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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 regulations; amending s. 2
48.151, F.S.; providing that the Chief Financial 3
Officer is the agent for service of process on health 4
maintenance organizations; amending s. 252.63, F.S.; 5
revising the content of a publication from the 6
Commissioner of Insurance Regulation relating to 7
orders applicable to insurance in areas under the 8
state of emergency; amending s. 624.4085, F.S.; 9
revising the definition of the term "life and health 10
insurer"; amending s. 624.422, F.S.; providing that 11
the appointment of the Chief Financial Officer for 12
service of process applies to insurers withdrawing 13
from and ceasing operations in this state until all 14
insurers' liabilities in this state are extinguished; 15
amending s. 624.45, F.S.; conforming a provision to 16
changes made by the act; amending s. 624.610, F.S.; 17
removing certain provisions relating to credits 18
allowed in specified reinsurance circumstances and 19
relating to assuming insurers' accreditations; 20
requiring filing fees from reinsurers requesting to 21
operate in this state; removing applicability 22
provisions; amending s. 626.9651, F.S.; requiring the 23
Office of Insurance Regulation and the Financial 24
Services Commission to adopt rules on cybersecurity of 25
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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
certain insurance data; providing requirements for 26
such rules; providing duties of the office; amending 27
s. 627.062, F.S.; prohibiting personal residential 28
property insurers from submitting more than one "use 29
and file" filing under certain circumstances; 30
providing an exception; amending s. 627.0621, F.S.; 31
requiring certain rate filings with the office from 32
residential property insurers to include rate 33
transparency reports; providing for acceptance or 34
rejection by the office of such reports; providing 35
requirements for such reports; requiring insurers to 36
provide such reports to consumers; requiring the 37
office to define terms used in such reports; requiring 38
the office to establish and maintain a specified 39
center on its website; providing requirements for the 40
website; amending s. 627.0645, F.S.; revising 41
requirements of rate filing with the office; amending 42
s. 627.0651, F.S.; prohibiting motor vehicle insurers 43
from submitting more than one "use and file" filing 44
under certain circumstances; amending s. 627.4554, 45
F.S.; requiring that certain forms be posted on the 46
website of the Department of Financial Services, 47
rather than the office; amending s. 627.6699, F.S.; 48
removing and revising definitions; removing provisions 49
relating to the creation of the Florida Small Employer 50
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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
Health Reinsurance Program; amending s. 627.711, F.S .; 51
requiring the office to contract with a state 52
university to design, operate, upgrade, and maintain a 53
specified database; requiring property insurers to 54
file certain policyholder forms in the database; 55
requiring the commission to adopt rules; amending s. 56
627.7152, F.S.; removing provisions relating to 57
requirements for reporting and rulemaking regarding 58
property insurance claims paid under assignment 59
agreements; creating s. 627.9145, F.S.; providing 60
reporting requirements for residential property 61
insurers; requiring the commission to adopt rules; 62
amending s. 627.915, F.S.; revising reporting 63
requirements for private passenger automobile 64
insurers; requiring the commission to adopt rules; 65
providing requirements for such rules; removing 66
reporting requirement p rovisions for certain insurers; 67
amending ss. 628.081 and 628.091, F.S.; removing the 68
requirement that domestic insurer incorporators 69
execute articles of incorporation and file them with 70
the office in triplicate; amending s. 628.111, F.S.; 71
removing the requirement that domestic insurers make 72
copies of amendments to articles of incorporation in 73
triplicate; amending s. 628.461, F.S.; specifying the 74
method of sending notifications regarding transactions 75
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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
or proposed transactions of voting securities of stock 76
insurers or controlling companies; revising the method 77
of filing certain statements; amending s. 628.4615, 78
F.S.; revising the method by which amendments to 79
certain applications must be sent to specialty 80
insurers; amending s. 628.717, F.S.; revising 81
requirements for the office's responses upon receipt 82
of articles of incorporation; amending s. 628.719, 83
F.S.; revising the method by which mutual insurance 84
holding companies show their adoption of article of 85
incorporation amendments and deliver the amendments to 86
the office; revising the requirements for the office's 87
responses upon receipt of amendments; amending s. 88
628.910, F.S.; removing the requirement that captive 89
insurance company incorporators file articles of 90
incorporation in triplicate; revising the office's 91
responses upon receipt of captive insurance company 92
articles of incorporation; amending s. 629.011, F.S.; 93
revising and providing definitions; amending s. 94
629.071, F.S.; authorizing assessable and 95
nonassessable reciprocal insurers, rather than 96
domestic reciprocal insurers, to transact insurance if 97
they maintain specified amounts of surplus funds; 98
amending s. 629.081, F.S.; conforming a provision to 99
changes made by the act; creating s. 629.082, F.S.; 100
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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
providing that attorneys in fact of reciprocals are 101
affiliates of the reciprocals for specified purposes; 102
creating s. 629.1015, F.S.; requiring documentation 103
supporting that fees, commissions, and other financial 104
considerations and payments to affiliates by 105
reciprocal insurers are fair and reasonable; providing 106
guidelines for the office in determining whether the 107
fees, commissions, and other financial considerations 108
and payments are fair and reasonable; providing 109
requirements for documentation of such fees; amending 110
s. 629.121, F.S.; providing that certain bonds fil ed 111
with the office as security are filed by attorneys in 112
fact, rather than attorneys of domestic reciprocal 113
insurers; increasing the bond amount; creating s. 114
629.162, F.S.; authorizing reciprocal insurers to 115
require subscriber contributions; providing disc losure 116
and reporting requirements for subscriber 117
contributions; creating s. 629.163, F.S.; authorizing 118
reciprocal insurers to establish subscriber savings 119
accounts; providing construction; providing 120
requirements for subscriber savings accounts; creating 121
s. 629.164, F.S.; authorizing reciprocal insurers to 122
make distributions to subscribers from subscriber 123
savings accounts; granting to subscribers' advisory 124
committees sole authority to authorize distributions, 125
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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
subject to prior written approval by the office; 126
providing requirements for reciprocal insurers that 127
prohibit subscribers from receiving distributions for 128
a specified period of time; providing construction; 129
authorizing reciprocal insurers to return to 130
subscribers unused premiums, savings, and credits 131
accruing to their accounts; authorizing domestic 132
reciprocal insurers to pay portions of unassigned 133
funds; providing distribution limits; prohibiting 134
distribution discriminations; amending s. 629.171, 135
F.S.; revising requirements for filing with the office 136
annual statements by reciprocal insurers; amending s. 137
629.181, F.S; replacing surplus deposits of 138
subscribers with subscriber contributions; providing 139
limits on subscriber contributions; amending s. 140
629.201, F.S.; requiring that each domestic reciprocal 141
insurer have a subscribers' advisory committee; 142
requiring that such committee be formed in compliance 143
with specified laws; requiring that rules and 144
amendments adopted by subscribers have prior approval 145
by the office; revising subscribers' advisory 146
committees' duties and membership; providing for 147
election and terms; repealing s. 629.271, F.S., 148
relating to distribution of savings; amending s. 149
629.291, F.S.; providing that forms filed with the 150
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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
office for plans to merge a reciprocal insurer with 151
another reciprocal in surer or to convert a reciprocal 152
insurer to a stock or mutual insurer are adopted by 153
the commission rather than the office; amending s. 154
629.301, F.S.; specifying the manner in which impaired 155
reciprocal insurers are proceeded against if they 156
cannot make up deficiencies in assets; specifying the 157
manner in which assessments are levied upon 158
subscribers if reciprocal insurers are liquidated; 159
providing that assessments are subject to specified 160
limits; repealing ss. 629.401 and 629.520, F.S., 161
relating to insurance exchange and the authority of a 162
limited reciprocal insurer, respectively; creating s. 163
629.56, F.S.; requiring reciprocal insurers to 164
maintain unearned premium reserves at all times; 165
amending s. 634.401, F.S.; revising provisions 166
relating to coverage for a ccidental damage under a 167
service warranty; creating s. 641.2012, F.S.; 168
providing applicability of service of process 169
provisions to health maintenance organizations; 170
amending s. 641.26, F.S.; revising requirements for 171
filing annual and quarterly reports by health 172
maintenance organizations; creating s. 641.283, F.S.; 173
providing applicability of administrative supervision 174
and hazardous insurer condition provisions to health 175
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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
maintenance organizations; amending s. 651.011, F.S.; 176
providing and revising definitions ; amending s. 177
651.018, F.S.; providing duties for the office if 178
certain conditions exist in continuing care 179
facilities; amending s. 651.019, F.S.; requiring 180
continuing care providers to provide to the office 181
specified information on financing and intended use of 182
proceeds under certain circumstances; creating s. 183
651.0212, F.S.; requiring and authorizing the office 184
to deny or revoke a provider's authority to engage in 185
certain continuing care activities under certain 186
circumstances; amending s. 651.0215, F.S.; revising 187
the timeframe for the office to examine and respond to 188
consolidated applications for provisional certificates 189
of authority and certificates of authority for 190
providers of continuing care; removing provisions 191
relating to the duties of the office in responding to 192
such applications; amending s. 651.022, F.S.; revising 193
requirements for applications for provisional 194
certificates of authority of providers of continuing 195
care; removing provisions relating to duties of the 196
office in responding to such applica tions; amending s. 197
651.023, F.S.; conforming cross -references and 198
provisions to changes made by the act; amending s. 199
651.024, F.S.; providing applicability of certain 200
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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
specialty insurer provisions and nonapplicability of 201
certain continuing care provider req uirements to 202
bondholders under certain circumstances; defining the 203
term "consent rights"; providing applicability of such 204
provisions to certain entities under certain 205
circumstances; amending s. 651.0246, F.S.; revising 206
requirements for applications for exp ansion of 207
certificated continuing care facilities; removing 208
specified duties of the office in responding to such 209
applications; revising the timeframe for the office to 210
review such applications; amending s. 651.026, F.S.; 211
revising requirements for annual re ports filed by 212
providers of continuing care; providing requirements 213
for quarterly reports; amending s. 651.0261, F.S.; 214
providing additional requirements for quarterly 215
reports filed by continuing care facilities; amending 216
s. 651.033, F.S.; requiring office approval before 217
execution of an agreement for establishing an escrow 218
account; defining the terms "emergency" and "business 219
day"; specifying circumstances under which providers 220
of continuing care may withdraw a specified percentage 221
of the required minimum l iquid reserve; revising the 222
timeframe for the office to deny petitions for 223
emergency withdrawals; providing duties of escrow 224
agents; amending s. 651.034, F.S.; revising duties of 225
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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
the office relating to impaired continuing care 226
providers; amending s. 651.03 5, F.S.; providing 227
requirements for continuing care providers' minimum 228
liquid reserve accounts in escrow; providing 229
requirements for debt service reserve transfers from 230
one financial institution or lender to another; 231
revising and providing requirements for continuing 232
care providers' operating reserves in escrow; amending 233
s. 651.043, F.S.; revising circumstances under which 234
certain notices of management changes must be provided 235
to the office; amending s. 651.055, F.S.; conforming 236
cross-references; amending s . 651.071, F.S.; providing 237
that continuing care and continuing care at -home 238
contracts are not subordinate to any secured claims 239
and must be treated with higher priority over all 240
other claims in the event of receivership or 241
liquidation proceedings against a provider; providing 242
an exception; amending s. 651.085, F.S.; requiring 243
designated resident representatives in continuing care 244
facilities to perform their duties in good faith; 245
requiring each continuing care facility to have its 246
own designated resident rep resentative; specifying the 247
methods for notifications to designated resident 248
representatives of certain meetings; creating s. 249
651.087, F.S; providing requirements for certain 250
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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
collection and distribution of funds by residents of 251
continuing care facilities; providing duties of 252
providers relating to such funds; providing 253
requirements for providers who borrow or solicit funds 254
from residents; providing that failure to comply with 255
specified collection and distribution provisions is a 256
violation of minimum liquid r eserve requirements; 257
authorizing the commission to require certain 258
statements or filing to be submitted by electronic 259
means; amending s. 651.091, F.S.; requiring continuing 260
care facilities to post notices of bankruptcy 261
proceedings; providing requirements f or such notices; 262
requiring continuing care facilities to maintain 263
certain records; requiring providers of continuing 264
care to make certain records available for review and 265
to deliver copies of specified disclosure statements; 266
providing liability and penalti es; providing 267
applicability; prohibiting persons from filing or 268
maintaining actions under certain circumstances; 269
creating s. 651.104, F.S.; prohibiting persons from 270
acting or holding themselves out as management 271
companies for continuing care retirement com munities 272
without a certificate of authority; providing 273
requirements for certificate of authority 274
applications; prohibiting the office from issuing 275
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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
certificates of authority under certain circumstances; 276
creating s. 651.1041, F.S.; providing applicability of 277
specified insurer provisions to acquisitions of 278
management companies; creating s. 651.1043, F.S.; 279
providing requirements for management company annual 280
and quarterly financial statements; requiring 281
acquisition application filings under certain 282
circumstances; requiring monthly statement filings 283
under certain circumstances; providing fines for 284
noncompliance; providing rulemaking authority; 285
creating s. 651.1045, F.S.; providing grounds for the 286
office to refuse, suspend, and revoke management 287
company certificates of authority; providing that 288
revocation of a management company's certificate of 289
authority does not relieve a provider from specified 290
obligations to residents and from annual statement 291
filings and license fees; authorizing the office to 292
seek enforcement actions; amending s. 651.105, F.S.; 293
authorizing the office to examine the businesses of 294
management companies and their parents, subsidiaries, 295
and affiliates under certain circumstances; requiring 296
the office to notify management companies of 297
compliance deficiencies and to require corrective 298
actions or plans; requiring management companies to 299
respond to such notices; amending s. 651.1065, F.S.; 300
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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
prohibiting management companies from engaging in 301
certain acts if delinquency proceedings have been or 302
are to be initiated; providing penalties; creating s. 303
651.1068, F.S.; prohibiting officers and directors of 304
insolvent providers or management companies from 305
serving as officers and directors of providers and 306
management companies and from having control over the 307
selection of officers and directors under certain 308
circumstances; amending s. 651.107, F.S.; requiring 309
management companies to file annual statements and pay 310
license fees during periods of certificate of 311
authority suspension; providing for automatic 312
reinstatement or revocation of certificates of 313
authority; amending s. 651.108, F.S.; providing 314
administrative fines for management companies for 315
certain violations; creating s. 651.113, F.S.; 316
defining the term "negative fund balance"; providing 317
guidelines for the commi ssioner to determine whether a 318
provider or facility is insolvent or in imminent 319
danger of becoming insolvent; requiring providers and 320
facilities determined to be insolvent or in danger of 321
insolvency to prepare a plan; authorizing the office 322
to issue an order requiring a provider or facility to 323
engage in certain acts under certain circumstances; 324
authorizing the office to issue immediate final orders 325
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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
requiring certain acts; providing construction; 326
amending s. 651.114, F.S.; removing provisions 327
relating to continuing care facility trustees and 328
lenders; creating s. 651.1165, F.S.; requiring the 329
office to record notices of lien against continuing 330
care facilities' properties; providing requirements 331
for such liens; providing for lien foreclosures in 332
civil actions; providing that such liens are preferred 333
to all liens, mortgages, and other encumbrances upon 334
the property and all unrecorded liens, mortgages, and 335
other encumbrances; providing conditions for lien 336
releases; amending ss. 627.642, 627.6475, 627.657, and 337
627.66997, F.S.; conforming cross -references; 338
providing applicability dates; providing effective 339
dates. 340
341
Be It Enacted by the Legislature of the State of Florida: 342
343
Section 1. Subsection (3) of section 48.151, Florida 344
Statutes, is amended to read: 345
48.151 Service on statutory agents for certain persons. — 346
(3) The Chief Financial Officer is the agent for service 347
of process on all insurers applying for authority to transact 348
insurance in this state, all licensed nonresident insurance 349
agents, all nonreside nt disability insurance agents licensed 350
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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
pursuant to s. 626.835, any unauthorized insurer under s. 351
626.906 or s. 626.937, domestic reciprocal insurers, fraternal 352
benefit societies under chapter 632, warranty associations under 353
chapter 634, prepaid limited h ealth service organizations under 354
chapter 636, health maintenance organizations under chapter 641, 355
and persons required to file statements under s. 628.461. The 356
Department of Financial Services shall create a secure online 357
portal as the sole means to accep t service of process on the 358
Chief Financial Officer under this section. 359
Section 2. Subsection (3) of section 252.63, Florida 360
Statutes, is amended to read: 361
252.63 Commissioner of Insurance Regulation; powers in a 362
state of emergency.— 363
(3) The commissioner shall publish in the next available 364
publication of the Florida Administrative Register a notice 365
identifying the date the emergency order was issued and shall 366
include a hyperlink or website address providing direct access 367
to the emergency order copy of the text of any order issued 368
under this section, together with a statement describing the 369
modification or suspension and explaining how the modification 370
or suspension will facilitate recovery from the emergency . 371
Section 3. Paragraph (g) of subsection (1) of section 372
624.4085, Florida Statutes, is amended to read: 373
624.4085 Risk-based capital requirements for insurers. — 374
(1) As used in this section, the term: 375
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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
(g) "Life and health insurer" means an insurer authorized 376
or eligible under the Florida Ins urance Code to underwrite life 377
or health insurance. The term includes a property and casualty 378
insurer that writes accident and health insurance only. 379
Effective January 1, 2015, The term also includes a health 380
maintenance organization that is authorized in this state and 381
one or more other states, jurisdictions, or countries and a 382
prepaid limited health service organization that is authorized 383
in this state and one or more other states, jurisdictions, or 384
countries. 385
Section 4. Subsection (3) of section 624. 422, Florida 386
Statutes, is renumbered as subsection (4), and a new subsection 387
(3) is added to that section to read: 388
624.422 Service of process; appointment of Chief Financial 389
Officer as process agent. — 390
(3) The appointment of the Chief Financial Officer under 391
this section applies to any insurer that withdraws from or 392
ceases operations in this state until the insurer has completed 393
its runoff of, or otherwise extinguished, all liabilities in 394
Florida. 395
Section 5. Subsection (2) of section 624.45, Florida 396
Statutes, is amended to read: 397
624.45 Participation of financial institutions in 398
reinsurance and in insurance exchanges. —Subject to applicable 399
laws relating to financial institutions and to any other 400
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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
applicable provision of the Florida Insurance Code, any 401
financial institution or aggregation of such institutions may: 402
(2) Participate, directly or indirectly, as an 403
underwriting member or as an investor in an underwriting member 404
of any insurance exchange authorized in accordance with s. 405
629.401, which underwriting member transacts only aggregate or 406
specific excess insurance over underlying self -insurance 407
coverage for self-insurance organizations authorized under the 408
Florida Insurance Code, for multiple -employer welfare 409
arrangements, or for workers' compensat ion self-insurance 410
trusts, in addition to any reinsurance the underwriting member 411
may transact. 412
413
Nothing in this section shall be deemed to prohibit a financial 414
institution from engaging in any presently authorized insurance 415
activity. 416
Section 6. Subsection (15) of section 624.610, Florida 417
Statutes, is renumbered as subsection (16), paragraph (b) of 418
subsection (3), paragraph (b) of subsection (12), and present 419
subsection (16) are amended, and a new subsection (15) is added 420
to that section, to read: 421
624.610 Reinsurance.— 422
(3) 423
(b)1. Credit must be allowed when the reinsurance is ceded 424
to an assuming insurer that is accredited as a reinsurer in this 425
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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
state. An accredited reinsurer is one that: 426
a. Files with the office evidence of its submission to 427
this state's jurisdiction; 428
b. Submits to this state's authority to examine its books 429
and records; 430
c. Is licensed or authorized to transact insurance or 431
reinsurance in at least one state or, in the case of a United 432
States branch of an alien assuming insurer, is entered through, 433
licensed, or authorized to transact insurance or reinsurance in 434
at least one state; 435
d. Files annually with the office a copy of its annual 436
statement filed with the insurance department of its state of 437
domicile any quarterly statement s if required by its state of 438
domicile or such quarterly statements if specifically requested 439
by the office, and a copy of its most recent audited financial 440
statement; and 441
(I) Maintains a surplus as regards policyholders in an 442
amount not less than $20 mi llion and whose accreditation has not 443
been denied by the office within 90 days after its submission; 444
or 445
(II) Maintains a surplus as regards policyholders in an 446
amount not less than $20 million and whose accreditation has 447
been approved by the office. 448
2. The office may deny or revoke an assuming insurer's 449
accreditation if the assuming insurer does not submit the 450
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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
required documentation pursuant to subparagraph 1., if the 451
assuming insurer fails to meet all of the standards required of 452
an accredited reinsure r, or if the assuming insurer's 453
accreditation would be hazardous to the policyholders of this 454
state. In determining whether to deny or revoke accreditation, 455
the office may consider the qualifications of the assuming 456
insurer with respect to all the followin g subjects: 457
a. Its financial stability; 458
b. The lawfulness and quality of its investments; 459
c. The competency, character, and integrity of its 460
management; 461
d. The competency, character, and integrity of persons who 462
own or have a controlling interest i n the assuming insurer; and 463
e. Whether claims under its contracts are promptly and 464
fairly adjusted and are promptly and fairly paid in accordance 465
with the law and the terms of the contracts. 466
3. Credit must not be allowed a ceding insurer if the 467
assuming insurer's accreditation has been revoked by the office 468
after notice and the opportunity for a hearing. 469
4. The actual costs and expenses incurred by the office to 470
review a reinsurer's request for accreditation and subsequent 471
reviews must be charged to a nd collected from the requesting 472
reinsurer. If the reinsurer fails to pay the actual costs and 473
expenses promptly when due, the office may refuse to accredit 474
the reinsurer or may revoke the reinsurer's accreditation. 475
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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
(12) 476
(b) The summary statement must b e signed and attested to 477
by either the chief executive officer or the chief financial 478
officer of the reporting insurer. In addition to the summary 479
statement, the office may require the filing of any supporting 480
information relating to the ceding of such ris ks as it deems 481
necessary. If the summary statement prepared by the ceding 482
insurer discloses that the net effect of a reinsurance treaty or 483
treaties (or series of treaties with one or more affiliated 484
reinsurers entered into for the purpose of avoiding the 485
following threshold amount) at any time results in an increase 486
of more than 25 percent to the insurer's surplus as to 487
policyholders, then the insurer shall certify in writing to the 488
office that the relevant reinsurance treaty or treaties comply 489
with the accounting requirements contained in any rule adopted 490
by the commission under subsection (16) (15). If such 491
certificate is filed after the summary statement of such 492
reinsurance treaty or treaties, the insurer shall refile the 493
summary statement with the certif icate. In any event, the 494
certificate must state that a copy of the certificate was sent 495
to the reinsurer under the reinsurance treaty. 496
(15) Any application filed with the office to review a 497
reinsurer's request to operate in this state under this section 498
must be accompanied by a filing fee equal to the application fee 499
charged under s. 624.501(1)(a). 500
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(16) This act shall apply to all cessions on or after 501
January 1, 2001, under reinsurance agreements that have an 502
inception, anniversary, or renewal date on o r after January 1, 503
2001. 504
Section 7. Section 626.9651, Florida Statutes, is amended 505
to read: 506
626.9651 Security of consumer data Privacy.— 507
(1) The department and commission shall must each adopt 508
rules consistent with other provisions of the Florida Insurance 509
Code to govern the use of a consumer's nonpublic personal 510
financial and health information. These rules must be based on, 511
consistent with, and not more restrictive than the Privacy of 512
Consumer Financial and Health Information Regulation, adopted 513
September 26, 2000, by the National Association of Insurance 514
Commissioners; however, the rules must permit the use and 515
disclosure of nonpublic personal health information for 516
scientific, medical, or public policy research, in accordance 517
with federal law. In addition, these rules must be consistent 518
with, and not more restrictive than, the standards contained in 519
Title V of the Gramm -Leach-Bliley Act of 1999, Pub. L. No. 106 -520
102, as amended in T itle LXXV of the Fixing America's Surface 521
Transportation (FAST) Act, Pub. L. No. 114 -94. If the office 522
determines that a health insurer or health maintenance 523
organization is in compliance with, or is actively undertaking 524
compliance with, the consumer priva cy protection rules adopted 525
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by the United States Department of Health and Human Services, in 526
conformance with the Health Insurance Portability and 527
Affordability Act, that health insurer or health maintenance 528
organization is in compliance with this subsection section. 529
(2) The office and the commission shall adopt rules 530
consistent with state law, including the Florida Insurance Code, 531
to ensure the cybersecurity of a consumer's nonpublic insurance 532
data. These rules may not be more restrictive than the Nation al 533
Association of Insurance Commissioners Insurance Data Security 534
Model Law, adopted as of October 2017, and subsequent amendments 535
thereto if the methodology remains substantially consistent. The 536
rules must: 537
(a) Apply to all entities acting as insurers, transacting 538
insurance, or otherwise engaging in insurance activities in this 539
state, including entities licensed under chapter 641, and any 540
entity that has been contracted to maintain, store, or process 541
personal information on behalf of a covered entity; 542
(b) Require the development and implementation of an 543
information security program as defined in the model law; 544
(c) Require investigation and notification of a 545
cybersecurity event as required under the model law; 546
(d) Require that each insurer submit to the department or 547
office all or part of the information required to be reported to 548
the department or office in a computer -readable form compatible 549
with the electronic data processing system of the department or 550
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office; and 551
(e) Require that the office be copied on any notice 552
provided to the Attorney General under s. 501.171. 553
(3) Upon receiving information under this section, the 554
office shall review the information and may initiate an 555
examination or investigation under s. 624.316, s. 624.3161, or 556
s. 626.8828. 557
Section 8. Paragraph (a) of subsection (2) of section 558
627.062, Florida Statutes, is amended to read: 559
627.062 Rate standards. — 560
(2) As to all such classes of insurance: 561
(a) Insurers or rating organizations shall establish and 562
use rates, rating schedules, or rating manuals that allow the 563
insurer a reasonable rate of return on the classes of insurance 564
written in this state. A copy of rates, rating schedules, rating 565
manuals, premium credits or discount schedules, and surcharge 566
schedules, and chang es thereto, must be filed with the office 567
under one of the following procedures: 568
1. If the filing is made at least 90 days before the 569
proposed effective date and is not implemented during the 570
office's review of the filing and any proceeding and judicial 571
review, such filing is considered a "file and use" filing. In 572
such case, the office shall finalize its review by issuance of a 573
notice of intent to approve or a notice of intent to disapprove 574
within 90 days after receipt of the filing. If the 90 -day period 575
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ends on a weekend or a holiday under s. 110.117(1)(a) -(i), it 576
must be extended until the conclusion of the next business day. 577
The notice of intent to approve and the notice of intent to 578
disapprove constitute agency action for purposes of the 579
Administrative Procedure Act. Requests for supporting 580
information, requests for mathematical or mechanical 581
corrections, or notification to the insurer by the office of its 582
preliminary findings does not toll the 90 -day period during any 583
such proceedings and subsequent ju dicial review. The rate shall 584
be deemed approved if the office does not issue a notice of 585
intent to approve or a notice of intent to disapprove within 90 586
days after receipt of the filing. 587
2. If the filing is not made in accordance with 588
subparagraph 1., such filing must be made as soon as 589
practicable, but within 30 days after the effective date, and is 590
considered a "use and file" filing. An insurer making a "use and 591
file" filing is potentially subject to an order by the office to 592
return to policyholders th ose portions of rates found to be 593
excessive, as provided in paragraph (h). For purposes of this 594
subparagraph, a personal residential property insurer may not 595
submit more than one "use and file" filing affecting 596
policyholders within a single policy period, unless the filing 597
is exclusively related to reinsurance. 598
3. For all property insurance filings made or submitted 599
after January 25, 2007, but before May 1, 2012, an insurer 600
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seeking a rate that is greater than the rate most recently 601
approved by the office shall make a "file and use" filing. For 602
purposes of this subparagraph, motor vehicle collision and 603
comprehensive coverages are not considered property coverages. 604
605
The provisions of this subsection do not apply to workers' 606
compensation, employer's liability insurance, and motor vehicle 607
insurance. 608
Section 9. Subsection (2) of section 627.0621, Florida 609
Statutes, is renumbered as subsection (3), present subsection 610
(2) is amended, and a new subsection (2) is added to that 611
section, to read: 612
627.0621 Transparency in rate regulation. — 613
(2) RATE TRANSPARENCY REPORT. — 614
(a) Beginning October 1, 2025, every rate filing 615
requesting a rate change for residential property coverage from 616
a property insurer must include a rate transparency report for 617
acceptance for use or modification by the office. The office may 618
accept the rate transparency report for filing, or if the office 619
finds that the report fails to provide the required information 620
in concise and plain language which aids consumers in their 621
understanding of ins urance, or finds the report to be 622
misleading, the office shall return the rate transparency report 623
to the property insurer for modification. The office's 624
acceptance for use or modification of the report may not be 625
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deemed approval pursuant to s. 627.062. Th e report shall be 626
compiled in a uniform format prescribed by the commission and 627
must include a graphical representation identifying a percentage 628
breakdown of rating factors anticipated of the company, book, or 629
program affected by the filing. 630
(b) Along with an offer of coverage and upon renewal, an 631
insurer must provide the corresponding copy of the rate 632
transparency report for the consumer's offered rate to aid 633
consumers in their understanding of insurance. If the report has 634
not been accepted for use or mo dified by the office, the report 635
must indicate that it is preliminary and subject to modification 636
by the office. 637
(c) The rate transparency report must include the 638
following categories of the book or program at the cumulative 639
level: 640
1. The percentage of the total rate factor associated with 641
the cost of reinsurance. 642
2. The percentage of the total rate factor associated with 643
the cost of claims. 644
3. The percentage of the total rate factor associated with 645
the defense containment and costs. 646
4. The percentage of the total rate factor associated with 647
fees and commissions. 648
5. The percentage of the rate factor associated with 649
profit and contingency of the insurer. 650
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6. Any other categories deemed necessary by the office or 651
commission. 652
653
An estimated percentage of the influence of each listed factor 654
must be provided to equal 100 percent. 655
(d) The insurer shall provide the rate transparency report 656
to the office upon the filing of a rate change with the office. 657
(e) The rate transparency report must a lso include the 658
following information: 659
1. Any major adverse findings by the office for the 660
previous 3 calendar years. 661
2. Whether the insurer uses affiliated entities to perform 662
functions of the insurer. 663
3. Contact information, to include a telephone number, 664
hours of service, and e -mail address for the Division of 665
Consumer Services of the department. 666
4. Contact information for the office. 667
5. Address for the website for public access to rate 668
filing and affiliate information outlined in subsection (3 ). 669
6. Any changes in the total insured value from the last 670
policy period. 671
(f) The office shall define, in concise and plain 672
language, any terms used with the rate transparency report to 673
aid consumers in their understanding of insurance. 674
(3)(2) WEBSITE FOR PUBLIC ACCESS TO RATE FILING 675
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INFORMATION.— 676
(a) The office shall establish and maintain a 677
comprehensive resource center on its website that uses concise 678
and plain language to aid consumers in their understanding of 679
insurance. The website must inclu de substantive information on 680
the current and historical dynamics of the market, data 681
concerning the financial condition and market conduct of 682
insurance companies available to consumers, and choices 683
available to consumers. At a minimum, the website must co ntain 684
the following: 685
1. Reports, using graphical information wherever possible, 686
which outline information about the state of the market and 687
adverse and positive trends affecting it. 688
2. Tools that aid consumers in finding insurers. 689
3. Tools that aid c onsumers in selecting the coverages 690
beneficial to them. 691
4. Information about mitigation credits and the My Safe 692
Florida Home Program, as well as other credits insurers may 693
offer beyond wind mitigation. 694
5. Access to the rate transparency report, annual 695
statements, market conduct information, and other information 696
related to each insurer. 697
6. Information on the Citizens Property Insurance 698
Corporation takeout process, the clearinghouse, and general 699
information as reported by the office. 700
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7.(a) With respect to any residential property rate 701
filing, the office shall provide the following information on a 702
publicly accessible Internet website : 703
a.1. The overall rate change requested by the insurer. 704
b.2. The rate change approved by the office along with all 705
of the actuary's assumptions and recommendations forming the 706
basis of the office's decision. 707
c.3. Certification by the office's actuary that, based on 708
the actuary's knowledge, his or her recommendations are 709
consistent with accepted actuarial principles. 710
d. Whether the insurer uses affiliated entities to perform 711
administrative, claims handling, or other functions of the 712
insurer and, if so, the total percentage of direct written 713
premium paid to the affiliated entities by the insurer in the 714
preceding annual calendar year. 715
(b) For any rate filing, regardless of whether or not the 716
filing is subject to a public hearing, the office shall provide 717
on its website a means for any policyholder who may be affected 718
by a proposed rate change to send an e -mail regarding the 719
proposed rate change. Such e -mail must be accessible to the 720
actuary assigned to review the rate filing. 721
(c) The statewide average requested rate change and final 722
approved statewide average rate change within a filing is not a 723
trade secret as defined in s. 688.002 or s. 812.081(1) and is 724
not subject to the public recor ds exemption for trade secrets 725
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provided in s. 119.0715 or s. 624.4213. 726
(d) County rating examples submitted to the office through 727
the rate collection system for the purposes of displaying rates 728
on the office website are not a trade secret as defined in s . 729
688.002 or s. 812.081(1) and are not subject to the public 730
records exemption for trade secrets provided in s. 119.0715 or 731
s. 624.4213. 732
Section 10. Paragraph (b) of subsection (3) of section 733
627.0645, Florida Statutes, is amended to read: 734
627.0645 Annual filings.— 735
(3) The filing requirements of this section shall be 736
satisfied by one of the following methods: 737
(b) If no rate change is proposed, a filing which consists 738
of a certification by an actuary that the existing rate level 739
produces rates which are actuarially sound and which are not 740
inadequate, as defined in s. 627.062. However, a full rate 741
filing is required after 2 consecutive years of certification 742
under this paragraph. 743
Section 11. Paragraph (b) of subsection (1) of section 744
627.0651, Florida Statutes, is amended to read: 745
627.0651 Making and use of rates for motor vehicle 746
insurance.— 747
(1) Insurers shall establish and use rates, rating 748
schedules, or rating manuals to allow the insurer a reasonable 749
rate of return on motor vehicle insura nce written in this state. 750
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A copy of rates, rating schedules, and rating manuals, and 751
changes therein, shall be filed with the office under one of the 752
following procedures: 753
(b) If the filing is not made in accordance with the 754
provisions of paragraph (a), such filing shall be made as soon 755
as practicable, but no later than 30 days after the effective 756
date, and shall be considered a "use and file" filing. An 757
insurer making a "use and file" filing is potentially subject to 758
an order by the office to return to policyholders portions of 759
rates found to be excessive, as provided in subsection (11). For 760
purposes of this paragraph, an insurer may not submit more than 761
one "use and file" filing impacting policyholders within a 762
single policy period. 763
Section 12. Effective upon this act becoming a law, 764
paragraph (a) of subsection (5) of section 627.4554, Florida 765
Statutes, is amended to read: 766
627.4554 Suitability in annuity transactions. — 767
(5) DUTIES OF INSURERS AND AGENTS. — 768
(a) An agent, when making a recommendati on of an annuity, 769
shall act in the best interest of the consumer under the 770
circumstances known at the time the recommendation is made, 771
without placing the financial interest of the agent or insurer 772
ahead of the consumer's interest. An agent has acted in th e best 773
interest of the consumer if the agent has satisfied the 774
following obligations regarding care, disclosure, conflict of 775
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interest, and documentation: 776
1.a. The agent, in making a recommendation, shall exercise 777
reasonable diligence, care, and skill to: 778
(I) Know the financial situation, insurance needs, and 779
financial objectives of the customer. 780
(II) Understand the available options after making a 781
reasonable inquiry into options available to the agent. 782
(III) Have a reasonable basis to believe the re commended 783
option effectively addresses the consumer's financial situation, 784
insurance needs, and financial objectives over the life of the 785
product, as evaluated in light of the consumer profile 786
information. 787
(IV) Communicate the reason or reasons for the 788
recommendation. 789
b. The requirements of sub -subparagraph a. include: 790
(I) Making reasonable efforts to obtain consumer profile 791
information from the consumer before the recommendation of an 792
annuity. 793
(II) Requiring an agent to consider the types of produc ts 794
the agent is authorized and licensed to recommend or sell which 795
address the consumer's financial situation, insurance needs, and 796
financial objectives. This does not require analysis or 797
consideration of any products outside the authority and license 798
of the agent or other possible alternative products or 799
strategies available in the market at the time of the 800
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recommendation. Agents shall be held to standards applicable to 801
agents with similar authority and licensure. 802
(III) Having a reasonable basis to belie ve the consumer 803
would benefit from certain features of the annuity, such as 804
annuitization, death or living benefit, or other insurance -805
related features. 806
c. The requirements of this subsection do not create a 807
fiduciary obligation or relationship and only create a 808
regulatory obligation as provided in this section. 809
d. The consumer profile information; characteristics of 810
the insurer; and product costs, rates, benefits, and features 811
are those factors generally relevant in making a determination 812
whether an annuity effectively addresses the consumer's 813
financial situation, insurance needs, and financial objectives, 814
but the level of importance of each factor under the care 815
obligation of this paragraph may vary depending on the facts and 816
circumstances of a particu lar case. However, each factor may not 817
be considered in isolation. 818
e. The requirements under sub -subparagraph a. apply to the 819
particular annuity as a whole and the underlying subaccounts to 820
which funds are allocated at the time of purchase or exchange of 821
an annuity, and riders and similar product enhancements, if any. 822
f. Sub-subparagraph a. does not require that the annuity 823
with the lowest one-time occurrence compensation structure or 824
multiple occurrence compensation structure shall necessarily be 825
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recommended. 826
g. Sub-subparagraph a. does not require the agent to have 827
ongoing monitoring obligations under the care obligation, 828
although such an obligation may be separately owed under the 829
terms of a fiduciary, consulting, investment, advising, or 830
financial planning agreement between the consumer and the agent. 831
h. In the case of an exchange or replacement of an 832
annuity, the agent shall consider the whole transaction, which 833
includes taking into consideration whether: 834
(I) The consumer will incur a surrender charge; be subject 835
to the commencement of a new surrender period; lose existing 836
benefits, such as death, living, or other contractual benefits; 837
or be subject to increased fees, investment advisory fees, or 838
charges for riders and similar product enhancemen ts. 839
(II) The replacing product would substantially benefit the 840
consumer in comparison to the replaced product over the life of 841
the product. 842
(III) The consumer has had another annuity exchange or 843
replacement and, in particular, an exchange or replacement 844
within the preceding 60 months. 845
i. This section does not require an agent to obtain any 846
license other than an agent license with the appropriate line of 847
authority to sell, solicit, or negotiate insurance in this 848
state, including, but not limi ted to, any securities license, in 849
order to fulfill the duties and obligations contained in this 850
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section; provided, the agent does not give advice or provide 851
services that are otherwise subject to securities laws or engage 852
in any other activity requiring o ther professional licenses. 853
2.a. Before the recommendation or sale of an annuity, the 854
agent shall prominently disclose to the consumer, on a form 855
substantially similar to that posted on the department office 856
website as Appendix A, related to an insurance agent disclosure 857
for annuities: 858
(I) A description of the scope and terms of the 859
relationship with the consumer and the role of the agent in the 860
transaction. 861
(II) An affirmative statement on whether the agent is 862
licensed and authorized to sell the foll owing products: 863
(A) Fixed annuities. 864
(B) Fixed indexed annuities. 865
(C) Variable annuities. 866
(D) Life insurance. 867
(E) Mutual funds. 868
(F) Stocks and bonds. 869
(G) Certificates of deposit. 870
(III) An affirmative statement describing the insurers for 871
which the agent is authorized, contracted, or appointed, or 872
otherwise able to sell insurance products, using the following 873
descriptions: 874
(A) From one insurer; 875
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(B) From two or more insurers; or 876
(C) From two or more insurers, although primarily 877
contracted with one insurer. 878
(IV) A description of the sources and types of cash 879
compensation and noncash compensation to be received by the 880
agent, including whether the agent is to be compensated for the 881
sale of a recommended annuity by commission as part of pre mium 882
or other remuneration received from the insurer, intermediary, 883
or other agent, or by fee as a result of a contract for advice 884
or consulting services. 885
(V) A notice of the consumer's right to request additional 886
information regarding cash compensation described in sub-887
subparagraph b. 888
b. Upon request of the consumer or the consumer's 889
designated representative, the agent shall disclose: 890
(I) A reasonable estimate of the amount of cash 891
compensation to be received by the agent, which may be stated as 892
a range of amounts or percentages. 893
(II) Whether the cash compensation is a one -time or 894
multiple occurrence amount; and if a multiple occurrence amount, 895
the frequency and amount of the occurrence, which may be stated 896
as a range of amounts or percentages. 897
c. Before or at the time of the recommendation or sale of 898
an annuity, the agent shall have a reasonable basis to believe 899
the consumer has been informed of various features of the 900
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annuity, such as the potential surrender period and surrender 901
charge; potential tax penalty if the consumer sells, exchanges, 902
surrenders, or annuitizes the annuity; mortality and expense 903
fees; any annual fees; investment advisory fees; potential 904
charges for and features of riders or other options of the 905
annuity; limitations on inter est returns; potential changes in 906
nonguaranteed elements of the annuity; insurance and investment 907
components; and market risk. 908
3. An agent shall identify and avoid or reasonably manage 909
and disclose material conflicts of interest, including material 910
conflicts of interest related to an ownership interest. 911
4. An agent shall at the time of the recommendation or 912
sale: 913
a. Make a written record of any recommendation and the 914
basis for the recommendation, subject to this section. 915
b. Obtain a consumer -signed statement on a form 916
substantially similar to that posted on the department office 917
website as Appendix B, related to a consumer's refusal to 918
provide information, documenting: 919
(I) A customer's refusal to provide the consumer profile 920
information, if any. 921
(II) A customer's understanding of the ramifications of 922
not providing his or her consumer profile information or 923
providing insufficient consumer profile information. 924
c. Obtain a consumer -signed statement on a form 925
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substantially similar to that posted on the department office 926
website as Appendix C, related to a consumer's decision to 927
purchase an annuity not based on a recommendation, acknowledging 928
the annuity transaction is not recommended if a customer decides 929
to enter into an annuity transaction that is not based on the 930
agent's recommendation. 931
5. Any requirement applicable to an agent under this 932
subsection applies to every agent who has exercised material 933
control or influence in the making of a recommendation and has 934
received direct compensation as a result of the recommendation 935
or sale, regardless of whether the agent has had any direct 936
contact with the consumer. Activities such as providing or 937
delivering marketing or education materials, product wholesaling 938
or other back office product support, and g eneral supervision of 939
an agent do not, in and of themselves, constitute material 940
control or influence. 941
Section 13. Paragraphs (c) through (o) and (r) through (w) 942
of subsection (3) of section 627.6699, Florida Statutes, are 943
redesignated as paragraphs (b ) through (n) and (o) through (t), 944
respectively, subsections (12) through (17) are renumbered as 945
subsections (11) through (16), respectively, and present 946
paragraphs (b), (p), (q), and (s) of subsection (3), paragraph 947
(d) of subsection (9), paragraphs (b) a nd (c) of subsection 948
(10), and present subsection (11) of that section are amended, 949
to read: 950
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627.6699 Employee Health Care Access Act. — 951
(3) DEFINITIONS.—As used in this section, the term: 952
(b) "Board" means the board of directors of the program. 953
(p) "Plan of operation" means the plan of operation of the 954
program, including articles, bylaws, and operating rules, 955
adopted by the board under subsection (11). 956
(q) "Program" means the Florida Small Employer Carrier 957
Reinsurance Program created under subsect ion (11). 958
(p)(s) "Reinsuring carrier" means a small employer carrier 959
that elects to comply with reinsurance the requirements set 960
forth in subsection (11) . 961
(9) SMALL EMPLOYER CARRIER'S ELECTION TO BECOME A RISK -962
ASSUMING CARRIER OR A REINSURING CARRIER. — 963
(d) A small employer carrier that elects to cease 964
participating as a reinsuring carrier and to become a risk -965
assuming carrier is prohibited from reinsuring or continuing to 966
reinsure any small employer health benefits plan under 967
subsection (11) as soon as the carrier becomes a risk -assuming 968
carrier and must pay a prorated assessment based upon business 969
issued as a reinsuring carrier for any portion of the year that 970
the business was reinsured. A small employer carrier that elects 971
to cease participating as a risk-assuming carrier and to become 972
a reinsuring carrier is permitted to reinsure small employer 973
health benefit plans under the terms set forth in subsection 974
(11) and must pay a prorated assessment based upon business 975
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issued as a reinsuring carrier for a ny portion of the year that 976
the business was reinsured. 977
(10) ELECTION PROCESS TO BECOME A RISK -ASSUMING CARRIER.— 978
(b) In determining whether to approve an application by a 979
small employer carrier to become a risk -assuming carrier, the 980
office shall consider: 981
1. The carrier's financial ability to support the 982
assumption of the risk of small employer groups. 983
2. The carrier's history of rating and underwriting small 984
employer groups. 985
3. The carrier's commitment to market fairly to all small 986
employers in the state or its service area, as applicable. 987
4. The carrier's ability to assume and manage the risk of 988
enrolling small employer groups without the protection of the 989
reinsurance program provided in subsection (11) . 990
(c) A small employer carrier that bec omes a risk-assuming 991
carrier pursuant to this subsection is not subject to 992
reinsurance the assessment provisions of subsection (11) . 993
(11) SMALL EMPLOYER HEALTH REINSURANCE PROGRAM. — 994
(a) There is created a nonprofit entity to be known as the 995
"Florida Small Employer Health Reinsurance Program." 996
(b)1. The program shall operate subject to the supervision 997
and control of the board. 998
2. Effective upon this act becoming a law, the board shall 999
consist of the director of the office or his or her designee, 1000
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who shall serve as the chairperson, and 13 additional members 1001
who are representatives of carriers and insurance agents and are 1002
appointed by the director of the office and serve as follows: 1003
a. Five members shall be representatives of health 1004
insurers licensed under chapter 624 or chapter 641. Two members 1005
shall be agents who are actively engaged in the sale of health 1006
insurance. Four members shall be employers or representatives of 1007
employers. One member shall be a person covered under an 1008
individual health insuran ce policy issued by a licensed insurer 1009
in this state. One member shall represent the Agency for Health 1010
Care Administration and shall be recommended by the Secretary of 1011
Health Care Administration. 1012
b. A member appointed under this subparagraph shall serve 1013
a term of 4 years and shall continue in office until the 1014
member's successor takes office, except that, in order to 1015
provide for staggered terms, the director of the office shall 1016
designate two of the initial appointees under this subparagraph 1017
to serve terms of 2 years and shall designate three of the 1018
initial appointees under this subparagraph to serve terms of 3 1019
years. 1020
3. The director of the office may remove a member for 1021
cause. 1022
4. Vacancies on the board shall be filled in the same 1023
manner as the original appointment for the unexpired portion of 1024
the term. 1025
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(c)1. The board shall submit to the office a plan of 1026
operation to assure the fair, reasonable, and equitable 1027
administration of the program. The board may at any time submit 1028
to the office any amendments t o the plan that the board finds to 1029
be necessary or suitable. 1030
2. The office shall, after notice and hearing, approve the 1031
plan of operation if it determines that the plan submitted by 1032
the board is suitable to assure the fair, reasonable, and 1033
equitable administration of the program and provides for the 1034
sharing of program gains and losses equitably and 1035
proportionately in accordance with paragraph (j). 1036
3. The plan of operation, or any amendment thereto, 1037
becomes effective upon written approval of the office. 1038
(d) The plan of operation must, among other things: 1039
1. Establish procedures for handling and accounting for 1040
program assets and moneys and for an annual fiscal reporting to 1041
the office. 1042
2. Establish procedures for selecting an administering 1043
carrier and set forth the powers and duties of the administering 1044
carrier. 1045
3. Establish procedures for reinsuring risks. 1046
4. Establish procedures for collecting assessments from 1047
participating carriers to provide for claims reinsured by the 1048
program and for administr ative expenses, other than amounts 1049
payable to the administrative carrier, incurred or estimated to 1050
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be incurred during the period for which the assessment is made. 1051
5. Provide for any additional matters at the discretion of 1052
the board. 1053
(e) The board shall recommend to the office market conduct 1054
requirements and other requirements for carriers and agents, 1055
including requirements relating to: 1056
1. Registration by each carrier with the office of its 1057
intention to be a small employer carrier under this section; 1058
2. Publication by the office of a list of all small 1059
employer carriers, including a requirement applicable to agents 1060
and carriers that a health benefit plan may not be sold by a 1061
carrier that is not identified as a small employer carrier; 1062
3. The availability of a broadly publicized, toll -free 1063
telephone number for access by small employers to information 1064
concerning this section; 1065
4. Periodic reports by carriers and agents concerning 1066
health benefit plans issued; and 1067
5. Methods concerning periodic demonstr ation by small 1068
employer carriers and agents that they are marketing or issuing 1069
health benefit plans to small employers. 1070
(f) The program has the general powers and authority 1071
granted under the laws of this state to insurance companies and 1072
health maintenance organizations licensed to transact business, 1073
except the power to issue health benefit plans directly to 1074
groups or individuals. In addition thereto, the program has 1075
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specific authority to: 1076
1. Enter into contracts as necessary or proper to carry 1077
out the provisions and purposes of this act, including the 1078
authority to enter into contracts with similar programs of other 1079
states for the joint performance of common functions or with 1080
persons or other organizations for the performance of 1081
administrative functions. 1082
2. Sue or be sued, including taking any legal action 1083
necessary or proper for recovering any assessments and penalties 1084
for, on behalf of, or against the program or any carrier. 1085
3. Take any legal action necessary to avoid the payment of 1086
improper claims against the program. 1087
4. Issue reinsurance policies, in accordance with the 1088
requirements of this act. 1089
5. Establish rules, conditions, and procedures for 1090
reinsurance risks under the program participation. 1091
6. Establish actuarial functions as appropriate for the 1092
operation of the program. 1093
7. Assess participating carriers in accordance with 1094
paragraph (j), and make advance interim assessments as may be 1095
reasonable and necessary for organizational and interim 1096
operating expenses. Interim assessments shall be c redited as 1097
offsets against any regular assessments due following the close 1098
of the calendar year. 1099
8. Appoint appropriate legal, actuarial, and other 1100
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committees as necessary to provide technical assistance in the 1101
operation of the program, and in any other function within the 1102
authority of the program. 1103
9. Borrow money to effect the purposes of the program. Any 1104
notes or other evidences of indebtedness of the program which 1105
are not in default constitute legal investments for carriers and 1106
may be carried as admi tted assets. 1107
10. To the extent necessary, increase the $5,000 1108
deductible reinsurance requirement to adjust for the effects of 1109
inflation. 1110
(g) A reinsuring carrier may reinsure with the program 1111
coverage of an eligible employee of a small employer, or any 1112
dependent of such an employee, subject to each of the following 1113
provisions: 1114
1. Except in the case of a late enrollee, a reinsuring 1115
carrier may reinsure an eligible employee or dependent within 60 1116
days after the commencement of the coverage of the small 1117
employer. A newly employed eligible employee or dependent of a 1118
small employer may be reinsured within 60 days after the 1119
commencement of his or her coverage. 1120
2. A small employer carrier may reinsure an entire 1121
employer group within 60 days after the commen cement of the 1122
group's coverage under the plan. 1123
3. The program may not reimburse a participating carrier 1124
with respect to the claims of a reinsured employee or dependent 1125
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until the carrier has paid incurred claims of at least $5,000 in 1126
a calendar year for b enefits covered by the program. In 1127
addition, the reinsuring carrier shall be responsible for 10 1128
percent of the next $50,000 and 5 percent of the next $100,000 1129
of incurred claims during a calendar year and the program shall 1130
reinsure the remainder. 1131
4. The board annually shall adjust the initial level of 1132
claims and the maximum limit to be retained by the carrier to 1133
reflect increases in costs and utilization within the standard 1134
market for health benefit plans within the state. The adjustment 1135
shall not be less than the annual change in the medical 1136
component of the "Consumer Price Index for All Urban Consumers" 1137
of the Bureau of Labor Statistics of the Department of Labor, 1138
unless the board proposes and the office approves a lower 1139
adjustment factor. 1140
5. A small employer carrier may terminate reinsurance for 1141
all reinsured employees or dependents on any plan anniversary. 1142
6. The premium rate charged for reinsurance by the program 1143
to a health maintenance organization that is approved by the 1144
Secretary of Health and H uman Services as a federally qualified 1145
health maintenance organization pursuant to 42 U.S.C. s. 1146
300e(c)(2)(A) and that, as such, is subject to requirements that 1147
limit the amount of risk that may be ceded to the program, which 1148
requirements are more restrict ive than subparagraph 3., shall be 1149
reduced by an amount equal to that portion of the risk, if any, 1150
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which exceeds the amount set forth in subparagraph 3. which may 1151
not be ceded to the program. 1152
7. The board may consider adjustments to the premium rates 1153
charged for reinsurance by the program for carriers that use 1154
effective cost containment measures, including high -cost case 1155
management, as defined by the board. 1156
8. A reinsuring carrier shall apply its case -management 1157
and claims-handling techniques, includ ing, but not limited to, 1158
utilization review, individual case management, preferred 1159
provider provisions, other managed care provisions or methods of 1160
operation, consistently with both reinsured business and 1161
nonreinsured business. 1162
(h)1. The board, as part o f the plan of operation, shall 1163
establish a methodology for determining premium rates to be 1164
charged by the program for reinsuring small employers and 1165
individuals pursuant to this section. The methodology shall 1166
include a system for classification of small em ployers that 1167
reflects the types of case characteristics commonly used by 1168
small employer carriers in the state. The methodology shall 1169
provide for the development of basic reinsurance premium rates, 1170
which shall be multiplied by the factors set for them in th is 1171
paragraph to determine the premium rates for the program. The 1172
basic reinsurance premium rates shall be established by the 1173
board, subject to the approval of the office. The premium rates 1174
set by the board may vary by geographical area, as determined 1175
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under this section, to reflect differences in cost. The 1176
multiplying factors must be established as follows: 1177
a. The entire group may be reinsured for a rate that is 1178
1.5 times the rate established by the board. 1179
b. An eligible employee or dependent may be rein sured for 1180
a rate that is 5 times the rate established by the board. 1181
2. The board periodically shall review the methodology 1182
established, including the system of classification and any 1183
rating factors, to assure that it reasonably reflects the claims 1184
experience of the program. The board may propose changes to the 1185
rates which shall be subject to the approval of the office. 1186
(i) If a health benefit plan for a small employer issued 1187
in accordance with this subsection is entirely or partially 1188
reinsured with the program, the premium charged to the small 1189
employer for any rating period for the coverage issued must be 1190
consistent with the requirements relating to premium rates set 1191
forth in this section. 1192
(j)1. Before July 1 of each calendar year, the board shall 1193
determine and report to the office the program net loss for the 1194
previous year, including administrative expenses for that year, 1195
and the incurred losses for the year, taking into account 1196
investment income and other appropriate gains and losses. 1197
2. Any net loss for the year shall be recouped by 1198
assessment of the carriers, as follows: 1199
a. The operating losses of the program shall be assessed 1200
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in the following order subject to the specified limitations. The 1201
first tier of assessments shall be made against reinsuri ng 1202
carriers in an amount which shall not exceed 5 percent of each 1203
reinsuring carrier's premiums from health benefit plans covering 1204
small employers. If such assessments have been collected and 1205
additional moneys are needed, the board shall make a second tier 1206
of assessments in an amount which shall not exceed 0.5 percent 1207
of each carrier's health benefit plan premiums. Except as 1208
provided in paragraph (m), risk -assuming carriers are exempt 1209
from all assessments authorized pursuant to this section. The 1210
amount paid by a reinsuring carrier for the first tier of 1211
assessments shall be credited against any additional assessments 1212
made. 1213
b. The board shall equitably assess carriers for operating 1214
losses of the plan based on market share. The board shall 1215
annually assess each carrier a portion of the operating losses 1216
of the plan. The first tier of assessments shall be determined 1217
by multiplying the operating losses by a fraction, the numerator 1218
of which equals the reinsuring carrier's earned premium 1219
pertaining to direct writing s of small employer health benefit 1220
plans in the state during the calendar year for which the 1221
assessment is levied, and the denominator of which equals the 1222
total of all such premiums earned by reinsuring carriers in the 1223
state during that calendar year. The second tier of assessments 1224
shall be based on the premiums that all carriers, except risk -1225
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assuming carriers, earned on all health benefit plans written in 1226
this state. The board may levy interim assessments against 1227
carriers to ensure the financial ability of the plan to cover 1228
claims expenses and administrative expenses paid or estimated to 1229
be paid in the operation of the plan for the calendar year prior 1230
to the association's anticipated receipt of annual assessments 1231
for that calendar year. Any interim assessme nt is due and 1232
payable within 30 days after receipt by a carrier of the interim 1233
assessment notice. Interim assessment payments shall be credited 1234
against the carrier's annual assessment. Health benefit plan 1235
premiums and benefits paid by a carrier that are le ss than an 1236
amount determined by the board to justify the cost of collection 1237
may not be considered for purposes of determining assessments. 1238
c. Subject to the approval of the office, the board shall 1239
make an adjustment to the assessment formula for reinsuri ng 1240
carriers that are approved as federally qualified health 1241
maintenance organizations by the Secretary of Health and Human 1242
Services pursuant to 42 U.S.C. s. 300e(c)(2)(A) to the extent, 1243
if any, that restrictions are placed on them that are not 1244
imposed on other small employer carriers. 1245
3. Before July 1 of each year, the board shall determine 1246
and file with the office an estimate of the assessments needed 1247
to fund the losses incurred by the program in the previous 1248
calendar year. 1249
4. If the board determines t hat the assessments needed to 1250
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fund the losses incurred by the program in the previous calendar 1251
year will exceed the amount specified in subparagraph 2., the 1252
board shall evaluate the operation of the program and report its 1253
findings, including any recommenda tions for changes to the plan 1254
of operation, to the office within 180 days following the end of 1255
the calendar year in which the losses were incurred. The 1256
evaluation shall include an estimate of future assessments, the 1257
administrative costs of the program, the appropriateness of the 1258
premiums charged and the level of carrier retention under the 1259
program, and the costs of coverage for small employers. If the 1260
board fails to file a report with the office within 180 days 1261
following the end of the applicable calendar y ear, the office 1262
may evaluate the operations of the program and implement such 1263
amendments to the plan of operation the office deems necessary 1264
to reduce future losses and assessments. 1265
5. If assessments exceed the amount of the actual losses 1266
and administrative expenses of the program, the excess shall be 1267
held as interest and used by the board to offset future losses 1268
or to reduce program premiums. As used in this paragraph, the 1269
term "future losses" includes reserves for incurred but not 1270
reported claims. 1271
6. Each carrier's proportion of the assessment shall be 1272
determined annually by the board, based on annual statements and 1273
other reports considered necessary by the board and filed by the 1274
carriers with the board. 1275
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7. Provision shall be made in the plan of oper ation for 1276
the imposition of an interest penalty for late payment of an 1277
assessment. 1278
8. A carrier may seek, from the office, a deferment, in 1279
whole or in part, from any assessment made by the board. The 1280
office may defer, in whole or in part, the assessment of a 1281
carrier if, in the opinion of the office, the payment of the 1282
assessment would place the carrier in a financially impaired 1283
condition. If an assessment against a carrier is deferred, in 1284
whole or in part, the amount by which the assessment is deferred 1285
may be assessed against the other carriers in a manner 1286
consistent with the basis for assessment set forth in this 1287
section. The carrier receiving such deferment remains liable to 1288
the program for the amount deferred and is prohibited from 1289
reinsuring any indivi duals or groups in the program if it fails 1290
to pay assessments. 1291
(k) Neither the participation in the program as reinsuring 1292
carriers, the establishment of rates, forms, or procedures, nor 1293
any other joint or collective action required by this act, may 1294
be the basis of any legal action, criminal or civil liability, 1295
or penalty against the program or any of its carriers either 1296
jointly or separately. 1297
(l) The board shall monitor compliance with this section, 1298
including the market conduct of small employer carriers, and 1299
shall report to the office any unfair trade practices and 1300
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misleading or unfair conduct by a small employer carrier that 1301
has been reported to the board by agents, consumers, or any 1302
other person. The office shall investigate all reports and, upon 1303
a finding of noncompliance with this section or of unfair or 1304
misleading practices, shall take action against the small 1305
employer carrier as permitte d under the insurance code or 1306
chapter 641. The board is not given investigatory or regulatory 1307
powers, but must forward all reports of cases or abuse or 1308
misrepresentation to the office. 1309
(m) Notwithstanding paragraph (j), the administrative 1310
expenses of the program shall be recouped by assessment of risk -1311
assuming carriers and reinsuring carriers and such amounts shall 1312
not be considered part of the operating losses of the plan for 1313
the purposes of this paragraph. Each carrier's portion of such 1314
administrative expenses shall be determined by multiplying the 1315
total of such administrative expenses by a fraction, the 1316
numerator of which equals the carrier's earned premium 1317
pertaining to direct writing of small employer health benefit 1318
plans in the state during the calen dar year for which the 1319
assessment is levied, and the denominator of which equals the 1320
total of such premiums earned by all carriers in the state 1321
during such calendar year. 1322
(n) The board shall advise the office, the Agency for 1323
Health Care Administration, t he department, other executive 1324
departments, and the Legislature on health insurance issues. 1325
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Specifically, the board shall: 1326
1. Provide a forum for stakeholders, consisting of 1327
insurers, employers, agents, consumers, and regulators, in the 1328
private health insurance market in this state. 1329
2. Review and recommend strategies to improve the 1330
functioning of the health insurance markets in this state with a 1331
specific focus on market stability, access, and pricing. 1332
3. Make recommendations to the office for legislat ion 1333
addressing health insurance market issues and provide comments 1334
on health insurance legislation proposed by the office. 1335
4. Meet at least three times each year. One meeting shall 1336
be held to hear reports and to secure public comment on the 1337
health insurance market, to develop any legislation needed to 1338
address health insurance market issues, and to provide comments 1339
on health insurance legislation proposed by the office. 1340
5. Issue a report to the office on the state of the health 1341
insurance market by Septem ber 1 each year. The report shall 1342
include recommendations for changes in the health insurance 1343
market, results from implementation of previous recommendations, 1344
and information on health insurance markets. 1345
Section 14. Paragraphs (c), (d), and (e) are add ed to 1346
subsection (2) of section 627.711, Florida Statutes, to read: 1347
627.711 Notice of premium discounts for hurricane loss 1348
mitigation; uniform mitigation verification inspection form. — 1349
(2) 1350
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(c) The office shall contract with a state university to 1351
design, operate, upgrade, and maintain a statewide database for 1352
uniform mitigation verification inspection forms. This database 1353
must be managed by the office to collect and evaluate mitigation 1354
features of residential properties within the state. 1355
(d) Beginning January 1, 2026, each insurer shall 1356
electronically file a copy of uniform mitigation inspection 1357
forms submitted by policyholders in the database created 1358
pursuant to paragraph (c) within 15 business days after receipt 1359
using the electronic format presc ribed by the office. 1360
(e) The Financial Services Commission shall adopt rules to 1361
implement this subsection. 1362
Section 15. Effective upon this act becoming a law, 1363
subsection (12) of section 627.7152, Florida Statutes, is 1364
amended to read: 1365
627.7152 Assignment agreements.— 1366
(12) The office shall require each insurer to report by 1367
January 30, 2022, and each year thereafter data on each 1368
residential and commercial property insurance claim paid in the 1369
prior calendar year under an assignment agreement. The Fina ncial 1370
Services Commission shall adopt by rule a list of the data 1371
required, which must include specific data about claims 1372
adjustment and settlement timeframes and trends, grouped by 1373
whether litigated or not litigated and by loss adjustment 1374
expenses. 1375
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Section 16. Section 627.9145, Florida Statutes, is created 1376
to read: 1377
627.9145 Reports by residential property insurers. —1378
Beginning March 1, 2026, and by March 1 every year thereafter, 1379
each authorized insurer and surplus lines insurer transacting 1380
residential property insurance in this state shall file with the 1381
office a report addressing the following areas: 1382
(1) Policy types, perils covered, statuses, and premiums. 1383
(2) Location and limits of writings in this state. 1384
(3) Coverages, deductibles, and exclusion s. 1385
(4) Mitigation discounts. 1386
(5) Claims reporting requirements. 1387
(6) Any other information deemed necessary by the 1388
commission to provide the office with the ability to track 1389
mitigation and resiliency trends occurring in the residential 1390
property market. 1391
1392
The commission shall adopt rules specifying the information 1393
required to be reported under this section and the format 1394
required for the reports. 1395
Section 17. Subsections (2) and (5) of section 627.915, 1396
Florida Statutes, are amended, and a new subsecti on (2) is added 1397
to that section, to read: 1398
627.915 Insurer experience reporting. — 1399
(2) Beginning January 1, 2026, each insurer transacting 1400
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private passenger automobile insurance in this state shall file 1401
monthly with the office a report addressing the fol lowing areas: 1402
(a) Policy coverage categories, including policies in 1403
force and total direct premiums earned and written. 1404
(b) Type, location, and limits of writings in this state. 1405
(c) Claims reporting requirements. 1406
(d) Any other information deemed ne cessary by the 1407
commission to provide the office with the ability to track 1408
trends occurring in the private passenger automobile insurance 1409
market. 1410
1411
The commission shall adopt rules specifying the information 1412
required to be reported under this subsection and the format 1413
required for the reports. 1414
(2) Each insurer transacting fire, homeowner's multiple 1415
peril, commercial multiple peril, medical malpractice, products 1416
liability, workers' compensation, private passenger automobile 1417
liability, commercial automobile liability, private passenger 1418
automobile physical damage, commercial automobile physical 1419
damage, officers' and directors' liability insurance, or other 1420
liability insurance shall report, for each such line of 1421
insurance, the information specified in this subs ection to the 1422
office. The information shall be reported for direct Florida 1423
business only and shall be reported on a calendar -year basis 1424
annually by April 1 for the preceding calendar year: 1425
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(a) Direct premiums written. 1426
(b) Direct premiums earned. 1427
(c) Loss reserves for all known claims: 1428
1. At beginning of the year. 1429
2. At end of the year. 1430
(d) Reserves for losses incurred but not reported: 1431
1. At beginning of the year. 1432
2. At end of the year. 1433
(e) Allocated loss adjustment expense: 1434
1. Reserve at beginning of the year. 1435
2. Reserve at end of the year. 1436
3. Paid during the year. 1437
(f) Unallocated loss adjustment expense: 1438
1. Reserve at beginning of the year. 1439
2. Reserve at end of the year. 1440
3. Paid during the year. 1441
(g) Direct losses paid. 1442
(h) Underwriting income or loss. 1443
(i) Commissions and brokerage fees. 1444
(j) Taxes, licenses, and fees. 1445
(k) Other acquisition costs. 1446
(l) General expenses. 1447
(m) Policyholder dividends. 1448
(n) Net investment gain or loss and other income gain or 1449
loss allocated pro rata by earned premium to Florida business 1450
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utilizing the investment allocation formula contained in the 1451
National Association of Insurance Commissioner's Profitability 1452
Report by line by state. 1453
(5) Any insurer or insurer group which does not wr ite at 1454
least 0.5 percent of the Florida market based on premiums 1455
written shall not have to file any report required by subsection 1456
(2) other than a report indicating its percentage of the market 1457
share. That percentage shall be calculated by dividing the 1458
current premiums written by the preceding year's total premiums 1459
written in the state for that line of insurance. 1460
Section 18. Effective upon this act becoming a law, 1461
subsection (2) of section 628.081, Florida Statutes, is amended 1462
to read: 1463
628.081 Incorporation of domestic insurer. — 1464
(2) The incorporators shall execute articles of 1465
incorporation in triplicate. At least three of them shall 1466
acknowledge execution before an officer authorized to take 1467
acknowledgments. 1468
Section 19. Effective upon this act bec oming a law, 1469
subsections (2), (3), and (4) of section 628.091, Florida 1470
Statutes, are amended to read: 1471
628.091 Filing, approval of articles of incorporation. — 1472
(2) The incorporators shall file the triplicate originals 1473
of the articles of incorporation with the office, accompanied by 1474
the filing fee specified in s. 624.501. 1475
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(3) The office shall promptly examine the articles of 1476
incorporation. If it finds that the articles of incorporation 1477
conform to law, and that a permit has b een or will be issued, it 1478
shall endorse its approval on each of the triplicate originals 1479
of the articles of incorporation , retain one copy for its files, 1480
and return the articles of incorporation remaining copies to the 1481
incorporators for filing with the Dep artment of State. 1482
(4) If the office does not so find, it shall refuse to 1483
approve the articles of incorporation and shall return the 1484
originals. 1485
Section 20. Effective upon this act becoming a law, 1486
subsections (2) and (3) of section 628.111, Florida Sta tutes, 1487
are amended to read: 1488
628.111 Amendment of articles of incorporation; mutual 1489
insurer.— 1490
(2)(a) Upon adoption of the amendment, the insurer shall 1491
make in triplicate under its corporate seal a certificate 1492
thereof, setting forth the amendment and the date and manner of 1493
the adoption thereof, which certificate shall be executed by the 1494
insurer's president or vice president and secretary or assistant 1495
secretary and acknowledged before an officer authorized to take 1496
acknowledgments. The insurer shall deliver the triplicate 1497
originals of the certificate to the office, together with the 1498
filing fee specified in s. 624.501. 1499
(b) The office shall promptly examine the certificate of 1500
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amendment,; and, if it finds that the certificate and the 1501
amendment comply with law , it shall endorse its approval on the 1502
certificate of amendment upon each of the triplicate originals, 1503
place one on file in its office, and return the remaining sets 1504
to the insurer. The insurer shall forthwith file such endorsed 1505
certificate certificates of amendment with the Department of 1506
State. The amendment shall be effective when filed with and 1507
approved by the Department of State. 1508
(3) If the office finds that the proposed amendment or 1509
certificate does not comply with the law, it shall not approve 1510
the same, and shall return the triplicate certificate of 1511
amendment to the insurer. 1512
Section 21. Paragraph (a) of subsection (1) and paragraph 1513
(b) of subsection (4) of section 628.461, Florida Statutes, are 1514
amended to read: 1515
628.461 Acquisition of controllin g stock.— 1516
(1) A person may not, individually or in conjunction with 1517
any affiliated person of such person, acquire directly or 1518
indirectly, conclude a tender offer or exchange offer for, enter 1519
into any agreement to exchange securities for, or otherwise 1520
finally acquire 10 percent or more of the outstanding voting 1521
securities of a domestic stock insurer or of a controlling 1522
company, unless: 1523
(a) The person or affiliated person has filed with the 1524
office and sent by registered mail to the principal office of 1525
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the insurer and controlling company a letter of notification 1526
regarding the transaction or proposed transaction within 5 days 1527
after any form of tender offer or exchange offer is proposed, or 1528
within 5 days after the acquisition of the securities if no 1529
tender offer or exchange offer is involved. The notification 1530
must be provided on forms prescribed by the commission 1531
containing information determined necessary to understand the 1532
transaction and identify all purchasers and owners involved; 1533
1534
A filing required under t his subsection must be made for any 1535
acquisition that equals or exceeds 10 percent of the outstanding 1536
voting securities. 1537
(4) 1538
(b) Any corporation, association, or trust filing the 1539
statement required by this section shall give all required 1540
information that is within the knowledge of the directors, 1541
officers, or trustees (or others performing functions similar to 1542
those of a director, officer, or trustee) of the corporation, 1543
association, or trust making the filing and of any person 1544
controlling either directly or indirectly such corporation, 1545
association, or trust. A copy of the statement and any 1546
amendments to the statement shall be sent by registered mail to 1547
the insurer at its principal office within the state and to any 1548
controlling company at its principal offi ce. If any material 1549
change occurs in the facts set forth in the statement filed with 1550
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the office and sent to such insurer or controlling company 1551
pursuant to this section, an amendment setting forth such 1552
changes shall be filed immediately with the office and sent 1553
immediately to such insurer and controlling company. 1554
Section 22. Paragraph (b) of subsection (5) of section 1555
628.4615, Florida Statutes, is amended to read: 1556
628.4615 Specialty insurers; acquisition of controlling 1557
stock, ownership interest, assets, or control; merger or 1558
consolidation.— 1559
(5) 1560
(b) Any person filing the statement required by this 1561
section shall give all required information that is within the 1562
knowledge of: 1563
1. The directors, officers, or trustees, if a corporation, 1564
or 1565
2. The partners, owners, managers, or joint venturers, or 1566
others performing functions similar to those of a director, 1567
officer, or trustee, if not a corporation, 1568
1569
of the person making the filing and of any person controlling 1570
either directly or indirectly such pers on. If any material 1571
change occurs in the facts set forth in the application filed 1572
with the office pursuant to this section, an amendment setting 1573
forth such changes shall be filed immediately with the office, 1574
and a copy of the amendment shall be sent by registered mail to 1575
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the principal office of the specialty insurer and to the 1576
principal office of the controlling company. 1577
Section 23. Effective upon this act becoming a law, 1578
subsection (2) of section 628.717, Florida Statutes, is amended 1579
to read: 1580
628.717 Filing of articles of incorporation. — 1581
(2) The office shall promptly examine the articles of 1582
incorporation,; and, if it finds that the articles of 1583
incorporation comply with law, the office shall endorse its 1584
approval on the certificate of amendment upon each of the 1585
originals, place one on file in its office, and return the 1586
remaining sets to the incorporators . The incorporators shall 1587
promptly file such endorsed articles of incorporation with the 1588
Department of State. The articles of incorporation shall be 1589
effective when filed with and approved by the Department of 1590
State. 1591
Section 24. Effective upon this act becoming a law, 1592
subsection (2) of section 628.719, Florida Statutes, is amended 1593
to read: 1594
628.719 Amendment of articles of incorporation. — 1595
(2)(a) Upon adoption of an amendment, the mutual insurance 1596
holding company shall make under its corporate seal a 1597
certificate thereof, setting forth the amendment and the date 1598
and manner of the adoption thereof, which certificate shall be 1599
executed by the mutual insurance holding company's president or 1600
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vice president and secretary or assistant secretary and 1601
acknowledged before an officer authorized to take 1602
acknowledgments. The mutual insurance holding company shall 1603
deliver the originals of the certificate to the office. 1604
(b) The office shall promptly examine the certificate of 1605
amendment, and, if the office finds that the certificate and the 1606
amendment comply with law, the office shall endorse its approval 1607
on the certificate of amendment upon each of the origi nals, 1608
place one on file in its office, and return the remaining sets 1609
to the mutual insurance holding company . The mutual insurance 1610
holding company shall promptly file such endorsed certificate 1611
certificates of amendment with the Department of State. The 1612
amendment shall be effective when filed with and approved by the 1613
Department of State. 1614
Section 25. Effective upon this act becoming a law, 1615
subsection (4) of section 628.910, Florida Statutes, is amended 1616
to read: 1617
628.910 Incorporation options and requirem ents.— 1618
(4) In the case of a captive insurance company formed as a 1619
corporation or a nonprofit corporation, before the articles of 1620
incorporation are transmitted to the Secretary of State, the 1621
incorporators shall file the articles of incorporation in 1622
triplicate with the office. The office shall promptly examine 1623
the articles of incorporation. If it finds that the articles of 1624
incorporation conform to law, it shall endorse its approval on 1625
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each of the triplicate originals of the articles of 1626
incorporation, retain one copy for its files, and return the 1627
articles of incorporation remaining copies to the incorporators 1628
for filing with the Department of State. 1629
Section 26. Subsection (5) of section 629.011, Florida 1630
Statutes, is amended, and subsections (6), (7), and (8) are 1631
added to that section, to read: 1632
629.011 Definitions. —As used in this part, the term: 1633
(5) "Reciprocal insurer" means an unincorporated 1634
aggregation of subscribers operating individually and 1635
collectively through an attorney in fact to provide reci procal 1636
insurance among themselves. 1637
(a) An assessable reciprocal insurer is a reciprocal 1638
insurer that is able to levy an assessment on its subscribers to 1639
make up any shortfall in capital and surplus to cover claims and 1640
expenses as specified in s. 629.231. 1641
(b) A nonassessable reciprocal insurer is a reciprocal 1642
insurer authorized under s. 629.091(3) or s. 629.291(5) to issue 1643
policies where there is no recourse against subscribers for any 1644
shortfall in capital and surplus to cover claims and expenses. 1645
(6) "Subscriber contribution" means any transfer of money 1646
by a subscriber of a reciprocal insurer to the reciprocal 1647
insurer in excess of the premium approved by the office, when 1648
such money is counted as surplus for the reciprocal insurer or 1649
used to pay surplus notes. 1650
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(7) "Subscriber savings account" means any account in 1651
which a reciprocal insurer allocates money to be held in whole 1652
or in part for the benefit of an individual subscriber, other 1653
than accounts holding money for the payment of a specific claim 1654
by or settlement of a specific legal dispute with that 1655
individual subscriber. 1656
(8) "Subscribers' advisory committee" means the governing 1657
committee of a domestic reciprocal insurer which is formed in 1658
compliance with s. 629.201 and represents the interests of the 1659
subscribers. 1660
Section 27. Section 629.071, Florida Statutes, is amended 1661
to read: 1662
629.071 Surplus funds required. — 1663
(1) An assessable A domestic reciprocal insurer hereunder 1664
formed, if it has otherwise complied with the applicable 1665
provisions of this code, may be authorized to transact insurance 1666
if it has and thereafter maintains surplus funds of not less 1667
than $3 million $250,000. 1668
(2) A nonassessable reciprocal insurer, if it has 1669
otherwise complied with the applicable provisions of this code, 1670
may be authorized to transact insurance if it has and thereafter 1671
maintains a surplus as to policyholders which is equal to that 1672
required under s. 624.408 for a domestic stock insurer 1673
authorized to transact like kinds of insurance In addition to 1674
the surplus required to be maintained under subsection (1), the 1675
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insurer shall have, when first so authorized, an expendable 1676
surplus of not less than $750,000 . 1677
Section 28. Effective upon this act becoming a law, 1678
subsection (3) of section 629.081, Florida Statutes, is amended 1679
to read: 1680
629.081 Organization of reciprocal insurer. — 1681
(3) The filing must be accompanied by the application fee 1682
required by s. 624.501(1)(a) . 1683
Section 29. Section 629.082, Florida Statutes, is created 1684
to read: 1685
629.082 Reciprocal affiliates.—The attorney in fact of a 1686
reciprocal is an affiliate of the reciprocal for purposes of s. 1687
624.10. 1688
Section 30. Section 629.1015, Florida Statutes, is created 1689
to read: 1690
629.1015 Affiliate fees. — 1691
(1) Each reciprocal insurer doing business i n this state 1692
which pays a fee, commission, or other financial consideration 1693
or payment to any affiliate directly or indirectly must provide 1694
to the office documentation supporting that such fee, 1695
commission, or other financial consideration or payment to any 1696
affiliate is fair and reasonable for each service being provided 1697
by contract. In determining whether the fee, commission, or 1698
other financial consideration or payment is fair and reasonable, 1699
the office must consider the following: 1700
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(a) The actual cost of each service provided by an 1701
affiliate; 1702
(b) The relative financial condition of the reciprocal 1703
insurer and of the attorney in fact; 1704
(c) The level of debt and how that debt is serviced; 1705
(d) The amount of dividends paid by the attorney in fact 1706
and its affiliates and for what purpose; 1707
(e) Whether the terms of the written contract benefit the 1708
reciprocal insurer and are in the best interest of the 1709
subscribers; and 1710
(f) Any other such information as the office reasonably 1711
requires in making this determina tion. 1712
(2) For each agreement with an affiliate in force on July 1713
1, 2025, each domestic reciprocal insurer shall provide to the 1714
office no later than October 1, 2025, the cost incurred by the 1715
affiliate to provide each service, the amount charged to the 1716
domestic reciprocal insurer for each service, and the dollar 1717
amount of fees forgiven, waived, or reimbursed by the affiliate 1718
for the 2 most recent preceding years. If the total dollar 1719
amount charged to the domestic reciprocal insurer was greater 1720
than the total cost to provide services for either year, the 1721
domestic reciprocal insurer must explain how it determined the 1722
fee was fair and reasonable. For any proposed contract with an 1723
affiliate effective after July 1, 2025, the domestic reciprocal 1724
insurer must provide documentation to support that the fee, 1725
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commission, or other financial consideration or payment to the 1726
affiliate is fair and reasonable. 1727
Section 31. Section 629.121, Florida Statutes, is amended 1728
to read: 1729
629.121 Attorney in fact Attorney's bond.— 1730
(1) Concurrently with the filing of the declaration 1731
provided for in s. 629.081, the attorney in fact of a domestic 1732
reciprocal insurer shall file with the office a bond in favor of 1733
this state for the benefit of all persons damaged as a result of 1734
breach by the attorney in fact of the conditions of his or her 1735
bond as set forth in subsection (2). The bond shall be executed 1736
by the attorney in fact and by an authorized corporate surety 1737
and shall be subject to the approval of the office. 1738
(2) The bond shall be i n the sum of $300,000 $100,000, 1739
aggregate in form, the bond conditioned that the attorney in 1740
fact will faithfully account for all moneys and other property 1741
of the insurer coming into his or her hands, and that he or she 1742
will not withdraw or appropriate to his or her own use from the 1743
funds of the insurer any moneys or property to which he or she 1744
is not entitled under the power of attorney. 1745
(3) The bond shall provide that it is not subject to 1746
cancellation unless 30 days' advance notice in writing of 1747
cancellation is given both the attorney in fact and the office. 1748
Section 32. Section 629.162, Florida Statutes, is created 1749
to read: 1750
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629.162 Subscriber contributions. — 1751
(1) Reciprocal insurers may, subject to prior approval by 1752
the office, require contributio ns from subscribers in addition 1753
to premiums approved by the office. 1754
(2) A reciprocal insurer shall clearly disclose required 1755
subscriber contributions on the declarations page of any policy 1756
issued by the reciprocal insurer, separate from any cost 1757
associated with the premium. 1758
(3) Reciprocal insurers must provide subscribers an annual 1759
report detailing how each dollar of subscriber contributions was 1760
allocated or spent. 1761
Section 33. Section 629.163, Florida Statutes, is created 1762
to read: 1763
629.163 Subscriber savings accounts. — 1764
(1) Reciprocal insurers may establish subscriber savings 1765
accounts. 1766
(2) Moneys placed in subscriber savings accounts are not 1767
considered distributions under s. 629.164. 1768
(3) Subscriber savings accounts are subject to the 1769
following requirements: 1770
(a) Reciprocal insurers must inform each subscriber, in 1771
writing, of the limitations and restrictions imposed upon the 1772
use or possession of moneys held in subscriber savings accounts. 1773
(b) Reciprocal insurers must inform each subscriber, in 1774
writing, of the procedures used to distribute moneys to 1775
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subscriber savings accounts and any calculations used to 1776
determine the amount of moneys to be distributed to subscriber 1777
savings accounts. 1778
(c) Advertisements marketing the benefits of subscriber 1779
savings accounts must note the limitations and restrictions 1780
imposed upon the use or possession of moneys held in subscriber 1781
savings accounts. 1782
(d) Upon cancellation or nonrenewal of a subscriber's 1783
policy, the subscriber is entitled to all moneys held in the 1784
subscriber's savings account, except when such moneys are 1785
otherwise allocated by law or contract, or when such 1786
distribution is prohibited by order of the office. 1787
Section 34. Section 629.164, Florida Statutes, is created 1788
to read: 1789
629.164 Subscriber di stributions.— 1790
(1) Reciprocal insurers may make distributions to 1791
subscribers from their subscriber savings accounts. 1792
(2) The subscribers' advisory committee shall have the 1793
sole authority to authorize distributions, subject to prior 1794
written approval by the office. 1795
(3) Any reciprocal insurer that otherwise authorizes 1796
distributions but prohibits subscribers from receiving 1797
distributions for a specified period of time, including after 1798
initial subscription, must renew the subscriber's policy for 1799
that period of time plus 1 additional policy year. This 1800
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subsection does not prohibit the cancellation or nonrenewal of a 1801
policy pursuant to s. 624.4133 or by order of the office. 1802
(4) A reciprocal insurer may return to its subscribers any 1803
unused premiums, savings, or credits accruing to their accounts. 1804
Such distribution may not unfairly discriminate between classes 1805
of risks or policies, or between subscribers, but may vary as to 1806
classes of subscribers based on the experience of the classes. 1807
(5) In addition to the option provided in subsection (4), 1808
a domestic reciprocal insurer may, upon the prior written 1809
approval of the office, pay to its subscribers a portion of 1810
unassigned funds of up to 10 percent of surplus, with 1811
distribution limited to 50 percent of net income from the 1812
previous calendar year. Such distribution may not unfairly 1813
discriminate between classes of risks or policies, or between 1814
subscribers, but may vary as to classes of subscribers based on 1815
the experience of the classes. 1816
Section 35. Section 629.171 , Florida Statutes, is amended 1817
to read: 1818
629.171 Annual statement. — 1819
(1) The subscribers' advisory committee shall procure an 1820
audited annual statement of the accounts and records of the 1821
insurer and the attorney in fact. The statement of the insurer 1822
must be prepared by an independent auditor at the expense of the 1823
reciprocal insurer and must be available for inspection by any 1824
subscriber. The statement of the attorney in fact must be 1825
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prepared by an independent auditor at the expense of the 1826
attorney in fact. 1827
(2)(1) The annual statement filing of a reciprocal insurer 1828
must shall be submitted made and filed by its attorney in fact. 1829
(3)(2) The audited statement of the attorney in fact must 1830
shall be submitted with the annual statement filing of the 1831
reciprocal insurer, as required under s. 624.424, and 1832
supplemented by such information as may be required by the 1833
office relative to the affairs and transactions of the attorney 1834
in fact relating insofar as they relate to the reciprocal 1835
insurer. 1836
Section 36. Subsecti on (1) of section 629.181, Florida 1837
Statutes, is amended to read: 1838
629.181 Financial condition; method of determining. —In 1839
determining the financial condition of a reciprocal insurer, the 1840
office shall apply the following rules: 1841
(1) Subscriber contribution s are The surplus deposits of 1842
subscribers shall be allowed as assets, except that any premium 1843
deposits delinquent for 90 days must shall first be charged 1844
against such subscriber contributions. Subscriber contributions 1845
may not exceed 2 percent of each indiv idual subscribers' policy 1846
premium for a nonassessable reciprocal insurer and 10 percent of 1847
each individual subscribers' policy premium for an assessable 1848
reciprocal insurer surplus deposit. 1849
Section 37. Section 629.201, Florida Statutes, is amended 1850
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to read: 1851
629.201 Subscribers' advisory committee. —Each domestic 1852
reciprocal insurer must have a subscribers' advisory committee 1853
representing the interests of the subscribers. 1854
(1) The subscribers' advisory committee of a domestic 1855
reciprocal insurer exercising the subscribers' rights must shall 1856
be formed in compliance with this section and selected under 1857
such rules as the subscribers adopt. Such rules, along with any 1858
amendments, must be approved by the office before becoming 1859
effective. 1860
(2) Not less than two -thirds of such committee shall be 1861
subscribers other than the attorney, or any person employed by, 1862
representing, or having a financial interest in the attorney. 1863
(2)(3) The subscribers' advisory committee shall perform 1864
all of the following duties : 1865
(a) Supervise the finances of the insurer .; 1866
(b) Supervise the insurer's operations to such extent as 1867
to ensure assure conformity with the subscribers' agreement , and 1868
power of attorney, and other governing documents. ; 1869
(c) Hire independent auditors, counsel, and other experts 1870
at the expense of the insurer as necessary to fulfill the 1871
committee's duties. Procure the audit of the accounts and 1872
records of the insurer and of the attorney at the expense of the 1873
insurer; and 1874
(d) Exercise any Have such additional powers and functions 1875
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as may be conferred by the subscribers' agreement. 1876
(3) The initial subscribers' advisory committee must be 1877
appointed by the original subscribers or the attorney in fact. 1878
Within 6 months after the reciprocal insurer is authorized to 1879
transact insurance, at least two -thirds of the committee members 1880
must be elected as provided for in subsections (4) and (5). 1881
(4) The subscribers' advisory committee must consist of 1882
subscribers of the reciprocal insurer. At least two -thirds of 1883
the subscribers' advisory committee must consist of subscribers 1884
who are independent of, not employed by, not representing, not 1885
selected by, and without any financial interest in the attorney 1886
in fact. The independent subscribers must be elected by the 1887
subscribers of the reciprocal insurer. 1888
(5) Any rules governing the election of subscribers to the 1889
subscribers' advisory committee require all of the following: 1890
(a) An electorate composed exclusively of all subscribers 1891
of the reciprocal insurer. 1892
(b) Terms of not more than 5 years. 1893
(c) A process that allows subscribers to nominate other 1894
subscribers for election to the subscribers' advisory committee. 1895
(6) If a reciprocal insurer has more than 50 subscribers, 1896
the attorney in fact must provide a platform by which 1897
subscribers can communicate with each other regarding the 1898
subscribers' advisory committee election process. 1899
Section 38. Section 629.271, Florida Statutes, is 1900
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repealed. 1901
Section 39. Effective upon this act becoming a law, 1902
subsections (1) and (2) of sectio n 629.291, Florida Statutes, 1903
are amended to read: 1904
629.291 Merger or conversion. — 1905
(1) A reciprocal insurer, upon affirmative vote of not 1906
less than two-thirds of its subscribers who vote on such merger 1907
or conversion pursuant to due notice, and subject to approval by 1908
the office of the terms therefor, may merge with another 1909
reciprocal insurer or be converted to a stock or mutual insurer, 1910
to be thereafter governed by the applicable sections of the 1911
Florida Insurance Code . However, a domestic stock insurer may 1912
not convert to a reciprocal insurer. 1913
(2) A plan to merge a reciprocal insurer with another 1914
reciprocal insurer or for conversion of the reciprocal insurer 1915
to a stock or mutual insurer must be filed with the office o n 1916
forms adopted by the commission office and must contain such 1917
information as the office reasonably requires to evaluate the 1918
transaction. 1919
Section 40. Section 629.301, Florida Statutes, is amended 1920
to read: 1921
629.301 Impaired reciprocal insurers. — 1922
(1) If the assets of a domestic reciprocal insurer are at 1923
any time insufficient to discharge its liabilities, other than 1924
any liability on account of funds contributed by the attorney in 1925
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fact or others, and to maintain the required surplus, its 1926
attorney shall forthwith make up the deficiency or levy an 1927
assessment upon the subscribers for the amount needed to make up 1928
the deficiency, but subject to the limitation set forth in the 1929
power of attorney or policy. 1930
(2) If the attorney in fact fails to make up such 1931
deficiency or to make the assessment within 30 days after the 1932
office orders the attorney in fact him or her to do so, or if 1933
the deficiency is not fully made up within 60 days after the 1934
date the assessment was made, the insurer shall be deemed 1935
insolvent and shall be proceeded against in the same manner as 1936
any other insurer under chapter 631 and the insurance as 1937
authorized by this code. 1938
(3) If liquidation of a reciprocal such an insurer is 1939
ordered, the receiver shall levy an assessment shall be levied 1940
upon the subscribers an assessment for such an amount as the 1941
receiver determines to be necessary to discharge all liabilities 1942
of the insurer. The liabilities must be , subject to limits as 1943
provided by this chapter, as the office determines to be 1944
necessary to dischar ge all liabilities of the insurer, exclusive 1945
of any funds contributed by the attorney in fact or other 1946
persons, but inclusive of including the reasonable cost of the 1947
liquidation. The assessment is subject to any limits set forth 1948
in the power of attorney, the policy, or this chapter. 1949
Section 41. Section 629.401, Florida Statutes, is 1950
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repealed. 1951
Section 42. Section 629.520, Florida Statutes, is 1952
repealed. 1953
Section 43. Section 629.56, Florida Statutes, is created 1954
to read: 1955
629.56 Unearned premium res erves.—A reciprocal insurer 1956
must maintain an unearned premium reserve at all times and as 1957
required under s. 625.051. 1958
Section 44. Paragraph (c) of subsection (13) of section 1959
634.401, Florida Statutes, is amended to read: 1960
634.401 Definitions. —As used in this part, the term: 1961
(13) "Service warranty" means any warranty, guaranty, 1962
extended warranty or extended guaranty, maintenance service 1963
contract equal to or greater than 1 year in length or which does 1964
not meet the exemption in paragraph (a), contract ag reement, or 1965
other written promise for a specific duration to perform the 1966
repair, replacement, or maintenance of a consumer product, or 1967
for indemnification for repair, replacement, or maintenance, for 1968
operational or structural failure due to a defect in mat erials 1969
or workmanship, normal wear and tear, power surge, or accidental 1970
damage from handling in return for the payment of a segregated 1971
charge by the consumer; however: 1972
(c) All contracts that include coverage for accidental 1973
damage from handling must be co vered by the contractual 1974
liability policy referred to in s. 634.406(3) , unless issued by 1975
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an association not required to establish an unearned premium 1976
reserve or maintain contractual liability insurance under s. 1977
634.406(7). 1978
Section 45. Section 641.2012, Florida Statutes, is created 1979
to read: 1980
641.2012 Service of process. —Sections 624.422 and 624.423 1981
apply to health maintenance organizations. 1982
Section 46. Subsections (1) and (3), paragraph (a) of 1983
subsection (5), and subsection (6) of section 641.26, Fl orida 1984
Statutes, are amended to read: 1985
641.26 Annual and quarterly reports. — 1986
(1) Every health maintenance organization shall file an 1987
annual statement covering the preceding calendar year on or 1988
before March 1, and quarterly statements covering the periods 1989
ending on March 31, June 30, and September 30 within 45 days 1990
after each such date , annually within 3 months after the end of 1991
its fiscal year, or within an extension of time therefor as the 1992
office, for good cause, may grant, in a form prescribed by the 1993
commission, file a report with the office , verified by the oath 1994
of two officers of the organization or, if not a corporation, of 1995
two persons who are principal managing directors of the affairs 1996
of the organization, properly notarized, showing its condition 1997
on the last day of the immediately preceding reporting period. 1998
Such report shall include: 1999
(a) A financial statement of the health maintenance 2000
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organization filed by electronic means in a computer -readable 2001
form using a format acceptable to the office. 2002
(b) A financial statement of the health maintenance 2003
organization filed on forms acceptable to the office. 2004
(c) An audited financial statement of the health 2005
maintenance organization, including its balance sheet and a 2006
statement of operations for the preceding ye ar certified by an 2007
independent certified public accountant, prepared in accordance 2008
with statutory accounting principles. 2009
(d) The number of health maintenance contracts issued and 2010
outstanding and the number of health maintenance contracts 2011
terminated. 2012
(e) The number and amount of damage claims for medical 2013
injury initiated against the health maintenance organization and 2014
any of the providers engaged by it during the reporting year, 2015
broken down into claims with and without formal legal process, 2016
and the disposition, if any, of each such claim. 2017
(f) An actuarial certification that: 2018
1. The health maintenance organization is actuarially 2019
sound, which certification shall consider the rates, benefits, 2020
and expenses of, and any other funds available for the payment 2021
of obligations of, the organization. 2022
2. The rates being charged or to be charged are 2023
actuarially adequate to the end of the period for which rates 2024
have been guaranteed. 2025
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3. Incurred but not reported claims and claims reported 2026
but not fully paid have been adequately provided for. 2027
4. The health maintenance organization has adequately 2028
provided for all obligations required by s. 641.35(3)(a). 2029
(g) A report prepared by the certified public accountant 2030
and filed with the office describing material weaknes ses in the 2031
health maintenance organization's internal control structure as 2032
noted by the certified public accountant during the audit. The 2033
report must be filed with the annual audited financial report as 2034
required in paragraph (c). The health maintenance org anization 2035
shall provide a description of remedial actions taken or 2036
proposed to correct material weaknesses, if the actions are not 2037
described in the independent certified public accountant's 2038
report. 2039
(h) Such other information relating to the performance o f 2040
health maintenance organizations as is required by the 2041
commission or office. 2042
(3) Every health maintenance organization shall file 2043
quarterly, for the first three calendar quarters of each year, 2044
an unaudited financial statement of the organization as 2045
described in paragraphs (1)(a) and (b). The statement for the 2046
quarter ending March 31 shall be filed on or before May 15, the 2047
statement for the quarter ending June 30 shall be filed on or 2048
before August 15, and the statement for the quarter ending 2049
September 30 shall be filed on or before November 15. The 2050
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quarterly report shall be verified by the oath of two officers 2051
of the organization, properly notarized. 2052
(5) Each authorized health maintenance organization shall 2053
retain an independent certified public account ant, referred to 2054
in this section as "CPA," who agrees by written contract with 2055
the health maintenance organization to comply with the 2056
provisions of this part. 2057
(a) The CPA shall provide to the HMO audited financial 2058
statements consistent with this part and s. 624.424. 2059
(6) To facilitate uniformity in financial statements and 2060
to facilitate office analysis, the commission may by rule adopt 2061
the form for financial statements of a health maintenance 2062
organization, requiring the financial statement to comply with 2063
s. 624.424 including supplements as approved by the National 2064
Association of Insurance Commissioners in 1995, and may adopt 2065
subsequent amendments thereto if the methodology remains 2066
substantially consistent , and may by rule require each health 2067
maintenance organization to submit to the office all or part of 2068
the information contained in the annual statement in a computer -2069
readable form compatible with the electronic data processing 2070
system specified by the office. 2071
Section 47. Section 641.283, Florida Statute s, is created 2072
to read: 2073
641.283 Administrative supervision and hazardous insurer 2074
conditions.—Sections 624.80-624.87 apply to health maintenance 2075
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organizations. 2076
Section 48. Subsections (5) through (15) and (16) through 2077
(29) of section 651.011, Florida S tatutes, are renumbered as 2078
subsections (7) through (17) and (19) through (32), 2079
respectively, present subsections (7), (8), (19), and (26) are 2080
amended, and new subsections (5), (6), and (18) are added to 2081
that section, to read: 2082
651.011 Definitions. —As used in this chapter, the term: 2083
(5) "Affiliate" means an entity that exercises control 2084
over or is directly or indirectly controlled by the insurer 2085
provider through: 2086
(a) Equity ownership of voting securities; 2087
(b) Common managerial control; or 2088
(c) Collusive participation by the management of the 2089
insurer and affiliate in the management of the insurer or the 2090
affiliate. 2091
(6) "Affiliated person" of another person means: 2092
(a) The spouse of the other person; 2093
(b) The parents of the other person and their lin eal 2094
descendants, or the parents of the other person's spouse and 2095
their lineal descendants; 2096
(c) A person who directly or indirectly owns or controls, 2097
or holds with the power to vote, 10 percent or more of the 2098
outstanding voting securities of the other per son; 2099
(d) A person 10 percent or more of whose outstanding 2100
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voting securities are directly or indirectly owned or 2101
controlled, or held with power to vote, by the other person; 2102
(e) A person or group of persons who directly or 2103
indirectly control, are contro lled by, or are under common 2104
control with the other person; 2105
(f) An officer, director, partner, copartner, or employee 2106
of the other person; 2107
(g) If the other person is an investment company, an 2108
investment adviser of such company, or a member of an adviso ry 2109
board of such company; 2110
(h) If the other person is an unincorporated investment 2111
company not having a board of directors, the depositor of such 2112
company; or 2113
(i) A person who has entered into a written or unwritten 2114
agreement to act in concert with the o ther person in acquiring 2115
or limiting the disposition of securities of a domestic stock 2116
insurer provider or controlling company. 2117
(9)(7) "Continuing care at-home" means, pursuant to a 2118
contract other than a contract described in subsection (7) (5), 2119
furnishing to a resident who resides outside the facility the 2120
right to future access to shelter and nursing care or personal 2121
services, whether such services are provided in the facility or 2122
in another setting designated in the contract, by an individual 2123
not related by consanguinity or affinity to the resident, upon 2124
payment of an entrance fee. 2125
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(10)(8) "Control," "controlling," "controlled by," "under 2126
common control with," or "controlling company" means any 2127
corporation, trust, or association that directly or indirectly 2128
owns 10 25 percent or more of either the following : 2129
(a) The direct or indirect possession of the power to 2130
direct or cause the direction of the management and policies of 2131
a person, whether through the ownership of voting securities, by 2132
contract other than a commercial contract for goods or 2133
nonmanagement services, or otherwise. Control is presumed to 2134
exist if a person, directly or indirectly, owns, controls, holds 2135
with the power to vote, or holds proxies representing 10 percent 2136
or more of the voting securities of another person; or 2137
(b) A management company exercising control through a 2138
management agreement whereby the management company is 2139
responsible for the day -to-day business operations of the 2140
provider or the day-to-day decisionmaking on behalf of the 2141
provider. 2142
(a) The voting securities of one or more providers that 2143
are stock corporations; or 2144
(b) The ownership interest of one or more providers that 2145
are not stock corporations. 2146
(18) "Governing body" or "full governing body" means a 2147
board of directors, a management company, a body of a provider, 2148
or an obligated group whose members are elected or appointed to 2149
set strategy, oversee management or operations of a provider, 2150
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facility, or obligated group, and protect the interests of the 2151
provider, facility, or group. 2152
(22)(19) "Manager," "management," or "management company" 2153
means a person who administers the day -to-day business 2154
operations of a facility for a provider, is part of a committee 2155
that supervises the activities of a business that pro vides 2156
continuing care or a member of the full governing body of a 2157
business that provides continuing care, or is subject to the 2158
policies, directives, and oversight of the provider or governing 2159
body. 2160
(29)(26) "Regulatory action level event" means that any 2161
two of the following have occurred: 2162
(a) The provider's debt service coverage ratio is less 2163
than the greater of the minimum ratio specified in the 2164
provider's bond covenants or lending agreement for long -term 2165
financing or 1.20:1 as of the most recent annual report filed 2166
with the office pursuant to s. 651.026 or s. 651.0261, or, if 2167
the provider does not have a debt service coverage ratio 2168
required by its lending institution, the provider's debt service 2169
coverage ratio is less than 1.20:1 as of the most recent annual 2170
report filed with the office pursuant to s. 651.026 or s. 2171
651.0261. If the provider is a member of an obligated group 2172
having cross-collateralized debt, the obligated group's debt 2173
service coverage ratio must be used as the provider's debt 2174
service coverage ratio. 2175
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(b) The provider's days cash on hand is less than the 2176
greater of the minimum number of days cash on hand specified in 2177
the provider's bond covenants or lending agreement for long -term 2178
financing or 100 days. If the provider does not have a day s cash 2179
on hand required by its lending institution, the days cash on 2180
hand may not be less than 100 as of the most recent annual 2181
report filed with the office pursuant to s. 651.026 or s. 2182
651.0261. If the provider is a member of an obligated group 2183
having cross-collateralized debt, the days cash on hand of the 2184
obligated group must be used as the provider's days cash on 2185
hand. 2186
(c) The occupancy of the provider's facility is less than 2187
80 percent averaged over the 12 -month period immediately 2188
preceding the annual report filed with the office pursuant to s. 2189
651.026. 2190
Section 49. Section 651.018, Florida Statutes, is amended 2191
to read: 2192
651.018 Administrative supervision. —The office may place a 2193
facility in administrative supervision pursuant to part VI of 2194
chapter 624. If the office finds that any of the following 2195
conditions exist, the office shall place a facility in 2196
administrative supervision until the condition is resolved to 2197
the satisfaction of the office: 2198
(1) The facility is insolvent or impaired. 2199
(2) The facility is at a regulatory action level, pursuant 2200
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to s. 651.034. 2201
(3) The facility reports a negative debt service reserve. 2202
(4) The facility has failed to file a monthly, quarterly, 2203
or annual financial statement or an audited financial statement 2204
as required by this chapter. 2205
(5) The facility was issued a financial statement with a 2206
going concern issue by an independent certified public 2207
accountant. 2208
(6) The facility is found to be in hazardous financial 2209
condition pursuant to s. 651.113. 2210
(7) The facility has entered into a forbearance agreement 2211
with a lender. 2212
Section 50. Paragraph (a) of subsection (1) of section 2213
651.019, Florida Statutes, is amended to read: 2214
651.019 New financing, additional financing, or 2215
refinancing.— 2216
(1)(a) A provider shall p rovide a written general outline 2217
of the amount and the anticipated terms of any new financing or 2218
refinancing, and the intended use of proceeds, to the office and 2219
the residents' council at least 30 days before the closing date 2220
of the financing or refinancin g transaction. If there is a 2221
material change in the noticed information, a provider shall 2222
provide an updated notice to the office and the residents' 2223
council within 10 business days after the provider becomes aware 2224
of such change. 2225
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Section 51. Section 65 1.0212, Florida Statutes, is created 2226
to read: 2227
651.0212 General eligibility requirements to operate in 2228
this state.— 2229
(1) The office must deny or revoke a provider's authority 2230
to conduct business relating to continuing care in this state, 2231
including, but not limited to, the authority to enter into 2232
contracts, provide continuing care or continuing care at -home, 2233
or construct facilities for the purpose of providing continuing 2234
care in this state, if the office determines that any of the 2235
following applies to the provider's management, officers, or 2236
directors: 2237
(a) They are incompetent or untrustworthy. 2238
(b) They lack sufficient experience in continuing care 2239
management, posing a risk to contract holders. 2240
(c) They lack the experience, ability, or reputation 2241
necessary to ensure a reasonable likelihood of successful 2242
operation. 2243
(d) They are affiliated, directly or indirectly, with 2244
individuals or entities whose business practices have harmed 2245
residents, stockholders, investors, creditors, or the public 2246
through asset manipulation, fraudulent accounting, or bad faith 2247
actions. 2248
(2) The office must deny or revoke a provider's authority 2249
to conduct business relating to continuing care in this state, 2250
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including, but not limited to, the authority to enter into 2251
contracts, provide continuing care or continuing care at -home, 2252
or construct facilities for the purpose of providing continuing 2253
care in this state, if the office determines that any general 2254
partner, subscriber, stockholder, or incorporator who exercises 2255
or has the ability to exercise effective control of the 2256
provider, or who influences or has the ability to influence the 2257
provider's business transactions, lacks the financial standing 2258
and business experience necessary for the provider's successful 2259
operation. 2260
(3) The office may deny, suspend, or revoke a provider's 2261
authority to conduct business relating to continuing care in 2262
this state, including, but not limited to, the authority to 2263
enter into contracts, provide continuing care or continuing care 2264
at-home, or construct facilities for the purpose of providing 2265
continuing care, if the office determines that any general 2266
partner, subscriber, stockholder, or incorporator who exercises 2267
or has the ability to exercise effective control of the 2268
provider, or who influences or has the ability to influence the 2269
provider's business transactions, has been found guilty of, or 2270
has pleaded guilty or nolo contendere to, any felony or crime 2271
punishable by imprisonment of 1 year or more under the laws of 2272
the United States, any state, o r any other country, if the crime 2273
involves moral turpitude, regardless of whether a judgment of 2274
conviction has been entered by the court. However, if a provider 2275
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operates under a valid certificate of authority, the provider 2276
must immediately remove any such person from his or her role in 2277
the business upon discovery of the conditions set forth in this 2278
subsection or remove such person upon the order of the office. 2279
Failure to remove such person constitutes grounds for suspension 2280
or revocation of the provider's c ertificate of authority. 2281
(4) The office may deny, suspend, or revoke a provider's 2282
authority to conduct business relating to continuing care in 2283
this state, including, but not limited to, the authority to 2284
enter into contracts, provide continuing care or co ntinuing care 2285
at-home, or construct facilities for providing continuing care, 2286
if the office determines that any general partner, subscriber, 2287
stockholder, or incorporator who exercises or has the ability to 2288
exercise effective control of the provider, or who influences or 2289
has the ability to influence the provider's business 2290
transactions, is now or was previously affiliated, directly or 2291
indirectly, through ownership of 10 percent or more, with any 2292
business, corporation, or entity that has been found guilty of, 2293
or has pleaded guilty or nolo contendere to, any felony or crime 2294
punishable by imprisonment for 1 year or more under the laws of 2295
the United States, any state, or any other country. However, if 2296
a provider operates under a valid certificate of authority, th e 2297
provider must immediately remove any such person from his or her 2298
role in the business or notify the office upon discovery of the 2299
conditions set forth in this subsection. Failure to remove the 2300
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person, provide notice to the office, or comply with an order 2301
from the office to remove the person from his or her role 2302
constitutes grounds for suspension or revocation of the 2303
provider's certificate of authority. 2304
Section 52. Subsections (6) through (10) of section 2305
651.0215, Florida Statutes, are renumbered as sub sections (5) 2306
through (9), respectively, and subsection (4) and present 2307
subsection (5) of that section are amended to read: 2308
651.0215 Consolidated application for a provisional 2309
certificate of authority and a certificate of authority; 2310
required restrictions on use of entrance fees. — 2311
(4) Within 30 45 days after receipt of the information 2312
required under subsection (2), the office shall examine the 2313
information and notify the applicant in writing, specifically 2314
requesting any additional information that the offi ce is 2315
authorized to require. An application is deemed complete when 2316
the office receives all requested information and the applicant 2317
corrects any error or omission of which the applicant was timely 2318
notified or when the time for such notification has expired . 2319
Within 15 days after receipt of all of the requested additional 2320
information, the office shall notify the applicant in writing 2321
that all of the requested information has been received and that 2322
the application is deemed complete as of the date of the notice . 2323
Failure to notify the applicant in writing within the 15 -day 2324
period constitutes acknowledgment by the office that it has 2325
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received all requested additional information, and the 2326
application is deemed complete for purposes of review on the 2327
date the applicant files all of the required additional 2328
information. 2329
(5) Within 45 days after an application is deemed complete 2330
as set forth in subsection (4) and upon completion of the 2331
remaining requirements of this section, the office shall 2332
complete its review and issu e or deny a certificate of authority 2333
to the applicant. If a certificate of authority is denied, the 2334
office shall notify the applicant in writing, citing the 2335
specific failures to satisfy this chapter, and the applicant is 2336
entitled to an administrative heari ng pursuant to chapter 120. 2337
Section 53. Subsections (7) and (8) of section 651.022, 2338
Florida Statutes, are renumbered as subsections (6) and (7), 2339
respectively, and subsections (3) and (5) and present subsection 2340
(6) of that section are amended to read: 2341
651.022 Provisional certificate of authority; 2342
application.— 2343
(3) In addition to the information required in subsection 2344
(2), an applicant for a provisional certificate of authority 2345
shall submit a feasibility study , prepared by an independent 2346
consultant, with appropriate financial, marketing, and actuarial 2347
assumptions for the first 5 years of operations. The feasibility 2348
study must include at least the following information: 2349
(a) A description of the proposed facility, including the 2350
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location, size, anticipa ted completion date, and the proposed 2351
construction program. 2352
(b) An identification and evaluation of the primary and, 2353
if appropriate, the secondary market areas of the facility and 2354
the projected unit sales per month. 2355
(c) Projected revenues, including an ticipated entrance 2356
fees; monthly service fees; nursing care revenues, if 2357
applicable; and all other sources of revenue. 2358
(d) Projected expenses, including staffing requirements 2359
and salaries; cost of property, plant, and equipment, including 2360
depreciation expense; interest expense; marketing expense; and 2361
other operating expenses. 2362
(e) A projected balance sheet. 2363
(f) Expectations of the financial condition of the 2364
project, including the projected cash flow, and an estimate of 2365
the funds anticipated to be neces sary to cover startup losses. 2366
(g) The inflation factor, if any, assumed in the 2367
feasibility study for the proposed facility and how and where it 2368
is applied. 2369
(h) Project costs and the total amount of debt financing 2370
required, marketing projections, reside nt fees and charges, the 2371
competition, resident contract provisions, and other factors 2372
that affect the feasibility of the facility. 2373
(i) Appropriate population projections, including 2374
morbidity and mortality assumptions. 2375
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(j) The name of the person who pre pared the feasibility 2376
study and the experience of such person in preparing similar 2377
studies or otherwise consulting in the field of continuing care. 2378
The preparer of the feasibility study may be the provider or a 2379
contracted third party. 2380
(k) Any other infor mation that the applicant deems 2381
relevant and appropriate to enable the office to make a more 2382
informed determination. 2383
(5)(a) Within 30 days after receipt of an application for 2384
a provisional certificate of authority, the office shall examine 2385
the application and shall notify the applicant in writing, 2386
specifically setting forth and specifically requesting any 2387
additional information the office is permitted by law to 2388
require. If the application submitted is determined by the 2389
office to be substantially incomplet e so as to require 2390
substantial additional information, including biographical 2391
information, the office may return the application to the 2392
applicant with a written notice that the application as received 2393
is substantially incomplete and, therefore, unacceptabl e for 2394
filing without further action required by the office. Any filing 2395
fee received shall be refunded to the applicant. 2396
(b) Within 15 days after receipt of all of the requested 2397
additional information, the office shall notify the applicant in 2398
writing that all of the requested information has been received 2399
and the application is deemed to be complete as of the date of 2400
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the notice. Failure to so notify the applicant in writing within 2401
the 15-day period shall constitute acknowledgment by the office 2402
that it has received all requested additional information, and 2403
the application shall be deemed to be complete for purposes of 2404
review upon the date of the filing of all of the requested 2405
additional information. 2406
(6) Within 45 days after the date an application is deeme d 2407
complete as set forth in paragraph (5)(b), the office shall 2408
complete its review and issue a provisional certificate of 2409
authority to the applicant based upon its review and a 2410
determination that the application meets all requirements of 2411
law, that the feasibility study was based on sufficient data and 2412
reasonable assumptions, and that the applicant will be able to 2413
provide continuing care or continuing care at -home as proposed 2414
and meet all financial and contractual obligations related to 2415
its operations, includ ing the financial requirements of this 2416
chapter. If the application is denied, the office shall notify 2417
the applicant in writing, citing the specific failures to meet 2418
the provisions of this chapter. Such denial entitles the 2419
applicant to a hearing pursuant to chapter 120. 2420
Section 54. Subsections (4) through (9) of section 2421
651.023, Florida Statutes, are renumbered as subsections (3) 2422
through (8), respectively, and paragraphs (c) and (h) of 2423
subsection (1), subsection (2), and present subsections (3) and 2424
(7) of that section are amended to read: 2425
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651.023 Certificate of authority; application. — 2426
(1) After issuance of a provisional certificate of 2427
authority, the office shall issue to the holder of such 2428
provisional certificate a certificate of authority if the hol der 2429
of the provisional certificate provides the office with the 2430
following information: 2431
(c) Subject to subsection (3) (4), a provider may submit 2432
an application for a certificate of authority and any required 2433
exhibits upon submission of documents evidencin g that the 2434
project has a minimum of 30 percent of the units reserved for 2435
which the provider is charging an entrance fee. 2436
(h) Documents evidencing that the applicant has complied 2437
with the escrow requirements of subsection (4) (5) or subsection 2438
(6) (7) and will be able to comply with s. 651.035. 2439
2440
If any material change occurs in the facts set forth in an 2441
application filed with the office pursuant to this subsection, 2442
an amendment setting forth such change must be filed with the 2443
office within 10 business days after the applicant becomes aware 2444
of such change, and a copy of the amendment must be sent by 2445
registered mail to the principal office of the facility and to 2446
the principal office of the controlling company. 2447
(2) Within 30 days after receipt of the informa tion 2448
required under subsection (1), the office shall examine such 2449
information and notify the provider in writing, specifically 2450
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requesting any additional information the office is permitted by 2451
law to require. Within 15 days after receipt of all of the 2452
requested additional information, the office shall notify the 2453
provider in writing that all of the requested information has 2454
been received and the application is deemed to be complete as of 2455
the date of the notice. Failure to notify the applicant in 2456
writing within the 15-day period constitutes acknowledgment by 2457
the office that it has received all requested additional 2458
information, and the application shall be deemed complete for 2459
purposes of review on the date of filing all of the required 2460
additional information. 2461
(3) Within 45 days after an application is deemed complete 2462
as set forth in subsection (2), and upon completion of the 2463
remaining requirements of this section, the office shall 2464
complete its review and issue or deny a certificate of authority 2465
to the holder of a provisional certificate of authority. If a 2466
certificate of authority is denied, the office must notify the 2467
holder of the provisional certificate in writing, citing the 2468
specific failures to satisfy the provisions of this chapter. If 2469
denied, the holder of the provisional certificate is entitled to 2470
an administrative hearing pursuant to chapter 120. 2471
(6)(7) In lieu of the provider fulfilling the requirements 2472
imposed under in subsection (4) (5) and paragraphs (5)(b) (6)(b) 2473
and (c), the office may authorize th e release of escrowed funds 2474
to retire all outstanding debts on the facility and equipment 2475
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upon application of the provider and upon the provider's showing 2476
that the provider will grant to the residents a first mortgage 2477
on the land, buildings, and equipment that constitute the 2478
facility, and that the provider has satisfied paragraphs (5)(a) 2479
(6)(a) and (d). Such mortgage shall secure the refund of the 2480
entrance fee in the amount required by this chapter. The 2481
granting of such mortgage is subject to the following: 2482
(a) The first mortgage is granted to an independent trust 2483
that is beneficially held by the residents. The document 2484
creating the trust must include a provision that agrees to an 2485
annual audit and will furnish to the office all information the 2486
office may reasonably require. The mortgage may secure payment 2487
on bonds issued to the residents or trustee. Such bonds are 2488
redeemable after termination of the residency contract in the 2489
amount and manner required by this chapter for the refund of an 2490
entrance fee. 2491
(b) Before granting a first mortgage to the residents, all 2492
construction must be substantially completed and substantially 2493
all equipment must be purchased. No part of the entrance fees 2494
may be pledged as security for a construction loan or otherwise 2495
used for construction expenses before the completion of 2496
construction. 2497
(c) If the provider is leasing the land or buildings used 2498
by the facility, the leasehold interest must be for a term of at 2499
least 30 years. 2500
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Section 55. Subsection (3) of section 651.024, Flori da 2501
Statutes, is renumbered as subsection (5), and new subsections 2502
(3) and (4) are added to that section to read: 2503
651.024 Acquisition. — 2504
(3) A bondholder that obtains consent rights from a 2505
provider which allow the bondholder to have oversight or 2506
decisionmaking authority over a facility or in the financial 2507
decisions of the facility is subject to s. 628.4615 and is not 2508
required to submit filings pursuant to s. 651.022, s. 651.023, 2509
or s. 651.0245. For purposes of this subsection, the term 2510
"consent rights" includes, but is not limited to, all of the 2511
following: 2512
(a) Approving or initiating the sale of a facility. 2513
(b) Approving or entering into an affiliation arrangement 2514
on behalf of the facility. 2515
(c) Approving or executing new or amended financing for 2516
the facility. 2517
(d) Approving or entering into a forbearance agreement for 2518
the facility. 2519
(4) A continuing care retirement community that enters 2520
into an affiliation agreement with another entity resulting in a 2521
change of officers, directors, or effective contr ol is subject 2522
to s. 628.4615 and is not required to submit filings pursuant to 2523
s. 651.022, s. 651.023, or s. 651.0245. 2524
Section 56. Paragraph (a) of subsection (2), paragraph (a) 2525
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of subsection (5), and subsection (6) of section 651.0246, 2526
Florida Statutes, are amended to read: 2527
651.0246 Expansions. — 2528
(2) A provider applying for expansion of a certificated 2529
facility must submit all of the following: 2530
(a) A feasibility study prepared by an independent 2531
certified public accountant. The feasibility study mus t include 2532
at least the following information: 2533
1. A description of the facility and proposed expansion, 2534
including the location, the size, the anticipated completion 2535
date, and the proposed construction program. 2536
2. An identification and evaluation of the primary and, if 2537
applicable, secondary market areas of the facility and the 2538
projected unit sales per month. 2539
3. Projected revenues, including anticipated entrance 2540
fees; monthly service fees; nursing care revenues, if 2541
applicable; and all other sources of re venue. 2542
4. Projected expenses, including for staffing requirements 2543
and salaries; the cost of property, plant, and equipment, 2544
including depreciation expense; interest expense; marketing 2545
expense; and other operating expenses. 2546
5. A projected balance sheet of the applicant. 2547
6. The expectations for the financial condition of the 2548
project, including the projected cash flow and an estimate of 2549
the funds anticipated to be necessary to cover startup losses. 2550
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7. The inflation factor, if any, assumed in the study for 2551
the proposed expansion and how and where it is applied. 2552
8. Project costs; the total amount of debt financing 2553
required; marketing projections; resident rates, fees, and 2554
charges; the competition; resident contract provisions; and 2555
other factors that aff ect the feasibility of the facility. 2556
9. Appropriate population projections, including morbidity 2557
and mortality assumptions. 2558
10. The name of the person who prepared the feasibility 2559
study and his or her experience in preparing similar studies or 2560
otherwise consulting in the field of continuing care. 2561
11. Financial forecasts or projections prepared in 2562
accordance with standards adopted by the American Institute of 2563
Certified Public Accountants or in accordance with standards for 2564
feasibility studies for continuing care retirement communities 2565
adopted by the Actuarial Standards Board. 2566
12. An independent evaluation and examination opinion for 2567
the first 5 years of operations, or a comparable opinion 2568
acceptable to the office, by the certified public accounta nt who 2569
prepared the study, of the underlying assumptions used as a 2570
basis for the forecasts or projections in the study and that the 2571
assumptions are reasonable and proper and the project as 2572
proposed is feasible. 2573
13. The description of and plan for the ongoing operation 2574
of existing facilities. 2575
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14.13. Any other information that the provider deems 2576
relevant and appropriate to provide to enable the office to make 2577
a more informed determination. 2578
2579
If any material change occurs in the facts set forth in an 2580
application filed with the office pursuant to this section, an 2581
amendment setting forth such change must be filed with the 2582
office within 10 business days after the applicant becomes aware 2583
of such change, and a copy of the amendment must be sent by 2584
registered mail to the principal office of the facility and to 2585
the principal office of the controlling company. 2586
(5)(a) Within 30 days after receipt of an application for 2587
expansion, the office shall examine the application and shall 2588
notify the applicant in writing, s pecifically requesting any 2589
additional information that the office is authorized to require. 2590
Within 15 days after the office receives all the requested 2591
additional information, the office shall notify the applicant in 2592
writing that the requested information h as been received and 2593
that the application is deemed complete as of the date of the 2594
notice. Failure to notify the applicant in writing within the 2595
15-day period constitutes acknowledgment by the office that it 2596
has received all requested additional informatio n, and the 2597
application is deemed complete for purposes of review on the 2598
date the applicant files all of the required additional 2599
information. If the application submitted is determined by the 2600
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office to be substantially incomplete so as to require 2601
substantial additional information, including biographical 2602
information, the office may return the application to the 2603
applicant with a written notice stating that the application as 2604
received is substantially incomplete and, therefore, is 2605
unacceptable for filing witho ut further action required by the 2606
office. Any filing fee received must be refunded to the 2607
applicant. 2608
(6) Within 45 30 days after the date on which an 2609
application is deemed complete as provided in paragraph (5)(b), 2610
the office shall complete its review and , based upon its review, 2611
approve an expansion by the applicant and issue a determination 2612
that the application meets all requirements of law, that the 2613
feasibility study was based on sufficient data and reasonable 2614
assumptions, and that the applicant will be able to provide 2615
continuing care or continuing care at -home as proposed and meet 2616
all financial and contractual obligations related to its 2617
operations, including the financial requirements of this 2618
chapter. If the application is denied, the office must notify 2619
the applicant in writing, citing the specific failures to meet 2620
the requirements of this chapter. The denial entitles the 2621
applicant to a hearing pursuant to chapter 120. 2622
Section 57. Subsections (3) through (10) of section 2623
651.026, Florida Statutes, are renumbered as subsections (5) 2624
through (12), respectively, subsection (1), paragraphs (e) and 2625
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(f) of subsection (2), and present subsection (6) are amended, 2626
paragraphs (g) and (h) are added to subsection (2), and new 2627
subsections (3) and (4) are added to tha t section, to read: 2628
651.026 Annual and quarterly reports.— 2629
(1) Annually, on or before May 1, the provider shall file 2630
an annual report and such other information and data showing its 2631
condition as of the last day of the preceding calendar year, 2632
except as provided in subsection (7) (5). If the office does not 2633
receive the required information on or before May 1, a late fee 2634
may be charged pursuant to s. 651.015(2)(c). The office may 2635
approve an extension of up to 30 days. 2636
(2) The annual report shall be in s uch form as the 2637
commission prescribes and shall contain at least the following: 2638
(e) Each facility shall file with the office annually, 2639
together with the annual report required by this section, A 2640
computation of its minimum liquid reserve calculated in 2641
accordance with s. 651.035 on a form prescribed by the 2642
commission. 2643
(f) If, due to a change in generally accepted accounting 2644
principles, the balance sheet, statement of income and expenses, 2645
statement of equity or fund balances, or statement of cash flows 2646
is known by any other name or title, the annual report must 2647
contain Financial statements using the changed name names or 2648
title titles that most closely corresponds correspond to a 2649
balance sheet, statement of income and expenses, statement of 2650
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equity or fund balances, and statement of changes in cash flows , 2651
in the event that, due to a change in generally accepted 2652
accounting principles, the balance sheet, statement of income 2653
and expenses, statement of equity or fund balances, or statement 2654
of cash flows is known b y another name or title . 2655
(g) An accounts payable aging schedule that lists all 2656
outstanding debt obligations and the corresponding amounts owed 2657
to each vendor. 2658
(h) Details on any debt that has been forgiven or deferred 2659
during the period. Details must in clude the entity the debt is 2660
due to, the amount forgiven or deferred, an explanation as to 2661
why the debt was forgiven or deferred, and whether the debt has 2662
been assumed by another party on behalf of the facility. 2663
(3) Each facility shall file quarterly wit h the office all 2664
escrow bank statements for the last quarter of the reporting 2665
period which support the funds held in each of the minimum 2666
liquid reserves bank accounts. The liquid reserves funds include 2667
the debt service reserve, the operating reserve, and t he renewal 2668
and replacement reserve. 2669
(4) Any provider that has been placed into administrative 2670
supervision under s. 651.018 shall provide a compiled 2 -year 2671
forecast, submitted on a form prescribed by the office, as long 2672
as the provider operates under admi nistrative supervision. The 2673
compiled data in the 2 -year forecast shall be presented on a 2674
monthly basis. 2675
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(8)(6) The workpapers, account analyses, descriptions of 2676
basic assumptions, and other information necessary for a full 2677
understanding of the annual sta tement of a provider as filed 2678
with the office shall be made available for visual inspection by 2679
the office at the facility or, if the office requests, at 2680
another agreed-upon site. Photocopies shall be provided to the 2681
office upon request may not be made unle ss consented to by the 2682
provider. 2683
Section 58. Subsections (2), (3), and (4) of section 2684
651.0261, Florida Statutes, are renumbered as subsections (3), 2685
(4), and (5), respectively, subsection (1) and present 2686
subsection (3) are amended, and a new subsection (2) is added to 2687
that section, to read: 2688
651.0261 Quarterly and monthly statements. — 2689
(1) Within 45 days after the end of each fiscal quarter, 2690
each provider shall file a quarterly unaudited financial 2691
statement of the provider or of the facility in the fo rm 2692
prescribed by commission rule and days cash on hand, occupancy, 2693
debt service coverage ratio, and a detailed listing of the 2694
assets maintained in the liquid reserve as required under s. 2695
651.035. The last quarterly statement for a fiscal year is not 2696
required if a provider does not have pending a regulatory action 2697
level event, impairment, or a corrective action plan. If a 2698
provider falls below two or more of the thresholds set forth in 2699
s. 651.011(29) s. 651.011(26) at the end of any fiscal quarter, 2700
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the provider shall submit to the office, at the same time as the 2701
quarterly statement, an explanation of the circumstances and a 2702
description of the actions it will take to meet the 2703
requirements. 2704
(2) Each provider shall file with the office quarterly, 2705
together with the quarterly statement required by this section: 2706
(a) All escrow bank statements for each quarter which 2707
support the funds held in each of the minimum liquid reserve 2708
bank account, including, but not limited to, the debt service 2709
reserve, the operating rese rve, and the renewal and replacement 2710
reserve. 2711
(b) An accounts payable aging schedule that lists all 2712
outstanding debt obligations and the corresponding amounts owed 2713
to vendors. 2714
(c) Details on any debt that has been forgiven or deferred 2715
during the period. Such details must include the entity the debt 2716
is due to, the amount forgiven or deferred, an explanation as to 2717
why the debt was forgiven or deferred, and whether the debt has 2718
been assumed by another party on behalf of the facility. If a 2719
facility is required to file monthly financial statements with 2720
the office, the facility is required to include details on 2721
forgiven or deferred debt with the monthly filing. 2722
(4)(3) A filing under subsection (3) (2) may be required 2723
if any of the following applies: 2724
(a) The provider is: 2725
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1. Subject to administrative supervision proceedings; 2726
2. Subject to a corrective action plan resulting from a 2727
regulatory action level event and for up to 2 years after the 2728
factors that caused the regulatory action level event have been 2729
corrected; or 2730
3. Subject to delinquency or receivership proceedings or 2731
has filed for bankruptcy. 2732
(b) The provider or facility displays a declining 2733
financial position. 2734
(c) A change of ownership of the provider or facility has 2735
occurred within the previ ous 2 years. 2736
(d) The provider is found to be impaired. 2737
Section 59. Paragraph (c) of subsection (1), subsection 2738
(2), paragraph (a) of subsection (3), and paragraph (c) of 2739
subsection (5) of section 651.033, Florida Statutes, are 2740
amended, and subsection (7) is added to that section, to read: 2741
651.033 Escrow accounts. — 2742
(1) When funds are required to be deposited in an escrow 2743
account pursuant to s. 651.0215, s. 651.022, s. 651.023, s. 2744
651.0246, s. 651.035, or s. 651.055: 2745
(c) Any agreement establishing an escrow account required 2746
under this chapter is subject to approval by the office before 2747
execution. The agreement must be in writing and contain, in 2748
addition to any other provisions required by law, a provision 2749
whereby the escrow agent agrees to abide by the duties imposed 2750
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by paragraphs (b) and (e), (3)(a) and (b), (5)(a), and 2751
subsection (6). 2752
(2)(a) As used in this subsection, the term "emergency" 2753
means conditions that exist beyond the control of the provider, 2754
such as severe damage to the provider's phy sical premises caused 2755
by a natural or manmade disaster or another event of comparable 2756
gravity and severity. 2757
(b) Notwithstanding s. 651.035(7), in the event of an 2758
emergency and upon written petition by the provider to the 2759
office, on a form prescribed by the office, the office may allow 2760
a withdrawal of up to 10 percent of the required minimum liquid 2761
reserve, consistent with the requirements governing how funds 2762
can be used under s. 651.035. Before submitting the petition to 2763
the office, the provider must mee t with the office to review the 2764
emergency petition. In the meeting, the provider must address 2765
the details of the emergency, the circumstances leading to the 2766
need for an emergency petition, the provider's plan to mitigate 2767
the emergency, the amount being req uested, and the provider's 2768
plan and timeline to restore the minimum liquid reserves into 2769
compliance with s. 651.035 . The office shall have 10 business 3 2770
working days to deny the petition for the emergency 10 -percent 2771
withdrawal. If the office fails to deny the petition within 10 2772
business 3 working days, the petition is deemed to have been 2773
granted by the office. For purposes of this section, the term 2774
"business day working day" means each day that is not a 2775
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Saturday, Sunday, or legal holiday as defined by Flori da law. 2776
Also, for purposes of this section, the day the petition is 2777
received by the office is not counted as one of the 10 3 days. 2778
(3) When entrance fees are required to be deposited in an 2779
escrow account pursuant to s. 651.0215, s. 651.022, s. 651.023, 2780
s. 651.0246, or s. 651.055: 2781
(a) The provider shall deliver to the resident a written 2782
receipt. The receipt must show the payor's name and address, the 2783
date, the price of the care contract, and the amount of money 2784
paid. A copy of each receipt, together with the funds, must be 2785
deposited with the escrow agent or as provided in paragraph (c). 2786
The escrow agent must release such funds to the provider 7 days 2787
after the date of receipt of the funds by the escrow agent if 2788
the provider, operating under a certificate o f authority issued 2789
by the office, has met the requirements of s. 651.0215(7) s. 2790
651.0215(8), s. 651.023(5) s. 651.023(6), or s. 651.0246. 2791
However, if the resident rescinds the contract within the 7 -day 2792
period, the escrow agent must release the escrowed fee s to the 2793
resident. 2794
(5) When funds are required to be deposited in an escrow 2795
account pursuant to s. 651.0215, s. 651.022, s. 651.023, s. 2796
651.0246, or s. 651.035, the following apply: 2797
(c) In accordance with the annual and quarterly filing 2798
deadlines set forth in ss. 651.026 and 651.0261 On or before the 2799
20th day of the month following the quarter for which the 2800
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statement is due, the provider shall file with the office a copy 2801
of the escrow agent's statement or, if the provider has not 2802
received the escrow age nt's statement, a copy of the written 2803
request to the escrow agent for the statement. 2804
(7) The escrow agent shall provide prompt written 2805
notification to the office upon withdrawal of any funds from an 2806
account required by s. 651.035. Any escrow agreement es tablished 2807
to meet any requirement of s. 651.035 must contain this 2808
provision. 2809
Section 60. Subsection (2) of section 651.034, Florida 2810
Statutes, is amended to read: 2811
651.034 Financial and operating requirements for 2812
providers.— 2813
(2) Except when the offic e's remedial rights are suspended 2814
pursuant to s. 651.114(11)(a), The office must take action 2815
necessary to place an impaired provider under regulatory 2816
control, including administrative supervision or any remedy 2817
available under part I of chapter 631. An impairment is 2818
sufficient grounds for the department to be appointed as 2819
receiver as provided in chapter 631, except when the office's 2820
remedial rights are suspended pursuant to s. 651.114(11)(a). If 2821
the office's remedial rights are suspended pursuant to s. 2822
651.114(11)(a), the impaired provider must make available to the 2823
office copies of any corrective action plan approved by the 2824
third-party lender or trustee to cure the impairment and any 2825
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related required report. For purposes of s. 631.051, impairment 2826
of a provider is defined according to the term "impaired" has 2827
the same meaning as in under s. 651.011. The office may forego 2828
taking action for up to 90 180 days after the impairment if the 2829
office finds there is a reasonable expectation that the 2830
impairment may be elim inated within the 90-day 180-day period. 2831
Section 61. Subsections (1) and (3), paragraph (b) of 2832
subsection (7), and subsection (8) of section 651.035, Florida 2833
Statutes, are amended to read: 2834
651.035 Minimum liquid reserve requirements. — 2835
(1) A provider shall maintain in escrow a minimum liquid 2836
reserve consisting of the following reserves, as applicable . 2837
Each established account must be separate and unique to a 2838
facility, unencumbered, and not commingled with any other funds 2839
from any other account, facil ity, affiliate, or obligated group. 2840
Funds held in escrow under paragraphs (a), (c), and (d) must be 2841
held completely separate from any funds held by a trustee under 2842
paragraph (b), meaning the debt service, operating, and renewal 2843
and replacement reserves mus t have their own distinct account 2844
number: 2845
(a) Each provider shall maintain in escrow as a debt 2846
service reserve the aggregate amount of all principal and 2847
interest payments due during the fiscal year on any mortgage 2848
loan or other long-term financing of the facility, including 2849
property taxes as recorded in the audited financial report 2850
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required under s. 651.026. The amount must include any leasehold 2851
payments and all costs related to such payments. If principal 2852
payments are not due during the fiscal year, the provider must 2853
maintain in escrow as a minimum liquid reserve an amount equal 2854
to interest payments due during the next 12 months on any 2855
mortgage loan or other long -term financing of the facility, 2856
including property taxes. If a provider does not have a mortg age 2857
loan or other financing on the facility, the provider must 2858
deposit monthly in escrow as a minimum liquid reserve an amount 2859
equal to one-twelfth of the annual property tax liability as 2860
indicated in the most recent tax notice provided pursuant to s. 2861
197.322(3), and must annually pay property taxes out of such 2862
escrow. 2863
(b) A provider that has outstanding indebtedness that 2864
requires a debt service reserve to be held in escrow pursuant to 2865
a trust indenture or mortgage lien on the facility and for which 2866
the debt service reserve may only be used to pay principal and 2867
interest payments on the debt that the debtor is obligated to 2868
pay, and which may include property taxes and insurance, may 2869
include such debt service reserve in computing the minimum 2870
liquid reserve needed to satisfy this subsection if the provider 2871
furnishes to the office a copy of the agreement under which such 2872
debt service reserve is held, together with a statement of the 2873
amount being held in escrow for the debt service reserve, 2874
certified by the lend er or trustee and the provider to be 2875
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correct. The trustee shall provide the office with any 2876
information concerning the debt service reserve account upon 2877
request of the provider or the office. In addition, the trust 2878
indenture, loan agreement, or escrow agre ement must provide that 2879
the provider, trustee, lender, escrow agent, or a person 2880
designated to act in its place shall notify the office in 2881
writing at least 10 days before the withdrawal of any portion of 2882
the debt service reserve funds required to be held i n escrow as 2883
described in this paragraph. The notice must include an 2884
affidavit sworn to by the provider, the trustee, or a person 2885
designated to act in its place which includes the amount of the 2886
scheduled debt service payment, the payment due date, the amoun t 2887
of the withdrawal, the accounts from which the withdrawal will 2888
be made, and a plan with a schedule for replenishing the 2889
withdrawn funds. If the plan is revised by a consultant that is 2890
retained as prescribed in the provider's financing documents, 2891
the revised plan must be submitted to the office within 10 days 2892
after the approval by the lender or trustee. If a debt service 2893
reserve is transferred from one financial institution or lender 2894
to another, the provider must provide notice to the office at 2895
least 10 days before the transfer takes place. The notice must 2896
include an affidavit sworn to by the provider and include the 2897
name of the institution where the debt service reserve is being 2898
transferred, the date of transfer, the amount being transferred, 2899
a copy of the agreement requiring the transfer to the new 2900
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financial institution, and the contact information for the 2901
escrow agent of the new account. The new escrow agreement must 2902
comply with s. 651.033. Any funds held pursuant to this section 2903
do not negate the require ment to maintain an escrow account as 2904
required in paragraph (a). Any such separate debt service 2905
reserves are not subject to the transfer provisions set forth in 2906
subsection (8). 2907
(c) Each provider shall maintain in escrow an operating 2908
reserve equal to or greater than the following amounts: 2909
1. Thirty 30 percent of the total operating expenses 2910
projected in the feasibility study required by s. 651.023 for 2911
the first 12 months of operation. 2912
2. After the first 12 months of operation, 30 percent of 2913
the operating reserve in the annual report filed pursuant to s. 2914
651.026. 2915
3. Once a provider maintains an occupancy level in excess 2916
of 80 percent for at least 12 months and has presented in its 2917
most recent annual report that it has reached stabilized 2918
occupancy, 15 percent of the total operating reserve upon 2919
approval of the office. 2920
4. If the provider has been found to meet any of the 2921
following conditions, 50 percent of the total operating reserve: 2922
a. Is insolvent or financially impaired. 2923
b. Is at regulatory action level under s. 651.034. 2924
c. Is placed under administrative supervision. 2925
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d. Is in a hazardous financial condition under s. 651.113. 2926
e. Entered into a forbearance agreement with a lender. 2927
f. Filed or has notified the office of its intent to file 2928
for bankruptcy. 2929
g. Failed to maintain minimum liquid reserve requirements 2930
under subsections (10) and (11). 2931
2932
Upon notice from the office that a condition identified in this 2933
subparagraph exists, the provider has 10 days within which to 2934
fund the operating reserve at 50 percent and provide evidence of 2935
the funding to the office. 2936
(d) Before reducing the operating reserve required under 2937
paragraph (c), the provider must obtain written approval from 2938
the office Thereafter, each provider shall maintain in es crow an 2939
operating reserve equal to 15 percent of the total operating 2940
expenses in the annual report filed pursuant to s. 651.026 . 2941
(e) If a provider has been in operation for more than 12 2942
months, the total annual operating expenses must be determined 2943
by averaging the total annual operating expenses reported to the 2944
office by the number of annual reports filed with the office 2945
within the preceding 3 -year period subject to adjustment if 2946
there is a change in the number of facilities owned. For 2947
purposes of this subsection, total annual operating expenses 2948
include all expenses of the facility except depreciation and 2949
amortization; interest and property taxes included in paragraph 2950
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(a); extraordinary expenses that are adequately explained and 2951
documented in accordance with generally accepted accounting 2952
principles; liability insurance premiums in excess of those paid 2953
in calendar year 1999; and changes in the obligation to provide 2954
future services to current residents. For providers initially 2955
licensed during or after calen dar year 1999, liability insurance 2956
must be included in the total operating expenses in an amount 2957
not to exceed the premium paid during the first 12 months of 2958
facility operation. The operating reserves required under this 2959
subsection must be in an unencumber ed account held in escrow for 2960
the benefit of the residents. Such funds may not be encumbered 2961
or subject to any liens or charges by the escrow agent or 2962
judgments, garnishments, or creditors' claims against the 2963
provider or facility. However, if a facility ha d a lien, 2964
mortgage, trust indenture, or similar debt instrument in place 2965
before January 1, 1993, which encumbered all or any part of the 2966
reserves required by this subsection and such funds were used to 2967
meet the requirements of this subsection, then such ar rangement 2968
may be continued, unless a refinancing or acquisition has 2969
occurred, and the provider is in compliance with this 2970
subsection. 2971
(f)(d) Each provider shall maintain in escrow a renewal 2972
and replacement reserve equal to 15 percent of the total 2973
accumulated depreciation based on the audited financial 2974
statement required to be filed pursuant to s. 651.026, not to 2975
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exceed 15 percent of the facility's average operating expenses 2976
for the past 3 fiscal years based on the audited financial 2977
statements for each of those years. For a provider who is an 2978
operator of a facility but is not the owner and depreciation is 2979
not included as part of the provider's financial statement, the 2980
renewal and replacement reserve required by this paragraph must 2981
equal 15 percent of the to tal operating expenses of the 2982
provider, as described in this section. Each provider licensed 2983
before October 1, 1983, shall fully fund the renewal and 2984
replacement reserve by October 1, 2003, by multiplying the 2985
difference between the former escrow requiremen t and the present 2986
escrow requirement by the number of years the facility has been 2987
in operation after October 1, 1983. 2988
(3) If principal and interest payments are paid to a trust 2989
that is beneficially held by the residents as described in s. 2990
651.023(6) s. 651.023(7), the office may waive all or any 2991
portion of the escrow requirements for mortgage principal and 2992
interest contained in subsection (1) if the office finds that 2993
such waiver is not inconsistent with the security protections 2994
intended by this chapter. 2995
(7) 2996
(b)1. For all other proposed withdrawals, in order to 2997
receive the consent of the office, the provider must file 2998
documentation showing why the withdrawal is necessary for the 2999
continued operation of the facility and such additional 3000
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information as the o ffice reasonably requires. 3001
2. The office shall notify the provider when the filing is 3002
deemed complete. If the provider has complied with all prior 3003
requests for information, the filing is deemed complete after 30 3004
days without communication from the office . 3005
3. Within 30 days after the date a file is deemed 3006
complete, the office shall provide the provider with written 3007
notice of its approval or disapproval of the request. The 3008
provider may not withdraw funds until the office provides such 3009
written notice. The office may disapprove any request to 3010
withdraw such funds if it determines that the withdrawal is not 3011
in the best interest of the residents. 3012
(8) The office may order the immediate transfer of up to 3013
100 percent of the funds held in the minimum liquid reser ve to 3014
the custody of the department pursuant to part III of chapter 3015
625 if the office finds that the provider is impaired or 3016
insolvent, or if the facility fails to fund the minimum liquid 3017
reserve required by subsection (10) or subsection (11) . The 3018
office may order such a transfer regardless of whether the 3019
office has suspended or revoked, or intends to suspend or 3020
revoke, the certificate of authority of the provider. 3021
Section 62. Subsection (2) of section 651.043, Florida 3022
Statutes, is amended to read: 3023
651.043 Approval of change in management. — 3024
(2) A provider or management company shall notify the 3025
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office, in writing or electronically, of any change in the 3026
information required by s. 651.022(2) management within 10 3027
business days. For each new management co mpany or manager not 3028
employed by a management company, the provider shall submit to 3029
the office the information required by s. 651.022(2) and a copy 3030
of the written management contract, if applicable. 3031
Section 63. Subsection (2) of section 651.055, Florid a 3032
Statutes, is amended to read: 3033
651.055 Continuing care contracts; right to rescind. — 3034
(2) A resident has the right to rescind a continuing care 3035
contract and receive a full refund of any funds paid, without 3036
penalty or forfeiture, within 7 days after exe cuting the 3037
contract. However, if an individual signs a reservation contract 3038
pursuant to s. 651.023(3) s. 651.023(4) and fails to cancel such 3039
contract within 30 days after executing the contract and 3040
subsequently signs a residency contract pursuant to this s ection 3041
and rescinds the contract within 7 days, the forfeiture penalty 3042
authorized under s. 651.023(3) s. 651.023(4) may be deducted 3043
from the refund unless there is evidence of extenuating 3044
circumstances such as, but not limited to, the death, illness, 3045
or diagnosis of a chronic or terminal illness of the individual 3046
or the individual's spouse or partner or a change in financial 3047
or asset position which warrants cancellation of the contract. A 3048
resident may not be required to move into the facility 3049
designated in the contract before the expiration of the 7 -day 3050
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period. During the 7 -day period, the resident's funds must be 3051
held in an escrow account, or the provider may hold the check 3052
until the 7-day period expires pursuant to s. 651.033(3)(c). 3053
Section 64. Subsect ion (1) of section 651.071, Florida 3054
Statutes, is amended to read: 3055
651.071 Contracts as preferred claims on liquidation or 3056
receivership.— 3057
(1) In the event of receivership or liquidation 3058
proceedings against a provider, all continuing care and 3059
continuing care at-home contracts executed by a provider are 3060
deemed preferred claims against all assets owned by the 3061
provider.; however, Such claims are not subordinate to any 3062
secured claim and must be treated with higher priority over all 3063
other claims, except Class 1 claims. For purposes of s. 631.271, 3064
such contracts are deemed Class 2 claims. 3065
Section 65. Subsections (2) and (3) of section 651.085, 3066
Florida Statutes, are amended to read: 3067
651.085 Quarterly meetings between residents and the 3068
governing body of the provider; resident representation before 3069
the governing body of the provider. — 3070
(2) A residents' council formed pursuant to s. 651.081, 3071
members of which are elected by the residents, shall nominate 3072
and elect a designated resident representative to represent them 3073
before the governing body of the provider on matters specified 3074
in subsection (3). The initial designated resident 3075
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representative elected under this section shall be elected to 3076
serve at least 12 months. The designated resident representative 3077
does not have to be a current member of the residents' council; 3078
however, such individua l must be a resident, as defined in s. 3079
651.011. Designated resident representatives shall perform their 3080
duties in good faith. For providers that own or operate more 3081
than one facility in the state, each facility must have its own 3082
designated resident represe ntative. 3083
(3) The designated resident representative shall be 3084
notified in writing or electronically by a representative of the 3085
provider at least 14 days in advance of any meeting of the full 3086
governing body at which the annual budget and proposed changes 3087
or increases in resident fees or services are on the agenda or 3088
will be discussed before presenting the increases in resident 3089
fees or services to all residents . The designated resident 3090
representative shall be invited to attend and participate in 3091
that portion of the meeting designated for the discussion of 3092
such changes. Designated resident representatives shall perform 3093
their duties in good faith. For providers that own or operate 3094
more than one facility in the state, each facility must have its 3095
own designated resident representative. 3096
Section 66. Section 651.087, Florida Statutes, is created 3097
to read: 3098
651.087 Resident funds for charitable or operational 3099
purposes.— 3100
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(1) The organized collection and distribution of funds by 3101
residents for charitable or benevol ent purposes may not be under 3102
the control of a provider or management company. Any provider or 3103
management company assisting in the collection or distribution 3104
of funds from its residents for the purpose of creating a 3105
benevolence or charitable fund, and whic h is outside the 3106
approved operational fees, is subject to the following 3107
requirements: 3108
(a) The provider must notify the office and the residents' 3109
council that a fund is being established. 3110
(b) The provider, under the direction and approval of the 3111
residents' council, must establish written policies that govern 3112
the funds. The written policies must include, in detail, how the 3113
entity will be governed, the collection of funds, and the 3114
criteria to be used for the distribution of funds. Any changes 3115
to the written policy must be agreed upon by the residents' 3116
council. 3117
(c) Within 60 days after the fund is established, the 3118
provider must provide the written policy to the office and 3119
current residents and post it in a prominent position in the 3120
facility which is ac cessible to all residents and the general 3121
public. Additionally, the written policy must be given to all 3122
prospective residents. 3123
(d) The provider must include in its annual and quarterly 3124
reports a statement detailing the financial position of the fund 3125
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as of the annual or quarter period end date and a summary 3126
breakdown of how any funds were used during that reporting 3127
period, excluding any personally identifiable information. 3128
(2) A provider may not borrow or solicit funds from 3129
residents for operationa l purposes without prior written 3130
approval from the office. 3131
(a) Before any funds are eligible for distribution to the 3132
provider, the provider must submit to the office: 3133
1. A request to borrow funds, with notice to the 3134
residents' council, which must inc lude the requested amount, a 3135
detailed summary of the intended use of the funds, and any 3136
additional information that supports the provider's need to 3137
borrow funds from the residents. The requested amount may not 3138
exceed 10 percent of the funds available from residents and 3139
shall be restricted to use for only operational expenses, which 3140
must solely benefit the residents of the facility. Funds may not 3141
be used for the benefit of management, the board of directors, 3142
or the general partner. 3143
2. An anticipated payme nt schedule for repayment of the 3144
borrowed funds. Full repayment shall be completed within 12 3145
months after the distribution. 3146
3. A board resolution and sworn affidavit signed by two 3147
officers or the general partner of the provider which indicates 3148
support for the request to borrow funds and the repayment plan. 3149
(b) Within 30 days after receipt of the borrowed funds, 3150
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the provider shall begin repayment to the fund in equal monthly 3151
payments that allow for a complete funding of the borrowed funds 3152
within 12 months. 3153
(c) The provider must acknowledge that it is required to 3154
repay the full amount borrowed before the office may approve 3155
additional funds to be borrowed from residents. 3156
(d) The office shall receive written majority support from 3157
the residents' council before approving the provider's request. 3158
(3) Upon receipt of approval from the office, the provider 3159
shall comply with the following: 3160
(a) Maintain a 50 percent operating reserve pursuant to s. 3161
651.035(1)(c)4. for the duration of the repayment period. 3162
Following the repayment period, the provider must obtain the 3163
office's prior written approval to reduce the operating reserve 3164
amount. 3165
(b) Within 5 days after receiving the office's approval, 3166
submit supporting documentation to the office as evidence that 3167
the operating reserve has been increased in compliance with this 3168
section. 3169
(c) In order to protect the residents' investment, 3170
immediately transfer up to 100 percent of the funds held in the 3171
minimum liquid reserve operating reserve account to the custody 3172
of the department pursuant to part III of chapter 625. The 3173
provider shall fund the account with the department within 15 3174
days after receiving the office's approval. The office may not 3175
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approve the provider's request unless it has confirmation that 3176
the provider has established the account with the department. 3177
(4) Any provider that has benevolent or charitable funds 3178
established before July 1, 2025, shall fully comply with this 3179
section by October 1, 2025. 3180
(5) Any provider that has borrowed funds from reside nts 3181
before July 1, 2025, shall provide notice to the office by 3182
October 1, 2025. Notice must include the date the funds were 3183
borrowed, the amount borrowed, and any documentation supporting 3184
the request and approval of the borrowed funds. 3185
(6) In the event that a provider triggers an impairment or 3186
insolvency or enters into a forbearance agreement with a lender, 3187
the repayment of any outstanding borrowed funds shall be 3188
accelerated. Within 5 days after a provider becomes aware of an 3189
impairment or insolvency or the need to enter into a forbearance 3190
agreement with a lender, the provider shall provide notice of 3191
the triggering event to the residents' council and repay any 3192
outstanding amounts due under a repayment plan. Notice must also 3193
be given to the office within t he same 5 days. 3194
(7) Failure to comply with this section is a violation of 3195
s. 651.035, and the provider will be considered impaired 3196
pursuant to s. 651.011(16). 3197
(8) The commission may by rule require all or part of the 3198
statements or filings required unde r this section to be 3199
submitted by electronic means in a computer -readable form 3200
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compatible with the electronic data format specified by the 3201
commission. 3202
Section 67. Paragraphs (h) through (n) of subsection (2) 3203
of section 651.091, Florida Statutes, are re designated as 3204
paragraphs (i) through (o), respectively, present paragraph (h) 3205
of subsection (2) and paragraph (d) of subsection (3) are 3206
amended, a new paragraph (h) and paragraph (p) are added to 3207
subsection (2), and subsection (5) is added to that section, to 3208
read: 3209
651.091 Availability, distribution, and posting of reports 3210
and records; requirement of full disclosure. — 3211
(2) Every continuing care facility shall: 3212
(h) Post a notice of any bankruptcy proceedings in a 3213
prominent location within the facility which is accessible to 3214
all residents and the general public. Such notice must include a 3215
summary of the bankruptcy proceedings and specify where the full 3216
legal record of the bankruptcy proceedings can be inspected 3217
within the facility. The facility shall als o designate and make 3218
available a management representative to discuss the bankruptcy 3219
proceedings and address questions from residents. The notice 3220
required under this paragraph must also include a listing of all 3221
court documents related to the bankruptcy pro ceedings and the 3222
designated representative's contact information. 3223
(i)(h) Deliver the information described in s. 651.085(4) 3224
in writing or electronically to the president or chair of the 3225
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residents' council and make supporting documentation available 3226
upon request. 3227
(p) Maintain records showing compliance with the 3228
requirements of this subsection, including how, where, and when 3229
the required information was provided. 3230
(3) Before entering into a contract to furnish continuing 3231
care or continuing care at -home, the provider undertaking to 3232
furnish the care, or the agent of the provider, shall make full 3233
disclosure, obtain written acknowledgment of receipt, and 3234
provide copies of the disclosure documents to the prospective 3235
resident or his or her legal representative, of the following 3236
information: 3237
(d) In keeping with the intent of this subsection relating 3238
to disclosure, the provider shall make available for review : 3239
1. Master plans approved by the provider's board or 3240
governing body; 3241
2. Any proposed or approved and any plans for expansion or 3242
phased development within the next 3 years; and 3243
3. Any known legal impediments to the plans disclosed in 3244
subparagraphs 1. and 2., including, but not limited to, pending 3245
legal action to stop or modify the plans, the denial of building 3246
permits, or a failure to secure financing , to the extent that 3247
the availability of such plans does not put at risk real estate, 3248
financing, acquisition, negotiations, or other implementation of 3249
operational plans and thus jeopardize the success of 3250
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negotiations, operations, and development . 3251
(5)(a) A provider that enters into a contract for 3252
continuing care at a facility without first delivering a true 3253
and complete copy of the full disclosure document to the 3254
contracting party, or that enters into a con tract based on a 3255
disclosure document that omits a material fact required to be 3256
stated or necessary to prevent misleading statements, is liable 3257
for actual damages and any interest thereon, reasonable attorney 3258
fees, and court costs and shall refund fees paid to the 3259
contracting party. However, the provider shall deduct the 3260
contractual value of care and lodging provided before the 3261
violation, misstatement, or omission was discovered or should 3262
have reasonably been discovered from the fees to be refunded to 3263
the contracting party. 3264
(b) This section applies regardless of whether the 3265
provider had actual knowledge of the misstatement or omission. 3266
(c) A person may not file or maintain an action under this 3267
section if, before filing the action, the person received a 3268
written offer citing this section for a refund of all amounts 3269
paid the provider, plus interest at the prime rate, less the 3270
contractual value of care and lodging provided before receipt of 3271
the offer, and failed to accept it within 30 days after actual 3272
receipt. 3273
Section 68. Section 651.104, Florida Statutes, is created 3274
to read: 3275
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651.104 Certificate of authority to act as a management 3276
company.— 3277
(1) It is unlawful for any person to act as or hold 3278
himself or herself out to be management company for a continu ing 3279
care retirement community in this state without a valid 3280
certificate of authority issued by the office pursuant to this 3281
section. A management company that was operating in this state 3282
as of June 30, 2025, may continue to operate until January 1, 3283
2026, as a management company without a certificate of authority 3284
and is not in violation of the requirement to possess a valid 3285
certificate of authority as a management company during that 3286
period of time. To qualify for and hold authority to act as a 3287
management company in this state, a management company must 3288
otherwise be in compliance pursuant to this section and with its 3289
organizational agreement. A person who, on or after January 1, 3290
2026, does not hold a certificate of authority to act as a 3291
management company whil e operating as a management company is 3292
subject to a fine of $10,000 per violation per day. 3293
(2) A management company shall file with the office an 3294
application for a certificate of authority on a form adopted by 3295
the commission and furnished by the office. The application must 3296
include or have attached the following information and 3297
documents: 3298
(a) All basic organizational documents of the management 3299
company, such as the articles of incorporation, articles of 3300
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association, partnership agreement, trade name cer tificate, 3301
trust agreement, shareholder agreement, and other applicable 3302
documents, and all amendments to those documents. 3303
(b) The bylaws, rules, and regulations or similar 3304
documents regulating the conduct or the internal affairs of the 3305
management company. 3306
(c) The names, addresses, official positions, and 3307
professional qualifications of the individuals employed or 3308
retained by the management company who are responsible for the 3309
conduct of the affairs of the management company, including all 3310
members of the board of directors, board of trustees, executive 3311
committee, or other governing board or committee, and the 3312
principal officers, or equivalent, or for a partnership or 3313
association of the management company, the partners or members. 3314
(d) Audited annual financi al statements, prepared in 3315
accordance with generally accepted accounting principles, for 3316
the 2 most recent fiscal years, which prove that the applicant 3317
has a positive net worth in both fiscal years. If the applicant 3318
has been in existence for less than 2 fi scal years, the 3319
application must include financial statements or reports, 3320
certified by an officer of the applicant and prepared in 3321
accordance with generally accepted accounting principles, for 3322
any completed fiscal years and for any month during the current 3323
fiscal year for which such financial statements or reports have 3324
been completed. If the applicant reports net losses for either 3325
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of the 2 most recent fiscal years, the applicant must provide 3326
pro forma financial statements up to the period of time that the 3327
applicant demonstrates 2 consecutive years of profitability. Pro 3328
forma financial statements must include the balance sheet, 3329
income statement, and cash flow statement. An audited financial 3330
statement or report prepared on a consolidated basis must 3331
include a columnar consolidating or combining worksheet that 3332
must be filed with the report and comply with the following: 3333
1. Amounts shown on the consolidated audited financial 3334
report must be shown on the worksheet; 3335
2. Amounts for each entity must be stated separately; and 3336
3. Explanations of consolidating and eliminating entries 3337
must be included. 3338
(e) Any information as the office may require in order to 3339
review the current financial condition of the applicant. 3340
(f) A statement describing the business plan , including 3341
information on staffing levels and activities proposed or 3342
ongoing, in this state and nationwide. The plan must provide 3343
details setting forth the applicant's capability of providing a 3344
sufficient number of experienced and qualified personnel in t he 3345
areas of issuing continuing care life contracts and managing 3346
continuing care retirement communities or similar communities, 3347
compliance with statutory requirements, and claims processing, 3348
recordkeeping, and underwriting. 3349
(g) If the applicant is not cur rently acting as a 3350
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management company, a statement of the amounts and sources of 3351
the funds available for organization expenses and the proposed 3352
arrangements for reimbursement and compensation of incorporators 3353
or other principals. 3354
(h) Such other data, fin ancial statements, and pertinent 3355
information as the commission or office may reasonably require 3356
with respect to the management company, its directors, or its 3357
trustees, or with respect to any parent, subsidiary, or 3358
affiliate, if the management company relie s on a contractual or 3359
financial relationship with such parent, subsidiary, or 3360
affiliate in order to meet the financial requirements of this 3361
chapter, to determine the financial status of the management 3362
company and the management capabilities of its managers and 3363
owners. 3364
(3) An applicant must also submit all of the following for 3365
all individuals referenced in paragraph (2)(c): 3366
(a) A complete biographical statement on a form prescribed 3367
by the commission. 3368
(b) An independent background report as prescribed b y the 3369
commission. 3370
(c) A full set of fingerprints to the office or to a 3371
vendor, entity, or agency authorized by s. 943.053(13). The 3372
office, vendor, entity, or agency, as applicable, shall forward 3373
the fingerprints to the Department of Law Enforcement for state 3374
processing, and the Department of Law Enforcement shall forward 3375
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the fingerprints to the Federal Bureau of Investigation for 3376
national processing in accordance with s. 943.053 and 28 C.F.R. 3377
s. 20. 3378
(d) A self-disclosure of any administrative, civil, or 3379
criminal complaints, settlements, or discipline of the 3380
applicant, or any of the applicant's affiliates, which relates 3381
to a violation of the insurance laws or continuing care 3382
retirement community laws, in any state. 3383
(4)(a) The applicant shall make available for inspection 3384
by the office copies of all contracts and contract templates 3385
relating to services provided by the management company to 3386
providers or other persons using the services of the management 3387
company. 3388
(b) The applicant shall also make available for inspection 3389
by the office copies of all contracts and contract templates 3390
with any provider. 3391
(5) The office may not issue a certificate of authority if 3392
it determines that the management company or any individual 3393
specified in paragraph (2)(c) is not competent, trustwort hy, 3394
financially responsible, or of good personal and business 3395
reputation. 3396
(6) A certificate of authority issued under this section 3397
remains valid, unless suspended or revoked by the office, so 3398
long as the certificateholder continues in business in this 3399
state. 3400
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Section 69. Section 651.1041, Florida Statutes, is created 3401
to read: 3402
651.1041 Acquisition of a management company. —An 3403
acquisition of a management company is governed by s. 628.4615 3404
as if the company were a specialty insurer. 3405
Section 70. Section 651.1043, Florida Statutes, is created 3406
to read: 3407
651.1043 Management company annual and quarterly financial 3408
statements; notice of change of ownership; fines for 3409
noncompliance.— 3410
(1) Each authorized management company shall annually file 3411
with the office a full and true statement of its financial 3412
condition, transactions, and affairs within 3 months after the 3413
end of the management company's fiscal year or within such 3414
extension of time as the office may grant for good cause. The 3415
statement must be for the p receding fiscal year and must be in 3416
such form and contain such matters as the commission prescribes 3417
and must be verified by at least two officers of the management 3418
company. 3419
(2) Each authorized management company shall also annually 3420
file an audited financ ial statement prepared in accordance with 3421
generally accepted accounting principles by an independent 3422
certified public accountant. The audited financial statement 3423
must be filed with the office within 3 months after the end of 3424
the management company's fiscal year and be for the preceding 3425
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fiscal year. An audited financial statement prepared on a 3426
consolidated basis must include a columnar consolidating or 3427
combining worksheet that must be filed with the statement and 3428
must comply with all of the following: 3429
(a) Amounts shown on the consolidated audited financial 3430
statement must be shown on the worksheet. 3431
(b) Amounts for each entity must be stated separately. 3432
(c) Explanations of consolidating and eliminating entries 3433
must be included. 3434
(3) For the purpose of de termining the financial status of 3435
the management company and the management capabilities of its 3436
managers and owners, the management company must submit such 3437
other data, financial statements, and pertinent information as 3438
the commission or office may reasona bly require with respect to 3439
the management company, its directors, or its trustees, or with 3440
respect to any parent, subsidiary, or affiliate if the 3441
management company relies on a contractual or financial 3442
relationship with such parent, subsidiary, or affilia te in order 3443
to meet the financial requirements of this chapter. 3444
(4) For any material change in its ownership, a management 3445
company shall file an acquisition application as required by s. 3446
651.024. 3447
(5) Within 45 days after the end of each fiscal quarter, 3448
each management company shall file a quarterly unaudited 3449
financial statement in the form prescribed by commission rule. 3450
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(6) If the office finds that such information is needed to 3451
properly monitor the financial condition of a management company 3452
or is otherwise needed to protect the public interest, the 3453
office may require the management company to file: 3454
(a) Within 25 days after the end of each month, a monthly 3455
unaudited financial statement of the management company in the 3456
form prescribed by the commissi on by rule. 3457
(b) For the purpose of determining the financial status of 3458
the management company and the management capabilities of its 3459
managers and owners, such other data, financial statements, and 3460
pertinent information as the office may reasonably requir e with 3461
respect to the management company, its directors, or its 3462
trustees, or with respect to any parent, subsidiary, or 3463
affiliate if the management company relies on a contractual or 3464
financial relationship with such parent, subsidiary, or 3465
affiliate in order to meet the financial requirements of this 3466
chapter. 3467
(7) Any management company that fails to file an annual 3468
financial report or quarterly financial report in the form and 3469
within the time required by this section shall forfeit to the 3470
office an amount set by order of the office which does not 3471
exceed $1,000 for each of the first 10 days of noncompliance and 3472
does not exceed $2,000 for each subsequent day of noncompliance. 3473
Upon notice by the office that the management company is not in 3474
compliance with this s ection, the management company's authority 3475
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to perform in the capacity of a management company for any 3476
provider or facility in this state ceases until the office 3477
determines the management company to be in compliance. The 3478
office may not collect more than $10 0,000 under this subsection 3479
with respect to any particular report. 3480
(8) All moneys collected by the office under this section 3481
must be deposited to the credit of the Insurance Regulatory 3482
Trust Fund. 3483
(9) The commission may by rule require all or part of t he 3484
statements or filings required under this section to be 3485
submitted by electronic means in a computer -readable form 3486
compatible with the electronic data format specified by the 3487
commission. 3488
Section 71. Section 651.1045, Florida Statutes, is created 3489
to read: 3490
651.1045 Management company grounds for discretionary 3491
denial, suspension, or revocation of certificate of authority. — 3492
(1) The office may deny an application or suspend or 3493
revoke the certificate of authority of any applicant or 3494
management company i f it finds that any one or more of the 3495
following grounds applicable to the applicant or management 3496
company exist: 3497
(a) Failing to continue to meet the requirements for the 3498
certificate of authority originally granted. 3499
(b) Failing to meet one or more of t he qualifications for 3500
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the certificate of authority under this chapter. 3501
(c) Making a material misstatement or misrepresentation to 3502
obtain the certificate of authority or committing fraud in 3503
obtaining or in attempting to obtain the certificate of 3504
authority. 3505
(d) Demonstrating a lack of fitness or trustworthiness. 3506
(e) Engaging in fraudulent or dishonest practices of 3507
management in the conduct of business. 3508
(f) Misappropriating, converting, or withholding moneys. 3509
(g) Failing to comply with, or violating, any lawful order 3510
or rule issued by the office or commission or violating any 3511
provision of this chapter. 3512
(h) Becoming insolvent or financially impaired or 3513
conducting business in a manner that poses a risk to the public. 3514
(i) Refusing to be exa mined or to produce accounts, 3515
records, and files for examination, refusing to give information 3516
with respect to its affairs, or refusing to perform any other 3517
legal obligation under this chapter when required by the office. 3518
(j) Failing to comply with the r equirements of s. 3519
651.1043. 3520
(k) Failing to maintain full compliance with escrow 3521
accounts or funds as required by this chapter, if responsible 3522
for the day-to-day operations of the provider. 3523
(l) Failing to meet the requirements of this chapter for 3524
disclosure of information to residents concerning the facility, 3525
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its ownership, its management, its development, or its financial 3526
condition, or failing to honor its continuing care or continuing 3527
care at-home contracts, if responsible for the day -to-day 3528
operations of the provider. 3529
(m) Having any cause for which issuance of the license 3530
could have been denied had it then existed and been known to the 3531
office. 3532
(n) Having owners, managers, officers, or directors who 3533
have been found guilty of, or have pleaded guilty or nolo 3534
contendere to, a felony in this state or any other state, 3535
regardless of whether a judgment or conviction was entered by 3536
the court having jurisdiction of such cases. 3537
(o) Engaging in unfair methods of competition or in unfair 3538
or deceptive acts or p ractices prohibited under part IX of 3539
chapter 626. 3540
(p) Demonstrating a pattern of bankrupt enterprises. 3541
(q) Including in ownership, control, or management any 3542
person who: 3543
1. Is not reputable and of responsible character; 3544
2. Is so lacking in manageme nt expertise as to make the 3545
operation of the provider hazardous to potential and existing 3546
residents; 3547
3. Is so lacking in management experience, ability, and 3548
standing as to jeopardize the reasonable promise of successful 3549
operation; 3550
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4. Is affiliated, dir ectly or indirectly, through 3551
ownership or control, with any person whose business operations 3552
are or have been marked by business practices or conduct that is 3553
detrimental to the public, contract holders, investors, or 3554
creditors; by manipulation of assets, f inances, or accounts; or 3555
by bad faith; or 3556
5. Has business operations marked by business practices or 3557
conduct that is detrimental to the public, contract holders, 3558
investors, or creditors; by manipulation of assets, finances, or 3559
accounts; or by bad faith. 3560
(r) Failing to file a notice of change in management, 3561
failing to remove a disapproved manager, or persisting in 3562
appointing disapproved managers. 3563
(2) Revocation of a management company's certificate of 3564
authority under this section does not relieve a pro vider of the 3565
provider's obligation to residents under the terms and 3566
conditions of any continuing care or continuing care at -home 3567
contract between the provider and residents or this chapter. The 3568
management company shall continue to file its annual statement 3569
and pay license fees to the office as required under this 3570
chapter as if the certificate of authority had continued in full 3571
force, but the management company may not issue any new 3572
contracts on behalf of a provider. 3573
(3) The office may seek an action in th e circuit court of 3574
the Second Judicial Circuit, in and for Leon County, to enforce 3575
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the office's order and the provisions of this section. 3576
Section 72. Subsections (1), (4), (5), and (6) of section 3577
651.105, Florida Statutes, are amended to read: 3578
651.105 Examination.— 3579
(1) The office may at any time, and shall at least once 3580
every 3 years, examine the business of any applicant for a 3581
certificate of authority and any provider or management company 3582
engaged in the execution of care contracts or engaged in th e 3583
performance of obligations under such contracts, in the same 3584
manner as is provided for the examination of insurance companies 3585
pursuant to ss. 624.316 and 624.318. For a provider or 3586
management company as deemed accredited under s. 651.028, such 3587
examinations must take place at least once every 5 years. An 3588
examination covering the preceding 3 or 5 fiscal years of the 3589
provider or management company , as applicable, must be commenced 3590
within 12 months after the end of the most recent fiscal year 3591
covered by the examination. Such examination may include events 3592
subsequent to the end of the most recent fiscal year and the 3593
events of any prior period which relate to possible violations 3594
of this chapter or which affect the present financial condition 3595
of the provider or management company. At least once every 3 or 3596
5 fiscal years, as applicable, the office shall conduct an 3597
interview in person, telephonically, or through electronic 3598
communication with the current president or chair of the 3599
residents' council, or another design ated officer of the council 3600
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if the president or chair is not available, as part of the 3601
examination process. The examinations must be made by a 3602
representative or examiner designated by the office whose 3603
compensation will be fixed by the office pursuant to s. 624.320. 3604
Routine examinations may be made by having the necessary 3605
documents submitted to the office ,; and, for this purpose, 3606
financial documents and records conforming to commonly accepted 3607
accounting principles and practices, as required under s. 3608
651.026, are deemed adequate. The final written report of each 3609
examination must be filed with the office and, when so filed, 3610
constitutes a public record. Any provider or management company 3611
being examined shall, upon request, give reasonable and timely 3612
access to all of its records. The representative or examiner 3613
designated by the office may at any time examine the records and 3614
affairs and inspect the physical property of any provider or 3615
management company, whether in connection with a formal 3616
examination or not. 3617
(4) The office shall notify the provider or management 3618
company and the executive officer of the governing body of the 3619
provider or management company in writing of all deficiencies in 3620
its compliance with the provisions of this chapter and the rules 3621
adopted pursuant to this chapter and shall set a reasonable 3622
length of time for compliance by the provider or management 3623
company. In addition, the office shall require corrective action 3624
or request a corrective action plan from the provider or 3625
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management company which plan demonstrates a good faith attempt 3626
to remedy the deficiencies by a specified date. If the provider 3627
or management company fails to comply within the established 3628
length of time, the office may initiate action against the 3629
provider or management company in accordance with the provisions 3630
of this chapter. 3631
(5) A provider or management company shall respond to 3632
written correspondence from the office and provide data, 3633
financial statements, and pertinent information as requested by 3634
the office. The office has sta nding to petition a circuit court 3635
for mandatory injunctive relief to compel access to and require 3636
the provider or management company to produce the documents, 3637
data, records, and other information requested by the office. 3638
The office may petition the circuit court in the county in which 3639
the facility is situated or the Circuit Court of Leon County to 3640
enforce this section. 3641
(6) Unless a provider is impaired or subject to a 3642
regulatory action level event, any parent, subsidiary, or 3643
affiliate is not subject to ex amination by the office as part of 3644
a routine examination. However, If a provider, or facility, or 3645
management company relies on a contractual or financial 3646
relationship with a parent, a subsidiary, or an affiliate in 3647
order to meet the financial requirements of this chapter, the 3648
office may examine any parent, subsidiary, or affiliate that has 3649
a contractual or financial relationship with the provider , or 3650
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facility, or management company to the extent necessary to 3651
ascertain the financial condition of the provider or management 3652
company. For any provider that has been placed into 3653
administrative supervision under s. 651.018, any parent, 3654
subsidiary, or affiliate is subject to examination by t he 3655
office. 3656
Section 73. Section 651.1065, Florida Statutes, is amended 3657
to read: 3658
651.1065 Soliciting or accepting new continuing care 3659
contracts by impaired or insolvent facilities or providers. — 3660
(1) Regardless of whether delinquency proceedings as to a 3661
continuing care facility have been or are to be initiated, a 3662
proprietor, a general partner, a member, an officer, a director, 3663
a trustee, or a manager, or a management company of a continuing 3664
care facility may not actively solicit, approve the solicitation 3665
or acceptance of, or accept new continuing care contracts in 3666
this state after the proprietor, general partner, member, 3667
officer, director, trustee, or manager, or a management company 3668
knew, or reasonably should have known, that the continuing care 3669
facility was impaired or insolvent except with the written 3670
permission of the office. If the facility has declared 3671
bankruptcy, the bankruptcy court or trustee appointed by the 3672
court has jurisdiction over suc h matters. The office must 3673
approve or disapprove the continued marketing of new contracts 3674
within 15 days after receiving a request from a provider. 3675
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(2) A proprietor, a general partner, a member, an officer, 3676
a director, a trustee, or a manager, or a management company 3677
that who violates this section commits a felony of the third 3678
degree, punishable as provided in s. 775.082, s. 775.083, or s. 3679
775.084. 3680
Section 74. Section 651.1068, Florida Statutes, is created 3681
to read: 3682
651.1068 Officers and directors of insolvent providers or 3683
management companies. —Any person who was an officer or director 3684
of a provider or management company doing business in this state 3685
and who served in that capacity within the 2 -year period before 3686
the date the provider or management com pany became insolvent, 3687
for any insolvency that occurs on or after July 1, 2025, may not 3688
thereafter serve as an officer or director of a provider or 3689
management company authorized in this state or have direct or 3690
indirect control over the selection or appoint ment of an officer 3691
or director of a provider or management company through contract 3692
or trust or by operation of law, unless the officer or director 3693
demonstrates that his or her personal actions or omissions were 3694
not a significant contributing cause to the insolvency. 3695
Section 75. Subsections (2) and (3) of section 651.107, 3696
Florida Statutes, are amended to read: 3697
651.107 Duration of suspension; obligations during 3698
suspension period; reinstatement. — 3699
(2) During the period of suspension, the provider or 3700
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management company shall file its annual statement and pay 3701
license fees and taxes as required under this chapter as if the 3702
certificate had continued in full force ,; but the provider shall 3703
issue no new contracts. 3704
(3) Upon expiration of the suspension period , if within 3705
such period the certificate of authority has not otherwise 3706
terminated, the provider's or management company's certificate 3707
of authority shall automatically be reinstated unless the office 3708
finds that the causes for the suspension have not been re moved 3709
or that the provider or management company is otherwise not in 3710
compliance with the requirements of this chapter. If not so 3711
automatically reinstated, the certificate of authority shall be 3712
deemed to be revoked as of the end of the suspension period or 3713
upon failure of the provider or management company to continue 3714
the certificate during the suspension period, whichever event 3715
first occurs. 3716
Section 76. Subsection (2) of section 651.108, Florida 3717
Statutes, is amended to read: 3718
651.108 Administrative fin es.— 3719
(2) If it is found that the provider or management company 3720
has knowingly and willfully violated a lawful order of the 3721
office or a provision of this chapter, the office may impose a 3722
fine of up to in an amount not to exceed $10,000 for each such 3723
violation. 3724
Section 77. Section 651.113, Florida Statutes, is created 3725
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to read: 3726
651.113 Hazardous facility or provider standards; office's 3727
evaluation and enforcement authority; immediate final order. — 3728
(1) As used in this section, the term "negative fund 3729
balance" means a financial position of a provider or facility in 3730
which the assets of a provider or facility do not exceed its 3731
liabilities as required under generally accepted accounting 3732
principles. The Commissioner of Insurance Regulation may deem a 3733
provider or facility that has a negative fund balance to be 3734
insolvent or in imminent danger of becoming insolvent if any of 3735
the following hazardous financial condition standards or factors 3736
is applicable or present: 3737
(a) The provider's or facility's financial sta tements 3738
contain findings or conditions that the commissioner considers 3739
detrimental to its financial stability. 3740
(b) An independent auditor has identified significant 3741
financial risks or issued a going concern opinion. 3742
(c) The provider's or facility's cur rent or projected 3743
ratio of total assets, including required reserves, to total 3744
liabilities indicates financial impairment or deterioration, or 3745
trends suggest a potential decline in operations, working 3746
capital, or equity. 3747
(d) The provider's or facility's current or projected 3748
ratio of current assets to current liabilities indicates 3749
financial impairment or deterioration, or trends suggest a 3750
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potential decline in operations, working capital, or equity. 3751
(e) The provider or facility is unable to carry out norm al 3752
daily activities and meet its obligations as they become due, 3753
based on its current or projected cash flow and liquidity 3754
position. 3755
(f) The provider's or facility's past -year operating 3756
losses or projected operating losses are significant enough to 3757
jeopardize daily operations or long -term viability. 3758
(g) The insolvency of an affiliated provider or facility 3759
or other affiliated person results in legal liability of the 3760
provider or facility for payments and expenses of such magnitude 3761
as to jeopardize the pro vider's or facility's ability to meet 3762
its obligations as they become due, without substantial 3763
disposition of assets outside the ordinary course of business, 3764
any restructuring of debt, or externally forced revisions of its 3765
operations. 3766
(h) The provider or facility has receivables that are more 3767
than 90 days past due. 3768
(i) The insolvency is not temporary and the provider or 3769
facility cannot demonstrate a significant reduction or 3770
resolution of the financial shortfall. 3771
(j) The provider or facility faces finan cial difficulties 3772
due to reporting entrance fees as deferred revenue, factoring in 3773
generally accepted accounting principles and the overall impact 3774
on net income. 3775
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(k) A startup provider, a facility undergoing plant 3776
expansion, or an entity refinancing its debt has developed a 3777
financial condition that could seriously jeopardize current or 3778
future operation. 3779
(2) The provider or facility shall prepare a plan to 3780
address and correct any condition that has led to a 3781
determination of insolvency or imminent danger of insolvency by 3782
the Commissioner of Insurance Regulation. The plan must be 3783
presented to the commissioner within 30 days after the date of 3784
the insolvency determination. If the plan to correct the 3785
condition is disapproved by the commissioner, if the plan do es 3786
not correct the condition leading to the commissioner's 3787
determination of insolvency, or if the provider's or facility's 3788
hazardous condition is such that it cannot be significantly 3789
corrected or eliminated, the commissioner may proceed with 3790
liquidation under chapter 631. 3791
(3) If the office determines that the continued operations 3792
of a provider or facility authorized to transact business in 3793
this state may be hazardous to its residents or to the general 3794
public, the office may issue an order requiring the pr ovider or 3795
facility to do any of the following: 3796
(a) Obtain additional financing or revenues to maintain 3797
solvency. 3798
(b) Reduce expenses by specified methods or amounts. 3799
(c) Increase the operating reserve. 3800
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(d) File reports in a form acceptable to the office 3801
concerning the market value of the provider's or facility's 3802
assets. 3803
(e) Limit or withdraw from certain investments or 3804
discontinue certain investment practices to the extent the 3805
office deems necessary. 3806
(f) Document the adequacy of income and oper ating reserves 3807
in relation to expenses. 3808
(g) File, in addition to regular annual statements, 3809
interim financial reports on a form prescribed by the 3810
commission. 3811
(h) Correct corporate governance practice deficiencies and 3812
adopt and use governance practices acceptable to the office. 3813
(i) Provide a business plan acceptable to the office in 3814
order to continue to transact business in this state. 3815
(j) Notwithstanding any other law limiting the frequency 3816
or amount of rate adjustments, adjust rates for any non -life 3817
insurance product written by the insurer which the office 3818
considers necessary to improve the financial condition of the 3819
insurer. 3820
(4) The office may, pursuant to ss. 120.569 and 120.57, in 3821
its discretion and without advance notice or hearing, issue an 3822
immediate final order to any insurer requiring the actions 3823
specified in subsection (3). 3824
(5) This section may not be interpreted to limit the 3825
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powers granted to the office by any laws of this state, nor may 3826
it be interpreted to supersede any laws of this st ate. 3827
Section 78. Subsection (11) of section 651.114, Florida 3828
Statutes, is amended to read: 3829
651.114 Delinquency proceedings; remedial rights. — 3830
(11)(a) The rights of the office described in this section 3831
are subordinate to the rights of a trustee or l ender pursuant to 3832
the terms of a resolution, ordinance, loan agreement, indenture 3833
of trust, mortgage, lease, security agreement, or other 3834
instrument creating or securing bonds or notes issued to finance 3835
a facility, and the office, subject to paragraph (c), may not 3836
exercise its remedial rights provided under this section and ss. 3837
651.018, 651.106, 651.108, and 651.116 with respect to a 3838
facility that is subject to a lien, mortgage, lease, or other 3839
encumbrance or trust indenture securing bonds or notes issued i n 3840
connection with the financing of the facility, if the trustee or 3841
lender, by inclusion or by amendment to the loan documents or by 3842
a separate contract with the office, agrees that the rights of 3843
residents under a continuing care or continuing care at -home 3844
contract will be honored and will not be disturbed by a 3845
foreclosure or conveyance in lieu thereof as long as the 3846
resident: 3847
1. Is current in the payment of all monetary obligations 3848
required by the contract; 3849
2. Is in compliance and continues to comply wi th all 3850
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provisions of the contract; and 3851
3. Has asserted no claim inconsistent with the rights of 3852
the trustee or lender. 3853
(b) This subsection does not require a trustee or lender 3854
to: 3855
1. Continue to engage in the marketing or resale of new 3856
continuing care or continuing care at -home contracts; 3857
2. Pay any rebate of entrance fees as may be required by a 3858
resident's continuing care or continuing care at -home contract 3859
as of the date of acquisition of the facility by the trustee or 3860
lender and until expiration of the period described in paragraph 3861
(d); 3862
3. Be responsible for any act or omission of any owner or 3863
operator of the facility arising before the acquisition of the 3864
facility by the trustee or lender; or 3865
4. Provide services to the residents to the extent that 3866
the trustee or lender would be required to advance or expend 3867
funds that have not been designated or set aside for such 3868
purposes. 3869
(c) If the office determines, at any time during the 3870
suspension of its remedial rights as provided in paragraph (a), 3871
that: 3872
1. The trustee or lender is not in compliance with 3873
paragraph (a); 3874
2. A lender or trustee has assigned or has agreed to 3875
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assign all or a portion of a delinquent or defaulted loan to a 3876
third party without the office's written consent; 3877
3. The provider engaged in the misappropriation, 3878
conversion, or illegal commitment or withdrawal of minimum 3879
liquid reserve or escrowed funds required under this chapter; 3880
4. The provider refused to be examined by the office 3881
pursuant to s. 651.105(1); or 3882
5. The provider refused to produce any relevant accounts, 3883
records, and files requested as part of an examination, 3884
3885
the office shall notify the trustee or lender in writing of its 3886
determination, setting forth the reasons giving rise to the 3887
determination and specifying those remedial rights afforded to 3888
the office which the office shall then reinstate. 3889
(d) Upon acquisition of a facility by a trustee or lender 3890
and evidence satisfactory to the office that the requirements of 3891
paragraph (a) have been met, the office shall i ssue a 90-day 3892
temporary certificate of authority granting the trustee or 3893
lender the authority to engage in the business of providing 3894
continuing care or continuing care at -home and to issue 3895
continuing care or continuing care at -home contracts subject to 3896
the office's right to immediately suspend or revoke the 3897
temporary certificate of authority if the office determines that 3898
any of the grounds described in s. 651.106 apply to the trustee 3899
or lender or that the terms of the contract used as the basis 3900
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for the issuance of the temporary certificate of authority by 3901
the office have not been or are not being met by the trustee or 3902
lender since the date of acquisition. 3903
Section 79. Section 651.1165, Florida Statutes, is created 3904
to read: 3905
651.1165 Recording of lien by the office.— 3906
(1) The office shall, as a condition to granting a 3907
provisional certificate of authority to an applicant, record 3908
with the county recorder of any county a notice of lien against 3909
the facility's properties on behalf of all residents and 3910
contract holders who enter into life care contracts with the 3911
applicant to secure performance of the provider's obligations to 3912
residents and contract holders pursuant to life care contracts. 3913
(2) From the time of the recording under subsection (1), 3914
there exists a lien for an amount equal to the reasonable value 3915
of services to be performed under a life care contract in favor 3916
of each resident and contract holder on the land and 3917
improvements of the facility's properties owned by the provider, 3918
not exempt from execution , which are listed in the notice of 3919
lien filed pursuant to subsection (3) and which are located in 3920
the county in which the notice of lien is recorded. 3921
(3) The lien shall be perfected by the office by executing 3922
by affidavit the notice and claim of lien, w hich must contain: 3923
(a) The legal description of the lands and improvements to 3924
be charged with a lien. 3925
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(b) The name of the owner of the property affected. 3926
(c) A statement that the lien has been filed by the office 3927
pursuant to this section. 3928
(4) The lien may be released or partially released at the 3929
request of the applicant if, in the judgment of the director, 3930
such release or partial release inures to the benefit of the 3931
residents and contract holders and the performance of the 3932
provider's obligations to the residents and contract holders. 3933
(5) The lien may be foreclosed by civil action. Any number 3934
of persons claiming liens against the same property pursuant to 3935
this section may join in the same action. If separate actions 3936
are commenced, the court may cons olidate such actions. The court 3937
shall, as part of the costs, allow reasonable attorney fees for 3938
each claimant who is a party to the action. 3939
(6) In a civil action filed pursuant to this section, the 3940
judgment must be entered in favor of each resident and c ontract 3941
holder having a lien who has joined in the foreclosure action 3942
for the amount equal to the reasonable value of services to be 3943
performed under a life care contract in favor of each resident 3944
and contract holder. The court shall order the sheriff to se ll 3945
any property subject to the lien at the time judgment is given, 3946
in the same manner as real and personal property is sold on 3947
execution. The lien for the reasonable value of services to be 3948
performed under a life care contract must be on equal footing 3949
with claims of other residents and contract holders. If a sale 3950
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is ordered and the property sold and the proceeds of the sale 3951
are not sufficient to discharge all liens of residents and 3952
contract holders against the property, the proceeds must be 3953
prorated among the respective residents and contract holders. 3954
(7) The lien provided for in this section is preferred to 3955
all liens, mortgages, or other encumbrances upon the property 3956
attaching subsequently to the time the lien is recorded and is 3957
preferred to all unrecord ed liens, mortgages, and other 3958
encumbrances. The amount secured by any lien having priority to 3959
the lien filed pursuant to this section may not be increased 3960
without prior approval of the office. 3961
(8) The office shall file a release of the lien upon proof 3962
of complete performance of all obligations to residents and 3963
contract holders pursuant to life care contracts. 3964
(9) The office may subordinate any lien filed pursuant to 3965
this section to the lien of a first mortgage or other long -term 3966
financing obtained by the provider, regardless of the time at 3967
which the subsequent lien attaches. 3968
Section 80. Subsection (3) of section 627.642, Florida 3969
Statutes, is amended to read: 3970
627.642 Outline of coverage. — 3971
(3) In addition to the outline of coverage, a policy as 3972
specified in s. 627.6699(3)(j) s. 627.6699(3)(k) must be 3973
accompanied by an identification card that contains, at a 3974
minimum: 3975
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(a) The name of the organization issuing the policy or the 3976
name of the organization administering the policy, whichever 3977
applies. 3978
(b) The name of the contract holder. 3979
(c) The type of plan only if the plan is filed in the 3980
state, an indication that the plan is self -funded, or the name 3981
of the network. 3982
(d) The member identification number, contract number, and 3983
policy or group number, if applicable. 3984
(e) A contact phone number or electronic address for 3985
authorizations and admission certifications. 3986
(f) A phone number or electronic address whereby the 3987
covered person or hospital, physician, or other person rendering 3988
services covered by the policy may obtain benefits verification 3989
and information in order to estimate patient financial 3990
responsibility, in compliance with privacy rules under the 3991
Health Insurance Portability and Accountability Act. 3992
(g) The national plan identifier, in accord ance with the 3993
compliance date set forth by the federal Department of Health 3994
and Human Services. 3995
3996
The identification card must present the information in a 3997
readily identifiable manner or, alternatively, the information 3998
may be embedded on the card and availa ble through magnetic 3999
stripe or smart card. The information may also be provided 4000
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through other electronic technology. 4001
Section 81. Paragraph (a) of subsection (2), paragraphs 4002
(a), (e), and (g) of subsection (7), and paragraph (a) of 4003
subsection (8) of section 627.6475, Florida Statutes, are 4004
amended to read: 4005
627.6475 Individual reinsurance pool. — 4006
(2) DEFINITIONS.—As used in this section: 4007
(a) "Board," "Carrier," and "health benefit plan" have the 4008
same meaning ascribed in s. 627.6699(3). 4009
(7) INDIVIDUAL HEALTH REINSURANCE PROGRAM. — 4010
(a) The individual health reinsurance program shall 4011
operate subject to the supervision and control of the board of 4012
the small employer health reinsurance program established 4013
pursuant to s. 627.6699(11) . The board shall es tablish a 4014
separate, segregated account for eligible individuals reinsured 4015
pursuant to this section, which account may not be commingled 4016
with the small employer health reinsurance account. 4017
(e)1. Before March 1 of each calendar year, the board 4018
shall determine and report to the office the program net loss in 4019
the individual account for the previous year, including 4020
administrative expenses for that year and the incurred losses 4021
for that year, taking into account investment income and other 4022
appropriate gains and losses. 4023
2. Any net loss in the individual account for the year 4024
shall be recouped by assessing the carriers as follows: 4025
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a. The operating losses of the program shall be assessed 4026
in the following order subject to the specified limitations. The 4027
first tier of assessments shall be made against reinsuring 4028
carriers in an amount that may not exceed 5 percent of each 4029
reinsuring carrier's premiums for individual health insurance. 4030
If such assessments have been collected and additional moneys 4031
are needed, the board s hall make a second tier of assessments in 4032
an amount that may not exceed 0.5 percent of each carrier's 4033
health benefit plan premiums. 4034
b. Except as provided in paragraph (f), risk -assuming 4035
carriers are exempt from all assessments authorized pursuant to 4036
this section. The amount paid by a reinsuring carrier for the 4037
first tier of assessments shall be credited against any 4038
additional assessments made. 4039
c. The board shall equitably assess reinsuring carriers 4040
for operating losses of the individual account based on market 4041
share. The board shall annually assess each carrier a portion of 4042
the operating losses of the individual account. The first tier 4043
of assessments shall be determined by multiplying the operating 4044
losses by a fraction, the numerator of which equals the 4045
reinsuring carrier's earned premium pertaining to direct 4046
writings of individual health insurance in the state during the 4047
calendar year for which the assessment is levied, and the 4048
denominator of which equals the total of all such premiums 4049
earned by reinsuring carriers in the state during that calendar 4050
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year. The second tier of assessments shall be based on the 4051
premiums that all carriers, except risk -assuming carriers, 4052
earned on all health benefit plans written in this state. The 4053
board may levy interim assessm ents against reinsuring carriers 4054
to ensure the financial ability of the plan to cover claims 4055
expenses and administrative expenses paid or estimated to be 4056
paid in the operation of the plan for the calendar year prior to 4057
the association's anticipated receipt of annual assessments for 4058
that calendar year. Any interim assessment is due and payable 4059
within 30 days after receipt by a carrier of the interim 4060
assessment notice. Interim assessment payments shall be credited 4061
against the carrier's annual assessment. Heal th benefit plan 4062
premiums and benefits paid by a carrier that are less than an 4063
amount determined by the board to justify the cost of collection 4064
may not be considered for purposes of determining assessments. 4065
d. Subject to the approval of the office, the bo ard shall 4066
adjust the assessment formula for reinsuring carriers that are 4067
approved as federally qualified health maintenance organizations 4068
by the Secretary of Health and Human Services pursuant to 42 4069
U.S.C. s. 300e(c)(2)(A) to the extent, if any, that restr ictions 4070
are placed on them which are not imposed on other carriers. 4071
3. Before March 1 of each year, the board shall determine 4072
and file with the office an estimate of the assessments needed 4073
to fund the losses incurred by the program in the individual 4074
account for the previous calendar year. 4075
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4. If the board determines that the assessments needed to 4076
fund the losses incurred by the program in the individual 4077
account for the previous calendar year will exceed the amount 4078
specified in subparagraph 2., the board shall evaluate the 4079
operation of the program and report its findings and 4080
recommendations to the office in the format established in s. 4081
627.6699(11) for the comparable report for the small employer 4082
reinsurance program. 4083
(g) Except as otherwise provided in t his section, the 4084
board and the office shall have all powers, duties, and 4085
responsibilities with respect to carriers that issue and 4086
reinsure individual health insurance, as specified for the board 4087
and the office in s. 627.6699(11) with respect to small emplo yer 4088
carriers, including, but not limited to , the provisions of s. 4089
627.6699(11) relating to : 4090
1. Use of assessments that exceed the amount of actual 4091
losses and expenses. 4092
2. The annual determination of each carrier's proportion 4093
of the assessment. 4094
3. Interest for late payment of assessments. 4095
4. Authority for the office to approve deferment of an 4096
assessment against a carrier. 4097
5. Limited immunity from legal actions or carriers. 4098
6. Development of standards for compensation to be paid to 4099
agents. Such standards shall be limited to those specifically 4100
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enumerated in s. 627.6699(11)(d) s. 627.6699(12)(d). 4101
7. Monitoring compliance by carriers with this section. 4102
(8) STANDARDS TO ASSURE FAIR MARKETING. — 4103
(a) Each health insurance issuer that offers individu al 4104
health insurance shall actively market coverage to eligible 4105
individuals in the state. The provisions of s. 627.6699(11) s. 4106
627.6699(12) that apply to small employer carriers that market 4107
policies to small employers shall also apply to health insurance 4108
issuers that offer individual health insurance with respect to 4109
marketing policies to individuals. 4110
Section 82. Subsection (2) of section 627.657, Florida 4111
Statutes, is amended to read: 4112
627.657 Provisions of group health insurance policies. — 4113
(2) The medical policy as specified in s. 627.6699(3)(j) 4114
s. 627.6699(3)(k) must be accompanied by an identification card 4115
that contains, at a minimum: 4116
(a) The name of the organization issuing the policy or 4117
name of the organization administering the policy, whichever 4118
applies. 4119
(b) The name of the certificateholder. 4120
(c) The type of plan only if the plan is filed in the 4121
state, an indication that the plan is self -funded, or the name 4122
of the network. 4123
(d) The member identification number, contract number, and 4124
policy or group number, if applicable. 4125
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(e) A contact phone number or electronic address for 4126
authorizations and admission certifications. 4127
(f) A phone number or electronic address whereby the 4128
covered person or hospital, physician, or other person rendering 4129
services covered by the policy may obtain benefits verification 4130
and information in order to estimate patient financial 4131
responsibility, in compliance with privacy rules under the 4132
Health Insurance Portability and Accountability Act. 4133
(g) The national plan identif ier, in accordance with the 4134
compliance date set forth by the federal Department of Health 4135
and Human Services. 4136
4137
The identification card must present the information in a 4138
readily identifiable manner or, alternatively, the information 4139
may be embedded on the c ard and available through magnetic 4140
stripe or smart card. The information may also be provided 4141
through other electronic technology. 4142
Section 83. Subsection (1) of section 627.66997, Florida 4143
Statutes, is amended to read: 4144
627.66997 Stop-loss insurance.— 4145
(1) A self-insured health benefit plan established or 4146
maintained by a small employer, as defined in s. 627.6699(3)(s) 4147
s. 627.6699(3)(v), is exempt from s. 627.6699 and may use a 4148
stop-loss insurance policy issued to the employer. For purposes 4149
of this subsection, the term "stop -loss insurance policy" means 4150
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an insurance policy issued to a small employer which covers the 4151
small employer's obligation for the excess cost of medical care 4152
on an equivalent basis per employee provided under a self -4153
insured health benefit plan. 4154
(a) A small employer stop -loss insurance policy is 4155
considered a health insurance policy and is subject to s. 4156
627.6699 if the policy has an aggregate attachment point that is 4157
lower than the greatest of: 4158
1. Two thousand dollars multiplied by t he number of 4159
employees; 4160
2. One hundred twenty percent of expected claims, as 4161
determined by the stop -loss insurer in accordance with actuarial 4162
standards of practice; or 4163
3. Twenty thousand dollars. 4164
(b) Once claims under the small employer health benefi t 4165
plan reach the aggregate attachment point set forth in paragraph 4166
(a), the stop-loss insurance policy authorized under this 4167
section must cover 100 percent of all claims that exceed the 4168
aggregate attachment point. 4169
Section 84. Reciprocal insurers licens ed before July 1, 4170
2025, have until July 1, 2026, to comply with the changes made 4171
to subscribers' advisory committees in s. 629.201, Florida 4172
Statutes. Reciprocal insurers licensed before July 1, 2025, have 4173
until July 1, 2027, to comply with the changes made to unearned 4174
premium reserve requirements imposed under s. 629.56, Florida 4175
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Statutes. 4176
Section 85. Except as otherwise expressly provided in this 4177
act and except for this section, which shall take effect upon 4178
this act becoming a law, this act shall take e ffect July 1, 4179
2025. 4180