstanding voting securities of the underwriting member 1865
2767	2767	or controlling company without complying with this sect ion, the 1866
2768	2768	office shall order that the person and any affiliated person of 1867
2769	2769	such person cease acquisition of any further securities of the 1868
2770	2770	underwriting member or controlling company; however, the person 1869
2771	2771	or any affiliated person of such person may request a 1870
2772	2772	proceeding, which proceeding shall be convened within 7 days 1871
2773	2773	after the rendering of the order for the sole purpose of 1872
2774	2774	determining whether the person, individually or in connection 1873
2775	2775	with any affiliated person of such person, has acquired 5 1874
2776	2776	percent or more of t he outstanding voting securities of an 1875
2777	2777
2778	2778	HB 1015 2024
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2785	2785	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2786	2786
2787	2787
2788	2788
2789	2789	underwriting member or controlling company. Upon the failure of 1876
2790	2790	the person or affiliated person to request a hearing within 7 1877
2791	2791	days, or upon a determination at a hearing convened pursuant to 1878
2792	2792	this subsection that the pe rson or affiliated person has 1879
2793	2793	acquired voting securities of an underwriting member or 1880
2794	2794	controlling company in violation of this section, the office may 1881
2795	2795	order the person and affiliated person to divest themselves of 1882
2796	2796	any voting securities so acquired. 1883
2797	2797	(9) The office shall, if necessary to protect the public 1884
2798	2798	interest, suspend or revoke the certificate of authority of any 1885
2799	2799	underwriting member or controlling company: 1886
2800	2800	(a) The control of which is acquired in violation of this 1887
2801	2801	section; 1888
2802	2802	(b) That is controlled, directly or indirectly, by any 1889
2803	2803	person or any affiliated person of such person who, in violation 1890
2804	2804	of this section, has obtained control of an underwriting member 1891
2805	2805	or controlling company; or 1892
2806	2806	(c) That is controlled, directly or indirectly, by any 1893
2807	2807	person who, directly or indirectly, controls any other person 1894
2808	2808	who, in violation of this section, acquires control of an 1895
2809	2809	underwriting member or controlling company. 1896
2810	2810	(10) If any underwriting member is subject to suspension 1897
2811	2811	or revocation pursuant to subsection (9), the underwriting 1898
2812	2812	member shall be deemed to be in such condition, or to be using 1899
2813	2813	or to have been subject to such methods or practices in the 1900
2814	2814
2815	2815	HB 1015 2024
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2817	2817
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2822	2822	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2823	2823
2824	2824
2825	2825
2826	2826	conduct of its business, as to render its further transaction of 1901
2827	2827	insurance presently or prospectively hazardous to its 1902
2828	2828	policyholders, creditors, or stockholders or to the public. 1903
2829	2829	Section 50. Section 629.615, Florida Statutes, is created 1904
2830	2830	to read: 1905
2831	2831	629.615 Recordkeeping and annual report. — 1906
2832	2832	(1) Each underwriting member shall have and maintain its 1907
2833	2833	principal place of bus iness in this state and shall keep therein 1908
2834	2834	complete records of its assets, transactions, and affairs in 1909
2835	2835	accordance with such methods and systems as are customary for or 1910
2836	2836	suitable to the kind or kinds of insurance transacted. 1911
2837	2837	(2) Each underwriting member s hall file with the office a 1912
2838	2838	full and true statement of its financial condition, 1913
2839	2839	transactions, and affairs. The statement shall be filed on or 1914
2840	2840	before March 1 of each year, or within such extension of time as 1915
2841	2841	the office for good cause grants and shall be for the preceding 1916
2842	2842	calendar year. The statement shall contain information generally 1917
2843	2843	included in insurer financial statements prepared in accordance 1918
2844	2844	with generally accepted insurance accounting principles and 1919
2845	2845	practices and in a form generally used by insurers f or financial 1920
2846	2846	statements, sworn to by at least two executive officers of the 1921
2847	2847	underwriting member. The form of the financial statements shall 1922
2848	2848	be the approved form of the National Association of Insurance 1923
2849	2849	Commissioners or its successor organization. The commi ssion may 1924
2850	2850	by rule require each insurer to submit any part of the 1925
2851	2851
2852	2852	HB 1015 2024
2853	2853
2854	2854
2855	2855
2856	2856	CODING: Words stricken are deletions; words underlined are additions.
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2859	2859	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2860	2860
2861	2861
2862	2862
2863	2863	information contained in the financial statement in a computer -1926
2864	2864	readable form compatible with the office's electronic data 1927
2865	2865	processing system. In addition to information furnished in 1928
2866	2866	connection with its annual statement, an underwriting member 1929
2867	2867	must furnish to the office as soon as reasonably possible such 1930
2868	2868	information about its transactions or affairs as the office 1931
2869	2869	requests in writing. All information furnished pursuant to the 1932
2870	2870	office's request must be verified by the oath of two executive 1933
2871	2871	officers of the underwriting member. 1934
2872	2872	Section 51. Section 629.616, Florida Statutes, is created 1935
2873	2873	to read: 1936
2874	2874	629.616 Limitations on coverage written by underwriting 1937
2875	2875	members.— 1938
2876	2876	(1) An underwriting member may not expose itself to any 1939
2877	2877	loss on any one risk in an amount exceeding 10 percent of its 1940
2878	2878	surplus to policyholders. Any risk or portion of any risk which 1941
2879	2879	shall have been reinsured in an assuming reinsurer authorized or 1942
2880	2880	approved to do such business in this state shall be deducted in 1943
2881	2881	determining the limitation of risk prescribed in this section. 1944
2882	2882	(2) If the office has reason to believe that the 1945
2883	2883	underwriting member's ratio of actual or projected annual gross 1946
2884	2884	written premiums to policyholder surplus exceeds 8 to 1 o r the 1947
2885	2885	underwriting member's ratio of actual or projected annual net 1948
2886	2886	premiums to policyholder surplus exceeds 4 to 1, the office may 1949
2887	2887	establish maximum gross or net annual premiums to be written by 1950
2888	2888
2889	2889	HB 1015 2024
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2891	2891
2892	2892
2893	2893	CODING: Words stricken are deletions; words underlined are additions.
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2896	2896	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2897	2897
2898	2898
2899	2899
2900	2900	the underwriting member consistent with maintaining the rati os 1951
2901	2901	specified in this sub -subparagraph. 1952
2902	2902	(a) Projected annual net or gross premiums shall be based 1953
2903	2903	on the actual writings to date for the underwriting member's 1954
2904	2904	current calendar year, its writings for the previous calendar 1955
2905	2905	year, or both. Ratios shall be com puted on an annualized basis. 1956
2906	2906	(b) For purposes of this subsection, the term "gross 1957
2907	2907	written premiums" means direct premiums written and reinsurance 1958
2908	2908	assumed. 1959
2909	2909	(3) For the purpose of determining the limitation on 1960
2910	2910	coverage written, surplus as to policyholde rs shall be deemed to 1961
2911	2911	include any voluntary reserves, or any part thereof, which are 1962
2912	2912	not required by or pursuant to law and shall be determined from 1963
2913	2913	the last sworn statement of such underwriting member with the 1964
2914	2914	office, or by the last report or examination filed by the 1965
2915	2915	office, whichever is more recent at the time of assumption of 1966
2916	2916	such risk. 1967
2917	2917	Section 52. Section 629.617, Florida Statutes, is created 1968
2918	2918	to read: 1969
2919	2919	629.617 Reserves of underwriting members. — 1970
2920	2920	(1) An underwriting member must at all times maintai n an 1971
2921	2921	unearned premium reserve equal to 50 percent of the net written 1972
2922	2922	premiums of the subscribers on policies having 1 year or less to 1973
2923	2923	run, and pro rata on those for longer periods, except that all 1974
2924	2924	premiums on any marine or transportation insurance trip ris k 1975
2925	2925
2926	2926	HB 1015 2024
2927	2927
2928	2928
2929	2929
2930	2930	CODING: Words stricken are deletions; words underlined are additions.
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2933	2933	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2934	2934
2935	2935
2936	2936
2937	2937	shall be deemed unearned until the trip is terminated. For the 1976
2938	2938	purpose of this subparagraph, the term "net written premiums" 1977
2939	2939	means the premium payments made by subscribers plus the premiums 1978
2940	2940	due from subscribers, after deducting the amounts specifically 1979
2941	2941	provided in the subscribers' agreements for expenses, including 1980
2942	2942	reinsurance costs and fees paid to the attorney in fact, 1981
2943	2943	provided that the power of attorney agreement contains an 1982
2944	2944	explicit provision requiring the attorney in fact to refund any 1983
2945	2945	unearned subscribers fees on a pro -rata basis for canceled 1984
2946	2946	policies. If there is no such provision, the unearned premium 1985
2947	2947	reserve shall be calculated without any adjustment for fees paid 1986
2948	2948	to the attorney in fact. If the unearned premium reserves at any 1987
2949	2949	time do not amount to $100,000, there shall be maintained on 1988
2950	2950	deposit at the exchange at all times additional funds in cash or 1989
2951	2951	eligible securities which, together with the unearned premium 1990
2952	2952	reserves, equal $100,000. In calculating the foregoing reserves, 1991
2953	2953	the amount of the atto rney's bond, as filed with the office and 1992
2954	2954	as required by s. 629.121, shall be included in such reserves. 1993
2955	2955	If at any time the unearned premium reserves are less than the 1994
2956	2956	foregoing requirements, the subscribers, or the attorney in 1995
2957	2957	fact, shall advance funds to make up the deficiency. Such 1996
2958	2958	advances shall only be repaid out of the surplus of the exchange 1997
2959	2959	and only after receiving written approval from the office. 1998
2960	2960	(2) All underwriting members of an exchange shall maintain 1999
2961	2961	loss reserves, including a reserve for incurred but not reported 2000
2962	2962
2963	2963	HB 1015 2024
2964	2964
2965	2965
2966	2966
2967	2967	CODING: Words stricken are deletions; words underlined are additions.
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2970	2970	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2971	2971
2972	2972
2973	2973
2974	2974	claims. The reserves shall be subject to review by the office, 2001
2975	2975	and, if loss experience shows that an underwriting member's loss 2002
2976	2976	reserves are inadequate, the office shall require the 2003
2977	2977	underwriting member to maintain loss reserves in such additional 2004
2978	2978	amount as is needed to make them adequate. 2005
2979	2979	Section 53. Section 629.618, Florida Statutes, is created 2006
2980	2980	to read: 2007
2981	2981	629.618 Dividends and profits. — 2008
2982	2982	(1) An underwriting member may not distribute any profits 2009
2983	2983	in the form of cash or other as sets to owners except out of that 2010
2984	2984	part of its available and accumulated surplus funds which is 2011
2985	2985	derived from realized net operating profits on its business and 2012
2986	2986	realized capital gains. In any one year such payments to owners 2013
2987	2987	may not exceed 30 percent of such surplus as of December 31 of 2014
2988	2988	the immediately preceding year, unless otherwise approved by the 2015
2989	2989	office. No distribution of profits shall be made that would 2016
2990	2990	render an underwriting member impaired or insolvent. 2017
2991	2991	(2) A stock dividend may be paid by an underwriting member 2018
2992	2992	out of any available surplus funds in excess of the aggregate 2019
2993	2993	amount of surplus advanced to the underwriting member under s. 2020
2994	2994	629.619. 2021
2995	2995	(3) A dividend otherwise lawful may be payable out of an 2022
2996	2996	underwriting member's earned surplus even t hough the total 2023
2997	2997	surplus of the underwriting member is then less than the 2024
2998	2998	aggregate of its past contributed surplus resulting from 2025
2999	2999
3000	3000	HB 1015 2024
3001	3001
3002	3002
3003	3003
3004	3004	CODING: Words stricken are deletions; words underlined are additions.
3005	3005	hb1015-00
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3007	3007	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3008	3008
3009	3009
3010	3010
3011	3011	issuance of its capital stock at a price in excess of the par 2026
3012	3012	value thereof. 2027
3013	3013	Section 54. Section 629.619, Florida Statutes , is created 2028
3014	3014	to read: 2029
3015	3015	629.619 Borrowing of money by underwriting members. — 2030
3016	3016	(1) An underwriting member may borrow money to defray the 2031
3017	3017	expenses of its organization, provide it with surplus funds, or 2032
3018	3018	for any purpose of its business, upon a written agreeme nt that 2033
3019	3019	such money is required to be repaid only out of the underwriting 2034
3020	3020	member's surplus in excess of that stipulated in such agreement. 2035
3021	3021	The agreement may provide for interest not exceeding 15 percent 2036
3022	3022	simple interest per annum. The interest shall or shall not 2037
3023	3023	constitute a liability of the underwriting member as to its 2038
3024	3024	funds other than such excess of surplus, as stipulated in the 2039
3025	3025	agreement. A commission or promotion expense may not be paid in 2040
3026	3026	connection with any such loan. The use of any surplus note and 2041
3027	3027	any repayments thereof shall be subject to the approval of the 2042
3028	3028	office. 2043
3029	3029	(2) Money so borrowed, together with any interest thereon 2044
3030	3030	if so stipulated in the agreement, may not form a part of the 2045
3031	3031	underwriting member's legal liabilities except as to its surplus 2046
3032	3032	in excess of the amount thereof stipulated in the agreement, nor 2047
3033	3033	be the basis of any setoff; but until repayment, financial 2048
3034	3034	statements filed or published by an underwriting member shall 2049
3035	3035	show as a footnote thereto the amount thereof then unpaid, 2050
3036	3036
3037	3037	HB 1015 2024
3038	3038
3039	3039
3040	3040
3041	3041	CODING: Words stricken are deletions; words underlined are additions.
3042	3042	hb1015-00
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3044	3044	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3045	3045
3046	3046
3047	3047
3048	3048	together with any interest thereon accrued but unpaid. 2051
3049	3049	Section 55. Section 62 9.6201, Florida Statutes, is created 2052
3050	3050	to read: 2053
3051	3051	629.6201 Improperly issued contracts, riders, and 2054
3052	3052	endorsements.— 2055
3053	3053	(1) Any insurance policy, rider, or endorsement issued by 2056
3054	3054	an underwriting member and otherwise valid which contains any 2057
3055	3055	condition or provisio n not in compliance with the requirements 2058
3056	3056	of this part may not be thereby rendered invalid, except as 2059
3057	3057	provided in s. 627.415, but shall be construed and applied in 2060
3058	3058	accordance with such conditions and provisions as would have 2061
3059	3059	applied had such policy, rider, or endorsement been in full 2062
3060	3060	compliance with this part. In the event an underwriting member 2063
3061	3061	issues or delivers any policy for an amount which exceeds any 2064
3062	3062	limitations otherwise provided in this part, the underwriting 2065
3063	3063	member shall be liable to the insured or his or her beneficiary 2066
3064	3064	for the full amount stated in the policy in addition to any 2067
3065	3065	other penalties that may be imposed. 2068
3066	3066	(2) Any insurance contract delivered or issued for 2069
3067	3067	delivery in this state governing a subject or subjects of 2070
3068	3068	insurance resident, loca ted, or to be performed in this state 2071
3069	3069	which, pursuant to the provisions of this part, the underwriting 2072
3070	3070	member may not lawfully insure under such a contract shall be 2073
3071	3071	cancelable at any time by the underwriting member, any provision 2074
3072	3072	of the contract to the con trary notwithstanding; and the 2075
3073	3073
3074	3074	HB 1015 2024
3075	3075
3076	3076
3077	3077
3078	3078	CODING: Words stricken are deletions; words underlined are additions.
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3081	3081	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3082	3082
3083	3083
3084	3084
3085	3085	underwriting member shall promptly cancel the contract in 2076
3086	3086	accordance with the request of the office therefor. No such 2077
3087	3087	illegality or cancellation shall be deemed to relieve the 2078
3088	3088	underwriting syndicate of any liability incurred by it under the 2079
3089	3089	contract while in force or to prohibit the underwriting 2080
3090	3090	syndicate from retaining the pro rata earned premium thereon. 2081
3091	3091	This provision does not relieve the underwriting syndicate from 2082
3092	3092	any penalty otherwise incurred by the underwriting syndica te. 2083
3093	3093	Section 56. Section 629.621, Florida Statutes, is created 2084
3094	3094	to read: 2085
3095	3095	629.621 Satisfaction of judgments. — 2086
3096	3096	(1) Every judgment or decree for the recovery of money 2087
3097	3097	heretofore or hereafter entered in any court of competent 2088
3098	3098	jurisdiction against any und erwriting member shall be fully 2089
3099	3099	satisfied within 60 days from and after the entry thereof or, in 2090
3100	3100	the case of an appeal from such judgment or decree, within 60 2091
3101	3101	days from and after the affirmance of the judgment or decree by 2092
3102	3102	the appellate court. 2093
3103	3103	(2) If the judgment or decree is not satisfied as required 2094
3104	3104	under subsection (1) and the office has received official 2095
3105	3105	documentation of that failure to satisfy the judgement or 2096
3106	3106	decree, the office shall forthwith prohibit the underwriting 2097
3107	3107	member from transacting busine ss. The office may not permit such 2098
3108	3108	underwriting member to write any new business until the judgment 2099
3109	3109	or decree, as well as any associated expenses and fees, is 2100
3110	3110
3111	3111	HB 1015 2024
3112	3112
3113	3113
3114	3114
3115	3115	CODING: Words stricken are deletions; words underlined are additions.
3116	3116	hb1015-00
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3118	3118	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3119	3119
3120	3120
3121	3121
3122	3122	wholly paid and satisfied and proof thereof is filed. The proof 2101
3123	3123	filed must include official docum entation from the clerk of the 2102
3124	3124	court where the judgment was entered, showing that the judgment 2103
3125	3125	or decree, expenses, and fees are satisfied. 2104
3126	3126	Section 57. Section 629.622, Florida Statutes, is created 2105
3127	3127	to read: 2106
3128	3128	629.622 Liquidation, rehabilitation, and re strictions.—The 2107
3129	3129	office, upon a showing that a member or associate broker of an 2108
3130	3130	exchange has met one or more of the grounds contained in part I 2109
3131	3131	of chapter 631, may restrict sales by type of risk, policy or 2110
3132	3132	contract limits, premium levels, or policy or contr act 2111
3133	3133	provisions; increase surplus or capital requirements of 2112
3134	3134	underwriting members; issue cease and desist orders; suspend or 2113
3135	3135	restrict a member's or associate broker's right to transact 2114
3136	3136	business; place an underwriting member under conservatorship or 2115
3137	3137	rehabilitation; or seek an order of liquidation as authorized by 2116
3138	3138	part I of chapter 631. 2117
3139	3139	Section 58. Section 629.623, Florida Statutes, is created 2118
3140	3140	to read: 2119
3141	3141	629.623 Prohibited conduct; penalties. — 2120
3142	3142	(1) The following acts by a member, associate broker, or 2121
3143	3143	affiliated person constitute prohibited conduct: 2122
3144	3144	(a) Fraud. 2123
3145	3145	(b) Fraudulent or dishonest acts committed by a member or 2124
3146	3146	associate broker before admission to an exchange, if the facts 2125
3147	3147
3148	3148	HB 1015 2024
3149	3149
3150	3150
3151	3151
3152	3152	CODING: Words stricken are deletions; words underlined are additions.
3153	3153	hb1015-00
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3155	3155	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3156	3156
3157	3157
3158	3158
3159	3159	and circumstances were not disclosed to the office upon 2126
3160	3160	application to become a member or associate broker. 2127
3161	3161	(c) Conduct detrimental to the welfare of an exchange. 2128
3162	3162	(d) Unethical or improper practices or conduct, 2129
3163	3163	inconsistent with just and equitable principles of trade as set 2130
3164	3164	forth in, but not limited to, ss. 626.951 -626.9641 and 626.973. 2131
3165	3165	(e) Failure to use due diligence to ascertain the 2132
3166	3166	insurance needs of a client or a principal. 2133
3167	3167	(f) Misstatements made under oath or upon an application 2134
3168	3168	for membership on an exchange. 2135
3169	3169	(g) Failure to testify or produce documents when request ed 2136
3170	3170	by the office. 2137
3171	3171	(h) Willful violation of any law of this state. 2138
3172	3172	(i) Failure of an officer or principal to testify under 2139
3173	3173	oath concerning a member, associate broker, or other person's 2140
3174	3174	affairs as they relate to the operation of an exchange. 2141
3175	3175	(j) Violation of the constitution and bylaws of the 2142
3176	3176	exchange. 2143
3177	3177	(2)(a) The office may order the suspension of further 2144
3178	3178	transaction of business on the exchange of any member or 2145
3179	3179	associate broker found to have engaged in prohibited conduct. In 2146
3180	3180	addition, any member or associate broker found to have engaged 2147
3181	3181	in prohibited conduct may be subject to reprimand, censure, or a 2148
3182	3182	fine not exceeding $75,000 imposed by the office. 2149
3183	3183	(b) Any member that has an affiliated person who is found 2150
3184	3184
3185	3185	HB 1015 2024
3186	3186
3187	3187
3188	3188
3189	3189	CODING: Words stricken are deletions; words underlined are additions.
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3192	3192	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3193	3193
3194	3194
3195	3195
3196	3196	to have engaged in prohibited conduct shal l be subject to 2151
3197	3197	involuntary withdrawal or in addition thereto may be subject to 2152
3198	3198	suspension, reprimand, censure, or a fine not exceeding $75,000. 2153
3199	3199	(3) Any suspension, reprimand, censure, or fine may be 2154
3200	3200	remitted or reduced by the office on such terms and conditions 2155
3201	3201	as are deemed fair and equitable. 2156
3202	3202	Section 59. Section 629.624, Florida Statutes, is created 2157
3203	3203	to read: 2158
3204	3204	629.624 Fines.– 2159
3205	3205	(1) Fines imposed under this part shall be remitted to the 2160
3206	3206	office and shall be deposited into the Insurance Regulatory 2161
3207	3207	Trust Fund. 2162
3208	3208	(2) When a member or associate broker has failed to pay a 2163
3209	3209	fine for 15 days after the fine becomes payable, the member or 2164
3210	3210	associate broker shall be suspended, unless the office has 2165
3211	3211	granted an extension of time to pay the fine. 2166
3212	3212	Section 60. Section 629.625, Florida Statutes, is created 2167
3213	3213	to read: 2168
3214	3214	629.625 Suspension. — 2169
3215	3215	(1) A member or associate broker that is suspended shall 2170
3216	3216	be deprived, during the period of suspension, of all rights and 2171
3217	3217	privileges of a member or of an associate broker and ma y be 2172
3218	3218	proceeded against by the office for any offense committed before 2173
3219	3219	or after the date of suspension. 2174
3220	3220	(2) A member or associate broker that is suspended may be 2175
3221	3221
3222	3222	HB 1015 2024
3223	3223
3224	3224
3225	3225
3226	3226	CODING: Words stricken are deletions; words underlined are additions.
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3229	3229	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3230	3230
3231	3231
3232	3232
3233	3233	reinstated at any time on such terms and conditions as the 2176
3234	3234	office may specify. 2177
3235	3235	Section 61. Section 629.626, Florida Statutes, is created 2178
3236	3236	to read: 2179
3237	3237	629.626 Retaliation. — 2180
3238	3238	(1) When by or pursuant to the laws of any other state or 2181
3239	3239	foreign country any taxes, licenses, or other fees, in the 2182
3240	3240	aggregate, and any fines, penalties, deposit requiremen ts, or 2183
3241	3241	other material obligations, prohibitions, or restrictions are or 2184
3242	3242	would be imposed upon an exchange or upon the agents or 2185
3243	3243	representatives of such exchange which are in excess of such 2186
3244	3244	taxes, licenses, and other fees, in the aggregate, or which are 2187
3245	3245	in excess of such fines, penalties, deposit requirements, or 2188
3246	3246	other obligations, prohibitions, or restrictions directly 2189
3247	3247	imposed upon similar exchanges or upon the agents or 2190
3248	3248	representatives of such exchanges of such other state or country 2191
3249	3249	under the statutes of this state, so long as such laws of such 2192
3250	3250	other state or country continue in force or are so applied, the 2193
3251	3251	same taxes, licenses, and other fees, in the aggregate, or 2194
3252	3252	fines, penalties, deposit requirements, or other material 2195
3253	3253	obligations, prohibitions, or rest rictions of whatever kind 2196
3254	3254	shall be imposed by the office upon the exchanges, or upon the 2197
3255	3255	agents or representatives of such exchanges, of such other state 2198
3256	3256	or country doing business or seeking to do business in this 2199
3257	3257	state. 2200
3258	3258
3259	3259	HB 1015 2024
3260	3260
3261	3261
3262	3262
3263	3263	CODING: Words stricken are deletions; words underlined are additions.
3264	3264	hb1015-00
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3266	3266	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3267	3267
3268	3268
3269	3269
3270	3270	(2) Any tax, license, or other ob ligation imposed by any 2201
3271	3271	city, county, or other political subdivision or agency of a 2202
3272	3272	state, jurisdiction, or foreign country on an exchange, or on 2203
3273	3273	the agents or representatives on an exchange, shall be deemed to 2204
3274	3274	be imposed by such state, jurisdiction, or fo reign country 2205
3275	3275	within the meaning of subsection (1). 2206
3276	3276	Section 62. Section 629.627, Florida Statutes, is created 2207
3277	3277	to read: 2208
3278	3278	629.627 Agents.— 2209
3279	3279	(1) Agents as defined in ss. 626.015 and 626.914 who are 2210
3280	3280	broker members or associate broker members of an exchan ge shall 2211
3281	3281	be allowed only to place on an exchange the same kind or kinds 2212
3282	3282	of business that the agent is licensed to place pursuant to 2213
3283	3283	Florida law. Direct Florida business as defined in s. 626.916 or 2214
3284	3284	s. 626.917 shall be written through a broker member who is a 2215
3285	3285	surplus lines agent as defined in s. 626.914. The activities of 2216
3286	3286	each broker member or associate broker with regard to an 2217
3287	3287	exchange shall be subject to all applicable provisions of the 2218
3288	3288	insurance laws of this state, and all such activities shall 2219
3289	3289	constitute transactions under his or her license as an insurance 2220
3290	3290	agent for purposes of the Florida insurance law. 2221
3291	3291	(2) If an underwriting member has assumed the risk as to a 2222
3292	3292	surplus lines coverage and if the premium therefor has been 2223
3293	3293	received by the surplus lines ag ent who placed such insurance, 2224
3294	3294	then in all questions thereafter arising under the coverage as 2225
3295	3295
3296	3296	HB 1015 2024
3297	3297
3298	3298
3299	3299
3300	3300	CODING: Words stricken are deletions; words underlined are additions.
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3302	3302	Page 90 of 95
3303	3303	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3304	3304
3305	3305
3306	3306
3307	3307	between the underwriting member and the insured, the 2226
3308	3308	underwriting member shall be deemed to have received the premium 2227
3309	3309	due to it for such coverage; and the underwr iting member shall 2228
3310	3310	be liable to the insured as to losses covered by such insurance, 2229
3311	3311	and for unearned premiums which may become payable to the 2230
3312	3312	insured upon cancellation of such insurance, whether or not in 2231
3313	3313	fact the surplus lines agent is indebted to the und erwriting 2232
3314	3314	member with respect to such insurance or for any other cause. 2233
3315	3315	Section 63. Section 629.628, Florida Statutes, is created 2234
3316	3316	to read: 2235
3317	3317	629.628 Background information. —The information as to the 2236
3318	3318	background and identity of each person about whom inf ormation is 2237
3319	3319	required to be furnished pursuant to s. 629.614 must include, 2238
3320	3320	but need not be limited to: 2239
3321	3321	(1) Such person's occupations, positions of employment, 2240
3322	3322	and offices held during the past 10 years. 2241
3323	3323	(2) The principal business and address of any busin ess, 2242
3324	3324	corporation, or other organization in which each such office was 2243
3325	3325	held or in which such occupation or position of employment was 2244
3326	3326	carried on. 2245
3327	3327	(3) Whether, at any time during such 10 -year period, such 2246
3328	3328	person was convicted of any crime other than a traf fic 2247
3329	3329	violation. 2248
3330	3330	(4) Whether, during such 10 -year period, such person has 2249
3331	3331	been the subject of any proceeding for the revocation of any 2250
3332	3332
3333	3333	HB 1015 2024
3334	3334
3335	3335
3336	3336
3337	3337	CODING: Words stricken are deletions; words underlined are additions.
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3340	3340	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3341	3341
3342	3342
3343	3343
3344	3344	license and, if so, the nature of such proceeding and the 2251
3345	3345	disposition thereof. 2252
3346	3346	(5) Whether, during such 10 -year period, such person has 2253
3347	3347	been the subject of any proceeding under the federal Bankruptcy 2254
3348	3348	Act or whether, during such 10 -year period, any corporation, 2255
3349	3349	partnership, firm, trust, or association in which such person 2256
3350	3350	was a director, officer, trustee, partner, or other official has 2257
3351	3351	been subject to any such proceeding, either during the time in 2258
3352	3352	which such person was a director, officer, trustee, partner, or 2259
3353	3353	other official, or within 12 months thereafter. 2260
3354	3354	(6) Whether, during such 10 -year period, such person has 2261
3355	3355	been enjoined, temporarily or permanently, by a court of 2262
3356	3356	competent jurisdiction from violating any federal or state law 2263
3357	3357	regulating the business of insurance, securities, or banking, or 2264
3358	3358	from carrying out any particular practice or practices in the 2265
3359	3359	course of the business of insurance, securities, or banking, 2266
3360	3360	together with details of any such event. 2267
3361	3361	Section 64. Section 628.629, Florida Statutes, is created 2268
3362	3362	to read: 2269
3363	3363	628.629 Offsets.—Any action, requirement, or constraint 2270
3364	3364	imposed by the office shall reduce or offset similar actions, 2271
3365	3365	requirements, or constraints of any exchange. 2272
3366	3366	Section 65. Section 629.6301, Florida Statutes, is created 2273
3367	3367	to read: 2274
3368	3368	629.6301 Restriction on member ownership. —The investment 2275
3369	3369
3370	3370	HB 1015 2024
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3372	3372
3373	3373
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3377	3377	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3378	3378
3379	3379
3380	3380
3381	3381	in any underwriting member by brokers, agents, or intermediaries 2276
3382	3382	transacting business on the exchange, and the investment in any 2277
3383	3383	such broker, agent, or intermediary by any underwriting member, 2278
3384	3384	directly or indirectly, shall in each case be limited in the 2279
3385	3385	aggregate to less than 5 percent of the total invest ment in such 2280
3386	3386	underwriting member, broker, agent, or intermediary. 2281
3387	3387	Section 66. Section 629.631, Florida Statutes, is created 2282
3388	3388	to read: 2283
3389	3389	629.631 Prohibition of underwriting manager investment. —2284
3390	3390	Any direct or indirect investment in any underwriting manager by 2285
3391	3391	a broker member or any affiliated person of a broker member or 2286
3392	3392	any direct or indirect investment in a broker member by an 2287
3393	3393	underwriting manager or any affiliated person of an underwriting 2288
3394	3394	manager is prohibited. 2289
3395	3395	Section 67. Section 629.632, Florida S tatutes, is created 2290
3396	3396	to read: 2291
3397	3397	629.632 Limitations on reinsurance. —An underwriting member 2292
3398	3398	may not accept reinsurance on an assumed basis from an affiliate 2293
3399	3399	or a controlling company, nor may a broker member or management 2294
3400	3400	company place reinsurance from its af filiate or controlling 2295
3401	3401	company with an underwriting member. 2296
3402	3402	Section 68. Section 629.633, Florida Statutes, is created 2297
3403	3403	to read: 2298
3404	3404	629.633 Rulemaking authority. —The commission shall adopt, 2299
3405	3405	amend, or repeal rules necessary to implement this part. 2300
3406	3406
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3409	3409
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3414	3414	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3415	3415
3416	3416
3417	3417
3418	3418	Section 69. Section 629.634, Florida Statutes, is created 2301
3419	3419	to read: 2302
3420	3420	629.634 Liability.—The performance of the contractual 2303
3421	3421	obligations of the exchange or its members entered into pursuant 2304
3422	3422	to this part may not be covered by any of the Florida state 2305
3423	3423	security or guaranty funds. 2306
3424	3424	Section 70. Paragraph (h) of subsection (3) of section 2307
3425	3425	163.01, Florida Statutes, is amended to read: 2308
3426	3426	163.01 Florida Interlocal Cooperation Act of 1969. — 2309
3427	3427	(3) As used in this section: 2310
3428	3428	(h) "Local government liability pool" means a r eciprocal 2311
3429	3429	insurer as defined in s. 629.011 s. 629.021 or any self-2312
3430	3430	insurance program created pursuant to s. 768.28(16), formed and 2313
3431	3431	controlled by counties or municipalities of this state to 2314
3432	3432	provide liability insurance coverage for counties, 2315
3433	3433	municipalities, or other public agencies of this state, which 2316
3434	3434	pool may contract with other parties for the purpose of 2317
3435	3435	providing claims administration, processing, accounting, and 2318
3436	3436	other administrative facilities. 2319
3437	3437	Section 71. Subsection (2) of section 624.45, Florida 2320
3438	3438	Statutes, is amended to read: 2321
3439	3439	624.45 Participation of financial institutions in 2322
3440	3440	reinsurance and in insurance exchanges. —Subject to applicable 2323
3441	3441	laws relating to financial institutions and to any other 2324
3442	3442	applicable provision of the Florida Insurance Code, any 2325
3443	3443
3444	3444	HB 1015 2024
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3446	3446
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3451	3451	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3452	3452
3453	3453
3454	3454
3455	3455	financial institution or aggregation of such institutions may: 2326
3456	3456	(2) Participate, directly or indirectly, as an 2327
3457	3457	underwriting member or as an investor in an underwriting member 2328
3458	3458	of any insurance exchange authorized in accordance with s. 2329
3459	3459	629.401, which underwriting member transacts only aggregate or 2330
3460	3460	specific excess insurance over underlying self -insurance 2331
3461	3461	coverage for self-insurance organizations authorized under the 2332
3462	3462	Florida Insurance Code, for multiple -employer welfare 2333
3463	3463	arrangements, or for workers' compensation self-insurance 2334
3464	3464	trusts, in addition to any reinsurance the underwriting member 2335
3465	3465	may transact. 2336
3466	3466	2337
3467	3467	Nothing in this section shall be deemed to prohibit a financial 2338
3468	3468	institution from engaging in any presently authorized insurance 2339
3469	3469	activity. 2340
3470	3470	Section 72. Subsecti on (3) of section 626.9531, Florida 2341
3471	3471	Statutes, is amended to read: 2342
3472	3472	626.9531 Identification of insurers, agents, and insurance 2343
3473	3473	contracts.— 2344
3474	3474	(3) For the purposes of this section, the term "risk 2345
3475	3475	bearing entity" means a reciprocal insurer as defined in s. 2346
3476	3476	629.011 s. 629.021, a commercial self-insurance fund as defined 2347
3477	3477	in s. 624.462, a group self -insurance fund as defined in s. 2348
3478	3478	624.4621, a local government self -insurance fund as defined in 2349
3479	3479	s. 624.4622, a self-insured public utility as defined in s. 2350
3480	3480
3481	3481	HB 1015 2024
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3483	3483
3484	3484
3485	3485	CODING: Words stricken are deletions; words underlined are additions.
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3488	3488	F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3489	3489
3490	3490
3491	3491
3492	3492	624.46225, or an independent educational institution self -2351
3493	3493	insurance fund as defined in s. 624.4623. For the purposes of 2352
3494	3494	this section, the term "risk bearing entity" does not include an 2353
3495	3495	authorized insurer as defined in s. 624.09. 2354
3496	3496	Section 73. Reciprocal insurers li censed before July 1, 2355
3497	3497	2025, shall have until January 1, 2026, to increase their 2356
3498	3498	required surpluses as required by the changes to s. 629.071, 2357
3499	3499	Florida Statutes. The attorneys of reciprocal insurers licensed 2358
3500	3500	before July 1, 2025, shall have until January 1, 20 26, to 2359
3501	3501	increase their bonds, or deposits in lieu of bonds, as required 2360
3502	3502	by the changes to ss. 629.121 and 629.131, Florida Statutes. 2361
3503	3503	Section 74. This act shall take effect July 1, 2025. 2362