STORAGE NAME: h1433a.IBS
DATE: 4/11/2025
1
FLORIDA HOUSE OF REPRESENTATIVES
BILL ANALYSIS
This bill analysis was prepared by nonpartisan committee staff and does not constitute an official statement of legislative intent.
BILL #: CS/HB 1433
TITLE: Hurricane Mitigation Grants and Insurers'
Regulations
SPONSOR(S): Benarroch
COMPANION BILL: CS/SB 1740 (Ingoglia)
LINKED BILLS: None
RELATED BILLS: None
Committee References
Insurance & Banking
16 Y, 0 N, As CS
Budget
Commerce
SUMMARY
Effect of the Bill:
The bill:
Provides that a hurricane mitigation grant under the My Safe Florida Home Program may be awarded only
for each mitigation improvement that will result in a property insurance premium mitigation credit,
discount, or other rate differential and requires the Department of Financial Services to mandate
improvements to all openings as a condition of reimbursing a homeowner approved for a grant if
determined necessary.
Increases minimum surplus requirements for certain residential property insurers and provides staggered
dates for existing insurers to meet the new requirements.
Prohibits a person who was an officer or director of an insolvent insurer or the attorney in fact or officer or
director of the attorney in fact for an insolvent reciprocal insurer within 5 years of such insolvency from
thereafter serving certain leadership roles and prohibits payments to a managing general agent, affiliate, or
attorney in fact that has such a person occupying a director, officer, or attorney in fact position until OIR
determines the violation has been remedied.
Reduces potential delays in the effectiveness of residential property insurance rate decreases by limiting
when the Office of Insurance Regulation (OIR) can request a waiver of deemed approval or issue a notice of
intent to disapprove such filings.
Establishes a statutory framework governing the use of artificial intelligence in claims handling.
Fiscal or Economic Impact:
None.
JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
ANALYSIS
EFFECT OF THE BILL:
Hurricane Mitigation Grants
The bill provides that a hurricane mitigation grant under the My Safe Florida Home Program may be awarded only
for each mitigation improvement that will result in a property insurance premium mitigation credit, discount, or
other rate differential. (Section 1).
The bill provides that if necessary for the home to qualify for a mitigation credit, discount, or other rate differential,
the Department of Financial Services (DFS) is required to mandate improvements to all openings including exterior
doors, garage doors, windows, and skylights, as a condition of reimbursing a homeowner approved for a grant.
(Section 1).
Surplus Requirement for New Residential Property Insurers (Section 2)
The bill increases the minimum surplus requirement for a new domestic insurer as follows: JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
2
$35 million for an insurer that transacts residential property insurance and is not a wholly owned
subsidiary of an insurer domiciled in any other state (up from $15 million).
$12.5 million for an insurer that only transacts limited sinkhole coverage insurance for personal lines
residential property (up from $7.5 million).
$15 million for an insurer that only transacts residential property insurance in the form of renter’s
insurance, tenant’s coverage, cooperative unit owner insurance, or any combination thereof (up from $10
million).
Surplus Requirement for Residential Property Insurers (Section 4)
The bill provides that the minimum surplus requirement for existing residential property insurers is:
$35 million for insurers not holding a certificate of authority before July 1, 2025;
$15 million for insurers holding a certificate of authority before July 1, 2025, and until June 30, 2030;
$25 million for insurers holding a certificate of authority on or after July 1, 2030, and until June 30, 2035;
and
$35 million for insurers holding a certificate of authority on or after July 1, 2035.
The bill provides that the minimum surplus requirement for a domestic insurer that only transacts limited sinkhole
coverage insurance for personal lines residential property is:
$12.5 million for an insurer that does not hold a certificate of authority before July 1, 2025.
$7.5 million for an insurer holding a certificate of authority before July 1, 2025, and until June 30, 2030
$10 million for an insurer holding a certificate of authority on or after July 1, 2030 and until June 30, 2035.
$12.5 million for an insurer holding a certificate of authority on or after July 1, 2025.
Officers and Directors of Insolvent Insurers (Section 3)
The bill amends existing provisions limiting an officer or director of an insurer who served in that capacity within
the 2-year period before the date the insurer became insolvent from serving in certain positions of authority to
apply to insolvencies that occurred on or after July 1, 2002, but before July 1, 2025.
The bill provides that any person who was an officer or director of an insurer doing business in this state, the
attorney in fact of a reciprocal insurer doing business in this state, or an officer or director of an attorney in fact of
a reciprocal insurer doing business in this state and who served in that capacity within the 5-year period before
the date such insurer or reciprocal insurer became insolvent, for any insolvency that occurs on or after July 1,
2025, may not thereafter do any of the following:
Serve as an officer or a director of an insurer authorized in this state.
Serve as an officer or a director of a managing general agent of an insurer authorized in this state.
Serve as an attorney in fact or as an officer or a director of the attorney in fact of a reciprocal insurer
authorized in this state.
Serve as an officer or a director of an affiliate of an insurer authorized in this state which provides services
to such insurer.
Exercise direct or indirect control through contract, trust, or by operation of law over the selection or
appointment of any position specified above.
The bill provides that these prohibitions do not apply if the officer, director, or attorney in fact demonstrates, and
the OIR determines, that his or her personal actions or omissions were not a significant contributing cause to the
insolvency.
For any violation of the prohibitions described above, the OIR must prohibit an insurer or reciprocal insurer
authorized in this state from paying any compensation to a managing general agent, affiliate, or attorney in fact
that has an officer or director or is an attorney in fact that engaged in such violation until OIR determines the
violation has been remedied.
Rate Regulation Procedures
The bill prohibits the OIR from requesting that an insurer waive the “deemed approval” of a rate filing when the
filing proposes a rate decrease, as long as the decrease is not solely the result of a reduction in coverage or changes
to policy forms. Additionally, the OIR may not issue a notice of intent to disapprove a residential property JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
3
insurance rate filing that includes a proposed rate decrease unless it has completed a finalized review of the filing.
(Section 5).
Use of AI in Claims Handling
The bill creates a statutory framework regulating the use of algorithms
1, artificial intelligence (AI) systems
2, and
machine learning systems
3 in insurance claims handling. The bill allows insurers to use these technologies—
including systems that can make predictions or generate recommendations—to assist in processing claims.
However, it prohibits the denial of a claim—or any portion of a claim—based solely on the output of such systems.
A final denial decision must be made and documented by a qualified human professional
4 who independently
analyzes the claim, reviews the policy terms, and verifies the accuracy of any automated recommendations.
Additionally, the bill requires insurers to maintain detailed records of claim denials, including the identity of the
human professional responsible for the decision, the timing of the decision and any reviews, and the specific basis
for denial. Any written communication to a claimant must identify the responsible human professional and affirm
that the claim was not denied solely based on algorithmic or AI output. Also, insurers using these systems must
include procedures for their use and compliance with this portion of the bill in their claims handling manuals. The
OIR is authorized to verify compliance through market conduct examinations or other lawful investigative
methods. (Section 6).
The bill provides an effective date of July 1, 2025. (Section 7).
RELEVANT INFORMATION
SUBJECT OVERVIEW:
My Safe Florida Home Program
Background
In 2006, the Legislature created the My Safe Florida Home Program (MSFH Program) within DFS, with the intent
that the MSFH Program provide licensed inspectors to perform inspections for owners of site-built, single-family,
residential properties and grants to eligible applicants, subject to the availability of funds.
5 Under the MSFH
Program, DFS must develop and implement a comprehensive and coordinated approach for hurricane damage
mitigation that may include hurricane mitigation inspections,
6 mitigation grants,
7 and education, consumer
awareness, and outreach.
8
Mitigation Grants
Financial grants under the MSFH Program are intended to encourage single-family, site-built, owner-occupied,
residential property owners to retrofit their properties to make them less vulnerable to hurricane damage.
9 For a
homeowner to be eligible for a grant, the following criteria must be met:
The homeowner must have been granted a homestead exemption on the home under ch. 196, F.S.;
10
The home must be a dwelling with an insured value of $700,000 or less;
11
1
The bill defines "Algorithm" to mean a clearly specified mathematical process for computation that uses rules designed to
give prescribed results.
2
The bill defines "Artificial intelligence system" to mean a machine-based system that may have varying levels of autonomy
and that can, for a given set of objectives, generate outputs such as predictions, recommendations, content, or other outputs
influencing decisions made in real or virtual environments.
3
The bill defines "Machine learning system" to mean an artificial intelligence system that has the ability to learn from provided
data without being explicitly programmed.
4
The bill defines "Qualified human professional" to mean an individual who, under the Florida Insurance Code, has authority
to adjust or deny a claim or a portion of a claim and has such authority over a particular claim.
5 S. 215.5586, F.S.
6 See s. 215.5586(1), F.S.
7 See s. 215.5586(2), F.S.
8 See s. 215.5586(3), F.S.
9 s. 215.5586(2), F.S.
10 Chapter 196, F.S., relates to, among other things, homestead exemptions. JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
4
The home must undergo an acceptable hurricane mitigation inspection under the MSFH Program;
The building permit application for initial construction of the home must have been made before January 1,
2008; and
The homeowner must agree to make his or her home available for inspection once a mitigation project is
completed.
12
An application for a grant must contain a signed or electronically verified statement, made under penalty of
perjury, that the applicant has submitted only a single application.
13 The application must include attachments that
demonstrate the applicant meets the requirements described above.
14
Residential Property Insurance Mitigation Credits, Discounts, or Other Rate Differentials
Residential property insurance rates must account for mitigation measures undertaken by policyholders to reduce
hurricane losses.
15 Specifically, insurer rate filings must include actuarially reasonable discounts, credits, or other
rate differentials or appropriate reductions in deductibles to consumers who implement windstorm damage
mitigation techniques to their properties.
16 Upon their filing by an insurer or rating organization, the Office of
Insurance Regulation (OIR) determines the discounts, credits, and other rate differentials.
17 Windstorm mitigation
measures that must be evaluated for purposes of mitigation discounts include fixtures or construction techniques
that enhance roof strength, roof covering performance, roof-to-wall strength, wall-to-floor-to-foundation strength,
opening protection, and window, door, and skylight strength.
18
An insurer is required to notify an applicant or policyholder of any personal lines residential property insurance
policy, at the time of the issuance of the policy and at each renewal, of the availability of each premium discount,
credit, other rate differential for properties on which fixtures or construction techniques demonstrated to reduce
the amount of loss in a windstorm can be or have been installed or implemented.
19 The Financial Services
Commission is required to develop a uniform mitigation verification inspection form to be used by all insurers
when submitted by policyholders for the purpose of factoring discounts for wind insurance.
20
Insurance Company Surplus
To transact insurance in Florida, insurers must apply for a certificate of authority and meet certain surplus
requirements. The surplus requirements for existing insurers are different than the requirements for new
insurers.
21
Surplus Requirement for New Residential Property Insurers
S. 624.407, F.S. establishes the surplus requirement for new insurers doing business in this state. The minimum
surplus requirement for a new domestic insurer that transacts residential property insurance is:
$15 million if not a wholly owned subsidiary of an insurer domiciled in any other state.
22
$50 million if a wholly owned subsidiary of an insurer domiciled in any other state.
23
The minimum surplus requirement for a domestic insurer that only transacts limited sinkhole coverage insurance
for personal lines residential property is $7.5 million.
24
11 Homeowners who are low-income persons, as defined s. 420.0004(11), F.S., are exempt from this requirement. The term “low-income
persons” is defined by s. 420.0004(11), F.S., as one or more natural persons or a family, the total annual adjusted gross household income of
which does not exceed 80% of the median annual adjusted gross income for households within the state, or 80% of the median annual
adjusted gross income for households within the metropolitan statistical area (MSA) or, if not within an MSA, within the county in which the
person or family resides, whichever is greater.
12 S. 215.5586(2)(a), F.S.
13 s. 215.5586(2), F.S.
14 Id.
15 s. 627.062(2)(j), F.S.
16 S. 627.0629(1), F.S.
17 Id.
18 Id.
19 S. 627.711(1), F.S.
20 S. 627.711(2)(a), F.S.
21 See ss. 624.407 and 624.408, F.S.
22 S. 624.407(1)(e)1, F.S.
23 S. 624.407(1)(e)2, F.S. JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
5
An insurer that only transacts residential property renter’s insurance, tenant’s coverage, or cooperative unit owner
insurance, or any combination thereof, must have a minimum surplus of $10 million.
25
Surplus Requirement for Existing Residential Property Insurers
S. 624.408, F.S. establishes the surplus requirement for existing insurers doing business in this state. The minimum
surplus requirement for existing residential property insurers is:
$15 million for residential property insurers not holding a certificate of authority before July 1, 2011;
$5 million for residential property insurers holding a certificate of authority before July 1, 2011, and until
June 30, 2016;
$10 million for residential property insurers holding a certificate of authority on or after July 1, 2016, and
until June 30, 2021; and
$15 million for residential property insurers holding a certificate of authority on or after July 1, 2021.
26
The minimum surplus requirement for a domestic insurer that only transacts limited sinkhole coverage insurance
for personal lines residential property is $7.5 million.
27
The minimum surplus requirement for an insurer that only transacts residential property insurance in the form of
renter’s insurance, tenant’s coverage, cooperative unit owner insurance, or any combination thereof, is $10
million.
28
Officers and Directors of Insolvent Insurers
The OIR has broad authority to deny, suspend, or revoke an insurer’s authority to transact insurance in Florida if it
finds the insurer’s officers or directors to be:
29
Incompetent or untrustworthy;
So lacking in insurance company managerial experience as to make the proposed operation hazardous to
the insurance-buying public;
So lacking in insurance experience, ability, and standing as to jeopardize the reasonable promise of
successful operation; or
Affiliated directly or indirectly through ownership, control, reinsurance transactions, or other insurance or
business relations, with any person or persons whose business operations are or have been marked, to the
detriment of policyholders, stockholders, investors, creditors, or the public, by manipulation of assets,
accounts, or reinsurance or by bad faith.
The OIR may not grant or continue authority to transact insurance to any insurer if any person, including any
subscriber, stockholder, or incorporator, who exercises or has the ability to exercise effective control of the
insurer, or who influences or has the ability to influence the transaction of the business of the insurer, does not
possess the financial standing and business experience for the successful operation of the insurer.
30
An officer or director of an insurer who served in that capacity within the 2-year period before the date the insurer
became insolvent may not serve as an officer or director of an insurer authorized in this state or have direct or
indirect control over the selection or appointment of an officer or director through contract, trust, or by operation
of law, unless the officer or director demonstrates to the OIR that his or her personal actions or omissions were not
a significant contributing cause to the insolvency.
31 This applies to any insolvency that occurs on or after July 1,
2002, but does not have a definite end date.
Regulation of Insurance Rates
24 S. 624.407(1)(f), F.S.
25 S. 624.407(1)(g), F.S.
26 S. 624.408(1), F.S.
27 S. 624.408(1)(h), F.S.
28 S. 624.408(1)(i), F.S.
29 S. 624.404(3)(a), F.S.
30 S. 624.404(3)(b), F.S.
31 S. 624.4073, F.S. JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
6
Part I of chapter 627, F.S., known as the Rating Law, governs property, casualty, and surety insurance covering
risks that are located in, resident in, or to be performed in Florida.
32 The Rating Law requires that rates for all
classes of insurance it governs must not be excessive, inadequate, or unfairly discriminatory.
33 Although the terms
“rate” and “premium” are often used interchangeably, the Rating Law distinguishes between them. A rate is the
unit charge that is multiplied by the measure of exposure or amount of insurance specified in the policy. This
calculation results in the premium, which is the amount paid by the consumer for coverage.
34
When a rate filing is submitted, the Office of Insurance Regulation (OIR) reviews it to determine whether the rate is
excessive, inadequate, or unfairly discriminatory. The OIR makes this determination using generally accepted
actuarial techniques and considers a variety of factors, including:
Past and prospective loss experience;
Past and prospective expenses;
The degree of competition among insurers for the risk insured;
Investment income reasonably expected by the insurer;
The reasonableness of the judgment reflected in the rate filing;
Dividends, savings, or unabsorbed premium deposits returned to policyholders;
The adequacy of loss reserves;
The cost of reinsurance;
Trend factors, including trends in actual losses per insured unit for the insurer;
Conflagration and catastrophe hazards;
Projected hurricane losses;
Projected flood losses, if the policy covers the risk of flood;
The cost of medical services, if applicable;
A reasonable margin for underwriting profit and contingencies; and
Other relevant factors that affect the frequency or severity of claims or expenses.
35
All insurers or rating organizations writing property or casualty insurance under this part must submit an annual
base rate filing for each applicable line of insurance. This filing must be submitted to the OIR no later than 12
months after the insurer’s previous base rate filing and must demonstrate that the rates are not inadequate.
36 If no
rate change is proposed, an insurer may satisfy the annual filing requirement by submitting a certification from an
actuary. The certification must state that the current rate levels are actuarially sound and not inadequate, as
defined in s. 627.062, F.S.
37
Waiver of Timelines
All insurers or rating organizations must file rates with the OIR in one of two ways:
"File and use": The filing is submitted at least 90 days before the proposed effective date.
"Use and file": The filing is submitted within 30 days after the new rate becomes effective.
38
For “file and use” filings, the rate is deemed approved if the OIR does not issue a notice of intent to approve or
disapprove within 90 days of receiving the filing.
39
Legal Waiver of Rights
As a general legal principle, a person may waive any right that:
Affects their own property;
32 s. 627.021(1), F.S.
33 s. 627.062(1), F.S.
34 s. 627.041, F.S.
35 s. 627.062(2)(b), F.S.
36 s. 627.0645(1), F.S.
37 Rates shall be deemed inadequate if they are clearly insufficient, together with the investment income attributable to them, to sustain
projected losses and expenses in the class of business to which they apply. Section 627.062(2)(e)3., F.S. A rate shall be deemed inadequate as
to the premium charged to a risk or group of risks if discounts or credits are allowed which exceed a reasonable reflection of expense
savings and reasonably expected loss experience from the risk or group of risks. S. 627.062(2)(3)5., F.S.
38 s. 627.062(2)(a), F.S.
39 s. 627.062(2)(a)1., F.S. JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
7
Belongs solely to them; and
Is not prohibited from being waived by law or public policy.
40
This includes rights that are secured by contract, granted by statute, or even guaranteed by the Constitution—so
long as the waiver does not interfere with the rights of others and is not contrary to public policy.
41
Artificial Intelligence in Claim Handling
Artificial intelligence (AI) is the development of computer systems to perform tasks that normally require human
intelligence, such as learning and decision-making.
42 It enables computer systems to receive information that is
either provided to them by others or gathered by them, which they can then process and respond to in some
meaningful way. To a certain extent, AI systems are capable of adapting their behavior by analyzing the effects of
previous actions and working autonomously.
43 AI technologies are also beginning to see increased use in certain
insurance operations, such as underwriting and claims handling.
44 Concerns about the potential misuse or
unintended consequences of AI have prompted efforts to examine and develop standards at the federal and state
levels.
45
Insurance Claims Adjusters
The DFS Division of Insurance Agent and Agency Services is responsible for the licensing and regulation of
insurance agents, adjusters, insurance agencies, as well as related personnel and business entities.
46 Current law
provides the following five adjuster licenses:
An all-lines adjuster,
Temporary license all-lines adjuster,
Public adjuster,
Public adjuster apprentice, and
Catastrophe or emergency adjuster.
47
A licensed all-lines adjuster may be appointed as an independent adjuster, or company employee adjuster, but not
concurrently as both.
48 An all-lines adjuster means a person who acts on behalf of an insurer to determine the
amount of and settle a claim (adjust).
49 An “independent adjuster” is defined as a person who is licensed as an all-
lines adjuster and who is self-appointed or works for an independent adjusting firm to adjust claims.
50 A “company
adjuster” is defined as a person who is licensed as an all-lines adjuster and who is appointed and employed by an
insurer to adjust claims.
51
OTHER RESOURCES:
My Safe Florida Home
40 AGO 077-41.
41 Schoeff v. R.J. Reynolds Tobacco Co., 232 So.3d 294 (Fla. 2017), citing DK Arena, Inc. v. EB Acquisitions I, LLC, 112 So.3d 85, 97 (Fla. 2013)
(quoting Gilman v. Butzloff, 155 Fla. 888, 22 So.2d 263, 265 (1945)).
42 National Conference of State Legislatures (NCSL), Artificial Intelligence 2023 Legislation, Jan. 12, 2024, https://www.ncsl.org/technology-
and-communication/artificial-intelligence-2023-legislation (last visited April 10, 2025).
43 European Parliament, What is artificial intelligence and how is it used?, E.U. News, Jun. 20, 2023, https://www.europarl.
europa.eu/news/en/headlines/society/20200827STO85804/what-is-artificial-intelligence-and-how-is-it-used (last visited April 10, 2025).
44 National Association of Insurance Commissioners, Model Bulletin on the Use of Artificial Intelligence Systems by Insurers, adopted Dec. 3,
2023. https://content.naic.org/sites/default/files/inline-files/Model (last visited April 11, 2025).
45 NCSL, Artificial Intelligence 2023 Legislation, Jan. 12, 2024, https://www.ncsl.org/technology-and-communication/
artificial-intelligence-2023-legislation (last visited April 10, 2025).
46 Ch. 626, parts I, II, III, IV, V, VI, VIII, IX, and XIII, F.S.
47 S. 626.859, F.S.
48 S. 626.864, F.S.
49 S. 626.8548, F.S.
50 S. 626.855, F.S.
51 S. 626.856, F.S. JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
8
BILL HISTORY
COMMITTEE REFERENCE ACTION DATE
STAFF
DIRECTOR/
POLICY CHIEF
ANALYSIS
PREPARED BY
Insurance & Banking
Subcommittee
16 Y, 0 N, As CS 4/10/2025 Hamon Herrera
THE CHANGES ADOPTED BY THE
COMMITTEE:
Prohibited the Office of Insurance Regulation (OIR) from requesting
that an insurer waive “deemed approval” for a residential property
insurance rate filing that proposes a rate decrease, unless the decrease
is solely due to reduced coverage or policy form changes.
Prohibited the OIR from issuing a notice of intent to disapprove a rate
filing that proposes a rate decrease unless the review of the filing is
finalized.
Established a statutory framework governing the use of artificial
intelligence in claims handling.
Budget Committee
Commerce Committee
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THIS BILL ANALYSIS HAS BEEN UPDATED TO INCORPORATE ALL OF THE CHANGES DESCRIBED ABOVE.
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