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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
A bill to be entitled 1
An act relating to insurance; creating s. 624.341, 2
F.S.; providing legislative findings; requiring the 3
Department of Law Enforcement to accept and process 4
certain fingerprints; specifying procedures for 5
submitting and processing fingerprints; providing fee s 6
for fingerprinting; authorizing the department to 7
exchange certain records with the Office of Insurance 8
Regulation for certain purposes; specifying that 9
fingerprints must be submitted in accordance with 10
certain rules; authorizing fingerprints to be 11
submitted through a third -party vendor authorized by 12
the department; requiring the department to conduct 13
certain background checks; requiring certain 14
background checks to be conducted through the Federal 15
Bureau of Investigation; requiring that fingerprints 16
be submitted and entered into a specified system; 17
specifying who bears the costs of fingerprint 18
processing; requiring the office to review certain 19
background checks results and to make certain 20
determination; requiring that certain criminal history 21
records be used by the office for certain purposes; 22
creating s. 624.347, F.S.; providing definitions; 23
providing applicability; establishing standards for 24
compensation arrangements and oversight of affiliate 25
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transactions involving insurers, reciprocal insurers, 26
managing general agents, and attorneys in fact; 27
providing penalties; authorizing the office to issue 28
orders restricting certain fund transfers under 29
specified circumstances; providing applicability of 30
and limitations on such orders; requiring the office 31
to adopt rules; amending s. 624.424, F.S.; specifying 32
requirements for affiliate compensation arrangements; 33
removing a requirement that the office consider a 34
specified factor in determining whether certain 35
affiliate considerations and payments by an insurer 36
are fair and reasonable; amending s. 626.732, F.S.; 37
revising the requirements for qualifications or 38
licenses as general lines agents; amending s. 626.914, 39
F.S.; removing the definition of the term "diligent 40
effort"; amending s. 626.916, F.S.; revising the 41
conditions under which insurance coverage is eligible 42
for export; amending s. 627.351, F.S.; requiring 43
notification of arbitration before the Division of 44
Administrative Hearings as an option for dispute 45
resolution procedures under Citizens Property 46
Insurance Corporation; removing obsolete language; 47
providing an effective date. 48
49
Be It Enacted by the Legislature of the State of Florida: 50
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51
Section 1. Section 624.341, Florida Statutes, is created 52
to read: 53
624.341 Authority of Department of Law Enforcement to 54
accept fingerprints of, and exchange criminal history records 55
with respect to, certain persons applying to the Office of 56
Insurance Regulation. — 57
(1) The Legislature finds that criminal activity of 58
insurers poses a particular danger to the residents of thi s 59
state. Floridians rely, in good faith, on the honest conduct of 60
those who issue and manage insurance policies and other 61
insurance instruments in this state. To safeguard this state's 62
residents, the Legislature finds it necessary to ensure that 63
incorporators, subscribers, officers, employees, contractors, 64
stockholders, directors, owners, members, managers, or 65
volunteers involved in the organization, operation, or 66
management of any insurer that is authorized to sell insurance 67
do not have a criminal backgrou nd. 68
(2) The Department of Law Enforcement shall accept and 69
process fingerprints of incorporators, subscribers, officers, 70
employees, contractors, stockholders, directors, owners, 71
members, managers, or volunteers involved in the organization, 72
operation, or management of: 73
(a) Any insurer or proposed insurer transacting or 74
proposing to transact insurance in this state. 75
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(b) Any entity that is eligible to be examined or 76
investigated under 624.316. 77
(3) Each person required to submit fingerprints to the 78
office must provide a full set of fingerprints to the office or 79
to a vendor, entity, or agency authorized under s. 943.053(13). 80
The office, vendor, entity, or agency shall forward the 81
fingerprints to the Department of Law Enforcement for state 82
processing, and the Department of Law Enforcement shall forward 83
the fingerprints to the Federal Bureau of Investigation for 84
national processing as provided in s. 624.34. Fees for state and 85
federal fingerprint processing must be borne by the person 86
submitting the fingerpr ints. The state cost for fingerprint 87
processing is as provided in s. 943.053(3)(e). 88
(4) The Department of Law Enforcement may, to the extent 89
authorized by federal law, exchange any state or federal 90
criminal history records with the office for the purpose of 91
issuance or continuation of a certificate of authority, 92
certification, or license to operate in this state. 93
(5) Fingerprints must be submitted in accordance with 94
rules adopted by the commission. 95
(a) Fingerprints may be submitted through a third -party 96
vendor authorized by the Department of Law Enforcement. 97
(b) The Department of Law Enforcement shall conduct the 98
state criminal history background check, and a federal criminal 99
history background check shall be conducted through the Federal 100
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Bureau of Investigation. 101
(c) All fingerprints submitted to the Department of Law 102
Enforcement must be submitted and entered into the statewide 103
automated biometric identification system established in s. 104
943.05(2)(b) and available for use in accordance with s. 105
943.05(2)(g) and (h). 106
(d) The costs of fingerprint processing, including the 107
cost of retaining the fingerprints, must be borne by the person 108
subject to the background checks. 109
(e) The office shall review the results of the state and 110
federal criminal history background checks and determine whether 111
the applicant meets the requirements for the certificate of 112
authority, certification, or license to operate in this state. 113
(6) State criminal history records obtained through the 114
Department of Law Enforcement, fede ral criminal history records 115
obtained through the Federal Bureau of Investigation, and local 116
criminal history records obtained through local law enforcement 117
agencies must be used by the office for the purpose of issuance, 118
denial, suspension, or revocation of certificates of authority, 119
certifications, or licenses issued to operate in this state. 120
Section 2. Section 624.347, Florida Statutes, is created 121
to read: 122
624.347 Affiliate transactions; managing general agents; 123
attorneys in fact; oversight. — 124
(1) DEFINITIONS.—As used in this section, the term: 125
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(a) "Affiliated entity" means any affiliate of an insurer. 126
The term includes a managing general agent, attorney in fact, 127
and reciprocal insurer when acting in a capacity that involves 128
compensation from the insurer. 129
(b) "Attorney in fact" has the same meaning as in s. 130
629.011. 131
(c) "Insurer" means an authorized property insurer. 132
(d) "Managing general agent" has the same meaning as in s. 133
626.015. 134
(e) "Reciprocal insurer" has the same meaning as in s. 135
629.011. 136
(2) APPLICABILITY.—This section applies to any insurer 137
that contracts with or makes payments to an affiliated entity. 138
(3) COMPENSATION ARRANGEMENTS WITH AFFILIATED ENTITIES. — 139
(a) Each insurer doing business in this state which pays, 140
directly or indirectly, a fee, commission, or other financial 141
consideration or payment to any affiliated entity must provide 142
to the office documentation demonstrating that such fee, 143
commission, or other financial consideration or payment is fair 144
and reasonable for each service being provided. In determining 145
whether the fee, commission, or other financial consideration or 146
payment is fair and reasonable, the office must consider all of 147
the following: 148
1. The actual cost of each service provided by an 149
affiliated entity. 150
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2. The relative financial condition of the insurer and the 151
affiliated entity. 152
3. The level of debt and how that debt is serviced. 153
4. The amount of the dividends paid by the insurer and the 154
affiliated entity and for what purpose. 155
5. Whether the terms of the written contract benefit the 156
insurer and are in the best interest of the policyholders or 157
subscribers. 158
6. Any other such information as the office reasonably 159
requires in making this determination. 160
(b) For each agreement with an affiliated e ntity in force 161
on July 1, 2025, each insurer shall provide to the office no 162
later than October 1, 2025, the cost incurred by the affiliated 163
entity to provide each service, the dollar amount charged to the 164
insurer for each service, and the dollar amount of fees 165
forgiven, waived, or reimbursed by the affiliated entity for the 166
2 most recent years. If the total dollar amount charged to the 167
insurer was greater than the total cost to provide services for 168
either year, the insurer must explain how it determined tha t the 169
fee was fair and reasonable. For any proposed contract with an 170
affiliated entity effective after July 1, 2025, the insurer must 171
provide documentation to support that the fee, commission, or 172
other financial consideration or payment to the affiliated 173
entity is fair and reasonable. 174
(c)1. Beginning July 1, 2026, the office may require 175
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specific types of compensation arrangements between an insurer 176
and any affiliated entity to be structured as fee for service. 177
As used in this subparagraph, the term "fee for service" means 178
fixed amounts or hourly rates for itemized services. 179
2. Compensation as a fee for service may not be based on: 180
a. Commission; 181
b. Premium volume; 182
c. Underwriting profit; or 183
d. Financial results of the insurer. 184
(d) This subsection does not prohibit an insurer from 185
paying a dividend to or making other financial arrangement with 186
an affiliated entity if such dividend or financial arrangement 187
has been reviewed and approved by the office pursuant to this 188
section or any other applicab le law. 189
(e) An agreement between an insurer and an affiliated 190
entity must include a termination clause and may not exceed a 191
term of 3 years. Any extension of such an agreement must be 192
approved by the office before becoming effective. An agreement 193
between an insurer and an affiliated entity may include 194
provisions for extension, but may not remain in effect for 195
longer than 3 years without continuing to meet the requirements 196
of paragraph (a) and without being approved by the office. If 197
the agreement provides for extension, the agreement must clearly 198
state that the extension is subject to approval by the office at 199
least every 3 years. 200
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(4) EMERGENCY RESTRICTIONS. — 201
(a) During a declared emergency, the office may issue 202
orders restricting fund transfers from an insurer to an 203
affiliated entity without prior approval. 204
(b) Orders under paragraph (a) may apply to all or 205
specified insurers and may not exceed 90 days unless extended by 206
the office. 207
(5) ADDITIONAL OVERSIGHT. — 208
(a) The office may recover improper affiliated entity 209
payment transfers, including, but not limited to, the following: 210
1. Transfers that violate the approved compensation, 211
approved dividend, or any other approved financial arrangement. 212
2. Transfers made while the insurer was undercapital ized. 213
(b) An insurer must provide notice to the office at least 214
30 days before any pledge of capital or assets to any affiliated 215
entity for a loan or financial obligation. Such notice must 216
include a description of the collateral, the nature of the 217
obligation, and the parties involved. The office may reject and 218
prohibit the pledge if such financial arrangement is not in the 219
best interest of the insurer. 220
(6) ENFORCEMENT.— 221
(a) The office may impose penalties for violations of this 222
section. 223
(b) The office shall adopt rules to implement this 224
section. 225
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Section 3. Subsection (13) of section 624.424, Florida 226
Statutes, is amended to read: 227
624.424 Annual statement and other information. — 228
(13) Each insurer doing business in this state which pays 229
a fee, commission, or other financial consideration or payment 230
to any affiliate directly or indirectly is required upon request 231
to provide to the office any information the office deems 232
necessary. The fee, commission, or other financial consideration 233
or payment to any affiliate must be fair and reasonable. 234
Affiliate compensation arrangements must comply with s. 624.347 235
and with the requirements of this subsection In determining 236
whether the fee, commission, or other financial consideration or 237
payment is fair and rea sonable, the office shall consider, among 238
other things, the actual cost of the service being provided . 239
Section 4. Subsection (1) of section 626.732, Florida 240
Statutes, is amended to read: 241
626.732 Requirement as to knowledge, experience, or 242
instruction.— 243
(1) Except as provided in subsection (4), an applicant for 244
a license as a general lines agent, except for a chartered 245
property and casualty underwriter (CPCU), may not be qualified 246
or licensed unless, within the 4 years immediately preceding the 247
date the application for license is filed with the department, 248
the applicant has satisfied, at a minimum, one of the following 249
requirements: 250
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(a) Taught or successfully completed 60 200 hours of 251
coursework in property, casualty, surety, health, and marine 252
insurance approved by the department, 3 hours of which must be 253
on the subject matter of ethics .; 254
(b) Completed at least 1 year in responsible insurance 255
duties as a substantially full -time bona fide employee in all 256
lines of property and casualty insurance as set forth in the 257
definition of a general lines agent under s. 626.015, but 258
without the education requirement described in paragraph (a) .; 259
or 260
(c) Completed at least 1 year of responsible insurance 261
duties as a licensed and appointed customer representative , 262
service representative, or personal lines agent and 40 hours of 263
coursework approved by the department covering the areas of 264
property, casualty, surety, health, and marine insurance. 265
Section 5. Subsection (4) of section 626.914, Florida 266
Statutes, is amended to read: 267
626.914 Definitions. —As used in this Surplus Lines Law, 268
the term: 269
(4) "Diligent effort" means seeking coverage from and 270
having been rejected by at least three authorized insurers 271
currently writing this type of coverage and documenting t hese 272
rejections. However, if the residential structure has a dwelling 273
replacement cost of $700,000 or more, the term means seeking 274
coverage from and having been rejected by at least one 275
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authorized insurer currently writing this type of coverage and 276
documenting this rejection. 277
Section 6. Paragraphs (a) and (e) of subsection (1) and 278
paragraph (b) of subsection (3) of section 626.916, Florida 279
Statutes, are amended to read: 280
626.916 Eligibility for export. — 281
(1) No insurance coverage shall be eligible for export 282
unless it meets all of the following conditions: 283
(a) The coverage must be of a kind or class not generally 284
available from authorized insurers transacting insurance in this 285
state The full amount of insurance required must not be 286
procurable, after a diligent effort has been made by the 287
producing agent to do so, from among the insurers authorized to 288
transact and actually writing that kind and class of insurance 289
in this state, and the amount of insurance exported shall be 290
only the excess over the amou nt so procurable from authorized 291
insurers. Surplus lines agents must verify that a diligent 292
effort has been made by requiring a properly documented 293
statement of diligent effort from the retail or producing agent. 294
However, to be in compliance with the dilig ent effort 295
requirement, the surplus lines agent's reliance must be 296
reasonable under the particular circumstances surrounding the 297
export of that particular risk. Reasonableness shall be assessed 298
by taking into account factors which include, but are not 299
limited to, a regularly conducted program of verification of the 300
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information provided by the retail or producing agent. 301
Declinations must be documented on a risk -by-risk basis. If it 302
is not possible to obtain the full amount of insurance required 303
by layering the risk, it is permissible to export the full 304
amount. 305
(e) The insured has signed or otherwise provided 306
documented acknowledgment of a disclosure in substantially the 307
following form: "You are agreeing to place coverage in the 308
surplus lines market. Coverag e may be available in the admitted 309
market. Persons insured by surplus lines carriers are not 310
protected under the Florida Insurance Guaranty Act with respect 311
to any right of recovery for the obligation of an insolvent 312
unlicensed insurer." If the acknowledgment of the disclosure is 313
signed by the insured, the insured is presumed to have been 314
informed and to know that other coverage may be available. 315
(3) 316
(b) Subsection (1) does not apply to classes of insurance 317
which are related to indemnity of deductibles for property 318
insurance or are subject to s. 627.062(3)(d)1. These classes may 319
be exportable under the following conditions: 320
1. The insurance must be placed only by or through a 321
surplus lines agent licensed in this state; 322
2. The insurer must be made eli gible under s. 626.918; and 323
3. The insured has complied with paragraph (1)(e). If the 324
disclosure is signed by the insured, the insured is presumed to 325
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have been informed and to know that other coverage may be 326
available, and, with respect to the diligent -effort requirement 327
under subsection (1), there is no liability on the part of, and 328
no cause of action arises against, the retail agent presenting 329
the form. 330
Section 7. Paragraph (ll) of subsection (6) of section 331
627.351, Florida Statutes, is amended to r ead: 332
627.351 Insurance risk apportionment plans. — 333
(6) CITIZENS PROPERTY INSURANCE CORPORATION. — 334
(ll)1. In addition to any other method of alternative 335
dispute resolution authorized by state law, the corporation may 336
adopt policy forms that provide an option for the insured to 337
select, at the time of entering into the policy or upon renewal, 338
to have disputes regarding the corporation's claim 339
determinations for the resolution of disputes regarding its 340
claim determinations , including disputes regarding cov erage for, 341
or the scope and value of, a claim, resolved through arbitration 342
in a proceeding before the Division of Administrative Hearings. 343
Each insured must be notified in writing, at the time of 344
entering into a policy with the corporation and upon each 345
renewal, that the insured must decide whether to resolve 346
disputes through arbitration before the Division of 347
Administrative Hearings. Such notification must be in at least 348
12-point boldfaced type, immediately preceding the insured's 349
signature, in substantia lly the following form: 350
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351
AN INSURED MUST CHOOSE AT THE TIME OF ENTERING INTO THIS POLICY 352
OR UPON RENEWAL WHETHER TO RESOLVE DISPUTES THROUGH ARBITRATION 353
BEFORE THE DIVISION OF ADMINISTRATIVE HEARINGS. THE INSURED MUST 354
INDICATE THIS SELECTION BY MARKING "AC CEPT" OR "DECLINE" BELOW. 355
THIS DECISION CANNOT BE CHANGED DURING THE TERM OF THE POLICY. 356
357
[ ] ACCEPT 358
[ ] DECLINE 359
360
2. Any such policies are not subject to s. 627.70154. All 361
arbitrations before proceedings in the Division of 362
Administrative Hearings pursu ant to such policies are subject to 363
ss. 57.105 and 768.79 as if filed in the courts of this state 364
and are not considered chapter 120 administrative proceedings. 365
Rule 1.442, Florida Rules of Civil Procedure, applies to any 366
offer served pursuant to s. 768.79 , except that, notwithstanding 367
any provision in Rule 1.442, Florida Rules of Civil Procedure, 368
to the contrary, an offer shall not be served earlier than 10 369
days after filing the request for hearing with the Division of 370
Administrative Hearings and shall not be served later than 10 371
days before the date set for the final hearing. The 372
administrative law judge in such arbitrations proceedings shall 373
award attorney fees and other relief pursuant to ss. 57.105 and 374
768.79. The corporation may not seek, and the offic e may not 375
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approve, a maximum hourly rate for attorney fees. 376
2. The corporation may contract with the division to 377
conduct proceedings to resolve disputes regarding its claim 378
determinations as may be provided for in the applicable policies 379
of insurance. This subparagraph expires July 1, 2025. 380
Section 8. This act shall take effect July 1, 2025. 381