Florida Senate - 2024 SB 1622 By Senator Trumbull 2-01148A-24 20241622__ 1 A bill to be entitled 2 An act relating to insurance; amending s. 624.3161, 3 F.S.; revising the entities for which the Office of 4 Insurance Regulation is required to conduct market 5 conduct examinations; revising the purpose of the 6 examination; amending s. 624.424, F.S.; requiring 7 insurers and insurer groups to file a specified 8 supplemental report on a monthly basis; requiring that 9 such report include certain information for each zip 10 code for which policies are written; amending s. 11 624.4305, F.S.; authorizing the Financial Services 12 Commission to adopt rules related to notice of 13 nonrenewal of residential property insurance policies; 14 amending s. 624.46226, F.S.; revising the requirements 15 for public housing authority self-insurance funds; 16 amending s. 626.9201, F.S.; prohibiting insurers from 17 canceling or nonrenewing certain insurance policies 18 under certain circumstances; providing exceptions; 19 authorizing the commission to adopt rules and the 20 Commissioner of Insurance Regulation to issue orders; 21 providing construction; amending s. 627.062, F.S.; 22 specifying requirements for rate filings if certain 23 models are used; amending s. 627.351, F.S.; revising 24 requirements for certain policies that are not subject 25 to certain rate increase limitations; amending ss. 26 628.011 and 628.061, F.S.; conforming provisions to 27 changes made by the act; amending s. 628.801, F.S.; 28 revising requirements for rules adopted for insurers 29 that are members of an insurance holding company; 30 deleting an obsolete date; authorizing the commission 31 to adopt rules; amending s. 629.011, F.S.; defining 32 terms; revising the definition of the term reciprocal 33 insurance; repealing s. 629.021, F.S., relating to 34 the definition of the term reciprocal insurer; 35 repealing s. 629.031, F.S., relating to the scope of 36 ch. 629, F.S.; amending s. 629.051, F.S.; requiring a 37 domestic reciprocal insurer to have and use certain 38 names; requiring certain foreign or alien reciprocal 39 insurers to use a fictitious name; creating s. 40 629.056, F.S.; requiring a reciprocal insurer to 41 maintain a certain unearned premium reserves; defining 42 the term net written premiums; requiring certain 43 actions if the unearned premium reserves are less than 44 a certain amount; repealing s. 629.061, F.S., relating 45 to the term attorney; amending s. 629.071, F.S.; 46 revising the surplus funds required of a reciprocal 47 insurer; amending s. 629.081, F.S.; revising the 48 procedure for persons to organize as a domestic 49 reciprocal insurer; specifying requirements for the 50 permit application; requiring that the application be 51 accompanied by a specified fee; requiring the office 52 to evaluate and grant or deny the permit application 53 in accordance with specified provisions; amending s. 54 629.091, F.S.; providing requirements for the 55 application for a certificate of authority to operate 56 as a domestic reciprocal insurer; requiring that such 57 certificate of authority be issued in the name of the 58 reciprocal insurer to its attorney in fact; creating 59 s. 629.094, F.S.; requiring a domestic reciprocal 60 insurer to meet certain requirements to maintain its 61 eligibility for a certificate of authority; amending 62 s. 629.101, F.S.; revising requirements for the power 63 of attorney given by subscribers of a domestic 64 reciprocal insurer to the attorney in fact; conforming 65 provisions to changes made by the act; amending s. 66 629.111, F.S.; requiring that modifications of the 67 terms of certain agreements, charters, and powers of 68 attorney be made jointly by the attorney in fact and 69 the subscribers advisory committee; prohibiting such 70 modifications from taking effect until approval in 71 writing by the office; amending s. 629.121, F.S.; 72 conforming provisions to changes made by the act; 73 revising the amount of the bond the attorney in fact 74 of a reciprocal insurer must file with the office; 75 amending ss. 629.131 and 629.141, F.S.; conforming 76 provisions to changes made by the act; amending s. 77 629.161, F.S.; revising the requirements for a 78 reciprocal insurer that borrows money; providing 79 applicability; amending s. 629.171, F.S.; revising the 80 manner of making and filing the annual statement of a 81 reciprocal insurer; amending s. 629.191, F.S.; 82 conforming provisions to changes made by the act; 83 amending s. 629.201, F.S.; conforming provisions to 84 changes made by the act; creating s. 629.225, F.S.; 85 prohibiting persons from acquiring certain securities 86 or ownership interests of certain attorneys in fact 87 and controlling companies of certain attorneys in 88 fact; providing an exception; authorizing certain 89 persons to request that the office waive certain 90 requirements; providing that the office may waive 91 certain requirements if specified determinations are 92 made; specifying the requirements of an application to 93 the office relating to certain acquisitions; requiring 94 that such application be accompanied by a specified 95 fee; requiring that amendments be filed with the 96 office under certain circumstances; specifying the 97 manner in which the acquisition application must be 98 reviewed; authorizing the office, and requiring the 99 office if a request for a proceeding is filed, to 100 conduct a proceeding within a specified timeframe to 101 consider the appropriateness of such application; 102 requiring that certain time periods be tolled; 103 requiring that written requests for a proceeding be 104 filed within a certain timeframe; authorizing certain 105 persons to take all steps to conclude the acquisition 106 during the pendency of the proceeding or review 107 period; requiring the office to order a proposed 108 acquisition disapproved and that actions to conclude 109 the acquisition be ceased under certain circumstances; 110 prohibiting certain persons from making certain 111 changes during the pendency of the offices review of 112 an acquisition; providing an exception; defining the 113 terms material change in the operation of the 114 attorney in fact and material change in the 115 management of the attorney in fact; requiring the 116 office to approve or disapprove certain changes upon 117 making certain findings; requiring that a proceeding 118 be conducted within a certain timeframe; requiring 119 that recommended orders and final orders be issued 120 within a certain timeframe; specifying the 121 circumstances under which the office may disapprove an 122 acquisition; specifying that certain persons have the 123 burden of proof; requiring the office to approve an 124 acquisition upon certain findings; specifying that 125 certain votes are not valid and that certain 126 acquisitions are void; specifying that certain 127 provisions may be enforced by an injunction; creating 128 a private right of action in favor of the attorney in 129 fact or the controlling company to enforce certain 130 provisions; providing that a certain demand upon the 131 office is not required before certain legal actions; 132 providing that the office is not a necessary party to 133 certain actions; specifying the persons who are deemed 134 designated for service of process and who have 135 submitted to the administrative jurisdiction of the 136 office; providing that approval by the office does not 137 constitute a certain recommendation; providing that 138 certain actions are unlawful; providing criminal 139 penalties; providing a statute of limitations; 140 authorizing a person to rebut a presumption of control 141 by filing certain disclaimers; specifying the contents 142 of such disclaimer; specifying that, after a 143 disclaimer is filed, the attorney in fact is relieved 144 of a certain duty; authorizing the office to order 145 certain persons to cease acquisition of the attorney 146 in fact or controlling company and divest themselves 147 of any stock or ownership interest under certain 148 circumstances; requiring the office to suspend or 149 revoke the reciprocal certificate of authority under 150 certain circumstances; specifying that the attorney in 151 fact is deemed to be hazardous to its policyholders if 152 the reciprocal insurer is subject to suspension or 153 revocation; authorizing the office to offer the 154 reciprocal insurer the ability to cure any suspension 155 or revocation under certain circumstances; providing 156 applicability; creating s. 629.227, F.S.; specifying 157 the information as to the background and identity of 158 certain persons which must be furnished by such 159 persons; amending s. 629.231, F.S.; authorizing the 160 levy of assessments upon subscribers of certain 161 assessable reciprocal insurers; requiring that 162 assessments be approved in advance by certain 163 entities; requiring the office to revoke the 164 authorization to convert upon impairment of a surplus 165 of a nonassessable reciprocal insurer; providing for 166 policies that remain in force after such revocation 167 and prohibiting reciprocal insurers from issuing new 168 policies that do not require contingent assessment 169 liability from new subscribers; amending ss. 629.241 170 and 629.251, F.S.; conforming provisions to changes 171 made by the act; repealing s. 629.261, F.S., relating 172 to nonassessable policies; amending ss. 629.271 and 173 629.281, F.S.; conforming provisions to changes made 174 by the act; amending s. 629.291, F.S.; providing that 175 certain insurers that merge are governed by the 176 insurance code; prohibiting domestic stock insurers 177 from being converted to reciprocal insurers; requiring 178 that specified plans be filed with the office and that 179 such plans contain certain information; authorizing 180 the conversion of assessable reciprocal insurers to 181 nonassessable reciprocal insurers under certain 182 circumstances; providing certain procedures when 183 certain reciprocal insurers convert; prohibiting a 184 reciprocal insurer that becomes impaired from issuing 185 or converting certain policies; providing 186 applicability; amending s. 629.301, F.S.; conforming 187 provisions to changes made by the act; revising the 188 procedures that apply when an insurer becomes 189 insolvent; repealing s. 629.401, F.S., relating to 190 insurance exchanges; repealing s. 629.520, F.S., 191 relating to the authority of limited reciprocal 192 insurers; creating s. 629.525, F.S.; requiring the 193 commission to adopt, amend, or repeal certain rules; 194 amending ss. 163.01, 624.413, 624.45, and 626.9531, 195 F.S.; conforming provisions to changes made by the 196 act; requiring compliance by reciprocal insurers and 197 attorneys in fact with increased surplus requirements 198 and bond requirements, respectively, imposed by the 199 act by a specified date; providing an effective date. 200 201 Be It Enacted by the Legislature of the State of Florida: 202 203 Section 1.Subsection (1) of section 624.3161, Florida 204 Statutes, is amended to read: 205 624.3161Market conduct examinations. 206 (1)As often as it deems necessary, The office shall, as 207 often as it deems necessary, examine each licensed rating 208 organization, each advisory organization, each group, 209 association, carrier, as defined in s. 440.02, or other 210 organization of insurers which engages in joint underwriting or 211 joint reinsurance, the attorney in fact of each reciprocal 212 insurer, and each authorized insurer transacting in this state 213 any class of insurance to which the provisions of chapter 627 is 214 are applicable. The examination must shall be for the purpose of 215 ascertaining compliance by the person examined with the 216 applicable provisions of chapters 440, 624, 626, 627, 629, and 217 635. 218 Section 2.Paragraph (a) of subsection (10) of section 219 624.424, Florida Statutes, is amended to read: 220 624.424Annual statement and other information. 221 (10)(a)Each insurer or insurer group doing business in 222 this state shall file, on a monthly quarterly basis in 223 conjunction with financial reports required by paragraph (1)(a), 224 a supplemental report on an individual and group basis on a form 225 prescribed by the commission with information on personal lines 226 and commercial lines residential property insurance policies in 227 this state. The supplemental report must shall include separate 228 information for personal lines property policies and for 229 commercial lines property policies and totals for each item 230 specified, including premiums written for each of the property 231 lines of business as described in ss. 215.555(2)(c) and 232 627.351(6)(a). The report must shall include the following 233 information for each zip code for which policies are written 234 county on a monthly basis: 235 1.Total number of policies in force at the end of each 236 month. 237 2.Total number of policies canceled. 238 3.Total number of policies nonrenewed. 239 4.Number of policies canceled due to hurricane risk. 240 5.Number of policies nonrenewed due to hurricane risk. 241 6.Number of new policies written. 242 7.Total dollar value of structure exposure under policies 243 that include wind coverage. 244 8.Number of policies that exclude wind coverage. 245 9.Number of claims open each month. 246 10.Number of claims closed each month. 247 11.Number of claims pending each month. 248 12.Number of claims in which either the insurer or insured 249 invoked any form of alternative dispute resolution, and 250 specifying which form of alternative dispute resolution was 251 used. 252 Section 3.Section 624.4305, Florida Statutes, is amended 253 to read: 254 624.4305Nonrenewal of residential property insurance 255 policies.Any insurer planning to nonrenew more than 10,000 256 residential property insurance policies in this state within a 257 12-month period shall give notice in writing to the Office of 258 Insurance Regulation for informational purposes 90 days before 259 the issuance of any notices of nonrenewal. The notice provided 260 to the office must set forth the insurers reasons for such 261 action, the effective dates of nonrenewal, and any arrangements 262 made for other insurers to offer coverage to affected 263 policyholders. The commission may adopt rules to administer this 264 section. 265 Section 4.Paragraph (d) of subsection (1) of section 266 624.46226, Florida Statutes, is amended to read: 267 624.46226Public housing authorities self-insurance funds; 268 exemption for taxation and assessments. 269 (1)Notwithstanding any other provision of law, any two or 270 more public housing authorities in the state as defined in 271 chapter 421 may form a self-insurance fund for the purpose of 272 pooling and spreading liabilities of its members as to any one 273 or combination of casualty risk or real or personal property 274 risk of every kind and every interest in such property against 275 loss or damage from any hazard or cause and against any loss 276 consequential to such loss or damage, provided the self 277 insurance fund that is created: 278 (d)Maintains a continuing program of excess insurance 279 coverage and reinsurance reserve evaluation to protect the 280 financial stability of the fund in an amount and manner 281 determined by a qualified and independent actuary. The program 282 must, at a minimum, this program must: 283 1.Include a net retention in an amount and manner selected 284 by the administrator, ratified by the governing body, and 285 certified by a qualified actuary; 286 2.Include reinsurance or Purchase excess insurance from 287 authorized insurance carriers or eligible surplus lines 288 insurers; and. 289 3.Be certified by a qualified and independent actuary as 290 to the programs adequacy. This certification must be submitted 291 simultaneously with the certifications required under paragraphs 292 (b) and (c). 293 2.Retain a per-loss occurrence that does not exceed 294 $350,000. 295 296 A for-profit or not-for-profit corporation, limited liability 297 company, or other similar business entity in which a public 298 housing authority holds an ownership interest or participates in 299 its governance under s. 421.08(8) may join a self-insurance fund 300 formed under this section in which such public housing authority 301 participates. Such for-profit or not-for-profit corporation, 302 limited liability company, or other similar business entity may 303 join the self-insurance fund solely to insure risks related to 304 public housing. 305 Section 5.Subsection (2) of section 626.9201, Florida 306 Statutes, is amended to read: 307 626.9201Notice of cancellation or nonrenewal. 308 (2)An insurer issuing a policy providing coverage for 309 property, casualty, surety, or marine insurance must give the 310 named insured written notice of cancellation or termination 311 other than nonrenewal at least 45 days before the effective date 312 of the cancellation or termination, including in the written 313 notice the reasons for the cancellation or termination, except 314 that: 315 (a)If cancellation is for nonpayment of premium, at least 316 10 days written notice of cancellation accompanied by the 317 reason for cancellation must be given. As used in this 318 paragraph, the term nonpayment of premium means the failure of 319 the named insured to discharge when due any of his or her 320 obligations in connection with the payment of premiums on a 321 policy or an installment of such a premium, whether the premium 322 or installment is payable directly to the insurer or its agent 323 or indirectly under any plan for financing premiums or extension 324 of credit or the failure of the named insured to maintain 325 membership in an organization if such membership is a condition 326 precedent to insurance coverage. The term also includes the 327 failure of a financial institution to honor the check of an 328 applicant for insurance which was delivered to a licensed agent 329 for payment of a premium, even if the agent previously delivered 330 or transferred the premium to the insurer. If a correctly 331 dishonored check represents payment of the initial premium, the 332 contract and all contractual obligations are void ab initio 333 unless the nonpayment is cured within the earlier of 5 days 334 after actual notice by certified mail is received by the 335 applicant or 15 days after notice is sent to the applicant by 336 certified mail or registered mail, and, if the contract is void, 337 any premium received by the insurer from a third party must 338 shall be refunded to that party in full; and 339 (b)If cancellation or termination occurs during the first 340 90 days during which the insurance is in force and if the 341 insurance is canceled or terminated for reasons other than 342 nonpayment, at least 20 days written notice of cancellation or 343 termination accompanied by the reason for cancellation or 344 termination must be given, except if there has been a material 345 misstatement or misrepresentation or failure to comply with the 346 underwriting requirements established by the insurer; and. 347 (c)1.Upon a declaration of an emergency pursuant to s. 348 252.36 and the filing of an order by the Commissioner of 349 Insurance Regulation, an insurer may not cancel or nonrenew a 350 personal residential or commercial residential property 351 insurance policy covering a dwelling or residential property 352 located in this state which has been damaged as a result of a 353 hurricane that is the subject of the declaration of emergency 354 for a period of 90 days after the dwelling or residential 355 property has been repaired. A dwelling or residential property 356 is deemed to be repaired when substantially completed and 357 restored to the extent that the dwelling or residential property 358 is insurable by another insurer that is writing policies in this 359 state. 360 2.An insurer or agent may cancel or nonrenew such a policy 361 before the repair of the dwelling or residential property: 362 a.Upon 10 days notice for nonpayment of premium; or 363 b.Upon 45 days notice: 364 (I)For a material misstatement or fraud related to the 365 claim; 366 (II)If the insurer determines that the insured has 367 unreasonably caused a delay in the repair of the dwelling or 368 residential property; or 369 (III)If the insurer has paid policy limits. 370 3.If the insurer elects to nonrenew a policy covering a 371 dwelling or residential property that has been damaged, the 372 insurer must provide at least 90 days notice to the insured 373 that the insurer intends to nonrenew the policy 90 days after 374 the dwelling or residential property has been repaired. 375 4.This paragraph does not prevent the insurer from 376 canceling or nonrenewing the policy 90 days after the repairs 377 are complete for the same reasons the insurer would otherwise 378 have canceled or nonrenewed the policy but for the limitation 379 imposed in subparagraph 1. 380 5.The commission may adopt rules, and the Commissioner of 381 Insurance Regulation may issue orders, necessary to implement 382 this paragraph. 383 Section 6.Paragraph (j) of subsection (2) of section 384 627.062, Florida Statutes, is amended to read: 385 627.062Rate standards. 386 (2)As to all such classes of insurance: 387 (j)With respect to residential property insurance rate 388 filings, the rate filing: 389 1.Must account for mitigation measures undertaken by 390 policyholders to reduce hurricane losses and windstorm losses. 391 2.May use a modeling indication that is the weighted or 392 straight average of two or more hurricane loss projection models 393 found by the Florida Commission on Hurricane Loss Projection 394 Methodology to be accurate or reliable pursuant to s. 627.0628. 395 If an averaged model is used under this subparagraph, the same 396 averaged model must be used throughout this state. If a weighted 397 average is used, the insurer must provide the office with a 398 justification for using the weighted average which shows that it 399 results in a rate that is reasonable, adequate, and fair. 400 401 The provisions of this subsection do not apply to workers 402 compensation, employers liability insurance, and motor vehicle 403 insurance. 404 Section 7.Paragraph (n) of subsection (6) of section 405 627.351, Florida Statutes, is amended to read: 406 627.351Insurance risk apportionment plans. 407 (6)CITIZENS PROPERTY INSURANCE CORPORATION. 408 (n)1.Rates for coverage provided by the corporation must 409 be actuarially sound pursuant to s. 627.062 and not competitive 410 with approved rates charged in the admitted voluntary market so 411 that the corporation functions as a residual market mechanism to 412 provide insurance only when insurance cannot be procured in the 413 voluntary market, except as otherwise provided in this 414 paragraph. The office shall provide the corporation such 415 information as would be necessary to determine whether rates are 416 competitive. The corporation shall file its recommended rates 417 with the office at least annually. The corporation shall provide 418 any additional information regarding the rates which the office 419 requires. The office shall consider the recommendations of the 420 board and issue a final order establishing the rates for the 421 corporation within 45 days after the recommended rates are 422 filed. The corporation may not pursue an administrative 423 challenge or judicial review of the final order of the office. 424 2.In addition to the rates otherwise determined pursuant 425 to this paragraph, the corporation shall impose and collect an 426 amount equal to the premium tax provided in s. 624.509 to 427 augment the financial resources of the corporation. 428 3.After the public hurricane loss-projection model under 429 s. 627.06281 has been found to be accurate and reliable by the 430 Florida Commission on Hurricane Loss Projection Methodology, the 431 model shall be considered when establishing the windstorm 432 portion of the corporations rates. The corporation may use the 433 public model results in combination with the results of private 434 models to calculate rates for the windstorm portion of the 435 corporations rates. This subparagraph does not require or allow 436 the corporation to adopt rates lower than the rates otherwise 437 required or allowed by this paragraph. 438 4.The corporation must make a recommended actuarially 439 sound rate filing for each personal and commercial line of 440 business it writes. 441 5.Notwithstanding the boards recommended rates and the 442 offices final order regarding the corporations filed rates 443 under subparagraph 1., the corporation shall annually implement 444 a rate increase which, except for sinkhole coverage, does not 445 exceed the following for any single policy issued by the 446 corporation, excluding coverage changes and surcharges: 447 a.Twelve percent for 2023. 448 b.Thirteen percent for 2024. 449 c.Fourteen percent for 2025. 450 d.Fifteen percent for 2026 and all subsequent years. 451 6.The corporation may also implement an increase to 452 reflect the effect on the corporation of the cash buildup factor 453 pursuant to s. 215.555(5)(b). 454 7.The corporations implementation of rates as prescribed 455 in subparagraphs 5. and 8. shall cease for any line of business 456 written by the corporation upon the corporations implementation 457 of actuarially sound rates. Thereafter, the corporation shall 458 annually make a recommended actuarially sound rate filing that 459 is not competitive with approved rates in the admitted voluntary 460 market for each commercial and personal line of business the 461 corporation writes. 462 8.The following New or renewal personal lines policies 463 that do not cover a primary residence written on or after 464 November 1, 2023, are not subject to the rate increase 465 limitations in subparagraph 5., but may not be charged more than 466 50 percent above, nor less than, the prior years established 467 rate for the corporation: 468 a.Policies that do not cover a primary residence; 469 b.New policies under which the coverage for the insured 470 risk, before the date of application with the corporation, was 471 last provided by an insurer determined by the office to be 472 unsound or an insurer placed in receivership under chapter 631; 473 or 474 c.Subsequent renewals of those policies, including the new 475 policies in sub-subparagraph b., under which the coverage for 476 the insured risk, before the date of application with the 477 corporation, was last provided by an insurer determined by the 478 office to be unsound or an insurer placed in receivership under 479 chapter 631. 480 9.As used in this paragraph, the term primary residence 481 means the dwelling that is the policyholders primary home or is 482 a rental property that is the primary home of the tenant, and 483 which the policyholder or tenant occupies for more than 9 months 484 of each year. 485 Section 8.Section 628.011, Florida Statutes, is amended to 486 read: 487 628.011Scope of part.This part applies only to domestic 488 stock insurers, mutual insurers, and captive insurers, except 489 that s. 628.341(2) applies also as to foreign and alien 490 insurers. 491 Section 9.Section 628.061, Florida Statutes, is amended to 492 read: 493 628.061Investigation of proposed organization.In 494 connection with any proposal to organize incorporate a domestic 495 insurer, the office shall make an investigation of: 496 (1)The character, reputation, financial standing, and 497 motives of the organizers, incorporators, and subscribers 498 organizing the proposed insurer. 499 (2)The character, financial responsibility, insurance 500 experience, and business qualifications of its proposed 501 officers. 502 (3)The character, financial responsibility, business 503 experience, and standing of the proposed stockholders and 504 directors. 505 Section 10.Subsections (1), (2), and (5) of section 506 628.801, Florida Statutes, are amended to read: 507 628.801Insurance holding companies; registration; 508 regulation. 509 (1)An insurer that is authorized to do business in this 510 state and that is a member of an insurance holding company 511 shall, on or before April 1 of each year, register with the 512 office and file a registration statement and be subject to 513 regulation with respect to its relationship to the holding 514 company as provided by law or rule. The commission shall adopt 515 rules establishing the information and statement form required 516 for registration and the manner in which registered insurers and 517 their affiliates are regulated. The rules apply to domestic 518 insurers, foreign insurers, and commercially domiciled insurers, 519 except for foreign insurers domiciled in states that are 520 currently accredited by the NAIC. Except to the extent of any 521 conflict with this code, the rules must include all requirements 522 and standards of the Insurance Holding Company System Model 523 Regulation and ss. 4 and 5 of the Insurance Holding Company 524 System Regulatory Act and the Insurance Holding Company System 525 Model Regulation of the NAIC, as adopted in December 2020 2010. 526 The commission may adopt subsequent amendments thereto if the 527 methodology remains substantially consistent. The rules may 528 include a prohibition on oral contracts between affiliated 529 entities. Material transactions between an insurer and its 530 affiliates must shall be filed with the office as provided by 531 rule. 532 (2)Effective January 1, 2015, The ultimate controlling 533 person of every insurer subject to registration shall also file 534 an annual enterprise risk report on or before April 1. As used 535 in this subsection, the term ultimate controlling person means 536 a person who is not controlled by any other person. The report 537 must, to the best of the ultimate controlling persons knowledge 538 and belief, must identify the material risks within the 539 insurance holding company system that could pose enterprise risk 540 to the insurer. The report must shall be filed with the lead 541 state office of the insurance holding company system as 542 determined by the procedures within the Financial Analysis 543 Handbook adopted by the NAIC and is confidential and exempt from 544 public disclosure as provided in s. 624.4212. 545 (a)An insurer may satisfy this requirement by providing 546 the office with the most recently filed parent corporation 547 reports that have been filed with the Securities and Exchange 548 Commission which provide the appropriate enterprise risk 549 information. 550 (b)The term enterprise risk means an activity, a 551 circumstance, an event, or a series of events involving one or 552 more affiliates of an insurer which, if not remedied promptly, 553 are likely to have a materially adverse effect upon the 554 financial condition or liquidity of the insurer or its insurance 555 holding company system as a whole, including anything that would 556 cause the insurers risk-based capital to fall into company 557 action level as set forth in s. 624.4085 or would cause the 558 insurer to be in a hazardous financial condition. 559 (c)The commission may adopt rules for filing the annual 560 enterprise risk report in accordance with the Insurance Holding 561 Company System Regulatory Act and the Insurance Holding Company 562 System Model Regulation of the NAIC, as adopted in December 563 2020. 564 (5)Effective January 1, 2015, The failure to file a 565 registration statement, or a summary of the registration 566 statement, or the enterprise risk filing report required by this 567 section within the time specified for filing is a violation of 568 this section. 569 Section 11.Section 629.011, Florida Statutes, is amended 570 to read: 571 629.011Definitions Reciprocal insurance defined.As used 572 in this part, the term: 573 (1)Affiliated person of another person means any of the 574 following: 575 (a)The spouse of the other person. 576 (b)The parents of the other person and their lineal 577 descendants, or the parents of the other persons spouse and 578 their lineal descendants. 579 (c)A person who directly or indirectly owns or controls, 580 or holds with the power to vote, 10 percent or more of the 581 outstanding voting securities of the other person. 582 (d)A person who directly or indirectly owns 10 percent or 583 more of the outstanding voting securities that are directly or 584 indirectly owned or controlled, or held with the power to vote, 585 by the other person. 586 (e)A person or group of persons who directly or indirectly 587 control, are controlled by, or are under common control with the 588 other person. 589 (f)A person who is a director, an officer, a trustee, a 590 partner, an owner, a manager, a joint venturer, or an employee, 591 or another person who is performing duties similar to those of a 592 person in one of the aforementioned positions. 593 (g)If the other person is an investment company, any 594 investment adviser of such company or any member of an advisory 595 board of such company. 596 (h)If the other person is an unincorporated investment 597 company not having a board of directors, the depositor of such 598 company. 599 (i)A person who has entered into an agreement, written or 600 unwritten, to act in concert with the other person in acquiring 601 or limiting the disposition of: 602 1.Securities of an attorney in fact or controlling company 603 that is a stock corporation; or 604 2.An ownership interest of an attorney in fact or 605 controlling company that is not a stock corporation. 606 (2)Attorney in fact means the attorney in fact of a 607 reciprocal insurer. The attorney in fact may be an individual, a 608 corporation, or another person. 609 (3)Controlling company means any person, corporation, 610 trust, limited liability company, association, or other entity 611 owning, directly or indirectly, 10 percent or more of the voting 612 securities of one or more attorneys in fact that are stock 613 corporations, or 10 percent or more of the ownership interest of 614 one or more attorneys in fact that are not stock corporations. 615 (4)Reciprocal insurance means is that resulting from an 616 interexchange among persons, known as A reciprocal insurer shall: 637 (1)A domestic reciprocal insurer shall have and use a 638 business name that must. The name shall include the word 639 reciprocal, or interinsurer, or interinsurance, or 640 exchange, or underwriters, or underwriting., but this 641 requirement shall not apply as to any insurer holding a 642 certificate of authority to transact insurance in this state 643 immediately prior to the effective date of this code. 644 (2)A foreign or alien reciprocal insurer transacting 645 business in this state, whose name does not include the word 646 reciprocal, interinsurer, interinsurance, exchange, 647 underwriters, or underwriting, shall use a fictitious name, 648 registered in accordance with s. 865.09, which includes one of 649 those words when transacting business in this state. 650 (3)A reciprocal insurer may sue and be sued in its own 651 name. 652 Section 15.Section 629.056, Florida Statutes, is created 653 to read: 654 629.056Premium reserves.A reciprocal insurer shall at all 655 times maintain unearned premium reserves equal to 50 percent of 656 the net written premiums of the subscribers on policies having 1 657 year or less to run, and pro rata on policies running for longer 658 periods, except that all premiums on any marine or 659 transportation insurance trip risk are deemed unearned until the 660 trip is terminated. For the purpose of this section, the term 661 net written premiums means the premium payments made by 662 subscribers plus the premiums due from subscribers, after 663 deducting the amounts specifically provided in the subscribers 664 agreements for expenses, including reinsurance costs and fees 665 paid to the attorney in fact, provided that the power of 666 attorney agreement contains an explicit provision requiring the 667 attorney in fact to refund any unearned subscriber fees on a pro 668 rata basis for canceled policies. In the absence of such a 669 provision, the unearned premium reserves must be calculated 670 without any adjustment for fees paid to the attorney in fact. If 671 the unearned premium reserves at any time are less than 672 $300,000, additional funds in cash or eligible securities must 673 be maintained on deposit at the exchange at all times which, 674 together with the unearned premium reserves, equal $300,000. In 675 calculating these reserves, the amount of the attorney in facts 676 bond, as filed with the office and as required by s. 629.121, 677 must be included in such reserves. If at any time the unearned 678 premium reserves are less than those required, the subscribers, 679 or the attorney in fact, must advance funds to cover the 680 deficiency. Such advances may only be repaid out of the surplus 681 of the exchange and only after receiving written approval from 682 the office. 683 Section 16.Section 629.061, Florida Statutes, is repealed. 684 Section 17.Section 629.071, Florida Statutes, is amended 685 to read: 686 629.071Surplus funds required.The surplus required of a 687 reciprocal insurer is as required in s. 624.407 as to the kind 688 of insurance proposed to be transacted. 689 (1)A domestic reciprocal insurer hereunder formed, if it 690 has otherwise complied with the applicable provisions of this 691 code, may be authorized to transact insurance if it has and 692 thereafter maintains surplus funds of not less than $250,000. 693 (2)In addition to the surplus required to be maintained 694 under subsection (1), the insurer shall have, when first so 695 authorized, an expendable surplus of not less than $750,000. 696 Section 18.Section 629.081, Florida Statutes, is amended 697 to read: 698 629.081Organization of reciprocal insurer. 699 (1)Twenty-five or more persons domiciled in this state who 700 wish to organize as a domestic reciprocal insurer may make 701 application to the office for a permit to do so. A domestic 702 reciprocal insurer may not be formed unless the persons so 703 proposing have first received a permit from the office may 704 organize a domestic reciprocal insurer and make application to 705 the office for a certificate of authority to transact insurance. 706 (2)The permit application, to be filed by the organizers 707 or the proposed attorney in fact, must be in writing and made in 708 accordance with forms prescribed by the commission. In addition 709 to any applicable requirements of s. 628.051 or other relevant 710 statutes, the application must include all of the following 711 shall fulfill the requirements of and shall execute and file 712 with the office, when applying for a certificate of authority, a 713 declaration setting forth: 714 (a)The name of the proposed reciprocal insurer, which must 715 be in accordance with s. 629.051.; 716 (b)The location of the insurers principal office, which 717 must shall be the same as that of the proposed attorney in fact 718 and must shall be maintained within this state.; 719 (c)The kinds of insurance proposed to be transacted.; 720 (d)The names and addresses of the original 25 or more 721 subscribers.; 722 (e)The proposed designation and appointment of the 723 proposed attorney in fact and a copy of the power of attorney.; 724 (f)The names and addresses of the officers and directors 725 of the proposed attorney in fact, if a corporation, or of its 726 members, if other than a corporation.; 727 (g)The background information as specified in s. 629.227 728 for all officers, directors, managers, and those in equivalent 729 positions of the proposed attorney in fact as well as for any 730 person with an ownership interest of 10 percent or more in the 731 proposed attorney in fact. 732 (h)The articles of incorporation and bylaws, or equivalent 733 documents, of the proposed attorney in fact, dated within the 734 last year and appropriately certified. 735 (i)The proposed charter powers of the subscribers 736 advisory committee, and the names and terms of office of the 737 members thereof, as well as the background information as 738 specified in s. 629.227 for each proposed member.; 739 (h)That all moneys paid to the reciprocal shall, after 740 deducting therefrom any sum payable to the attorney, be held in 741 the name of the insurer and for the purposes specified in the 742 subscribers agreement; 743 (j)(i)A copy of the proposed subscribers agreement.; 744 (j)A statement that each of the original subscribers has 745 in good faith applied for insurance of a kind proposed to be 746 transacted, and that the insurer has received from each such 747 subscriber the full premium or premium deposit required for the 748 policy applied for, for a term of not less than 6 months at an 749 adequate rate theretofore filed with and approved by the office; 750 (k)A statement of the financial condition of the insurer, 751 a schedule of its assets, and a statement that the surplus as 752 required by s. 629.071 is on hand; and 753 (l)A copy of each policy, endorsement, and application 754 form it then proposes to issue or use. 755 (m)A copy of the bond required under s. 629.121. 756 (3)The filing must be accompanied by the application fee 757 required by s. 624.501(1)(a) and such other pertinent 758 information and documents as reasonably requested by the office. 759 (4)The office shall evaluate and grant or deny the permit 760 application in accordance with ss. 628.061, 628.071, and other 761 relevant provisions of the code. 762 763 Such declaration shall be acknowledged by the attorney before an 764 officer authorized to take acknowledgments. 765 Section 19.Section 629.091, Florida Statutes, is amended 766 to read: 767 629.091Reciprocal certificate of authority. 768 (1)To apply for a certificate of authority as a domestic 769 reciprocal insurer, the attorney in fact of an applicant who has 770 previously received a permit from the office may file an 771 application in accordance with forms prescribed by the 772 commission which, in addition to applicable requirements of ss. 773 624.404, 624.411, 624.413, and other relevant statutes, consists 774 of all of the following: 775 (a)Executed copies of any proposed or draft documents 776 required as part of the permit application. 777 (b)A statement affirming that all moneys paid to the 778 reciprocal shall, after deducting therefrom any sum payable to 779 the attorney in fact, be held in the name of the insurer and for 780 the purposes specified in the subscribers agreement. 781 (c)A statement that each of the original subscribers has 782 in good faith applied for insurance of a kind proposed to be 783 transacted, and that the insurer has received from each such 784 subscriber the full premium or premium deposit required for the 785 policy applied for, for a term of not less than 6 months at the 786 rate that was filed with and approved by the office. 787 (d)A copy of the bond required under s. 629.121. 788 (e)A statement of the financial condition of the insurer, 789 a schedule of its assets, and a statement that the surplus as 790 required by s. 629.071 is on hand. 791 (f)Such other pertinent information or documents as 792 reasonably requested by the office. 793 (2)The reciprocal certificate of authority must of a 794 reciprocal insurer shall be issued to its attorney in the name 795 of the reciprocal insurer to its attorney in fact. 796 Section 20.Section 629.094, Florida Statutes, is created 797 to read: 798 629.094 Continued eligibility for certificate of 799 authority.-In order to maintain its eligibility for a 800 certificate of authority, a domestic reciprocal insurer must 801 continue to meet all conditions required to be met under this 802 code and the rules adopted thereunder for the initial 803 applications for a permit and certificate of authority. 804 Section 21.Section 629.101, Florida Statutes, is amended 805 to read: 806 629.101Power of attorney. 807 (1)The rights and powers of the attorney in fact of a 808 domestic reciprocal insurer are shall be as provided in the 809 power of attorney given it by the subscribers. 810 (2)The power of attorney must set forth all of the 811 following: 812 (a)The powers of the attorney in fact.; 813 (b)That the attorney in fact is empowered to accept 814 service of process on behalf of the insurer in actions against 815 the insurer upon contracts exchanged.; 816 (c)The place where the office of the attorney in fact is 817 maintained. 818 (d)The general services to be performed by the attorney in 819 fact.; 820 (e)(d)The maximum amount to be deducted from advance 821 premiums or deposits to be paid to the attorney in fact and the 822 general items of expense in addition to losses, to be paid by 823 the insurer.; and 824 (f)(e)Except as to nonassessable policies, a provision for 825 a contingent several liability of each subscriber in a specified 826 amount, which amount may shall be not be less than 5 times nor 827 more than 10 times the premium or premium deposit stated in the 828 policy. 829 (3)The power of attorney may: 830 (g)(a)Provide for The right of substitution of the 831 attorney in fact and revocation of the power of attorney and 832 rights thereunder.; 833 (h)(b)Impose such Restrictions upon the exercise of the 834 power as are agreed upon by the subscribers.; 835 (i)(c)Provide for The exercise of any right reserved to 836 the subscribers directly or through their advisory committee.; 837 and 838 (3)(d)The power of attorney may contain other lawful 839 provisions deemed advisable. 840 (4)The terms of any power of attorney or agreement 841 collateral thereto must shall be reasonable and equitable, and 842 no such power or agreement may shall be used or be effective in 843 this state unless filed with the office. 844 Section 22.Section 629.111, Florida Statutes, is amended 845 to read: 846 629.111Modifications.Modifications of the terms of the 847 subscribers agreement, charter of the subscribers advisory 848 committee, or of the power of attorney of a domestic reciprocal 849 insurer must shall be made jointly by the attorney in fact and 850 the subscribers advisory committee. No such modification may 851 shall be effective retroactively, nor as to any insurance 852 contract issued prior thereto. A modification may not take 853 effect until filed with, and approved in writing by, the office. 854 Section 23.Section 629.121, Florida Statutes, is amended 855 to read: 856 629.121Attorney in facts Attorneys bond. 857 (1)Concurrently with the filing of the permit application 858 declaration provided for in s. 629.081, the attorney in fact of 859 a domestic reciprocal insurer shall file with the office a bond 860 in favor of this state for the benefit of all persons damaged as 861 a result of breach by the attorney in fact of the conditions of 862 its his or her bond as set forth in subsection (2). The bond 863 must shall be executed by the attorney in fact and by an 864 authorized corporate surety and is shall be subject to the 865 approval of the office. 866 (2)The bond must shall be in the sum of $300,000 $100,000, 867 aggregate in form, the bond conditioned that the attorney in 868 fact will faithfully account for all moneys and other property 869 of the insurer coming into its his or her hands, and that it he 870 or she will not withdraw or appropriate to its his or her own 871 use from the funds of the insurer any moneys or property to 872 which it he or she is not entitled under the power of attorney. 873 (3)The bond must shall provide that it is not subject to 874 cancellation unless 30 days advance notice in writing of 875 cancellation is given both the attorney in fact and the office. 876 Section 24.Section 629.131, Florida Statutes, is amended 877 to read: 878 629.131Deposit in lieu of bond.In lieu of the bond 879 required under s. 629.121, the attorney in fact may maintain on 880 deposit with the department a like amount in value of securities 881 qualified for deposit under s. 625.52 and subject to the same 882 conditions as the bond. 883 Section 25.Section 629.141, Florida Statutes, is amended 884 to read: 885 629.141Action on bond.Action on the attorney in facts 886 attorneys bond or to recover against any such deposit made in 887 lieu thereof may be brought at any time by one or more 888 subscribers suffering loss through a violation of its conditions 889 or by a receiver or liquidator of the insurer. Amounts recovered 890 on the bond shall be deposited in and become part of the 891 insurers funds. The total aggregate liability of the surety 892 shall be limited to the amount of the penalty of such bond. 893 Section 26.Section 629.161, Florida Statutes, is amended 894 to read: 895 629.161Contributions to insurer. 896 (1)A reciprocal insurer may borrow money to defray the 897 expenses of its organization, to provide itself with surplus 898 funds, or for any purpose of its business, upon a written 899 agreement that such money is required to be repaid only out of 900 the insurers surplus in excess of that stipulated in such 901 agreement. Any interest stipulated in such agreement may not 902 constitute a liability of the insurer as to its funds other than 903 such excess of surplus. Commission or promotion expense may not 904 be paid in connection with any such loan. 905 (2)Money so borrowed, together with the interest thereon 906 if so stipulated in the agreement, may not form a part of the 907 insurers legal liabilities, except as to its surplus in excess 908 of the amount stipulated in the agreement, or be the basis of 909 any setoff; but until repaid, financial statements filed or 910 published by the insurer must show as a footnote to such 911 statement the amount of the unpaid loan together with any 912 interest accrued but unpaid. 913 (3)Any such loan to a reciprocal insurer is subject to the 914 approval of the office for the issue and the rate of interest to 915 be paid. The reciprocal insurer shall, in advance of the loan, 916 file with the office a statement of the purpose of the loan and 917 a copy of the proposed loan agreement. The office shall 918 disapprove any proposed loan or agreement if it finds that the 919 loan is unnecessary or excessive for the purpose intended; that 920 the terms of the loan agreement are not fair and equitable to 921 the parties and to other similar lenders, if any, to the 922 reciprocal insurer; or that the information so filed by the 923 reciprocal insurer is inadequate. 924 (4)Any such loan to a reciprocal insurer, or a substantial 925 portion of such loan, must be repaid by the reciprocal insurer 926 when no longer reasonably necessary for the purpose originally 927 intended. A reciprocal insurer may not repay such loan or any 928 interest on such loan unless repayment is approved in advance by 929 the office. 930 (5)This section does not apply to loans obtained by the 931 reciprocal insurer in the ordinary course of business from banks 932 and other financial institutions, or to loans secured by pledge 933 or mortgage of assets The attorney or other parties may advance 934 to a domestic reciprocal insurer upon reasonable terms such 935 funds as it may require from time to time in its operations. 936 Sums so advanced shall not be treated as a liability of the 937 insurer and, except upon liquidation of the insurer, shall not 938 be withdrawn or repaid except out of the insurers realized 939 earned surplus in excess of its minimum required surplus. No 940 such withdrawal or repayment shall be made without the advance 941 approval of the office. This section does not apply as to bank 942 loans or to loans made upon security. 943 Section 27.Subsection (1) of section 629.171, Florida 944 Statutes, is amended to read: 945 629.171Annual statement. 946 (1)The annual statement of a reciprocal insurer must shall 947 be made and filed by its attorney in fact in the same manner as 948 domestic stock insurers under s. 624.424. 949 Section 28.Section 629.191, Florida Statutes, is amended 950 to read: 951 629.191Who may be subscribers.Individuals, partnerships, 952 and corporations of this state may make applications for, enter 953 into agreements for, and hold policies or contracts in or with, 954 and be subscribers of, any domestic, foreign, or alien 955 reciprocal insurer. 956 Section 29.Section 629.201, Florida Statutes, is amended 957 to read: 958 629.201Subscribers advisory committee. 959 (1)The advisory committee of a domestic reciprocal insurer 960 exercising the subscribers rights must shall be selected under 961 such rules as the subscribers adopt. 962 (2)Not less than two-thirds of such committee may shall be 963 subscribers other than the attorney in fact, or any person 964 appointed by, employed by, representing, or having a financial 965 interest in the attorney in fact. 966 (3)The committee shall do all of the following: 967 (a)Supervise the finances of the insurer.; 968 (b)Supervise the insurers operations to such extent as to 969 assure conformity with the subscribers agreement and power of 970 attorney.; 971 (c)Procure the audit of the accounts and records of the 972 insurer and of the attorney in fact at the expense of the 973 insurer.; and 974 (d)Have such additional powers and functions as may be 975 conferred by the subscribers agreement. 976 Section 30.Section 629.225, Florida Statutes, is created 977 to read: 978 629.225Acquisitions. 979 (1)A person may not, individually or in conjunction with 980 an affiliated person of such person, directly or indirectly, 981 conclude a tender offer or exchange offer for, enter into any 982 agreement to exchange securities for, or otherwise finally 983 acquire 10 percent or more of the outstanding voting securities 984 of an attorney in fact that is a stock corporation or of a 985 controlling company of an attorney in fact that is a stock 986 corporation; or conclude an acquisition of, or otherwise finally 987 acquire, 10 percent or more of the ownership interest of an 988 attorney in fact that is not a stock corporation or of a 989 controlling company of an attorney in fact that is not a stock 990 corporation, unless all of the following conditions are met: 991 (a)The person or affiliated person has filed with the 992 office and sent to the principal office of the attorney in fact, 993 any controlling company of the attorney in fact, and the 994 reciprocal insurer a letter of notification regarding the 995 transaction or proposed transaction no later than 5 days after 996 any form of tender offer or exchange offer is proposed, or no 997 later than 5 days after the acquisition of the securities or 998 ownership interest if no tender offer or exchange offer is 999 involved. The notification must be provided on forms prescribed 1000 by the commission containing information determined necessary to 1001 understand the transaction and identify all purchasers and 1002 owners involved. 1003 (b)The person or affiliated person has filed with the 1004 office an application, signed under oath and prepared on forms 1005 prescribed by the commission, which contains the information 1006 specified in subsection (3). The application must be completed 1007 and filed within 30 days after any form of tender offer or 1008 exchange offer is proposed, or after the acquisition of the 1009 securities if no tender offer or exchange offer is involved. 1010 (c)The office has approved the tender offer or exchange 1011 offer, or acquisition if no tender offer or exchange offer is 1012 involved. 1013 (2)The person or affiliated person filing the notice in 1014 required in paragraph (1)(a) may additionally request that the 1015 office waive the requirements of paragraph (1)(b), provided that 1016 there is no change in the ultimate controlling shareholders, no 1017 change in the ownership percentages of the ultimate controlling 1018 shareholders, and no unaffiliated parties acquire any direct or 1019 indirect interest in the attorney in fact. The office may waive 1020 the filing if it determines that there is no change in the 1021 ultimate controlling shareholders, no change in the ownership 1022 percentages of the ultimate controlling shareholders, and no 1023 unaffiliated parties will acquire any direct or indirect 1024 interest in the attorney in fact. 1025 (3)The application to be filed with the office and 1026 furnished to the attorney in fact and controlling company must 1027 contain all of the following information and any additional 1028 information as the office deems necessary to determine the 1029 character, experience, ability, and other qualifications of the 1030 person, or the affiliated person of such person, for the 1031 protection of the reciprocal insurers subscribers and of the 1032 public: 1033 (a)The identity and background information specified in s. 1034 629.227 of: 1035 1.Each person by whom, or on whose behalf, the acquisition 1036 is to be made; and 1037 2.Any person who controls, either directly or indirectly, 1038 such other person, including each director, officer, trustee, 1039 partner, owner, manager, or joint venturer, or another person 1040 performing duties similar to those of persons in the 1041 aforementioned positions for the person. 1042 (b)The source and amount of the funds or other 1043 consideration used, or to be used, in making the acquisition. 1044 (c)Any plans or proposals that such persons may have made 1045 to liquidate the attorney in fact or controlling company, to 1046 sell any of their assets or merge or consolidate them with any 1047 person, or to make any other major change in their business or 1048 corporate structure or management, and any plans or proposals 1049 that such persons may have made to liquidate any controlling 1050 company of the attorney in fact, to sell any of its assets or 1051 merge or consolidate it with any person, or to make any other 1052 major change in its business or corporate structure or 1053 management. 1054 (d)The nature and the extent of the controlling interest 1055 which the person, or the affiliated person of such person, 1056 proposes to acquire, the terms of the proposed acquisition, and 1057 the manner in which the controlling interest is to be acquired 1058 of an attorney in fact or controlling company which is not a 1059 stock corporation. 1060 (e)The number of shares or other securities that the 1061 person, or the affiliated person of such person, proposes to 1062 acquire, the terms of the proposed acquisition, and the manner 1063 in which the securities are to be acquired. 1064 (f)Information as to any contract, arrangement, or 1065 understanding with any party with respect to any of the 1066 securities of the attorney in fact or controlling company, 1067 including, but not limited to, information relating to the 1068 transfer of any of the securities, option arrangements, puts or 1069 calls, or the giving or withholding of proxies, which 1070 information names the party with whom the contract, arrangement, 1071 or understanding has been entered into and gives the details 1072 thereof. 1073 (4)The acquisition application must be accompanied by the 1074 fee required under s. 624.501(1)(a). 1075 (5)If any material change occurs in the facts provided in 1076 the application filed with the office pursuant to this section, 1077 or the background information required under s. 629.227, an 1078 amendment specifying such changes must be immediately filed with 1079 the office, and a copy of the amendment must be sent to the 1080 principal office of the attorney in fact and to the principal 1081 office of the controlling company. 1082 (6)(a)The acquisition application must be reviewed in 1083 accordance with chapter 120. The office may conduct, or, if 1084 requested to do so in writing by a substantially affected 1085 person, shall conduct, a proceeding to consider the 1086 appropriateness of the proposed application. Time periods for 1087 purposes of chapter 120 are tolled during the pendency of the 1088 proceeding. Any written request for a proceeding must be filed 1089 with the office within 10 days after the date notice of the 1090 filing is given. During the pendency of the proceeding or review 1091 period by the office, any person or affiliated person complying 1092 with the filing requirements of this section may proceed and 1093 take all steps necessary to conclude the acquisition so long as 1094 finalization of the acquisition is conditioned upon obtaining 1095 office approval. However, at any time it finds an immediate 1096 danger to the public health, safety, and welfare of the 1097 reciprocal insurers subscribers exists, the office shall 1098 immediately order, pursuant to s. 120.569(2)(n), the proposed 1099 acquisition disapproved and any further steps to conclude the 1100 acquisition ceased. 1101 (b)During the pendency of the offices review of any 1102 acquisition subject to this section, the acquiring person may 1103 not make any material change in the operation of the attorney in 1104 fact or controlling company unless the office has specifically 1105 approved the change, and the acquiring person may not make any 1106 material change in the management of the attorney in fact unless 1107 advance written notice of the change in management is furnished 1108 to the office. The term material change in the operation of the 1109 attorney in fact means a transaction that disposes of or 1110 obligates 5 percent or more of the capital and surplus of the 1111 attorney in fact. The term material change in the management of 1112 the attorney in fact means any change in management involving 1113 officers or directors of the attorney in fact or any person of 1114 the attorney in fact or controlling company having authority to 1115 dispose of or obligate 5 percent or more of the attorney in 1116 facts capital or surplus. The office must approve a material 1117 change in the operation of the attorney in fact if it finds the 1118 applicable provisions of subsection (7) have not been met. The 1119 office may disapprove a material change in management of the 1120 attorney in fact if it finds that the applicable provisions of 1121 subsection (7) have been met, and in such case the attorney in 1122 fact shall promptly change management as acceptable to the 1123 office. 1124 (c)If a request for a proceeding is filed, the proceeding 1125 must be conducted within 60 days after the date the written 1126 request for a proceeding is received by the office. A 1127 recommended order must be issued within 20 days after the date 1128 of the close of the proceedings. A final order must be issued 1129 within 20 days after the date of the recommended order or, if 1130 exceptions to the recommended order are filed, within 20 days 1131 after the date the exceptions are filed. 1132 (7)The office may disapprove any acquisition subject to 1133 this section by any person, or any affiliated person of such 1134 person, who: 1135 (a)Willfully violates this section; 1136 (b)In violation of an order issued by the office pursuant 1137 to subsection (11), fails to divest himself or herself of any 1138 stock or ownership interest obtained in violation of this 1139 section or fails to divest himself or herself of any direct or 1140 indirect control of such stock or ownership interest, within 25 1141 days after such order; or 1142 (c)In violation of an order issued by the office pursuant 1143 to subsection (11), acquires an additional stock or ownership 1144 interest in an attorney in fact or controlling company or direct 1145 or indirect control of such stock or ownership interest, without 1146 complying with this section. 1147 (8)The person filing the application required by this 1148 section has the burden of proof. The office must approve any 1149 such acquisition if it finds, on the basis of the record made 1150 during any proceeding or on the basis of the filed application 1151 if no proceeding is conducted, that: 1152 (a)The financial condition of the acquiring person will 1153 not jeopardize the financial stability of the attorney in fact 1154 or prejudice the interests of the reciprocal insurers 1155 subscribers or the public. 1156 (b)Any plan or proposal that the acquiring person has 1157 made: 1158 1.To liquidate the attorney in fact, sell its assets, or 1159 merge or consolidate it with any person, or to make any other 1160 major change in its business or corporate structure or 1161 management, is fair and free of prejudice to the reciprocal 1162 insurers subscribers or to the public; or 1163 2.To liquidate any controlling company, sell its assets, 1164 or merge or consolidate it with any person, or to make any major 1165 change in its business or corporate structure or management 1166 which would have an effect upon the attorney in fact, is fair 1167 and free of prejudice to the reciprocal insurers subscribers or 1168 to the public. 1169 (c)The competence, experience, and integrity of those 1170 persons who will control directly or indirectly the operation of 1171 the attorney in fact indicate that the acquisition is in the 1172 best interest of the reciprocal insurers subscribers and in the 1173 public interest. 1174 (d)The natural persons for whom background information is 1175 required to be furnished pursuant to this section have such 1176 backgrounds as to indicate that it is in the best interests of 1177 the reciprocal insurers subscribers and in the public interest 1178 to permit such persons to exercise control over the attorney in 1179 fact. 1180 (e)The directors and officers, if such attorney in fact or 1181 controlling company is a stock corporation, or the trustees, 1182 partners, owners, managers, or joint venturers, or other persons 1183 performing duties similar to those of persons in the 1184 aforementioned positions, if such attorney in fact or 1185 controlling company is not a stock corporation, to be employed 1186 after the acquisition have sufficient insurance experience and 1187 ability to assure reasonable promise of successful operation. 1188 (f)The management of the attorney in fact after the 1189 acquisition will be competent and trustworthy and will possess 1190 sufficient managerial experience so as to make the proposed 1191 operation of the attorney in fact not hazardous to the 1192 insurance-buying public. 1193 (g)The management of the attorney in fact after the 1194 acquisition will not include any person who has directly or 1195 indirectly through ownership, control, reinsurance transactions, 1196 or other insurance or business relations unlawfully manipulated 1197 the assets, accounts, finances, or books of any insurer or 1198 otherwise acted in bad faith with respect thereto. 1199 (h)The acquisition is not likely to be hazardous or 1200 prejudicial to the reciprocal insurers subscribers or to the 1201 public. 1202 (i)The effect of the acquisition would not substantially 1203 lessen competition in the line of insurance for which the 1204 reciprocal insurer is licensed or certified in this state or 1205 would not tend to create a monopoly therein. 1206 (9)A vote by the stockholder of record, or by any other 1207 person, of any security acquired in contravention of this 1208 section is not valid. Any acquisition contrary to this section 1209 is void. Upon the petition of the attorney in fact, the 1210 controlling company, or the reciprocal insurer, the circuit 1211 court for the county in which the principal office of the 1212 attorney in fact is located may, without limiting the generality 1213 of its authority, order the issuance or entry of an injunction 1214 or other order to enforce this section. There is a private right 1215 of action in favor of the attorney in fact or controlling 1216 company to enforce this section. A demand upon the office that 1217 it perform its functions is not required as a prerequisite to 1218 any legal action by the attorney in fact or controlling company 1219 against another person, and the office may not be deemed a 1220 necessary party to any action by the attorney in fact or 1221 controlling company to enforce this section. Any person who 1222 makes or proposes an acquisition requiring the filing of an 1223 application pursuant to this section, or who files such an 1224 application, is deemed to have designated the chief financial 1225 officer, or his or her assistant or deputy or another person in 1226 charge of his or her office, as such persons agent for service 1227 of process under this section and is deemed to have submitted 1228 himself or herself to the administrative jurisdiction of the 1229 office and to the jurisdiction of the circuit court. 1230 (10)Any approval under this section by the office does not 1231 constitute a recommendation by the office of the tender offer or 1232 exchange offer, or the acquisition, if no tender offer or 1233 exchange offer is involved. It is unlawful for a person to 1234 represent that the offices approval constitutes a 1235 recommendation. A person who violates this subsection commits a 1236 felony of the third degree, punishable as provided in s. 1237 775.082, s. 775.083, or s. 775.084. The statute-of-limitations 1238 period for the prosecution of an offense committed under this 1239 subsection is 5 years. 1240 (11)A person may rebut a presumption of control by filing 1241 with the office a disclaimer of control with the office on a 1242 form prescribed by the commission. The disclaimer must fully 1243 disclose all material relationships and bases for affiliation 1244 between the person and the attorney in fact as well as the basis 1245 for disclaiming the affiliation. In lieu of such form, a person 1246 or acquiring party may file with the office a copy of a Schedule 1247 13G filed with the Securities and Exchange Commission pursuant 1248 to Rule 13d-1(b) or (c), 17 C.F.R. s. 240.13d-1, under the 1249 Securities Exchange Act of 1934, as amended. After a disclaimer 1250 has been filed, the attorney in fact is relieved of any duty to 1251 register or report under this section which may arise out of the 1252 attorney in facts relationship with the person unless the 1253 office disallows the disclaimer. 1254 (12)If the office determines that any person, or any 1255 affiliated person of such person, has acquired 10 percent or 1256 more of the outstanding voting securities of an attorney in fact 1257 or controlling company that is a stock corporation, or 10 1258 percent or more of the ownership interest of an attorney in fact 1259 or controlling company that is not a stock corporation, without 1260 complying with this section, the office may order that the 1261 person, and any affiliated person of such person, cease 1262 acquisition of the attorney in fact or controlling company and, 1263 if appropriate, divest itself of any stock or ownership interest 1264 acquired in violation of this section. 1265 (13)(a)The office shall, if necessary to protect the 1266 public interest, suspend or revoke the reciprocal certificate of 1267 authority of the reciprocal insurer whose attorney in fact or 1268 controlling company is acquired in violation of this section. 1269 (b)If a reciprocal insurer is subject to suspension or 1270 revocation pursuant to paragraph (a), the attorney in fact is 1271 deemed to be in such condition, or to be using or to have been 1272 subject to such methods or practices in the conduct of its 1273 business, as to render its further transaction of insurance 1274 hazardous to its subscribers, creditors, or stockholders or to 1275 the public. In such case, the office may offer the reciprocal 1276 insurer, through its subscriber representatives, the ability to 1277 cure any suspension or revocation by procuring another attorney 1278 in fact acceptable to the office. 1279 (14)This section does not apply to any acquisition of 1280 voting securities or ownership interest of an attorney in fact 1281 or of a controlling company by any person who is the owner of a 1282 majority of the voting securities or ownership interest with the 1283 approval of the office under this section or s. 629.091. 1284 Section 31.Section 629.227, Florida Statutes, is created 1285 to read: 1286 629.227Background information.The information as to the 1287 background and identity of each person for whom information is 1288 required to be furnished pursuant to s. 629.081 or s. 629.225 1289 must include, but need not be limited to, all of the following: 1290 (1)A sworn biographical statement, on forms adopted by the 1291 commission, which must include, but need not be limited to, the 1292 following information: 1293 (a)Occupations, positions of employment, and offices held 1294 during the past 10 years, including the principal business and 1295 address of any business, corporation, or organization where each 1296 occupation, position of employment, or office occurred. 1297 (b)Whether, during such 10-year period, the person was 1298 convicted of any crime other than a traffic violation. 1299 (c)Whether, during such 10-year period, the person has 1300 been the subject of any proceeding for the revocation of any 1301 license and, if so, the nature of the proceeding and the 1302 disposition of the proceeding. 1303 (d)Whether, during such 10-year period, the person has 1304 been the subject of any proceeding under the bankruptcy code. 1305 (e)Whether, during such 10-year period, any person or 1306 other business or organization in which the person was a 1307 director, officer, trustee, partner, owner, manager, or other 1308 official has been subject to any proceeding under the bankruptcy 1309 code, either during the time of that persons tenure with the 1310 business or organization or within 12 months thereafter. 1311 (f)Whether, during such 10-year period, the person has 1312 been enjoined, either temporarily or permanently, by a court of 1313 competent jurisdiction from violating any federal or state law 1314 regulating the business of insurance, securities, or banking, or 1315 from carrying out any particular practice or practices in the 1316 course of the business of insurance, securities, or banking, 1317 together with details as to any such event. 1318 (2)The fingerprints of each person. 1319 (3)An authorization for release of information necessary 1320 to investigate such persons background. 1321 (4)Any additional information that the office deems 1322 necessary to determine the character, experience, ability, and 1323 other qualifications of the person, or affiliated person of such 1324 person, for the protection of the reciprocal insurers 1325 subscribers and of the public. 1326 Section 32.Subsection (1) of section 629.231, Florida 1327 Statutes, is amended, and subsection (5) is added to that 1328 section, to read: 1329 629.231Assessments. 1330 (1)Assessments may from time to time be levied upon 1331 subscribers of an assessable a domestic reciprocal insurer who 1332 are liable for such assessments therefor under the terms of 1333 their policies by the attorney in fact. Any such assessment must 1334 be approved upon approval in advance by the subscribers 1335 advisory committee and the office, or by the department as 1336 receiver of the insurer. 1337 (5)Upon impairment of surplus of a nonassessable 1338 reciprocal insurer, the office shall revoke the authorization 1339 under s. 629.291(5) to convert to a nonassessable reciprocal 1340 insurer. After such revocation, any policy in force at the time 1341 the revocation occurs remains in force for the remainder of the 1342 period for which the premium has been paid, but the reciprocal 1343 insurer may not issue new policies without requiring contingent 1344 assessment liability from the new subscriber. 1345 Section 33.Section 629.241, Florida Statutes, is amended 1346 to read: 1347 629.241Time limit for assessments.Every subscriber of a 1348 domestic reciprocal insurer having contingent liability shall be 1349 liable for, and shall pay his or her share of, any assessment, 1350 as computed and limited in accordance with this chapter, if: 1351 (1)While his or her policy is in force or within 4 years 1352 after its termination, the subscriber is notified by either the 1353 attorney in fact or the office of its intentions to levy such 1354 assessment; or 1355 (2)An order to show cause why a receiver, conservator, 1356 rehabilitator, or liquidator of the insurer should not be 1357 appointed is issued while the subscribers policy is in force or 1358 within 4 years after its termination. 1359 Section 34.Section 629.251, Florida Statutes, is amended 1360 to read: 1361 629.251Aggregate liability.No one policy or subscriber as 1362 to such policy shall be assessed or charged with an aggregate of 1363 contingent liability as to obligations incurred by a domestic 1364 reciprocal insurer in any one calendar year in excess of the 1365 amount provided for in the power of attorney or in the 1366 subscribers agreement, computed solely upon premium earned on 1367 such policy during that year. 1368 Section 35.Section 629.261, Florida Statutes, is repealed. 1369 Section 36.Subsection (2) of section 629.271, Florida 1370 Statutes, is amended to read: 1371 629.271Distribution of savings. 1372 (2)In addition to the option provided in subsection (1), a 1373 domestic reciprocal insurer may, upon the prior written approval 1374 of the office, pay to its subscribers a portion of unassigned 1375 funds of up to 10 percent of surplus, with distribution limited 1376 to 50 percent of net income from the previous calendar year. 1377 Such distribution may not unfairly discriminate between classes 1378 of risks or policies, or between subscribers, but may vary as to 1379 classes of subscribers based on the experience of the classes. 1380 Section 37.Section 629.281, Florida Statutes, is amended 1381 to read: 1382 629.281Subscribers share in assets.Upon the liquidation 1383 of a domestic reciprocal insurer, its assets remaining after 1384 discharge of its indebtedness and policy obligations, the return 1385 of any contributions of the attorney in fact or other persons to 1386 its surplus made as provided in s. 629.161, and the return of 1387 any unused premium, savings, or credits then standing on 1388 subscribers accounts shall be distributed to its subscribers 1389 who were such within the 12 months prior to the last termination 1390 of its reciprocal certificate of authority, according to such 1391 reasonable formula as the office approves. 1392 Section 38.Subsections (1), (2), and (4) of section 1393 629.291, Florida Statutes, are amended, and subsection (5) is 1394 added to that section, to read: 1395 629.291Merger or conversion. 1396 (1)A domestic reciprocal insurer, upon affirmative vote of 1397 not less than two-thirds of its subscribers who vote on such 1398 merger pursuant to due notice, subject to and the approval by of 1399 the office of the terms therefor, may merge with another 1400 reciprocal insurer or be converted to a stock or mutual insurer, 1401 to be thereafter governed by the applicable sections of the 1402 Florida Insurance Code. However, a domestic stock insurer may 1403 not be converted to a reciprocal insurer. 1404 (2)Any such plan to merge a reciprocal insurer with 1405 another reciprocal insurer or for conversion of the reciprocal 1406 insurer to a stock or mutual insurer must be filed with the 1407 office on forms adopted by the commission and must contain such 1408 information as the office reasonable requires to evaluate the 1409 transaction Such a stock or mutual insurer shall be subject to 1410 the same capital or surplus requirements and shall have the same 1411 rights as a like domestic insurer transacting like kinds of 1412 insurance. 1413 (4)Reinsurance of all or substantially all of the 1414 insurance in force of a domestic reciprocal insurer in another 1415 insurer is shall be deemed to be a merger for the purposes of 1416 this section. 1417 (5)(a)An assessable reciprocal insurer may be converted to 1418 a nonassessable reciprocal insurer if: 1419 1.The subscribers advisory committee approves the 1420 application for conversion; 1421 2.The attorney in fact submits the application on the 1422 required application form; and 1423 3.The office finds that the application meets the minimum 1424 statutory requirements. 1425 (b)If the office approves the application, the assessable 1426 reciprocal insurer may be converted to a nonassessable 1427 reciprocal insurer by: 1428 1.Extinguishing the contingent liability of subscribers 1429 under all policies then in force in this state; 1430 2.Omitting contingent liability provisions in all policies 1431 delivered or issued in this state after the conversion; and 1432 3.Otherwise extinguishing the contingent liability of all 1433 of its subscribers. However, if the reciprocal insurer is 1434 transacting insurance as an authorized insurer in another state 1435 and that states laws require the insurer to issue policies with 1436 contingent liability provisions, the insurer may issue 1437 contingent liability policies in that other state. 1438 (c)If the surplus of the reciprocal insurer becomes 1439 impaired, the insurer may no longer issue nonassessable policies 1440 or convert assessable policies to nonassessable policies, and s. 1441 629.301 applies. 1442 Section 39.Subsections (1) and (2) of section 629.301, 1443 Florida Statutes, are amended to read: 1444 629.301Impaired reciprocal insurers. 1445 (1)If the assets of a domestic reciprocal insurer are at 1446 any time insufficient to discharge its liabilities, other than 1447 any liability on account of funds contributed by the attorney in 1448 fact or others, and to maintain the required surplus, its 1449 attorney in fact shall forthwith make up the deficiency or levy 1450 an assessment upon the subscribers for the amount needed to make 1451 up the deficiency, but subject to the limitation set forth in 1452 the power of attorney or policy. 1453 (2)If the attorney in fact fails to make up such 1454 deficiency or to make the assessment within 30 days after the 1455 office orders him or her to do so, or if the deficiency is not 1456 fully made up within 60 days after the date the assessment was 1457 made, the insurer must shall be deemed insolvent and shall be 1458 proceeded against in the same manner as any other domestic 1459 insurer under chapter 631 and the insurance as authorized by 1460 this code. 1461 Section 40.Section 629.401, Florida Statutes, is repealed. 1462 Section 41.Section 629.520, Florida Statutes, is repealed. 1463 Section 42.Section 629.525, Florida Statutes, is created 1464 to read: 1465 629.525Rulemaking authority.The commission shall adopt, 1466 amend, or repeal rules pursuant to chapter 120 which are 1467 necessary to implement this chapter. 1468 Section 43.Paragraph (h) of subsection (3) of section 1469 163.01, Florida Statutes, is amended to read: 1470 163.01Florida Interlocal Cooperation Act of 1969. 1471 (3)As used in this section: 1472 (h)Local government liability pool means a reciprocal 1473 insurer as defined in s. 629.011 s. 629.021 or any self 1474 insurance program created pursuant to s. 768.28(16), formed and 1475 controlled by counties or municipalities of this state to 1476 provide liability insurance coverage for counties, 1477 municipalities, or other public agencies of this state, which 1478 pool may contract with other parties for the purpose of 1479 providing claims administration, processing, accounting, and 1480 other administrative facilities. 1481 Section 44.Paragraph (c) of subsection (1) of section 1482 624.413, Florida Statutes, is amended to read: 1483 624.413Application for certificate of authority. 1484 (1)To apply for a certificate of authority, an insurer 1485 shall file its application therefor with the office, upon a form 1486 adopted by the commission and furnished by the office, showing 1487 its name; location of its home office and, if an alien insurer, 1488 its principal office in the United States; kinds of insurance to 1489 be transacted; state or country of domicile; and such additional 1490 information as the commission reasonably requires, together with 1491 the following documents: 1492 (c)If a foreign or alien reciprocal insurer, a copy of the 1493 power of attorney of its attorney in fact and of its 1494 subscribers agreement, if any, certified by the attorney in 1495 fact; and, if a domestic reciprocal insurer, the permit 1496 application declaration provided for in s. 629.081. 1497 Section 45.Section 624.45, Florida Statutes, is amended to 1498 read: 1499 624.45Participation of financial institutions in 1500 reinsurance and in insurance exchanges.Subject to applicable 1501 laws relating to financial institutions and to any other 1502 applicable provision of the Florida Insurance Code, any 1503 financial institution or aggregation of such institutions may: 1504 (1)own or control, directly or indirectly, any insurer 1505 that which is authorized or approved by the office, that which 1506 insurer transacts only reinsurance in this state, and that which 1507 actively engages in reinsuring risks located in this state. 1508 (2)Participate, directly or indirectly, as an underwriting 1509 member or as an investor in an underwriting member of any 1510 insurance exchange authorized in accordance with s. 629.401, 1511 which underwriting member transacts only aggregate or specific 1512 excess insurance over underlying self-insurance coverage for 1513 self-insurance organizations authorized under the Florida 1514 Insurance Code, for multiple-employer welfare arrangements, or 1515 for workers compensation self-insurance trusts, in addition to 1516 any reinsurance the underwriting member may transact. 1517 Nothing in However, this section may not shall be deemed to 1518 prohibit a financial institution from engaging in any presently 1519 authorized insurance activity. 1520 Section 46.Subsection (3) of section 626.9531, Florida 1521 Statutes, is amended to read: 1522 626.9531Identification of insurers, agents, and insurance 1523 contracts. 1524 (3)For the purposes of this section, the term risk 1525 bearing entity means a reciprocal insurer as defined in s. 1526 629.011 s. 629.021, a commercial self-insurance fund as defined 1527 in s. 624.462, a group self-insurance fund as defined in s. 1528 624.4621, a local government self-insurance fund as defined in 1529 s. 624.4622, a self-insured public utility as defined in s. 1530 624.46225, or an independent educational institution self 1531 insurance fund as defined in s. 624.4623. For the purposes of 1532 this section, the term risk bearing entity does not include an 1533 authorized insurer as defined in s. 624.09. 1534 Section 47.Reciprocal insurers licensed before July 1, 1535 2025, shall increase their surplus as required by the amendments 1536 made by this act to s. 629.071, Florida Statutes, by January 1, 1537 2026. The attorney in fact of a reciprocal insurer licensed 1538 before July 1, 2025, shall increase its bond as required by the 1539 amendments made by this act to s. 629.121, Florida Statutes, by 1540 January 1, 2026. 1541 Section 48.This act shall take effect July 1, 2025.