FL
Florida House Bill H0367

Florida 2025 Regular Session

Florida House Bill H0367 Compare Versions

OldNewDifferences
11
22
3-CS/CS/HB 367 2025
3+CS/HB 367 2025
44
55
66
77 CODING: Words stricken are deletions; words underlined are additions.
8-hb367-02-c2
8+hb367-01-c1
99 Page 1 of 8
1010 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
1111
1212
1313
1414 A bill to be entitled 1
1515 An act relating to home and service warranty 2
1616 association financial requirements; amending s. 3
17-634.3077, F.S.; revising the circumstances under which 4
18-home warranty associations are not required to set up 5
19-unearned premium reserves; revising the requirements 6
20-for certain contractual liability policies purchased 7
21-by home warranty associations; amending s. 634.406, 8
22-F.S.; revising the circumstances under which service 9
23-warranty associations are not required to establish 10
24-unearned premium reserves and are authorized to allow 11
25-their premiums to exceed specified ratios; revising 12
26-the requirements for certain contractual liability 13
27-policies purchased by service warranty associations ; 14
28-amending s. 634.414, F.S.; requiring service warranty 15
29-contracts that include coverage for certain accidental 16
30-damage to be covered by contractual liability 17
31-policies; providing exceptions; providing an effective 18
32-date. 19
33- 20
34-Be It Enacted by the Legislature of the State of Florida: 21
35- 22
36- Section 1. Subsection (3) of section 634.3077, Florida 23
37-Statutes, is amended to read: 24
38- 634.3077 Financial requirements. — 25
17+634.3077, F.S.; making technical changes; amending s. 4
18+634.406, F.S.; revising the circumstances under which 5
19+certain service warranty associations are not required 6
20+to establish unearned premium reserves or to maintain 7
21+contractual liability insurance and are authorized to 8
22+allow their premiums to exceed specified ratios; 9
23+amending s. 634.414, F.S.; requiring service warranty 10
24+contracts that include coverage for certain accidental 11
25+damage to be covered by contractual liability 12
26+policies; providing exceptions; providing an effective 13
27+date. 14
28+ 15
29+Be It Enacted by the Legislature of the State of Florida: 16
30+ 17
31+ Section 1. Subsection (3) of section 634.3077, Florida 18
32+Statutes, is amended to read: 19
33+ 634.3077 Financial requirements. — 20
34+ (3) An association may not be required to set up an 21
35+unearned premium reserve if it has purchased contractual 22
36+liability insurance which demonstrates to the satisfaction of 23
37+the office that 100 percent of its claim exposure is covered by 24
38+such insurance. Such contractual liability insurance shall be 25
3939
40-CS/CS/HB 367 2025
40+CS/HB 367 2025
4141
4242
4343
4444 CODING: Words stricken are deletions; words underlined are additions.
45-hb367-02-c2
45+hb367-01-c1
4646 Page 2 of 8
4747 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
4848
4949
5050
51- (3) An association may not be required to set up an 26
52-unearned premium reserve if it has purchased contra ctual 27
53-liability insurance which demonstrates to the satisfaction of 28
54-the office that 100 percent of its claim exposure is covered by 29
55-such insurance. Such contractual liability insurance shall be 30
56-obtained from an insurer or insurers that hold a certificate o f 31
57-authority to do business within the state or from an insurer or 32
58-insurers approved by the office as financially capable of 33
59-meeting the obligations incurred pursuant to the policy or 34
60-policies. For purposes of this subsection, the contractual 35
61-liability policy or policies shall contain the following 36
62-provisions: 37
63- (a) In the event that the home warranty association is 38
64-unable to fulfill its obligation under its contracts issued in 39
65-this state for any reason, including insolvency, bankruptcy, or 40
66-dissolution, the contractual liability insurer or insurers will 41
67-pay losses and unearned premiums under such plans directly to 42
68-persons making claims under such contracts. 43
69- (b) The insurer or insurers issuing the policy or policies 44
70-shall assume full responsibility for the a dministration of 45
71-claims in the event of the inability of the association to do 46
72-so. 47
73- (c) The policy or policies may not be canceled or not 48
74-renewed by the insurer or insurers or the association unless 60 49
75-days' written notice thereof has been given to the of fice by the 50
51+obtained from an insurer or insurers that hold a certificate of 26
52+authority to do business within the state or from an insurer or 27
53+insurers approved by the office as financially capable of 28
54+meeting the obligations incurred pursuant to the policy or 29
55+policies. For purposes of this subsection, the contractual 30
56+liability policy or policies shall contain the following 31
57+provisions: 32
58+ (a) In the event that the home warranty association is 33
59+unable to fulfill its obligation under its contracts issued in 34
60+this state for any reason, including insolvency, bankruptcy, or 35
61+dissolution, the contra ctual liability insurer or insurers will 36
62+pay losses and unearned premiums under such plans directly to 37
63+persons making claims under such contracts. 38
64+ (b) The insurer or insurers issuing the policy or policies 39
65+shall assume full responsibility for the adminis tration of 40
66+claims in the event of the inability of the association to do 41
67+so. 42
68+ (c) The policy or policies may not be canceled or not 43
69+renewed by the insurer or insurers or the association unless 60 44
70+days' written notice thereof has been given to the office b y the 45
71+insurer or insurers before the date of such cancellation or 46
72+nonrenewal. 47
73+ (d) The contractual liability insurance policy or policies 48
74+shall insure all home warranty contracts that were issued while 49
75+the policy or policies were was in effect whether or not the 50
7676
77-CS/CS/HB 367 2025
77+CS/HB 367 2025
7878
7979
8080
8181 CODING: Words stricken are deletions; words underlined are additions.
82-hb367-02-c2
82+hb367-01-c1
8383 Page 3 of 8
8484 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
8585
8686
8787
88-insurer or insurers before the date of such cancellation or 51
89-nonrenewal. 52
90- (d) The contractual liability insurance policy or policies 53
91-shall insure all home warranty contracts that were issued while 54
92-the policy or policies were was in effect whether or not the 55
93-premium has been remitted to the insurer or insurers. 56
94- (e) The policy or policies may either pay 100 percent of 57
95-claims as they are incurred, or pay 100 percent of claims due in 58
96-the event of the association's failure to pay claims when due. 59
97- Section 2. Subsections (3) and (4), paragraphs (b) and (c) 60
98-of subsection (6), and paragraph (a) of subsection (7) of 61
99-section 634.406, Florida Statutes, are amended to read: 62
100- 634.406 Financial requirements. — 63
101- (3) An association will not be required to establish an 64
102-unearned premium reserve if it has purchased contractual 65
103-liability insurance which demonstrates to the satisfaction of 66
104-the office that 100 percent of its claim exposure is covered by 67
105-such policy or policies. The contractual liability insurance 68
106-shall be obtained from an insurer or insurers that hold holds a 69
107-certificate of authority to do business within the state. For 70
108-the purposes of this subsection, the contractual liability 71
109-policy or policies shall contain the following provisions: 72
110- (a) In the event that the service warranty association 73
111-does not fulfill its obligation under contracts issued in this 74
112-state for any reason, including insolvency, bankruptcy, or 75
88+premium has been remitted to the insurer or insurers. 51
89+ Section 2. Subsections (3) and (4), paragraphs (b) and (c) 52
90+of subsection (6), and paragraph (a) of subsection (7) of 53
91+section 634.406, Florida Statutes, are amended to read: 54
92+ 634.406 Financial requirements.— 55
93+ (3) An association will not be required to establish an 56
94+unearned premium reserve if it has purchased contractual 57
95+liability insurance which demonstrates to the satisfaction of 58
96+the office that 100 percent of its claim exposure is covered by 59
97+such policy or policies. The contractual liability insurance 60
98+shall be obtained from an insurer or insurers that hold holds a 61
99+certificate of authority to do business within the state. For 62
100+the purposes of this subsection, the contractual liability 63
101+policy or policies shall contain the following provisions: 64
102+ (a) In the event that the service warranty association 65
103+does not fulfill its obligation under contracts issued in this 66
104+state for any reason, including insolvency, bankruptcy, or 67
105+dissolution, the contract ual liability insurer or insurers will 68
106+pay losses and unearned premium refunds under such plans 69
107+directly to the person making a claim under the contract. 70
108+ (b) The insurer or insurers issuing the contractual 71
109+liability policy or policies shall assume full responsibility 72
110+for the administration of claims in the event of the inability 73
111+of the association to do so. 74
112+ (c) The policy or policies may not be canceled or not 75
113113
114-CS/CS/HB 367 2025
114+CS/HB 367 2025
115115
116116
117117
118118 CODING: Words stricken are deletions; words underlined are additions.
119-hb367-02-c2
119+hb367-01-c1
120120 Page 4 of 8
121121 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
122122
123123
124124
125-dissolution, the contractual liability insurer or insurers will 76
126-pay losses and unearned premium refunds under such plans 77
127-directly to the person making a claim under the contract. 78
128- (b) The insurer or insurers issuing the contractual 79
129-liability policy or policies shall assume full responsibility 80
130-for the administration of claims in the event of the inability 81
131-of the association to do so. 82
132- (c) The policy or policies may not be canceled or not 83
133-renewed by either the insurer or insurers or the association 84
134-unless 60 days' written notice thereof has been given to the 85
135-office by the insurer or insurers before the date of such 86
136-cancellation or nonrenewal. 87
137- (d) The contractual liability insurance policy or policies 88
138-shall insure all service warranty contracts which were issued 89
139-while the policy or policies were was in effect whether or not 90
140-the premium has been remitted to the insurer or insurers. 91
141- (e) In the event the issuer or issuers of the contractual 92
142-liability policy or policies are is fulfilling the service 93
143-warranty covered by policy or policies and in the event the 94
144-service warranty holder cancels the service warranty, it is the 95
145-responsibility of the contractual liability policy issuer or 96
146-issuers to effectuate a full refund of unearned premium to the 97
147-consumer. This refund s hall be subject to the cancellation fee 98
148-provisions of s. 634.414. The salesperson or agent shall refund 99
149-to the contractual liability policy issuer or issuers the 100
125+renewed by either the insurer or insurers or the association 76
126+unless 60 days' written notice th ereof has been given to the 77
127+office by the insurer or insurers before the date of such 78
128+cancellation or nonrenewal. 79
129+ (d) The contractual liability insurance policy or policies 80
130+shall insure all service warranty contracts which were issued 81
131+while the policy or policies were was in effect whether or not 82
132+the premium has been remitted to the insurer or insurers. 83
133+ (e) In the event the issuer or issuers of the contractual 84
134+liability policy or policies are is fulfilling the service 85
135+warranty covered by policy or policies and in the event the 86
136+service warranty holder cancels the service warranty, it is the 87
137+responsibility of the contractual liability policy issuer or 88
138+issuers to effectuate a full refund of unearned premium to the 89
139+consumer. This refund shall be subject to t he cancellation fee 90
140+provisions of s. 634.414. The salesperson or agent shall refund 91
141+to the contractual liability policy issuer or issuers the 92
142+unearned pro rata commission. 93
143+ (f) An association may not utilize both the unearned 94
144+premium reserve and contractu al liability insurance 95
145+simultaneously. However, an association shall be allowed to have 96
146+contractual liability coverage on service warranties previously 97
147+sold and sell new service warranties covered by the unearned 98
148+premium reserve, and the converse of this s hall also be allowed. 99
149+An association must be able to distinguish how each individual 100
150150
151-CS/CS/HB 367 2025
151+CS/HB 367 2025
152152
153153
154154
155155 CODING: Words stricken are deletions; words underlined are additions.
156-hb367-02-c2
156+hb367-01-c1
157157 Page 5 of 8
158158 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
159159
160160
161161
162-unearned pro rata commission. 101
163- (f) An association may not utilize both the unearned 102
164-premium reserve and contractual liability insurance 103
165-simultaneously. However, an association shall be allowed to have 104
166-contractual liability coverage on service warranties previously 105
167-sold and sell new service warranties covered by the unearned 106
168-premium reserve, and th e converse of this shall also be allowed. 107
169-An association must be able to distinguish how each individual 108
170-service warranty is covered. 109
171- (g) The policy or policies may either pay 100 percent of 110
172-claims as they are incurred, or pay 100 percent of claims due i n 111
173-the event of the association's failure to pay claims when due. 112
174- (4) No warrantor may allow its gross written premiums in 113
175-force to exceed a 7-to-1 ratio to net assets; however, a company 114
176-may exceed this requirement if : 115
177- (a) The company: 116
178- 1.(a) Holds licenses issued pursuant to the provisions of 117
179-part I and this part ;, and 118
180- 2.(b) Maintains net assets of at least $2.5 million ;, and 119
181- 3.(c) Utilizes contractual liability insurance which 120
182-reimburses the service warranty association for 100 percent of 121
183-its paid claims;, and 122
184- (b)(d) The insurer or insurers issuing the contractual 123
185-liability insurance policy or policies maintain maintains a 124
186-policyholder surplus of at least $100 million and are is rated 125
162+service warranty is covered. 101
163+ (4) No warrantor may allow its gross written premiums in 102
164+force to exceed a 7-to-1 ratio to net assets; however, a company 103
165+may exceed this requirement if: 104
166+ (a) The company: 105
167+ 1.(a) Holds licenses issued pursuant to the provisions of 106
168+part I and this part ;, and 107
169+ 2.(b) Maintains net assets of at least $2.5 million ;, and 108
170+ 3.(c) Utilizes contractual liability insurance which 109
171+reimburses the service warranty association for 100 percent of 110
172+its paid claims;, and 111
173+ (b)(d) The insurer or insurers issuing the contractual 112
174+liability insurance policy or policies maintain maintains a 113
175+policyholder surplus of at least $100 million and are is rated 114
176+"A" or higher by A.M. Best Company. 115
177+ (6) An association that holds a license under this part 116
178+may allow its premiums for service warranties written under this 117
179+part to exceed the ratio to net assets limitations of this 118
180+section if the association meets all of the following: 119
181+ (b) Uses a contractual liability insurance policy or 120
182+policies approved by the office that: 121
183+ 1. Reimburse Reimburses the service warranty association 122
184+for 100 percent of their its claims liability and are is issued 123
185+by an insurer or insurers that maintain maintains a policyholder 124
186+surplus of at least $100 million; or 125
187187
188-CS/CS/HB 367 2025
188+CS/HB 367 2025
189189
190190
191191
192192 CODING: Words stricken are deletions; words underlined are additions.
193-hb367-02-c2
193+hb367-01-c1
194194 Page 6 of 8
195195 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
196196
197197
198198
199-"A" or higher by A.M. Best Company. 126
200- (6) An association that holds a license under this part 127
201-may allow its premiums for service warranties written under this 128
202-part to exceed the ratio to net assets limitations of this 129
203-section if the association meets all of the following: 130
204- (b) Uses a contractual liability insurance policy or 131
205-policies approved by the office that: 132
206- 1. Reimburse Reimburses the service warranty association 133
207-for 100 percent of their its claims liability and are is issued 134
208-by an insurer or insurers that maintain maintains a policyholder 135
209-surplus of at least $100 million; or 136
210- 2. Comply Complies with subsection (3) and are is issued 137
211-by an insurer or insurers that maintain maintains a policyholder 138
212-surplus of at least $200 million. 139
213- (c) The insurer or insurers issuing the contractual 140
214-liability insurance policy or policies: 141
215- 1. Are Is rated "A" or higher by A.M. Best Company or an 142
216-equivalent rating by another national rating service acceptable 143
217-to the office. 144
218- 2. In conjunction with the warranty association's filing 145
219-of the quarterly and annual reports , provide provides, on a form 146
220-prescribed by the commission, a statement certifying the gross 147
221-written premiums in force reported by the warranty association 148
222-and a statement that all of the warranty association's gross 149
223-written premium in force is covered und er the contractual 150
199+ 2. Comply Complies with subsection (3) and are is issued 126
200+by an insurer or insurers that maintain maintains a policyholder 127
201+surplus of at least $200 million. 128
202+ (c) The insurer or insurers issuing the contractual 129
203+liability insurance policy or policies: 130
204+ 1. Are Is rated "A" or higher by A.M. Best Company or an 131
205+equivalent rating by another national rating service acceptable 132
206+to the office. 133
207+ 2. In conjunction with the warranty association's filing 134
208+of the quarterly and annual reports, provide provides, on a form 135
209+prescribed by the commission, a statement certifying the gross 136
210+written premiums in force reported by the warranty ass ociation 137
211+and a statement that all of the warranty association's gross 138
212+written premium in force is covered under the contractual 139
213+liability policy or policies, regardless of whether it has been 140
214+reported. 141
215+ (7) An association licensed under this part and hold ing no 142
216+other license under part I or part II of this chapter is not 143
217+required to establish an unearned premium reserve or maintain 144
218+contractual liability insurance and may allow its premiums to 145
219+exceed the ratio to net assets limitation of this section if the 146
220+association complies with the following: 147
221+ (a) The association or, if the association is a direct or 148
222+indirect wholly owned subsidiary of a parent corporation, its 149
223+parent corporation has, and maintains at all times, a minimum 150
224224
225-CS/CS/HB 367 2025
225+CS/HB 367 2025
226226
227227
228228
229229 CODING: Words stricken are deletions; words underlined are additions.
230-hb367-02-c2
230+hb367-01-c1
231231 Page 7 of 8
232232 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
233233
234234
235235
236-liability policy or policies, regardless of whether it has been 151
237-reported. 152
238- (7) An association licensed under this part and holding no 153
239-other license under part I or part II of this chapter is not 154
240-required to establish an unearned premium reserve or maintain 155
241-contractual liability insurance and may allow its premiums to 156
242-exceed the ratio to net assets limitation of this section if the 157
243-association complies with the following: 158
244- (a) The association or, if the association is a direct or 159
245-indirect wholly owned subsidiary of a parent corporation, its 160
246-parent corporation has, and maintains at all times, a minimum 161
247-net worth of at least $100 million and provides the office with 162
248-one of the following: 163
249- 1. A copy of the association's annual audited finan cial 164
250-statements or the audited consolidated financial statements of 165
251-the association's parent corporation, prepared by an independent 166
252-certified public accountant in accordance with generally 167
253-accepted accounting principles, which clearly demonstrate the 168
254-net worth of the association or its parent corporation to be 169
255-$100 million and a quarterly written certification to the office 170
256-that such entity continues to maintain the net worth required 171
257-under this paragraph. 172
258- 2. The association's, or its parent corporation' s, Form 173
259-10-K, Form 10-Q, or Form 20-F as filed with the United States 174
260-Securities and Exchange Commission or such other documents 175
236+net worth of at least $100 mil lion and provides the office with 151
237+one of the following: 152
238+ 1. A copy of the association's annual audited financial 153
239+statements or the audited consolidated financial statements of 154
240+the association's parent corporation, prepared by an independent 155
241+certified public accountant in accordance with generally 156
242+accepted accounting principles, which clearly demonstrate the 157
243+net worth of the association or its parent corporation to be 158
244+$100 million and a quarterly written certification to the office 159
245+that such entity continue s to maintain the net worth required 160
246+under this paragraph. 161
247+ 2. The association's, or its parent corporation's, Form 162
248+10-K, Form 10-Q, or Form 20-F as filed with the United States 163
249+Securities and Exchange Commission or such other documents 164
250+required to be filed with a recognized stock exchange, which 165
251+shall be provided on a quarterly and annual basis within 10 days 166
252+after the last date each such report must be filed with the 167
253+Securities and Exchange Commission, the National Association of 168
254+Security Dealers Automat ed Quotation system, or other recognized 169
255+stock exchange. 170
256+ 171
257+Failure to timely file the documents required under this 172
258+paragraph may, at the discretion of the office, subject the 173
259+association to suspension or revocation of its license under 174
260+this part. 175
261261
262-CS/CS/HB 367 2025
262+CS/HB 367 2025
263263
264264
265265
266266 CODING: Words stricken are deletions; words underlined are additions.
267-hb367-02-c2
267+hb367-01-c1
268268 Page 8 of 8
269269 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
270270
271271
272272
273-required to be filed with a recognized stock exchange, which 176
274-shall be provided on a quarterly and annual basis within 10 days 177
275-after the last date each such report must be filed with the 178
276-Securities and Exchange Commission, the National Association of 179
277-Security Dealers Automated Quotation system, or other recognized 180
278-stock exchange. 181
279- 182
280-Failure to timely file the documents required under this 183
281-paragraph may, at the discretion of the office, subject the 184
282-association to suspension or revocation of its license under 185
283-this part. 186
284- Section 3. Subsection (5) is added to section 634.414, 187
285-Florida Statutes, to read: 188
286- 634.414 Forms; required provisions. — 189
287- (5) Each service warranty contract that includes coverage 190
288-for accidental damage from handling must be covered by the 191
289-contractual liability policy referred to in s. 634.406(3), 192
290-unless issued by an association not required to establish an 193
291-unearned premium reserve or maintain contractual liability 194
292-insurance under s. 634.406(7). 195
293- Section 4. This act shall take effect July 1, 2025. 196
273+ Section 3. Subsection (5) is added to section 634.414, 176
274+Florida Statutes, to read: 177
275+ 634.414 Forms; required provisions. — 178
276+ (5) Each service warranty contract that includes coverage 179
277+for accidental damage from handling must be covered by the 180
278+contractual liability policy referred to in s. 634.406(3), 181
279+unless issued by an association not required to establish an 182
280+unearned premium reserve or maintain contractual liability 183
281+insurance under s. 634.406(7). 184
282+ Section 4. This act shall take effect July 1, 2025. 185