Florida Senate - 2025 CS for SB 1656 By the Committee on Banking and Insurance; and Senator Collins 597-02487-25 20251656c1 1 A bill to be entitled 2 An act relating to insurance regulations; amending s. 3 48.151, F.S.; providing that the Chief Financial 4 Officer is the agent for service of process on health 5 maintenance organizations; amending s. 252.63, F.S.; 6 revising the content of a publication from the 7 Commissioner of Insurance Regulation relating to 8 orders applicable to insurance in areas under a state 9 of emergency; creating s. 624.341, F.S.; providing 10 legislative findings and intent; requiring the 11 Department of Law Enforcement to accept certain 12 fingerprints; specifying procedures for 13 fingerprinting; authorizing the Department of Law 14 Enforcement to exchange certain records with the 15 Office of Insurance Regulation; specifying that 16 fingerprints may be submitted in accordance with 17 certain rules; authorizing that the fingerprints be 18 submitted through a third-party vendor authorized by 19 the Department of Law Enforcement; requiring the 20 Department of Law Enforcement to conduct certain 21 background checks; requiring that certain fingerprints 22 be submitted and entered into a specified system; 23 requiring the office to inform the Department of Law 24 Enforcement of any person whose fingerprints no longer 25 must be retained; specifying who bears the costs of 26 fingerprint processing; specifying that certain 27 criminal records be used by the office for certain 28 purposes; amending s. 624.4085, F.S.; revising the 29 definition of the term life and health insurer; 30 amending s. 624.422, F.S.; providing that the 31 appointment of the Chief Financial Officer for service 32 of process applies to insurers withdrawing from and 33 ceasing operations in this state until all insurers 34 liabilities in this state are extinguished; amending 35 s. 624.424, F.S.; requiring certain authorized 36 insurers to provide certain information to the office; 37 revising the considerations of the office in 38 determining whether a fee, commission, or other 39 financial consideration is fair and reasonable; 40 amending s. 624.45, F.S.; conforming a provision to 41 changes made by the act; amending s. 624.610, F.S.; 42 deleting certain provisions relating to credits 43 allowed in specified reinsurance circumstances and 44 relating to assuming insurers accreditations; 45 requiring filing fees from reinsurers requesting to 46 operate in this state; deleting applicability 47 provisions; amending s. 626.9651, F.S.; requiring the 48 Office of Insurance Regulation and the Financial 49 Services Commission to adopt rules on cybersecurity of 50 certain insurance data; providing requirements for 51 such rules; providing duties of the office; providing 52 construction; amending s. 627.062, F.S.; prohibiting 53 personal residential property insurers from submitting 54 more than two use and file filings under certain 55 circumstances; providing an exception; amending s. 56 627.0621, F.S.; requiring that certain rate filings 57 with the office from residential property insurers 58 include rate transparency reports; providing for 59 acceptance or rejection by the office of such reports; 60 providing requirements for such reports; requiring 61 insurers to provide such reports to consumers; 62 requiring the office to define terms used in such 63 reports; requiring the office to establish and 64 maintain a specified center on its website; providing 65 requirements for the website; amending s. 627.0645, 66 F.S.; revising requirements of rate filing with the 67 office; amending s. 627.0651, F.S.; prohibiting motor 68 vehicle insurers from submitting more than two use and 69 file filings under certain circumstances; amending s. 70 627.4554, F.S.; requiring that certain forms be posted 71 on the website of the Department of Financial 72 Services, rather than the office; amending s. 73 627.6699, F.S.; deleting and revising definitions; 74 deleting provisions relating to the creation of the 75 Florida Small Employer Health Reinsurance Program; 76 amending s. 627.711, F.S.; requiring the office to 77 contract with a state university to design, operate, 78 upgrade, and maintain a specified database; requiring 79 property insurers to file certain policyholder forms 80 in the database; requiring the commission to adopt 81 rules; amending s. 627.7152, F.S.; deleting provisions 82 relating to requirements for reporting and rulemaking 83 regarding property insurance claims paid under 84 assignment agreements; creating s. 627.9145, F.S.; 85 providing reporting requirements for residential 86 property insurers; requiring the commission to adopt 87 rules; amending s. 627.915, F.S.; revising reporting 88 requirements for private passenger automobile 89 insurers; requiring the commission to adopt rules; 90 providing requirements for such rules; deleting 91 reporting requirement provisions for certain insurers; 92 amending ss. 628.081 and 628.091, F.S.; deleting the 93 requirement that domestic insurer incorporators 94 execute articles of incorporation and file them with 95 the office in triplicate; amending s. 628.111, F.S.; 96 deleting the requirement that domestic insurers make 97 copies of amendments to articles of incorporation in 98 triplicate; amending s. 628.461, F.S.; specifying the 99 method of sending notifications regarding transactions 100 or proposed transactions of voting securities of stock 101 insurers or controlling companies; revising the method 102 of filing certain statements; amending s. 628.4615, 103 F.S.; revising the method by which amendments to 104 certain applications must be sent to specialty 105 insurers; amending s. 628.717, F.S.; revising 106 requirements for the offices responses upon receipt 107 of articles of incorporation; amending s. 628.719, 108 F.S.; revising the method by which mutual insurance 109 holding companies show their adoption of article of 110 incorporation amendments and deliver the amendments to 111 the office; revising the requirements for the offices 112 responses upon receipt of amendments; amending s. 113 628.910, F.S.; deleting the requirement that captive 114 insurance company incorporators file articles of 115 incorporation in triplicate; revising the offices 116 responses upon receipt of captive insurance company 117 articles of incorporation; amending s. 629.011, F.S.; 118 revising definitions and defining terms; amending s. 119 629.071, F.S.; authorizing assessable and 120 nonassessable reciprocal insurers, rather than 121 domestic reciprocal insurers, to transact insurance if 122 they maintain specified amounts of surplus funds; 123 amending s. 629.081, F.S.; conforming a provision to 124 changes made by the act; creating s. 629.082, F.S.; 125 providing that attorneys in fact of reciprocals are 126 affiliates of the reciprocals for specified purposes; 127 creating s. 629.1015, F.S.; requiring certain 128 reciprocal insurers to provide the office with 129 documentation supporting that fees, commissions, and 130 other financial considerations and payments to 131 affiliates are fair and reasonable; requiring the 132 office to comply with certain provisions when making 133 certain determinations; providing requirements for 134 documentation of such fees; amending s. 629.121, F.S.; 135 providing that certain bonds filed with the office as 136 security are filed by attorneys in fact, rather than 137 attorneys of domestic reciprocal insurers; increasing 138 the bond amount; creating s. 629.162, F.S.; 139 authorizing reciprocal insurers to require subscriber 140 contributions; providing disclosure and reporting 141 requirements for subscriber contributions; specifying 142 that changes to subscriber contributions are subject 143 to prior approval by the office; creating s. 629.163, 144 F.S.; authorizing reciprocal insurers to establish 145 subscriber savings accounts; specifying that moneys 146 assigned to subscriber savings accounts are not 147 considered distributions; providing that subscriber 148 savings accounts are subject to certain requirements; 149 creating s. 629.164, F.S.; authorizing reciprocal 150 insurers to make distributions to subscribers from 151 subscriber savings accounts under certain conditions; 152 providing that the subscribers advisory committee or 153 the attorney in fact has authority to authorize 154 distributions, subject to prior written approval by 155 the office; authorizing reciprocal insurers, upon 156 prior written approval, to return to subscribers 157 certain unassigned funds; providing that such returns 158 may not exceed a certain amount; prohibiting certain 159 distribution discriminations; amending s. 629.171, 160 F.S.; revising requirements for filing with the office 161 annual statements by reciprocal insurers; amending s. 162 629.181, F.S; replacing surplus deposits of 163 subscribers with subscriber contributions; providing 164 limits on subscriber contributions; amending s. 165 629.201, F.S.; requiring that each domestic reciprocal 166 insurer have a subscribers advisory committee; 167 requiring that such committee be formed in compliance 168 with specified laws; requiring that rules and 169 amendments adopted by subscribers have prior approval 170 by the office; revising subscribers advisory 171 committees duties and membership; providing for 172 election and terms; repealing s. 629.271, F.S., 173 relating to distribution of savings; amending s. 174 629.291, F.S.; providing that forms filed with the 175 office for plans to merge a reciprocal insurer with 176 another reciprocal insurer or to convert a reciprocal 177 insurer to a stock or mutual insurer are adopted by 178 the commission rather than the office; amending s. 179 629.301, F.S.; specifying the manner in which impaired 180 reciprocal insurers are proceeded against if they 181 cannot make up deficiencies in assets; specifying the 182 manner in which assessments are levied upon 183 subscribers if reciprocal insurers are liquidated; 184 providing that assessments are subject to specified 185 limits; repealing ss. 629.401 and 629.520, F.S., 186 relating to insurance exchange and the authority of a 187 limited reciprocal insurer, respectively; creating s. 188 629.56, F.S.; requiring reciprocal insurers to 189 maintain unearned premium reserves at all times; 190 amending s. 634.401, F.S.; revising provisions 191 relating to coverage for accidental damage under a 192 service warranty; creating s. 641.2012, F.S.; 193 providing applicability of service of process 194 provisions to health maintenance organizations; 195 amending s. 641.26, F.S.; revising requirements for 196 filing annual and quarterly reports by health 197 maintenance organizations; creating s. 641.283, F.S.; 198 providing applicability of administrative supervision 199 and hazardous insurer condition provisions to health 200 maintenance organizations; amending s. 651.011, F.S.; 201 providing and revising definitions; amending s. 202 651.018, F.S.; providing duties for the office if 203 certain conditions exist in continuing care 204 facilities; amending s. 651.019, F.S.; requiring 205 continuing care providers to provide to the office 206 specified information on financing and intended use of 207 proceeds under certain circumstances; creating s. 208 651.0212, F.S.; requiring or authorizing the office, 209 depending on the circumstance, to deny or revoke, or 210 in some cases to suspend, a providers authority to 211 engage in certain continuing care activities; amending 212 s. 651.0215, F.S.; revising the timeframe for the 213 office to examine and respond to consolidated 214 applications for provisional certificates of authority 215 and certificates of authority for providers of 216 continuing care; deleting provisions relating to the 217 duties of the office in responding to such 218 applications; revising the requirements for when an 219 application is deemed complete; amending s. 651.022, 220 F.S.; revising requirements for applications for 221 provisional certificates of authority of providers of 222 continuing care; deleting provisions relating to 223 duties of the office in responding to such 224 applications; revising the requirements for when an 225 application is deemed complete; amending s. 651.023, 226 F.S.; conforming provisions to changes made by the 227 act; revising the requirements for when an application 228 is deemed complete; amending s. 651.024, F.S.; 229 providing applicability of certain specialty insurer 230 provisions and nonapplicability of certain continuing 231 care provider requirements to bondholders under 232 certain circumstances; defining the term consent 233 rights; providing applicability of such provisions to 234 certain entities under certain circumstances; amending 235 s. 651.0246, F.S.; revising requirements for 236 applications for expansion of certificated continuing 237 care facilities; deleting specified duties of the 238 office in responding to such applications; revising 239 the timeframe for the office to review such 240 applications; amending s. 651.026, F.S.; revising 241 requirements for annual reports filed by providers of 242 continuing care; providing requirements for reports; 243 amending s. 651.0261, F.S.; providing additional 244 requirements for quarterly reports filed by continuing 245 care facilities; amending s. 651.033, F.S.; requiring 246 office approval before execution of an agreement for 247 establishing an escrow account; defining the terms 248 emergency and business day; specifying 249 circumstances under which providers of continuing care 250 may withdraw a specified percentage of the required 251 minimum liquid reserve; revising the timeframe for the 252 office to deny petitions for emergency withdrawals; 253 providing duties of escrow agents; amending s. 254 651.034, F.S.; revising duties of the office relating 255 to impaired continuing care providers; amending s. 256 651.035, F.S.; providing requirements for continuing 257 care providers minimum liquid reserve accounts in 258 escrow; providing requirements for debt service 259 reserve transfers from one financial institution or 260 lender to another; revising and providing requirements 261 for continuing care providers operating reserves in 262 escrow; revising the circumstances under which the 263 office may order transfer of the minimum liquid 264 reserve; amending s. 651.043, F.S.; revising 265 circumstances under which certain notices of 266 management changes must be provided to the office; 267 amending s. 651.071, F.S.; providing that continuing 268 care and continuing care at-home contracts must be 269 treated with higher priority over all other claims in 270 the event of receivership or liquidation proceedings 271 against a provider; providing an exception; amending 272 s. 651.085, F.S.; requiring designated resident 273 representatives in continuing care facilities to 274 perform their duties in good faith; requiring each 275 continuing care facility to have its own designated 276 resident representative; specifying the methods for 277 notifications to designated resident representatives 278 of certain meetings; creating s. 651.087, F.S; 279 specifying that providers who borrow from or pledge 280 the personal funds of residents commit a misdemeanor; 281 providing criminal penalties; amending s. 651.091, 282 F.S.; requiring continuing care facilities to post 283 notices of bankruptcy proceedings; providing 284 requirements for such notices; requiring continuing 285 care facilities to maintain certain records; requiring 286 providers of continuing care to make certain records 287 available for review and to deliver copies of 288 specified disclosure statements; creating s. 651.104, 289 F.S.; prohibiting persons from acting or holding 290 themselves out as management companies for continuing 291 care retirement communities without a certificate of 292 authority; providing requirements for certificate of 293 authority applications; prohibiting the office from 294 issuing certificates of authority under certain 295 circumstances; creating s. 651.1041, F.S.; providing 296 applicability of specified insurer provisions to 297 acquisitions of management companies; creating s. 298 651.1043, F.S.; providing requirements for management 299 company annual and quarterly financial statements; 300 requiring acquisition application filings under 301 certain circumstances; requiring monthly statement 302 filings under certain circumstances; providing fines 303 for noncompliance; providing rulemaking authority; 304 creating s. 651.1045, F.S.; providing grounds for the 305 office to refuse, suspend, and revoke management 306 company certificates of authority; providing that 307 revocation of a management companys certificate of 308 authority does not relieve a provider from specified 309 obligations to residents and from annual statement 310 filings and license fees; authorizing the office to 311 seek enforcement actions; amending s. 651.105, F.S.; 312 authorizing the office to examine the businesses of 313 management companies and their parents, subsidiaries, 314 and affiliates under certain circumstances; requiring 315 the office to notify management companies of 316 compliance deficiencies and to require corrective 317 actions or plans; requiring management companies to 318 respond to such notices; amending s. 651.1065, F.S.; 319 prohibiting management companies from engaging in 320 certain acts if delinquency proceedings have been or 321 are to be initiated; providing penalties; amending s. 322 651.107, F.S.; requiring management companies to file 323 annual statements and pay license fees during periods 324 of certificate of authority suspension; providing for 325 automatic reinstatement or revocation of certificates 326 of authority; amending s. 651.108, F.S.; providing 327 administrative fines for management companies for 328 certain violations; creating s. 651.113, F.S.; 329 authorizing the office to consider certain information 330 in determining whether the continued operation of any 331 provider transacting business in this state may be 332 deemed to be in hazardous financial condition; 333 requiring providers and facilities determined to be 334 insolvent or in danger of insolvency to prepare a 335 plan; requiring the provider or facility to prepare a 336 specified plan; requiring that such plan be presented 337 to the office within a specified timeframe; 338 authorizing the office to issue an order requiring a 339 provider or facility to engage in certain acts under 340 certain circumstances; authorizing the office to issue 341 immediate final orders requiring certain acts; 342 providing construction; amending s. 651.114, F.S.; 343 deleting provisions relating to continuing care 344 facility trustees and lenders; creating s. 651.1165, 345 F.S.; requiring the office to record notices of lien 346 against continuing care facilities properties; 347 providing requirements for such liens; providing for 348 lien foreclosures in civil actions; providing that 349 such liens are preferred to all liens, mortgages, and 350 other encumbrances upon the property and all 351 unrecorded liens, mortgages, and other encumbrances; 352 providing conditions for lien releases; amending ss. 353 624.307, 627.642, 627.6475, 627.657, and 627.66997, 354 F.S.; conforming cross-references; providing 355 applicability dates; providing effective dates. 356 357 Be It Enacted by the Legislature of the State of Florida: 358 359 Section 1.Subsection (3) of section 48.151, Florida 360 Statutes, is amended to read: 361 48.151Service on statutory agents for certain persons. 362 (3)The Chief Financial Officer is the agent for service of 363 process on all insurers applying for authority to transact 364 insurance in this state, all licensed nonresident insurance 365 agents, all nonresident disability insurance agents licensed 366 pursuant to s. 626.835, any unauthorized insurer under s. 367 626.906 or s. 626.937, domestic reciprocal insurers, fraternal 368 benefit societies under chapter 632, warranty associations under 369 chapter 634, prepaid limited health service organizations under 370 chapter 636, health maintenance organizations under chapter 641, 371 and persons required to file statements under s. 628.461. The 372 Department of Financial Services shall create a secure online 373 portal as the sole means to accept service of process on the 374 Chief Financial Officer under this section. 375 Section 2.Subsection (3) of section 252.63, Florida 376 Statutes, is amended to read: 377 252.63Commissioner of Insurance Regulation; powers in a 378 state of emergency. 379 (3)The commissioner shall publish in the next available 380 publication of the Florida Administrative Register a notice 381 identifying the date the emergency order was issued and shall 382 include a hyperlink or website address providing direct access 383 to the emergency order copy of the text of any order issued 384 under this section, together with a statement describing the 385 modification or suspension and explaining how the modification 386 or suspension will facilitate recovery from the emergency. 387 Section 3.Section 624.341, Florida Statutes, is created to 388 read: 389 624.341Authority of Department of Law Enforcement to 390 accept fingerprints of, and exchange criminal history records 391 with respect to, certain persons applying to the Office of 392 Insurance Regulation. 393 (1)The Legislature finds that criminal activity of 394 insurers poses a particular danger to the residents of this 395 state. Floridians rely, in good faith, on the honest conduct of 396 those who issue and manage insurance policies and other 397 insurance instruments in this state. To safeguard this states 398 residents, the Legislature finds it necessary to ensure that 399 organizers, incorporators, subscribers, officers, employees, 400 contractors, affiliates, stockholders, directors, owners, 401 members, managers, volunteers, or any other persons who exercise 402 or have the ability to exercise effective control of, or who 403 influence or have the ability to influence the transaction of 404 the business of, or any other persons involved in, directly or 405 indirectly, the organization, operation, or management of any 406 insurer authorized to sell insurance are free of a criminal 407 background. 408 (2)The Department of Law Enforcement shall accept and 409 process fingerprints of organizers, incorporators, subscribers, 410 officers, employees, contractors, affiliates, stockholders, 411 directors, owners, members, managers, or volunteers involved, 412 directly or indirectly, in the organization, operation, or 413 management of: 414 (a)Any insurer or proposed insurer transacting or 415 proposing to transact insurance in this state. 416 (b)Any other entity that is examined or investigated or 417 that is eligible to be examined or investigated under the 418 provisions of the Florida Insurance Code. 419 (c)Any other person or entity subject to licensure under 420 the Florida Insurance Code. 421 (3)A full set of fingerprints of persons or entities 422 described in subsection (2) must be submitted to the office or 423 to a vendor, an entity, or an agency authorized by s. 424 943.053(13). The office, vendor, entity, or agency shall forward 425 the fingerprints to the Department of Law Enforcement for state 426 processing, and the Department of Law Enforcement shall forward 427 the fingerprints to the Federal Bureau of Investigation for 428 national processing as described in s. 624.34. Fees for state 429 and federal fingerprint processing must be borne by the person 430 submitting them. The state cost for fingerprint processing is as 431 provided in s. 943.053(3)(e). 432 (4)The Department of Law Enforcement may, to the extent 433 provided by federal law, exchange state, multistate, and federal 434 criminal history records with the office for the purpose of the 435 issuance, denial, suspension, or revocation of a certificate of 436 authority, certification, or license to operate in this state. 437 (5)Fingerprints for each person or entity described in 438 subsection (2) must be submitted in accordance with rules 439 adopted by the commission. 440 (a)Fingerprints may be submitted through a third-party 441 vendor authorized by the Department of Law Enforcement. 442 (b)The Department of Law Enforcement shall conduct the 443 state criminal history background check, and a federal criminal 444 history background check must be conducted through the Federal 445 Bureau of Investigation. 446 (c)All fingerprints submitted to the Department of Law 447 Enforcement must be submitted and entered into the statewide 448 automated fingerprint identification system established in s. 449 943.05(2)(b) and available for use in accordance with s. 450 943.05(2)(g) and (h). The office shall inform the Department of 451 Law Enforcement of any person whose fingerprints no longer must 452 be retained. 453 (d)The costs of fingerprint processing, including the cost 454 of retaining the fingerprints, must be borne by the person 455 subject to the background check. 456 (e)The office shall review the results of the state and 457 federal criminal history background checks and determine whether 458 the applicant meets requirements. 459 (6)Statewide criminal records obtained through the 460 Department of Law Enforcement, federal criminal records obtained 461 through the Federal Bureau of Investigation, and local criminal 462 records obtained through local law enforcement agencies must be 463 used by the office for the purpose of issuance, denial, 464 suspension, or revocation of certificates of authority, 465 certifications, or licenses issued to operate in this state. 466 Section 4.Paragraph (g) of subsection (1) of section 467 624.4085, Florida Statutes, is amended to read: 468 624.4085Risk-based capital requirements for insurers. 469 (1)As used in this section, the term: 470 (g)Life and health insurer means an insurer authorized 471 or eligible under the Florida Insurance Code to underwrite life 472 or health insurance. The term includes a property and casualty 473 insurer that writes accident and health insurance only. 474 Effective January 1, 2015, The term also includes a health 475 maintenance organization that is authorized in this state and 476 one or more other states, jurisdictions, or countries and a 477 prepaid limited health service organization that is authorized 478 in this state and one or more other states, jurisdictions, or 479 countries. 480 Section 5.Present subsection (3) of section 624.422, 481 Florida Statutes, is redesignated as subsection (4), and a new 482 subsection (3) is added to that section, to read: 483 624.422Service of process; appointment of Chief Financial 484 Officer as process agent. 485 (3)The appointment of the Chief Financial Officer under 486 this section applies to any insurer that withdraws from or 487 ceases operations in this state until the insurer has completed 488 its runoff of, or otherwise extinguished, all liabilities in 489 Florida. 490 Section 6.Subsection (13) of section 624.424, Florida 491 Statutes, is amended to read: 492 624.424Annual statement and other information. 493 (13)Each authorized insurer doing business in this state 494 which pays a fee, commission, or other financial consideration 495 or payment to any affiliate directly or indirectly is required 496 upon request to provide to the office any information the office 497 deems necessary. The fee, commission, or other financial 498 consideration or payment to any affiliate must be fair and 499 reasonable. In determining whether the fee, commission, or other 500 financial consideration or payment is fair and reasonable, the 501 office shall consider all of the following: 502 (a)The actual cost of each service provided by an 503 affiliate. 504 (b)The relative financial condition of the insurer and the 505 affiliate. 506 (c)The level of debt and how that debt is serviced. 507 (d)The amount of the dividends paid by the insurer and the 508 affiliates and for what purpose. 509 (e)Whether the terms of the written contract benefit the 510 insurer and are in the best interest of the policyholders or 511 subscribers. 512 (f)Any other such information as the office reasonably 513 requires in making this determination, among other things, the 514 actual cost of the service being provided. 515 Section 7.Subsection (2) of section 624.45, Florida 516 Statutes, is amended to read: 517 624.45Participation of financial institutions in 518 reinsurance and in insurance exchanges.Subject to applicable 519 laws relating to financial institutions and to any other 520 applicable provision of the Florida Insurance Code, any 521 financial institution or aggregation of such institutions may: 522 (2)Participate, directly or indirectly, as an underwriting 523 member or as an investor in an underwriting member of any 524 insurance exchange authorized in accordance with s. 629.401, 525 which underwriting member transacts only aggregate or specific 526 excess insurance over underlying self-insurance coverage for 527 self-insurance organizations authorized under the Florida 528 Insurance Code, for multiple-employer welfare arrangements, or 529 for workers compensation self-insurance trusts, in addition to 530 any reinsurance the underwriting member may transact. 531 532 Nothing in this section shall be deemed to prohibit a financial 533 institution from engaging in any presently authorized insurance 534 activity. 535 Section 8.Present subsection (15) of section 624.610, 536 Florida Statutes, is redesignated as subsection (16), a new 537 subsection (15) is added to that section, and paragraph (b) of 538 subsection (3), paragraph (b) of subsection (12), and present 539 subsection (16) of that section are amended, to read: 540 624.610Reinsurance. 541 (3) 542 (b)1.Credit must be allowed when the reinsurance is ceded 543 to an assuming insurer that is accredited as a reinsurer in this 544 state. An accredited reinsurer is one that: 545 a.Files with the office evidence of its submission to this 546 states jurisdiction; 547 b.Submits to this states authority to examine its books 548 and records; 549 c.Is licensed or authorized to transact insurance or 550 reinsurance in at least one state or, in the case of a United 551 States branch of an alien assuming insurer, is entered through, 552 licensed, or authorized to transact insurance or reinsurance in 553 at least one state; 554 d.Files annually with the office a copy of its annual 555 statement filed with the insurance department of its state of 556 domicile any quarterly statements if required by its state of 557 domicile or such quarterly statements if specifically requested 558 by the office, and a copy of its most recent audited financial 559 statement; and 560 (I)Maintains a surplus as regards policyholders in an 561 amount not less than $20 million and whose accreditation has not 562 been denied by the office within 90 days after its submission; 563 or 564 (II)Maintains a surplus as regards policyholders in an 565 amount not less than $20 million and whose accreditation has 566 been approved by the office. 567 2.The office may deny or revoke an assuming insurers 568 accreditation if the assuming insurer does not submit the 569 required documentation pursuant to subparagraph 1., if the 570 assuming insurer fails to meet all of the standards required of 571 an accredited reinsurer, or if the assuming insurers 572 accreditation would be hazardous to the policyholders of this 573 state. In determining whether to deny or revoke accreditation, 574 the office may consider the qualifications of the assuming 575 insurer with respect to all the following subjects: 576 a.Its financial stability; 577 b.The lawfulness and quality of its investments; 578 c.The competency, character, and integrity of its 579 management; 580 d.The competency, character, and integrity of persons who 581 own or have a controlling interest in the assuming insurer; and 582 e.Whether claims under its contracts are promptly and 583 fairly adjusted and are promptly and fairly paid in accordance 584 with the law and the terms of the contracts. 585 3.Credit must not be allowed a ceding insurer if the 586 assuming insurers accreditation has been revoked by the office 587 after notice and the opportunity for a hearing. 588 4.The actual costs and expenses incurred by the office to 589 review a reinsurers request for accreditation and subsequent 590 reviews must be charged to and collected from the requesting 591 reinsurer. If the reinsurer fails to pay the actual costs and 592 expenses promptly when due, the office may refuse to accredit 593 the reinsurer or may revoke the reinsurers accreditation. 594 (12) 595 (b)The summary statement must be signed and attested to by 596 either the chief executive officer or the chief financial 597 officer of the reporting insurer. In addition to the summary 598 statement, the office may require the filing of any supporting 599 information relating to the ceding of such risks as it deems 600 necessary. If the summary statement prepared by the ceding 601 insurer discloses that the net effect of a reinsurance treaty or 602 treaties (or series of treaties with one or more affiliated 603 reinsurers entered into for the purpose of avoiding the 604 following threshold amount) at any time results in an increase 605 of more than 25 percent to the insurers surplus as to 606 policyholders, then the insurer shall certify in writing to the 607 office that the relevant reinsurance treaty or treaties comply 608 with the accounting requirements contained in any rule adopted 609 by the commission under subsection (16) (15). If such 610 certificate is filed after the summary statement of such 611 reinsurance treaty or treaties, the insurer shall refile the 612 summary statement with the certificate. In any event, the 613 certificate must state that a copy of the certificate was sent 614 to the reinsurer under the reinsurance treaty. 615 (15)Any application filed with the office to review a 616 reinsurers request to operate in this state under this section 617 must be accompanied by a filing fee equal to the application fee 618 charged under s. 624.501(1)(a). 619 (16)This act shall apply to all cessions on or after 620 January 1, 2001, under reinsurance agreements that have an 621 inception, anniversary, or renewal date on or after January 1, 622 2001. 623 Section 9.Section 626.9651, Florida Statutes, is amended 624 to read: 625 626.9651Security of consumer data Privacy. 626 (1)The department and commission shall must each adopt 627 rules consistent with other provisions of the Florida Insurance 628 Code to govern the use of a consumers nonpublic personal 629 financial and health information. These rules must be based on, 630 consistent with, and not more restrictive than the Privacy of 631 Consumer Financial and Health Information Regulation, adopted 632 September 26, 2000, by the National Association of Insurance 633 Commissioners; however, the rules must permit the use and 634 disclosure of nonpublic personal health information for 635 scientific, medical, or public policy research, in accordance 636 with federal law. In addition, these rules must be consistent 637 with, and not more restrictive than, the standards contained in 638 Title V of the Gramm-Leach-Bliley Act of 1999, Pub. L. No. 106 639 102, as amended in Title LXXV of the Fixing Americas Surface 640 Transportation (FAST) Act, Pub. L. No. 114-94. If the office 641 determines that a health insurer or health maintenance 642 organization is in compliance with, or is actively undertaking 643 compliance with, the consumer privacy protection rules adopted 644 by the United States Department of Health and Human Services, in 645 conformance with the Health Insurance Portability and 646 Affordability Act, that health insurer or health maintenance 647 organization is in compliance with this subsection section. 648 (2)The office and the commission shall adopt rules 649 consistent with state law, including the Florida Insurance Code, 650 to ensure the cybersecurity of a consumers nonpublic insurance 651 data. These rules may not be more restrictive than the National 652 Association of Insurance Commissioners Insurance Data Security 653 Model Law, adopted as of October 2017, and subsequent amendments 654 thereto if the methodology remains substantially consistent. The 655 rules must: 656 (a)Apply to all entities acting as insurers, transacting 657 insurance, or otherwise engaging in insurance activities in this 658 state, including entities licensed under chapter 641, and any 659 entity contracted to maintain, store, or process personal 660 information on behalf of a covered entity; 661 (b)Require the development and implementation of an 662 information security program as defined in the model law; 663 (c)Require investigation and notification of a 664 cybersecurity event as required under the model law; 665 (d)Require that each insurer submit to the department or 666 office all or part of the information required to be reported to 667 the department or office in a computer-readable form compatible 668 with the electronic data processing system of the department or 669 office; and 670 (e)Require that the office be copied on any notice 671 provided to the Attorney General under s. 501.171. 672 (3)Upon receiving information under this section, the 673 office shall review the information and may initiate an 674 examination or investigation under s. 624.316, s. 624.3161, or 675 s. 626.8828. 676 (4)This section does not establish a private cause of 677 action. 678 Section 10.Paragraph (a) of subsection (2) of section 679 627.062, Florida Statutes, is amended to read: 680 627.062Rate standards. 681 (2)As to all such classes of insurance: 682 (a)Insurers or rating organizations shall establish and 683 use rates, rating schedules, or rating manuals that allow the 684 insurer a reasonable rate of return on the classes of insurance 685 written in this state. A copy of rates, rating schedules, rating 686 manuals, premium credits or discount schedules, and surcharge 687 schedules, and changes thereto, must be filed with the office 688 under one of the following procedures: 689 1.If the filing is made at least 90 days before the 690 proposed effective date and is not implemented during the 691 offices review of the filing and any proceeding and judicial 692 review, such filing is considered a use and file file and use 693 filing. In such case, the office shall finalize its review by 694 issuance of a notice of intent to approve or a notice of intent 695 to disapprove within 90 days after receipt of the filing. If the 696 90-day period ends on a weekend or a holiday under s. 697 110.117(1)(a)-(i), it must be extended until the conclusion of 698 the next business day. The notice of intent to approve and the 699 notice of intent to disapprove constitute agency action for 700 purposes of the Administrative Procedure Act. Requests for 701 supporting information, requests for mathematical or mechanical 702 corrections, or notification to the insurer by the office of its 703 preliminary findings does not toll the 90-day period during any 704 such proceedings and subsequent judicial review. The rate shall 705 be deemed approved if the office does not issue a notice of 706 intent to approve or a notice of intent to disapprove within 90 707 days after receipt of the filing. 708 2.If the filing is not made in accordance with 709 subparagraph 1., such filing must be made as soon as 710 practicable, but within 30 days after the effective date, and is 711 considered a file and use 723 filing. For purposes of this subparagraph, motor vehicle 724 collision and comprehensive coverages are not considered 725 property coverages. 726 727 The provisions of this subsection do not apply to workers 728 compensation, employers liability insurance, and motor vehicle 729 insurance. 730 Section 11.Present subsection (2) of section 627.0621, 731 Florida Statutes, is redesignated as subsection (3) and amended, 732 and a new subsection (2) is added to that section, to read: 733 627.0621Transparency in rate regulation. 734 (2)RATE TRANSPARENCY REPORT. 735 (a)Beginning October 1, 2025, every rate filing requesting 736 a rate change for residential property coverage from a property 737 insurer must include a rate transparency report for acceptance 738 for use or modification by the office. The office may accept the 739 rate transparency report for filing, or if the office finds that 740 the report fails to provide the required information in concise 741 and plain language which aids consumers in their understanding 742 of insurance, or finds the report to be misleading, the office 743 must return the rate transparency report to the property insurer 744 for modification. The offices acceptance for use or 745 modification of the report may not be deemed approval pursuant 746 to s. 627.062. The report must be compiled in a uniform format 747 prescribed by the commission and must include a graphical 748 representation identifying a percentage breakdown of rating 749 factors anticipated of the company, book, or program affected by 750 the filing. 751 (b)Along with an offer of coverage and upon renewal, an 752 insurer must provide the corresponding copy of the rate 753 transparency report for the consumers offered rate to aid 754 consumers in their understanding of insurance. If the report has 755 not been accepted for use or modified by the office, the report 756 must indicate that it is preliminary and subject to modification 757 by the office. 758 (c)The rate transparency report must include the following 759 categories of the book or program at the cumulative level: 760 1.The percentage of the total rate factor associated with 761 the cost of reinsurance. 762 2.The percentage of the total rate factor associated with 763 the cost of claims. 764 3.The percentage of the total rate factor associated with 765 the defense containment and costs. 766 4.The percentage of the total rate factor associated with 767 fees and commissions. 768 5.The percentage of the rate factor associated with profit 769 and contingency of the insurer. 770 6.Any other categories deemed necessary by the office or 771 commission. 772 773 An estimated percentage of the influence of each listed factor 774 must be provided to equal 100 percent. 775 (d)The insurer shall provide the rate transparency report 776 to the office upon the filing of a rate change with the office. 777 (e)The rate transparency report must also include the 778 following information: 779 1.Any major adverse findings by the office for the 780 previous 3 calendar years. 781 2.Whether the insurer uses affiliated entities to perform 782 functions of the insurer. 783 3.Contact information, to include a telephone number, 784 hours of service, and e-mail address for the Division of 785 Consumer Services of the department. 786 4.Contact information for the office. 787 5.Address for the website for public access to rate filing 788 and affiliate information outlined in subsection (3). 789 6.Any changes in the total insured value from the last 790 policy period. 791 (f)The office shall define, in concise and plain language, 792 any terms used with the rate transparency report to aid 793 consumers in their understanding of insurance. 794 (3)(2)WEBSITE FOR PUBLIC ACCESS TO RATE FILING 795 INFORMATION. 796 (a)The office shall establish and maintain a comprehensive 797 resource center on its website that uses concise and plain 798 language to aid consumers in their understanding of insurance. 799 The website must include substantive information on the current 800 and historical dynamics of the market, data concerning the 801 financial condition and market conduct of insurance companies 802 available to consumers, and choices available to consumers. At a 803 minimum, the website must contain the following: 804 1.Reports, using graphical information wherever possible, 805 which outline information about the state of the market and 806 adverse and positive trends affecting it. 807 2.Tools that aid consumers in finding insurers. 808 3.Tools that aid consumers in selecting the coverages 809 beneficial to them. 810 4.Information about mitigation credits and the My Safe 811 Florida Home Program, as well as other credits insurers may 812 offer beyond wind mitigation. 813 5.Access to the rate transparency report, annual 814 statements, market conduct information, and other information 815 related to each insurer. 816 6.Information on the Citizens Property Insurance 817 Corporation takeout process, the clearinghouse, and general 818 information as reported by the office. 819 7.(a)With respect to any residential property rate filing, 820 the office shall provide the following information on a publicly 821 accessible Internet website: 822 a.1.The overall rate change requested by the insurer. 823 b.2.The rate change approved by the office along with all 824 of the actuarys assumptions and recommendations forming the 825 basis of the offices decision. 826 c.3.Certification by the offices actuary that, based on 827 the actuarys knowledge, his or her recommendations are 828 consistent with accepted actuarial principles. 829 d.Whether the insurer uses affiliated entities to perform 830 administrative, claims handling, or other functions of the 831 insurer and, if so, the total percentage of direct written 832 premium paid to the affiliated entities by the insurer in the 833 preceding annual calendar year. 834 (b)For any rate filing, regardless of whether or not the 835 filing is subject to a public hearing, the office shall provide 836 on its website a means for any policyholder who may be affected 837 by a proposed rate change to send an e-mail regarding the 838 proposed rate change. Such e-mail must be accessible to the 839 actuary assigned to review the rate filing. 840 (c)The statewide average requested rate change and final 841 approved statewide average rate change within a filing is not a 842 trade secret as defined in s. 688.002 or s. 812.081(1) and is 843 not subject to the public records exemption for trade secrets 844 provided in s. 119.0715 or s. 624.4213. 845 (d)County rating examples submitted to the office through 846 the rate collection system for the purposes of displaying rates 847 on the office website are not a trade secret as defined in s. 848 688.002 or s. 812.081(1) and are not subject to the public 849 records exemption for trade secrets provided in s. 119.0715 or 850 s. 624.4213. 851 Section 12.Paragraph (b) of subsection (3) of section 852 627.0645, Florida Statutes, is amended to read: 853 627.0645Annual filings. 854 (3)The filing requirements of this section shall be 855 satisfied by one of the following methods: 856 (b)If no rate change is proposed, a filing which consists 857 of a certification by an actuary that the existing rate level 858 produces rates which are actuarially sound and which are not 859 inadequate, as defined in s. 627.062. However, for residential 860 property and private passenger auto insurers, a full rate filing 861 is required after 2 consecutive years of certification under 862 this paragraph. 863 Section 13.Paragraph (b) of subsection (1) of section 864 627.0651, Florida Statutes, is amended to read: 865 627.0651Making and use of rates for motor vehicle 866 insurance. 867 (1)Insurers shall establish and use rates, rating 868 schedules, or rating manuals to allow the insurer a reasonable 869 rate of return on motor vehicle insurance written in this state. 870 A copy of rates, rating schedules, and rating manuals, and 871 changes therein, shall be filed with the office under one of the 872 following procedures: 873 (b)If the filing is not made in accordance with the 874 provisions of paragraph (a), such filing must shall be made as 875 soon as practicable, but no later than 30 days after the 876 effective date, and is shall be considered a office 976 website as Appendix A, related to an insurance agent disclosure 977 for annuities: 978 (I)A description of the scope and terms of the 979 relationship with the consumer and the role of the agent in the 980 transaction. 981 (II)An affirmative statement on whether the agent is 982 licensed and authorized to sell the following products: 983 (A)Fixed annuities. 984 (B)Fixed indexed annuities. 985 (C)Variable annuities. 986 (D)Life insurance. 987 (E)Mutual funds. 988 (F)Stocks and bonds. 989 (G)Certificates of deposit. 990 (III)An affirmative statement describing the insurers for 991 which the agent is authorized, contracted, or appointed, or 992 otherwise able to sell insurance products, using the following 993 descriptions: 994 (A)From one insurer; 995 (B)From two or more insurers; or 996 (C)From two or more insurers, although primarily 997 contracted with one insurer. 998 (IV)A description of the sources and types of cash 999 compensation and noncash compensation to be received by the 1000 agent, including whether the agent is to be compensated for the 1001 sale of a recommended annuity by commission as part of premium 1002 or other remuneration received from the insurer, intermediary, 1003 or other agent, or by fee as a result of a contract for advice 1004 or consulting services. 1005 (V)A notice of the consumers right to request additional 1006 information regarding cash compensation described in sub 1007 subparagraph b. 1008 b.Upon request of the consumer or the consumers 1009 designated representative, the agent shall disclose: 1010 (I)A reasonable estimate of the amount of cash 1011 compensation to be received by the agent, which may be stated as 1012 a range of amounts or percentages. 1013 (II)Whether the cash compensation is a one-time or 1014 multiple occurrence amount; and if a multiple occurrence amount, 1015 the frequency and amount of the occurrence, which may be stated 1016 as a range of amounts or percentages. 1017 c.Before or at the time of the recommendation or sale of 1018 an annuity, the agent shall have a reasonable basis to believe 1019 the consumer has been informed of various features of the 1020 annuity, such as the potential surrender period and surrender 1021 charge; potential tax penalty if the consumer sells, exchanges, 1022 surrenders, or annuitizes the annuity; mortality and expense 1023 fees; any annual fees; investment advisory fees; potential 1024 charges for and features of riders or other options of the 1025 annuity; limitations on interest returns; potential changes in 1026 nonguaranteed elements of the annuity; insurance and investment 1027 components; and market risk. 1028 3.An agent shall identify and avoid or reasonably manage 1029 and disclose material conflicts of interest, including material 1030 conflicts of interest related to an ownership interest. 1031 4.An agent shall at the time of the recommendation or 1032 sale: 1033 a.Make a written record of any recommendation and the 1034 basis for the recommendation, subject to this section. 1035 b.Obtain a consumer-signed statement on a form 1036 substantially similar to that posted on the department office 1037 website as Appendix B, related to a consumers refusal to 1038 provide information, documenting: 1039 (I)A customers refusal to provide the consumer profile 1040 information, if any. 1041 (II)A customers understanding of the ramifications of not 1042 providing his or her consumer profile information or providing 1043 insufficient consumer profile information. 1044 c.Obtain a consumer-signed statement on a form 1045 substantially similar to that posted on the department office 1046 website as Appendix C, related to a consumers decision to 1047 purchase an annuity not based on a recommendation, acknowledging 1048 the annuity transaction is not recommended if a customer decides 1049 to enter into an annuity transaction that is not based on the 1050 agents recommendation. 1051 5.Any requirement applicable to an agent under this 1052 subsection applies to every agent who has exercised material 1053 control or influence in the making of a recommendation and has 1054 received direct compensation as a result of the recommendation 1055 or sale, regardless of whether the agent has had any direct 1056 contact with the consumer. Activities such as providing or 1057 delivering marketing or education materials, product wholesaling 1058 or other back office product support, and general supervision of 1059 an agent do not, in and of themselves, constitute material 1060 control or influence. 1061 Section 15.Paragraphs (b), (p), (q), and (s) of subsection 1062 (3), paragraph (d) of subsection (9), paragraphs (b) and (c) of 1063 subsection (10), and subsection (11) of section 627.6699, 1064 Florida Statutes, are amended to read: 1065 627.6699Employee Health Care Access Act. 1066 (3)DEFINITIONS.As used in this section, the term: 1067 (b)Board means the board of directors of the program. 1068 (p)Plan of operation means the plan of operation of the 1069 program, including articles, bylaws, and operating rules, 1070 adopted by the board under subsection (11). 1071 (q)Program means the Florida Small Employer Carrier 1072 Reinsurance Program created under subsection (11). 1073 (p)(s)Reinsuring carrier means a small employer carrier 1074 that elects to comply with reinsurance the requirements set 1075 forth in subsection (11). 1076 (9)SMALL EMPLOYER CARRIERS ELECTION TO BECOME A RISK 1077 ASSUMING CARRIER OR A REINSURING CARRIER. 1078 (d)A small employer carrier that elects to cease 1079 participating as a reinsuring carrier and to become a risk 1080 assuming carrier is prohibited from reinsuring or continuing to 1081 reinsure any small employer health benefits plan under 1082 subsection (11) as soon as the carrier becomes a risk-assuming 1083 carrier and must pay a prorated assessment based upon business 1084 issued as a reinsuring carrier for any portion of the year that 1085 the business was reinsured. A small employer carrier that elects 1086 to cease participating as a risk-assuming carrier and to become 1087 a reinsuring carrier is permitted to reinsure small employer 1088 health benefit plans under the terms set forth in subsection 1089 (11) and must pay a prorated assessment based upon business 1090 issued as a reinsuring carrier for any portion of the year that 1091 the business was reinsured. 1092 (10)ELECTION PROCESS TO BECOME A RISK-ASSUMING CARRIER. 1093 (b)In determining whether to approve an application by a 1094 small employer carrier to become a risk-assuming carrier, the 1095 office shall consider: 1096 1.The carriers financial ability to support the 1097 assumption of the risk of small employer groups. 1098 2.The carriers history of rating and underwriting small 1099 employer groups. 1100 3.The carriers commitment to market fairly to all small 1101 employers in the state or its service area, as applicable. 1102 4.The carriers ability to assume and manage the risk of 1103 enrolling small employer groups without the protection of the 1104 reinsurance program provided in subsection (11). 1105 (c)A small employer carrier that becomes a risk-assuming 1106 carrier pursuant to this subsection is not subject to 1107 reinsurance the assessment provisions of subsection (11). 1108 (11)SMALL EMPLOYER HEALTH REINSURANCE PROGRAM. 1109 (a)There is created a nonprofit entity to be known as the 1110 Florida Small Employer Health Reinsurance Program. 1111 (b)1.The program shall operate subject to the supervision 1112 and control of the board. 1113 2.Effective upon this act becoming a law, the board shall 1114 consist of the director of the office or his or her designee, 1115 who shall serve as the chairperson, and 13 additional members 1116 who are representatives of carriers and insurance agents and are 1117 appointed by the director of the office and serve as follows: 1118 a.Five members shall be representatives of health insurers 1119 licensed under chapter 624 or chapter 641. Two members shall be 1120 agents who are actively engaged in the sale of health insurance. 1121 Four members shall be employers or representatives of employers. 1122 One member shall be a person covered under an individual health 1123 insurance policy issued by a licensed insurer in this state. One 1124 member shall represent the Agency for Health Care Administration 1125 and shall be recommended by the Secretary of Health Care 1126 Administration. 1127 b.A member appointed under this subparagraph shall serve a 1128 term of 4 years and shall continue in office until the members 1129 successor takes office, except that, in order to provide for 1130 staggered terms, the director of the office shall designate two 1131 of the initial appointees under this subparagraph to serve terms 1132 of 2 years and shall designate three of the initial appointees 1133 under this subparagraph to serve terms of 3 years. 1134 3.The director of the office may remove a member for 1135 cause. 1136 4.Vacancies on the board shall be filled in the same 1137 manner as the original appointment for the unexpired portion of 1138 the term. 1139 (c)1.The board shall submit to the office a plan of 1140 operation to assure the fair, reasonable, and equitable 1141 administration of the program. The board may at any time submit 1142 to the office any amendments to the plan that the board finds to 1143 be necessary or suitable. 1144 2.The office shall, after notice and hearing, approve the 1145 plan of operation if it determines that the plan submitted by 1146 the board is suitable to assure the fair, reasonable, and 1147 equitable administration of the program and provides for the 1148 sharing of program gains and losses equitably and 1149 proportionately in accordance with paragraph (j). 1150 3.The plan of operation, or any amendment thereto, becomes 1151 effective upon written approval of the office. 1152 (d)The plan of operation must, among other things: 1153 1.Establish procedures for handling and accounting for 1154 program assets and moneys and for an annual fiscal reporting to 1155 the office. 1156 2.Establish procedures for selecting an administering 1157 carrier and set forth the powers and duties of the administering 1158 carrier. 1159 3.Establish procedures for reinsuring risks. 1160 4.Establish procedures for collecting assessments from 1161 participating carriers to provide for claims reinsured by the 1162 program and for administrative expenses, other than amounts 1163 payable to the administrative carrier, incurred or estimated to 1164 be incurred during the period for which the assessment is made. 1165 5.Provide for any additional matters at the discretion of 1166 the board. 1167 (e)The board shall recommend to the office market conduct 1168 requirements and other requirements for carriers and agents, 1169 including requirements relating to: 1170 1.Registration by each carrier with the office of its 1171 intention to be a small employer carrier under this section; 1172 2.Publication by the office of a list of all small 1173 employer carriers, including a requirement applicable to agents 1174 and carriers that a health benefit plan may not be sold by a 1175 carrier that is not identified as a small employer carrier; 1176 3.The availability of a broadly publicized, toll-free 1177 telephone number for access by small employers to information 1178 concerning this section; 1179 4.Periodic reports by carriers and agents concerning 1180 health benefit plans issued; and 1181 5.Methods concerning periodic demonstration by small 1182 employer carriers and agents that they are marketing or issuing 1183 health benefit plans to small employers. 1184 (f)The program has the general powers and authority 1185 granted under the laws of this state to insurance companies and 1186 health maintenance organizations licensed to transact business, 1187 except the power to issue health benefit plans directly to 1188 groups or individuals. In addition thereto, the program has 1189 specific authority to: 1190 1.Enter into contracts as necessary or proper to carry out 1191 the provisions and purposes of this act, including the authority 1192 to enter into contracts with similar programs of other states 1193 for the joint performance of common functions or with persons or 1194 other organizations for the performance of administrative 1195 functions. 1196 2.Sue or be sued, including taking any legal action 1197 necessary or proper for recovering any assessments and penalties 1198 for, on behalf of, or against the program or any carrier. 1199 3.Take any legal action necessary to avoid the payment of 1200 improper claims against the program. 1201 4.Issue reinsurance policies, in accordance with the 1202 requirements of this act. 1203 5.Establish rules, conditions, and procedures for 1204 reinsurance risks under the program participation. 1205 6.Establish actuarial functions as appropriate for the 1206 operation of the program. 1207 7.Assess participating carriers in accordance with 1208 paragraph (j), and make advance interim assessments as may be 1209 reasonable and necessary for organizational and interim 1210 operating expenses. Interim assessments shall be credited as 1211 offsets against any regular assessments due following the close 1212 of the calendar year. 1213 8.Appoint appropriate legal, actuarial, and other 1214 committees as necessary to provide technical assistance in the 1215 operation of the program, and in any other function within the 1216 authority of the program. 1217 9.Borrow money to effect the purposes of the program. Any 1218 notes or other evidences of indebtedness of the program which 1219 are not in default constitute legal investments for carriers and 1220 may be carried as admitted assets. 1221 10.To the extent necessary, increase the $5,000 deductible 1222 reinsurance requirement to adjust for the effects of inflation. 1223 (g)A reinsuring carrier may reinsure with the program 1224 coverage of an eligible employee of a small employer, or any 1225 dependent of such an employee, subject to each of the following 1226 provisions: 1227 1.Except in the case of a late enrollee, a reinsuring 1228 carrier may reinsure an eligible employee or dependent within 60 1229 days after the commencement of the coverage of the small 1230 employer. A newly employed eligible employee or dependent of a 1231 small employer may be reinsured within 60 days after the 1232 commencement of his or her coverage. 1233 2.A small employer carrier may reinsure an entire employer 1234 group within 60 days after the commencement of the groups 1235 coverage under the plan. 1236 3.The program may not reimburse a participating carrier 1237 with respect to the claims of a reinsured employee or dependent 1238 until the carrier has paid incurred claims of at least $5,000 in 1239 a calendar year for benefits covered by the program. In 1240 addition, the reinsuring carrier shall be responsible for 10 1241 percent of the next $50,000 and 5 percent of the next $100,000 1242 of incurred claims during a calendar year and the program shall 1243 reinsure the remainder. 1244 4.The board annually shall adjust the initial level of 1245 claims and the maximum limit to be retained by the carrier to 1246 reflect increases in costs and utilization within the standard 1247 market for health benefit plans within the state. The adjustment 1248 shall not be less than the annual change in the medical 1249 component of the Consumer Price Index for All Urban Consumers 1250 of the Bureau of Labor Statistics of the Department of Labor, 1251 unless the board proposes and the office approves a lower 1252 adjustment factor. 1253 5.A small employer carrier may terminate reinsurance for 1254 all reinsured employees or dependents on any plan anniversary. 1255 6.The premium rate charged for reinsurance by the program 1256 to a health maintenance organization that is approved by the 1257 Secretary of Health and Human Services as a federally qualified 1258 health maintenance organization pursuant to 42 U.S.C. s. 1259 300e(c)(2)(A) and that, as such, is subject to requirements that 1260 limit the amount of risk that may be ceded to the program, which 1261 requirements are more restrictive than subparagraph 3., shall be 1262 reduced by an amount equal to that portion of the risk, if any, 1263 which exceeds the amount set forth in subparagraph 3. which may 1264 not be ceded to the program. 1265 7.The board may consider adjustments to the premium rates 1266 charged for reinsurance by the program for carriers that use 1267 effective cost containment measures, including high-cost case 1268 management, as defined by the board. 1269 8.A reinsuring carrier shall apply its case-management and 1270 claims-handling techniques, including, but not limited to, 1271 utilization review, individual case management, preferred 1272 provider provisions, other managed care provisions or methods of 1273 operation, consistently with both reinsured business and 1274 nonreinsured business. 1275 (h)1.The board, as part of the plan of operation, shall 1276 establish a methodology for determining premium rates to be 1277 charged by the program for reinsuring small employers and 1278 individuals pursuant to this section. The methodology shall 1279 include a system for classification of small employers that 1280 reflects the types of case characteristics commonly used by 1281 small employer carriers in the state. The methodology shall 1282 provide for the development of basic reinsurance premium rates, 1283 which shall be multiplied by the factors set for them in this 1284 paragraph to determine the premium rates for the program. The 1285 basic reinsurance premium rates shall be established by the 1286 board, subject to the approval of the office. The premium rates 1287 set by the board may vary by geographical area, as determined 1288 under this section, to reflect differences in cost. The 1289 multiplying factors must be established as follows: 1290 a.The entire group may be reinsured for a rate that is 1.5 1291 times the rate established by the board. 1292 b.An eligible employee or dependent may be reinsured for a 1293 rate that is 5 times the rate established by the board. 1294 2.The board periodically shall review the methodology 1295 established, including the system of classification and any 1296 rating factors, to assure that it reasonably reflects the claims 1297 experience of the program. The board may propose changes to the 1298 rates which shall be subject to the approval of the office. 1299 (i)If a health benefit plan for a small employer issued in 1300 accordance with this subsection is entirely or partially 1301 reinsured with the program, the premium charged to the small 1302 employer for any rating period for the coverage issued must be 1303 consistent with the requirements relating to premium rates set 1304 forth in this section. 1305 (j)1.Before July 1 of each calendar year, the board shall 1306 determine and report to the office the program net loss for the 1307 previous year, including administrative expenses for that year, 1308 and the incurred losses for the year, taking into account 1309 investment income and other appropriate gains and losses. 1310 2.Any net loss for the year shall be recouped by 1311 assessment of the carriers, as follows: 1312 a.The operating losses of the program shall be assessed in 1313 the following order subject to the specified limitations. The 1314 first tier of assessments shall be made against reinsuring 1315 carriers in an amount which shall not exceed 5 percent of each 1316 reinsuring carriers premiums from health benefit plans covering 1317 small employers. If such assessments have been collected and 1318 additional moneys are needed, the board shall make a second tier 1319 of assessments in an amount which shall not exceed 0.5 percent 1320 of each carriers health benefit plan premiums. Except as 1321 provided in paragraph (m), risk-assuming carriers are exempt 1322 from all assessments authorized pursuant to this section. The 1323 amount paid by a reinsuring carrier for the first tier of 1324 assessments shall be credited against any additional assessments 1325 made. 1326 b.The board shall equitably assess carriers for operating 1327 losses of the plan based on market share. The board shall 1328 annually assess each carrier a portion of the operating losses 1329 of the plan. The first tier of assessments shall be determined 1330 by multiplying the operating losses by a fraction, the numerator 1331 of which equals the reinsuring carriers earned premium 1332 pertaining to direct writings of small employer health benefit 1333 plans in the state during the calendar year for which the 1334 assessment is levied, and the denominator of which equals the 1335 total of all such premiums earned by reinsuring carriers in the 1336 state during that calendar year. The second tier of assessments 1337 shall be based on the premiums that all carriers, except risk 1338 assuming carriers, earned on all health benefit plans written in 1339 this state. The board may levy interim assessments against 1340 carriers to ensure the financial ability of the plan to cover 1341 claims expenses and administrative expenses paid or estimated to 1342 be paid in the operation of the plan for the calendar year prior 1343 to the associations anticipated receipt of annual assessments 1344 for that calendar year. Any interim assessment is due and 1345 payable within 30 days after receipt by a carrier of the interim 1346 assessment notice. Interim assessment payments shall be credited 1347 against the carriers annual assessment. Health benefit plan 1348 premiums and benefits paid by a carrier that are less than an 1349 amount determined by the board to justify the cost of collection 1350 may not be considered for purposes of determining assessments. 1351 c.Subject to the approval of the office, the board shall 1352 make an adjustment to the assessment formula for reinsuring 1353 carriers that are approved as federally qualified health 1354 maintenance organizations by the Secretary of Health and Human 1355 Services pursuant to 42 U.S.C. s. 300e(c)(2)(A) to the extent, 1356 if any, that restrictions are placed on them that are not 1357 imposed on other small employer carriers. 1358 3.Before July 1 of each year, the board shall determine 1359 and file with the office an estimate of the assessments needed 1360 to fund the losses incurred by the program in the previous 1361 calendar year. 1362 4.If the board determines that the assessments needed to 1363 fund the losses incurred by the program in the previous calendar 1364 year will exceed the amount specified in subparagraph 2., the 1365 board shall evaluate the operation of the program and report its 1366 findings, including any recommendations for changes to the plan 1367 of operation, to the office within 180 days following the end of 1368 the calendar year in which the losses were incurred. The 1369 evaluation shall include an estimate of future assessments, the 1370 administrative costs of the program, the appropriateness of the 1371 premiums charged and the level of carrier retention under the 1372 program, and the costs of coverage for small employers. If the 1373 board fails to file a report with the office within 180 days 1374 following the end of the applicable calendar year, the office 1375 may evaluate the operations of the program and implement such 1376 amendments to the plan of operation the office deems necessary 1377 to reduce future losses and assessments. 1378 5.If assessments exceed the amount of the actual losses 1379 and administrative expenses of the program, the excess shall be 1380 held as interest and used by the board to offset future losses 1381 or to reduce program premiums. As used in this paragraph, the 1382 term future losses includes reserves for incurred but not 1383 reported claims. 1384 6.Each carriers proportion of the assessment shall be 1385 determined annually by the board, based on annual statements and 1386 other reports considered necessary by the board and filed by the 1387 carriers with the board. 1388 7.Provision shall be made in the plan of operation for the 1389 imposition of an interest penalty for late payment of an 1390 assessment. 1391 8.A carrier may seek, from the office, a deferment, in 1392 whole or in part, from any assessment made by the board. The 1393 office may defer, in whole or in part, the assessment of a 1394 carrier if, in the opinion of the office, the payment of the 1395 assessment would place the carrier in a financially impaired 1396 condition. If an assessment against a carrier is deferred, in 1397 whole or in part, the amount by which the assessment is deferred 1398 may be assessed against the other carriers in a manner 1399 consistent with the basis for assessment set forth in this 1400 section. The carrier receiving such deferment remains liable to 1401 the program for the amount deferred and is prohibited from 1402 reinsuring any individuals or groups in the program if it fails 1403 to pay assessments. 1404 (k)Neither the participation in the program as reinsuring 1405 carriers, the establishment of rates, forms, or procedures, nor 1406 any other joint or collective action required by this act, may 1407 be the basis of any legal action, criminal or civil liability, 1408 or penalty against the program or any of its carriers either 1409 jointly or separately. 1410 (l)The board shall monitor compliance with this section, 1411 including the market conduct of small employer carriers, and 1412 shall report to the office any unfair trade practices and 1413 misleading or unfair conduct by a small employer carrier that 1414 has been reported to the board by agents, consumers, or any 1415 other person. The office shall investigate all reports and, upon 1416 a finding of noncompliance with this section or of unfair or 1417 misleading practices, shall take action against the small 1418 employer carrier as permitted under the insurance code or 1419 chapter 641. The board is not given investigatory or regulatory 1420 powers, but must forward all reports of cases or abuse or 1421 misrepresentation to the office. 1422 (m)Notwithstanding paragraph (j), the administrative 1423 expenses of the program shall be recouped by assessment of risk 1424 assuming carriers and reinsuring carriers and such amounts shall 1425 not be considered part of the operating losses of the plan for 1426 the purposes of this paragraph. Each carriers portion of such 1427 administrative expenses shall be determined by multiplying the 1428 total of such administrative expenses by a fraction, the 1429 numerator of which equals the carriers earned premium 1430 pertaining to direct writing of small employer health benefit 1431 plans in the state during the calendar year for which the 1432 assessment is levied, and the denominator of which equals the 1433 total of such premiums earned by all carriers in the state 1434 during such calendar year. 1435 (n)The board shall advise the office, the Agency for 1436 Health Care Administration, the department, other executive 1437 departments, and the Legislature on health insurance issues. 1438 Specifically, the board shall: 1439 1.Provide a forum for stakeholders, consisting of 1440 insurers, employers, agents, consumers, and regulators, in the 1441 private health insurance market in this state. 1442 2.Review and recommend strategies to improve the 1443 functioning of the health insurance markets in this state with a 1444 specific focus on market stability, access, and pricing. 1445 3.Make recommendations to the office for legislation 1446 addressing health insurance market issues and provide comments 1447 on health insurance legislation proposed by the office. 1448 4.Meet at least three times each year. One meeting shall 1449 be held to hear reports and to secure public comment on the 1450 health insurance market, to develop any legislation needed to 1451 address health insurance market issues, and to provide comments 1452 on health insurance legislation proposed by the office. 1453 5.Issue a report to the office on the state of the health 1454 insurance market by September 1 each year. The report shall 1455 include recommendations for changes in the health insurance 1456 market, results from implementation of previous recommendations, 1457 and information on health insurance markets. 1458 Section 16.Paragraphs (c), (d), and (e) are added to 1459 subsection (2) of section 627.711, Florida Statutes, to read: 1460 627.711Notice of premium discounts for hurricane loss 1461 mitigation; uniform mitigation verification inspection form. 1462 (2) 1463 (c)The office shall contract with a state university to 1464 design, operate, upgrade, and maintain a statewide database for 1465 uniform mitigation verification inspection forms. This database 1466 must be managed by the office to collect and evaluate mitigation 1467 features of residential properties within this state. 1468 (d)Beginning January 1, 2026, each insurer shall 1469 electronically file a copy of uniform mitigation inspection 1470 forms submitted by policyholders in the database created 1471 pursuant to paragraph (c) within 15 business days after receipt 1472 using the electronic format prescribed by the office. 1473 (e)The Financial Services Commission shall adopt rules to 1474 implement this subsection. 1475 Section 17.Effective upon this act becoming a law, 1476 subsection (12) of section 627.7152, Florida Statutes, is 1477 amended to read: 1478 627.7152Assignment agreements. 1479 (12)The office shall require each insurer to report by 1480 January 30, 2022, and each year thereafter data on each 1481 residential and commercial property insurance claim paid in the 1482 prior calendar year under an assignment agreement. The Financial 1483 Services Commission shall adopt by rule a list of the data 1484 required, which must include specific data about claims 1485 adjustment and settlement timeframes and trends, grouped by 1486 whether litigated or not litigated and by loss adjustment 1487 expenses. 1488 Section 18.Section 627.9145, Florida Statutes, is created 1489 to read: 1490 627.9145Reports by residential property insurers. 1491 Beginning March 1, 2026, and by March 1 every year thereafter, 1492 each authorized insurer and surplus lines insurer transacting 1493 residential property insurance in this state shall file with the 1494 office a report addressing the following areas: 1495 (1)Policy types, perils covered, statuses, and premiums. 1496 (2)Location and limits of writings in this state. 1497 (3)Coverages, deductibles, and exclusions. 1498 (4)Mitigation discounts. 1499 (5)Claims reporting requirements. 1500 (6)Any other information deemed necessary by the 1501 commission to provide the office with the ability to track 1502 mitigation and resiliency trends occurring in the residential 1503 property market. 1504 1505 The commission shall adopt rules specifying the information 1506 required to be reported under this section and the format 1507 required for the reports. 1508 Section 19.Subsections (2), (4), and (5) of section 1509 627.915, Florida Statutes, are amended to read: 1510 627.915Insurer experience reporting. 1511 (2)Beginning January 1, 2026, each insurer transacting 1512 private passenger automobile insurance in this state shall file 1513 monthly with the office a report addressing the following areas: 1514 (a)Policy coverage categories, including policies in force 1515 and total direct premiums earned and written. 1516 (b)Type, location, and limits of writings in this state. 1517 (c)Claims reporting requirements. 1518 (d)Any other information deemed necessary by the 1519 commission to provide the office with the ability to track 1520 trends occurring in the private passenger automobile insurance 1521 market. 1522 1523 The commission shall adopt rules specifying the information 1524 required to be reported under this subsection and the format 1525 required for the reports. Each insurer transacting fire, 1526 homeowners multiple peril, commercial multiple peril, medical 1527 malpractice, products liability, workers compensation, private 1528 passenger automobile liability, commercial automobile liability, 1529 private passenger automobile physical damage, commercial 1530 automobile physical damage, officers and directors liability 1531 insurance, or other liability insurance shall report, for each 1532 such line of insurance, the information specified in this 1533 subsection to the office. The information shall be reported for 1534 direct Florida business only and shall be reported on a 1535 calendar-year basis annually by April 1 for the preceding 1536 calendar year: 1537 (a)Direct premiums written. 1538 (b)Direct premiums earned. 1539 (c)Loss reserves for all known claims: 1540 1.At beginning of the year. 1541 2.At end of the year. 1542 (d)Reserves for losses incurred but not reported: 1543 1.At beginning of the year. 1544 2.At end of the year. 1545 (e)Allocated loss adjustment expense: 1546 1.Reserve at beginning of the year. 1547 2.Reserve at end of the year. 1548 3.Paid during the year. 1549 (f)Unallocated loss adjustment expense: 1550 1.Reserve at beginning of the year. 1551 2.Reserve at end of the year. 1552 3.Paid during the year. 1553 (g)Direct losses paid. 1554 (h)Underwriting income or loss. 1555 (i)Commissions and brokerage fees. 1556 (j)Taxes, licenses, and fees. 1557 (k)Other acquisition costs. 1558 (l)General expenses. 1559 (m)Policyholder dividends. 1560 (n)Net investment gain or loss and other income gain or 1561 loss allocated pro rata by earned premium to Florida business 1562 utilizing the investment allocation formula contained in the 1563 National Association of Insurance Commissioners Profitability 1564 Report by line by state. 1565 (4)The office shall provide a summary of information 1566 provided pursuant to subsections (1) and (2) in its annual 1567 report. 1568 (5)Any insurer or insurer group which does not write at 1569 least 0.5 percent of the Florida market based on premiums 1570 written shall not have to file any report required by subsection 1571 (2) other than a report indicating its percentage of the market 1572 share. That percentage shall be calculated by dividing the 1573 current premiums written by the preceding years total premiums 1574 written in the state for that line of insurance. 1575 Section 20.Effective upon this act becoming a law, 1576 subsection (2) of section 628.081, Florida Statutes, is amended 1577 to read: 1578 628.081Incorporation of domestic insurer. 1579 (2)The incorporators shall execute articles of 1580 incorporation in triplicate. At least three of them shall 1581 acknowledge execution before an officer authorized to take 1582 acknowledgments. 1583 Section 21.Effective upon this act becoming a law, 1584 subsections (2), (3), and (4) of section 628.091, Florida 1585 Statutes, are amended to read: 1586 628.091Filing, approval of articles of incorporation. 1587 (2)The incorporators shall file the triplicate originals 1588 of the articles of incorporation with the office, accompanied by 1589 the filing fee specified in s. 624.501. 1590 (3)The office shall promptly examine the articles of 1591 incorporation. If it finds that the articles of incorporation 1592 conform to law, and that a permit has been or will be issued, it 1593 must shall endorse its approval on each of the triplicate 1594 originals of the articles of incorporation, retain one copy for 1595 its files, and return the articles of incorporation remaining 1596 copies to the incorporators for filing with the Department of 1597 State. 1598 (4)If the office does not so find, it must shall refuse to 1599 approve the articles of incorporation and shall return the 1600 originals. 1601 Section 22.Effective upon this act becoming a law, 1602 subsections (2) and (3) of section 628.111, Florida Statutes, 1603 are amended to read: 1604 628.111Amendment of articles of incorporation; mutual 1605 insurer. 1606 (2)(a)Upon adoption of the amendment, the insurer shall 1607 make in triplicate under its corporate seal a certificate 1608 thereof, setting forth the amendment and the date and manner of 1609 the adoption thereof, which certificate must shall be executed 1610 by the insurers president or vice president and secretary or 1611 assistant secretary and acknowledged before an officer 1612 authorized to take acknowledgments. The insurer shall deliver 1613 the triplicate originals of the certificate to the office, 1614 together with the filing fee specified in s. 624.501. 1615 (b)The office shall promptly examine the certificate of 1616 amendment,; and, if it finds that the certificate and the 1617 amendment comply with law, it must shall endorse its approval on 1618 the certificate of amendment upon each of the triplicate 1619 originals, place one on file in its office, and return the 1620 remaining sets to the insurer. The insurer shall forthwith file 1621 such endorsed certificate certificates of amendment with the 1622 Department of State. The amendment is shall be effective when 1623 filed with and approved by the Department of State. 1624 (3)If the office finds that the proposed amendment or 1625 certificate does not comply with the law, it may shall not 1626 approve the same, and must shall return the triplicate 1627 certificate of amendment to the insurer. 1628 Section 23.Paragraph (a) of subsection (1) and paragraph 1629 (b) of subsection (4) of section 628.461, Florida Statutes, are 1630 amended to read: 1631 628.461Acquisition of controlling stock. 1632 (1)A person may not, individually or in conjunction with 1633 any affiliated person of such person, acquire directly or 1634 indirectly, conclude a tender offer or exchange offer for, enter 1635 into any agreement to exchange securities for, or otherwise 1636 finally acquire 10 percent or more of the outstanding voting 1637 securities of a domestic stock insurer or of a controlling 1638 company, unless: 1639 (a)The person or affiliated person has filed with the 1640 office and sent by registered mail to the principal office of 1641 the insurer and controlling company a letter of notification 1642 regarding the transaction or proposed transaction within 5 days 1643 after any form of tender offer or exchange offer is proposed, or 1644 within 5 days after the acquisition of the securities if no 1645 tender offer or exchange offer is involved. The notification 1646 must be provided on forms prescribed by the commission 1647 containing information determined necessary to understand the 1648 transaction and identify all purchasers and owners involved; 1649 1650 A filing required under this subsection must be made for any 1651 acquisition that equals or exceeds 10 percent of the outstanding 1652 voting securities. 1653 (4) 1654 (b)Any corporation, association, or trust filing the 1655 statement required by this section shall give all required 1656 information that is within the knowledge of the directors, 1657 officers, or trustees (or others performing functions similar to 1658 those of a director, officer, or trustee) of the corporation, 1659 association, or trust making the filing and of any person 1660 controlling either directly or indirectly such corporation, 1661 association, or trust. A copy of the statement and any 1662 amendments to the statement shall be sent by registered mail to 1663 the insurer at its principal office within the state and to any 1664 controlling company at its principal office. If any material 1665 change occurs in the facts set forth in the statement filed with 1666 the office and sent to such insurer or controlling company 1667 pursuant to this section, an amendment setting forth such 1668 changes shall be filed immediately with the office and sent 1669 immediately to such insurer and controlling company. 1670 Section 24.Paragraph (b) of subsection (5) of section 1671 628.4615, Florida Statutes, is amended to read: 1672 628.4615Specialty insurers; acquisition of controlling 1673 stock, ownership interest, assets, or control; merger or 1674 consolidation. 1675 (5) 1676 (b)Any person filing the statement required by this 1677 section shall give all required information that is within the 1678 knowledge of: 1679 1.The directors, officers, or trustees, if a corporation, 1680 or 1681 2.The partners, owners, managers, or joint venturers, or 1682 others performing functions similar to those of a director, 1683 officer, or trustee, if not a corporation, 1684 1685 of the person making the filing and of any person controlling 1686 either directly or indirectly such person. If any material 1687 change occurs in the facts set forth in the application filed 1688 with the office pursuant to this section, an amendment setting 1689 forth such changes must shall be filed immediately with the 1690 office, and a copy of the amendment must shall be sent by 1691 registered mail to the principal office of the specialty insurer 1692 and to the principal office of the controlling company. 1693 Section 25.Effective upon this act becoming a law, 1694 subsection (2) of section 628.717, Florida Statutes, is amended 1695 to read: 1696 628.717Filing of articles of incorporation. 1697 (2)The office shall promptly examine the articles of 1698 incorporation,; and, if it finds that the articles of 1699 incorporation comply with law, the office must shall endorse its 1700 approval on the certificate of amendment upon each of the 1701 originals, place one on file in its office, and return the 1702 remaining sets to the incorporators. The incorporators shall 1703 promptly file such endorsed articles of incorporation with the 1704 Department of State. The articles of incorporation are shall be 1705 effective when filed with and approved by the Department of 1706 State. 1707 Section 26.Effective upon this act becoming a law, 1708 subsection (2) of section 628.719, Florida Statutes, is amended 1709 to read: 1710 628.719Amendment of articles of incorporation. 1711 (2)(a)Upon adoption of an amendment, the mutual insurance 1712 holding company shall make under its corporate seal a 1713 certificate thereof, setting forth the amendment and the date 1714 and manner of the adoption thereof, which certificate must shall 1715 be executed by the mutual insurance holding companys president 1716 or vice president and secretary or assistant secretary and 1717 acknowledged before an officer authorized to take 1718 acknowledgments. The mutual insurance holding company shall 1719 deliver the originals of the certificate to the office. 1720 (b)The office shall promptly examine the certificate of 1721 amendment, and, if the office finds that the certificate and the 1722 amendment comply with law, the office must shall endorse its 1723 approval on the certificate of amendment upon each of the 1724 originals, place one on file in its office, and return the 1725 remaining sets to the mutual insurance holding company. The 1726 mutual insurance holding company shall promptly file such 1727 endorsed certificate certificates of amendment with the 1728 Department of State. The amendment is shall be effective when 1729 filed with and approved by the Department of State. 1730 Section 27.Effective upon this act becoming a law, 1731 subsection (4) of section 628.910, Florida Statutes, is amended 1732 to read: 1733 628.910Incorporation options and requirements. 1734 (4)In the case of a captive insurance company formed as a 1735 corporation or a nonprofit corporation, before the articles of 1736 incorporation are transmitted to the Secretary of State, the 1737 incorporators shall file the articles of incorporation in 1738 triplicate with the office. The office shall promptly examine 1739 the articles of incorporation. If it finds that the articles of 1740 incorporation conform to law, it must shall endorse its approval 1741 on each of the triplicate originals of the articles of 1742 incorporation, retain one copy for its files, and return the 1743 articles of incorporation remaining copies to the incorporators 1744 for filing with the Department of State. 1745 Section 28.Subsection (5) of section 629.011, Florida 1746 Statutes, is amended, and subsections (6), (7), and (8) are 1747 added to that section, to read: 1748 629.011Definitions.As used in this part, the term: 1749 (5)Reciprocal insurer means an unincorporated 1750 aggregation of subscribers operating individually and 1751 collectively through an attorney in fact to provide reciprocal 1752 insurance among themselves. 1753 (a)An assessable reciprocal insurer is a reciprocal 1754 insurer that is able to levy an assessment on its subscribers to 1755 make up any shortfall in capital and surplus to cover claims and 1756 expenses as specified in s. 629.231. 1757 (b)A nonassessable reciprocal insurer is a reciprocal 1758 insurer authorized under s. 629.091(3) or s. 629.291(5) to issue 1759 policies where there is no recourse against subscribers for any 1760 shortfall in capital and surplus to cover claims and expenses. 1761 (6)Subscriber contribution means any transfer of money 1762 by a subscriber of a reciprocal insurer to the reciprocal 1763 insurer in excess of the premium approved by the office, if such 1764 money is counted as surplus for the reciprocal insurer or used 1765 to pay surplus notes. 1766 (7)Subscriber savings account means any account in which 1767 a reciprocal insurer assigns money for the benefit of an 1768 individual subscriber, other than accounts holding money for the 1769 payment of a specific claim by or settlement of a specific legal 1770 dispute with that individual subscriber. 1771 (8)Subscribers advisory committee means the governing 1772 committee of a domestic reciprocal insurer which is formed in 1773 compliance with s. 629.201 and represents the interests of the 1774 subscribers. 1775 Section 29.Section 629.071, Florida Statutes, is amended 1776 to read: 1777 629.071Surplus funds required. 1778 (1)An assessable A domestic reciprocal insurer hereunder 1779 formed, if it has otherwise complied with the applicable 1780 provisions of this code, may be authorized to transact insurance 1781 if it has and thereafter maintains surplus funds of not less 1782 than $3 million $250,000. 1783 (2)A nonassessable reciprocal insurer, if it has otherwise 1784 complied with the applicable provisions of this code, may be 1785 authorized to transact insurance if it has and thereafter 1786 maintains a surplus as to policyholders which is equal to that 1787 required under s. 624.408 for a domestic stock insurer 1788 authorized to transact like kinds of insurance In addition to 1789 the surplus required to be maintained under subsection (1), the 1790 insurer shall have, when first so authorized, an expendable 1791 surplus of not less than $750,000. 1792 Section 30.Effective upon this act becoming a law, 1793 subsection (3) of section 629.081, Florida Statutes, is amended 1794 to read: 1795 629.081Organization of reciprocal insurer. 1796 (3)The filing must be accompanied by the application fee 1797 required by s. 624.501(1)(a). 1798 Section 31.Section 629.082, Florida Statutes, is created 1799 to read: 1800 629.082Reciprocal affiliates.The attorney in fact of a 1801 reciprocal is an affiliate of the reciprocal for purposes of s. 1802 624.10. 1803 Section 32.Section 629.1015, Florida Statutes, is created 1804 to read: 1805 629.1015Affiliate fees. 1806 (1)Each reciprocal insurer doing business in this state 1807 which pays a fee, commission, or other financial consideration 1808 or payment to any affiliate directly or indirectly must provide 1809 to the office documentation supporting that such fee, 1810 commission, or other financial consideration or payment to any 1811 affiliate is fair and reasonable for each service being provided 1812 by contract. In determining whether the fee, commission, or 1813 other financial consideration or payment is fair and reasonable, 1814 the office must comply with s. 624.424(13). 1815 (2)For each agreement with an affiliate in force on July 1816 1, 2025, each domestic reciprocal insurer shall provide to the 1817 office no later than October 1, 2025, the cost incurred by the 1818 affiliate to provide each service, the amount charged to the 1819 domestic reciprocal insurer for each service, and the dollar 1820 amount of fees forgiven, waived, or reimbursed by the affiliate 1821 for the 2 most recent preceding years. If the total dollar 1822 amount charged to the domestic reciprocal insurer was greater 1823 than the total cost to provide services for either year, the 1824 domestic reciprocal insurer must explain how it determined the 1825 fee was fair and reasonable. For any proposed contract with an 1826 affiliate effective after July 1, 2025, the domestic reciprocal 1827 insurer must provide documentation to support that the fee, 1828 commission, or other financial consideration or payment to the 1829 affiliate is fair and reasonable. 1830 Section 33.Section 629.121, Florida Statutes, is amended 1831 to read: 1832 629.121Attorney in fact Attorneys bond. 1833 (1)Concurrently with the filing of the declaration 1834 provided for in s. 629.081, the attorney in fact of a domestic 1835 reciprocal insurer shall file with the office a bond in favor of 1836 this state for the benefit of all persons damaged as a result of 1837 breach by the attorney in fact of the conditions of his or her 1838 bond as set forth in subsection (2). The bond must shall be 1839 executed by the attorney in fact and by an authorized corporate 1840 surety and shall be subject to the approval of the office. 1841 (2)The bond must shall be in the sum of $300,000 $100,000, 1842 aggregate in form, the bond conditioned that the attorney in 1843 fact will faithfully account for all moneys and other property 1844 of the insurer coming into his or her hands, and that he or she 1845 will not withdraw or appropriate to his or her own use from the 1846 funds of the insurer any moneys or property to which he or she 1847 is not entitled under the power of attorney. 1848 (3)The bond must shall provide that it is not subject to 1849 cancellation unless 30 days advance notice in writing of 1850 cancellation is given both the attorney in fact and the office. 1851 Section 34.Section 629.162, Florida Statutes, is created 1852 to read: 1853 629.162Subscriber contributions. 1854 (1)Reciprocal insurers may, subject to prior approval by 1855 the office, require contributions from subscribers in addition 1856 to premiums approved by the office. 1857 (2)A reciprocal insurer shall clearly disclose required 1858 subscriber contributions on the declarations page of any policy 1859 issued by the reciprocal insurer, separate from any cost 1860 associated with the premium. 1861 (3)Reciprocal insurers shall provide subscribers an annual 1862 report detailing how each dollar of subscriber contributions was 1863 allocated or spent. 1864 (4)Changes to subscriber contributions are subject to 1865 prior approval by the office. 1866 Section 35.Section 629.163, Florida Statutes, is created 1867 to read: 1868 629.163Subscriber savings accounts. 1869 (1)Reciprocal insurers may establish subscriber savings 1870 accounts. 1871 (2)Moneys assigned to subscriber savings accounts are not 1872 considered distributions under s. 629.164. 1873 (3)Subscriber savings accounts are subject to the 1874 following requirements: 1875 (a)Reciprocal insurers shall inform each subscriber, in 1876 writing, of the limitations and restrictions imposed upon the 1877 use or possession of moneys assigned to subscriber savings 1878 accounts. 1879 (b)Reciprocal insurers shall inform each subscriber, in 1880 writing, of the procedures used to assign moneys to subscriber 1881 savings accounts and any calculations used to determine the 1882 amount of moneys to be assigned to subscriber savings accounts. 1883 (c)Advertisements marketing the benefits of subscriber 1884 savings accounts must note the limitations and restrictions 1885 imposed upon the use or possession of moneys assigned to 1886 subscriber savings accounts. 1887 (d)Upon cancellation or nonrenewal of a subscribers 1888 policy or policies, the subscriber is entitled, within 60 days, 1889 to all moneys assigned to the subscribers savings account, 1890 except when such moneys are otherwise allocated by law or 1891 contract, or when such distribution is prohibited by order of 1892 the office. 1893 Section 36.Section 629.164, Florida Statutes, is created 1894 to read: 1895 629.164Subscriber distributions. 1896 (1)Reciprocal insurers may make distributions to 1897 subscribers from their subscriber savings accounts, as set forth 1898 in their subscribers agreement. 1899 (2)The subscribers advisory committee or the attorney in 1900 fact, as set forth in the subscribers agreement, has the 1901 authority to authorize distributions, subject to prior written 1902 approval by the office. 1903 (3)Distributions may not unfairly discriminate between 1904 classes of risks or policies, or between subscribers, but may 1905 vary as to classes of subscribers based on the experience of the 1906 classes. 1907 (4)A domestic reciprocal insurer may, upon prior written 1908 approval of the office, return to its subscribers a portion of 1909 unassigned funds of up to 10 percent of surplus, with 1910 distributions limited to 50 percent of net income from the 1911 previous calendar year. Such distribution may not unfairly 1912 discriminate between classes of risks or policies, or between 1913 subscribers, but may vary as to classes of subscribers based on 1914 the experience of the classes. 1915 Section 37.Section 629.171, Florida Statutes, is amended 1916 to read: 1917 629.171Annual statement. 1918 (1)The subscribers advisory committee shall procure an 1919 audited annual statement of the accounts and records of the 1920 insurer and the attorney in fact. The statement of the insurer 1921 must be prepared by an independent auditor at the expense of the 1922 reciprocal insurer and must be available for inspection by any 1923 subscriber. The statement of the attorney in fact must be 1924 prepared by an independent auditor at the expense of the 1925 attorney in fact. 1926 (2)(1)The annual statement filing of a reciprocal insurer 1927 must shall be submitted made and filed by its attorney in fact. 1928 (3)(2)The audited statement of the attorney in fact must 1929 shall be submitted with the annual statement filing of the 1930 reciprocal insurer, as required under s. 624.424, and 1931 supplemented by such information as may be required by the 1932 office relative to the affairs and transactions of the attorney 1933 in fact relating insofar as they relate to the reciprocal 1934 insurer. 1935 Section 38.Subsection (1) of section 629.181, Florida 1936 Statutes, is amended to read: 1937 629.181Financial condition; method of determining.In 1938 determining the financial condition of a reciprocal insurer, the 1939 office shall apply the following rules: 1940 (1)Subscriber contributions are The surplus deposits of 1941 subscribers shall be allowed as assets, except that any premium 1942 deposits delinquent for 90 days must shall first be charged 1943 against such subscriber contributions. Subscriber contributions 1944 may not exceed 10 percent of each individual subscribers policy 1945 premium for a nonassessable reciprocal insurer and 10 percent of 1946 each individual subscribers policy premium for an assessable 1947 reciprocal insurer surplus deposit. 1948 Section 39.Section 629.201, Florida Statutes, is amended 1949 to read: 1950 629.201Subscribers advisory committee.Each domestic 1951 reciprocal insurer must have a subscribers advisory committee 1952 representing the interests of the subscribers. 1953 (1)The subscribers advisory committee of a domestic 1954 reciprocal insurer exercising the subscribers rights must shall 1955 be formed in compliance with this section and selected under 1956 such rules as the subscribers adopt. Such rules, along with any 1957 amendments, must be approved by the office before becoming 1958 effective. 1959 (2)Not less than two-thirds of such committee shall be 1960 subscribers other than the attorney, or any person employed by, 1961 representing, or having a financial interest in the attorney. 1962 (3)The subscribers advisory committee shall perform all 1963 of the following duties: 1964 (a)Supervise the finances of the insurer.; 1965 (b)Supervise the insurers operations to such extent as to 1966 ensure assure conformity with the subscribers agreement, and 1967 power of attorney, and other governing documents.; 1968 (c)Hire independent auditors, counsel, and other experts 1969 at the expense of the insurer as necessary to fulfill the 1970 committees duties. Procure the audit of the accounts and 1971 records of the insurer and of the attorney at the expense of the 1972 insurer; and 1973 (d)Exercise any Have such additional powers and functions 1974 as may be conferred by the subscribers agreement. 1975 (3)The initial subscribers advisory committee must be 1976 appointed by the original subscribers or the attorney in fact. 1977 Within 6 months after the reciprocal insurer is authorized to 1978 transact insurance, at least two-thirds of the committee members 1979 must be elected as provided for in subsections (4) and (5). 1980 (4)The subscribers advisory committee must be composed of 1981 subscribers of the reciprocal insurer. At least two-thirds of 1982 the subscribers advisory committee must be composed of 1983 subscribers who are independent of, not employed by, not 1984 representing, not selected by, and without any financial 1985 interest in the attorney in fact. The independent subscribers 1986 must be elected by the subscribers of the reciprocal insurer. 1987 (5)Any rules governing the election of subscribers to the 1988 subscribers advisory committee require all of the following: 1989 (a)An electorate composed exclusively of all subscribers 1990 of the reciprocal insurer. 1991 (b)Terms of not more than 5 years. 1992 (c)A process that allows subscribers to nominate other 1993 subscribers for election to the subscribers advisory committee. 1994 (6)If a reciprocal insurer has more than 50 subscribers, 1995 the attorney in fact must provide a platform by which 1996 subscribers can communicate with each other regarding the 1997 subscribers advisory committee election process. 1998 Section 40.Section 629.271, Florida Statutes, is repealed. 1999 Section 41.Effective upon this act becoming a law, 2000 subsections (1) and (2) of section 629.291, Florida Statutes, 2001 are amended to read: 2002 629.291Merger or conversion. 2003 (1)A reciprocal insurer, upon affirmative vote of not less 2004 than two-thirds of its subscribers who vote on such merger or 2005 conversion pursuant to due notice, and subject to approval by 2006 the office of the terms therefor, may merge with another 2007 reciprocal insurer or be converted to a stock or mutual insurer, 2008 to be thereafter governed by the applicable sections of the 2009 Florida Insurance Code. However, a domestic stock insurer may 2010 not convert to a reciprocal insurer. 2011 (2)A plan to merge a reciprocal insurer with another 2012 reciprocal insurer or for conversion of the reciprocal insurer 2013 to a stock or mutual insurer must be filed with the office on 2014 forms adopted by the commission office and must contain such 2015 information as the office reasonably requires to evaluate the 2016 transaction. 2017 Section 42.Section 629.301, Florida Statutes, is amended 2018 to read: 2019 629.301Impaired reciprocal insurers. 2020 (1)If the assets of a domestic reciprocal insurer are at 2021 any time insufficient to discharge its liabilities, other than 2022 any liability on account of funds contributed by the attorney in 2023 fact or others, and to maintain the required surplus, its 2024 attorney in fact must shall forthwith make up the deficiency or 2025 levy an assessment upon the subscribers for the amount needed to 2026 make up the deficiency, but subject to the limitation set forth 2027 in the power of attorney or policy. 2028 (2)If the attorney in fact fails to make up such 2029 deficiency or to make the assessment within 30 days after the 2030 office orders the attorney in fact him or her to do so, or if 2031 the deficiency is not fully made up within 60 days after the 2032 date the assessment was made, the insurer is shall be deemed 2033 insolvent and must shall be proceeded against in the same manner 2034 as any other insurer under chapter 631 and the insurance as 2035 authorized by this code. 2036 (3)If liquidation of a reciprocal such an insurer is 2037 ordered, the receiver must levy an assessment shall be levied 2038 upon the subscribers an assessment for such an amount as the 2039 receiver determines to be necessary to discharge all liabilities 2040 of the insurer. The liabilities must be, subject to limits as 2041 provided by this chapter, as the office determines to be 2042 necessary to discharge all liabilities of the insurer, exclusive 2043 of any funds contributed by the attorney in fact or other 2044 persons, but inclusive of including the reasonable cost of the 2045 liquidation. The assessment is subject to any limits set forth 2046 in the power of attorney, the subscribers agreement, the 2047 policy, or this chapter. 2048 Section 43.Section 629.401, Florida Statutes, is repealed. 2049 Section 44.Section 629.520, Florida Statutes, is repealed. 2050 Section 45.Section 629.56, Florida Statutes, is created to 2051 read: 2052 629.56Unearned premium reserves.A reciprocal insurer must 2053 maintain an unearned premium reserve at all times and as 2054 required under s. 625.051. 2055 Section 46.Paragraph (c) of subsection (13) of section 2056 634.401, Florida Statutes, is amended to read: 2057 634.401Definitions.As used in this part, the term: 2058 (13)Service warranty means any warranty, guaranty, 2059 extended warranty or extended guaranty, maintenance service 2060 contract equal to or greater than 1 year in length or which does 2061 not meet the exemption in paragraph (a), contract agreement, or 2062 other written promise for a specific duration to perform the 2063 repair, replacement, or maintenance of a consumer product, or 2064 for indemnification for repair, replacement, or maintenance, for 2065 operational or structural failure due to a defect in materials 2066 or workmanship, normal wear and tear, power surge, or accidental 2067 damage from handling in return for the payment of a segregated 2068 charge by the consumer; however: 2069 (c)All contracts that include coverage for accidental 2070 damage from handling must be covered by the contractual 2071 liability policy referred to in s. 634.406(3), unless issued by 2072 an association not required to establish an unearned premium 2073 reserve or maintain contractual liability insurance under s. 2074 634.406(7). 2075 Section 47.Section 641.2012, Florida Statutes, is created 2076 to read: 2077 641.2012Service of process.Sections 624.422 and 624.423 2078 apply to health maintenance organizations. 2079 Section 48.Subsections (1) and (3), paragraph (a) of 2080 subsection (5), and subsection (6) of section 641.26, Florida 2081 Statutes, are amended to read: 2082 641.26Annual and quarterly reports. 2083 (1)Every health maintenance organization shall file an 2084 annual statement covering the preceding calendar year on or 2085 before March 1, and quarterly statements covering the periods 2086 ending on March 31, June 30, and September 30 within 45 days 2087 after each such date, annually within 3 months after the end of 2088 its fiscal year, or within an extension of time therefor as the 2089 office, for good cause, may grant, in a form prescribed by the 2090 commission, file a report with the office, verified by the oath 2091 of two officers of the organization or, if not a corporation, of 2092 two persons who are principal managing directors of the affairs 2093 of the organization, properly notarized, showing its condition 2094 on the last day of the immediately preceding reporting period. 2095 Such report shall include: 2096 (a)A financial statement of the health maintenance 2097 organization filed by electronic means in a computer-readable 2098 form using a format acceptable to the office. 2099 (b)A financial statement of the health maintenance 2100 organization filed on forms acceptable to the office. 2101 (c)An audited financial statement of the health 2102 maintenance organization, including its balance sheet and a 2103 statement of operations for the preceding year certified by an 2104 independent certified public accountant, prepared in accordance 2105 with statutory accounting principles. 2106 (d)The number of health maintenance contracts issued and 2107 outstanding and the number of health maintenance contracts 2108 terminated. 2109 (e)The number and amount of damage claims for medical 2110 injury initiated against the health maintenance organization and 2111 any of the providers engaged by it during the reporting year, 2112 broken down into claims with and without formal legal process, 2113 and the disposition, if any, of each such claim. 2114 (f)An actuarial certification that: 2115 1.The health maintenance organization is actuarially 2116 sound, which certification shall consider the rates, benefits, 2117 and expenses of, and any other funds available for the payment 2118 of obligations of, the organization. 2119 2.The rates being charged or to be charged are actuarially 2120 adequate to the end of the period for which rates have been 2121 guaranteed. 2122 3.Incurred but not reported claims and claims reported but 2123 not fully paid have been adequately provided for. 2124 4.The health maintenance organization has adequately 2125 provided for all obligations required by s. 641.35(3)(a). 2126 (g)A report prepared by the certified public accountant 2127 and filed with the office describing material weaknesses in the 2128 health maintenance organizations internal control structure as 2129 noted by the certified public accountant during the audit. The 2130 report must be filed with the annual audited financial report as 2131 required in paragraph (c). The health maintenance organization 2132 shall provide a description of remedial actions taken or 2133 proposed to correct material weaknesses, if the actions are not 2134 described in the independent certified public accountants 2135 report. 2136 (h)Such other information relating to the performance of 2137 health maintenance organizations as is required by the 2138 commission or office. 2139 (3)Every health maintenance organization shall file 2140 quarterly, for the first three calendar quarters of each year, 2141 an unaudited financial statement of the organization as 2142 described in paragraphs (1)(a) and (b). The statement for the 2143 quarter ending March 31 shall be filed on or before May 15, the 2144 statement for the quarter ending June 30 shall be filed on or 2145 before August 15, and the statement for the quarter ending 2146 September 30 shall be filed on or before November 15. The 2147 quarterly report shall be verified by the oath of two officers 2148 of the organization, properly notarized. 2149 (5)Each authorized health maintenance organization shall 2150 retain an independent certified public accountant, referred to 2151 in this section as CPA, who agrees by written contract with 2152 the health maintenance organization to comply with the 2153 provisions of this part. 2154 (a)The CPA shall provide to the HMO audited financial 2155 statements consistent with this part and s. 624.424. 2156 (6)To facilitate uniformity in financial statements and to 2157 facilitate office analysis, the commission may by rule adopt the 2158 form for financial statements of a health maintenance 2159 organization, requiring the financial statement to comply with 2160 s. 624.424 including supplements as approved by the National 2161 Association of Insurance Commissioners in 1995, and may adopt 2162 subsequent amendments thereto if the methodology remains 2163 substantially consistent, and may by rule require each health 2164 maintenance organization to submit to the office all or part of 2165 the information contained in the annual statement in a computer 2166 readable form compatible with the electronic data processing 2167 system specified by the office. 2168 Section 49.Section 641.283, Florida Statutes, is created 2169 to read: 2170 641.283Administrative supervision and hazardous insurer 2171 conditions.Sections 624.80-624.87 apply to health maintenance 2172 organizations. 2173 Section 50.Present subsections (5) through (15) and (16) 2174 through (29) of section 651.011, Florida Statutes, are 2175 redesignated as subsections (7) through (17) and (19) through 2176 (32), respectively, new subsections (5), (6), and (18) are added 2177 to that section, and present subsections (7), (8), (19), and 2178 (26) of that section are amended, to read: 2179 651.011Definitions.As used in this chapter, the term: 2180 (5)Affiliate means an entity that exercises control over 2181 or is directly or indirectly controlled by the provider through: 2182 (a)Equity ownership of voting securities; 2183 (b)Common managerial control; or 2184 (c)Collusive participation by the management of the 2185 insurer and affiliate in the management of the insurer or the 2186 affiliate. 2187 (6)Affiliated person of another person means: 2188 (a)The spouse of the other person; 2189 (b)The parents of the other person and their lineal 2190 descendants, or the parents of the other persons spouse and 2191 their lineal descendants; 2192 (c)A person who directly or indirectly owns or controls, 2193 or holds with the power to vote, 10 percent or more of the 2194 outstanding voting securities of the other person; 2195 (d)A person 10 percent or more of whose outstanding voting 2196 securities are directly or indirectly owned or controlled, or 2197 held with power to vote, by the other person; 2198 (e)A person or group of persons who directly or indirectly 2199 control, are controlled by, or are under common control with the 2200 other person; 2201 (f)An officer, director, partner, copartner, or employee 2202 of the other person; 2203 (g)If the other person is an investment company, an 2204 investment adviser of such company, or a member of an advisory 2205 board of such company; 2206 (h)If the other person is an unincorporated investment 2207 company not having a board of directors, the depositor of such 2208 company; or 2209 (i)A person who has entered into a written or unwritten 2210 agreement to act in concert with the other person in acquiring 2211 or limiting the disposition of securities of a domestic stock 2212 insurer provider or controlling company. 2213 (9)(7)Continuing care at-home means, pursuant to a 2214 contract other than a contract described in subsection (7) (5), 2215 furnishing to a resident who resides outside the facility the 2216 right to future access to shelter and nursing care or personal 2217 services, whether such services are provided in the facility or 2218 in another setting designated in the contract, by an individual 2219 not related by consanguinity or affinity to the resident, upon 2220 payment of an entrance fee. 2221 (10)(8)Control, controlling, controlled by, under 2222 common control with, or controlling company means any 2223 corporation, trust, or association that directly or indirectly 2224 owns 10 25 percent or more of either the following: 2225 (a)The direct or indirect possession of the power to 2226 direct or cause the direction of the management and policies of 2227 a person, whether through the ownership of voting securities, by 2228 contract other than a commercial contract for goods or 2229 nonmanagement services, or otherwise. Control is presumed to 2230 exist if a person, directly or indirectly, owns, controls, holds 2231 with the power to vote, or holds proxies representing 10 percent 2232 or more of the voting securities of another person; or 2233 (b)A management company exercising control through a 2234 management agreement whereby the management company is 2235 responsible for the day-to-day business operations of the 2236 provider or the day-to-day decisionmaking on behalf of the 2237 provider 2238 (a)The voting securities of one or more providers that are 2239 stock corporations; or 2240 (b)The ownership interest of one or more providers that 2241 are not stock corporations. 2242 (18)Governing body or full governing body means a 2243 board of directors, a management company, a body of a provider, 2244 or an obligated group whose members are elected or appointed to 2245 set strategy, oversee management or operations of a provider, 2246 facility, or obligated group, and protect the interests of the 2247 provider, facility, or group. 2248 (22)(19)Manager, management, or management company 2249 means a person who administers the day-to-day business 2250 operations of a facility for a provider, is part of a committee 2251 that supervises the activities of a business that provides 2252 continuing care or a member of the full governing body of a 2253 business that provides continuing care, or is subject to the 2254 policies, directives, and oversight of the provider or governing 2255 body. 2256 (29)(26)Regulatory action level event means that any two 2257 of the following have occurred: 2258 (a)The providers debt service coverage ratio is less than 2259 the greater of the minimum ratio specified in the providers 2260 bond covenants or lending agreement for long-term financing or 2261 1.20:1 as of the most recent annual report filed with the office 2262 pursuant to s. 651.026 or s. 651.0261, or, if the provider does 2263 not have a debt service coverage ratio required by its lending 2264 institution, the providers debt service coverage ratio is less 2265 than 1.20:1 as of the most recent annual report filed with the 2266 office pursuant to s. 651.026 or s. 651.0261. If the provider is 2267 a member of an obligated group having cross-collateralized debt, 2268 the obligated groups debt service coverage ratio must be used 2269 as the providers debt service coverage ratio. 2270 (b)The providers days cash on hand is less than the 2271 greater of the minimum number of days cash on hand specified in 2272 the providers bond covenants or lending agreement for long-term 2273 financing or 100 days. If the provider does not have a days cash 2274 on hand required by its lending institution, the days cash on 2275 hand may not be less than 100 as of the most recent annual 2276 report filed with the office pursuant to s. 651.026 or s. 2277 651.0261. If the provider is a member of an obligated group 2278 having cross-collateralized debt, the days cash on hand of the 2279 obligated group must be used as the providers days cash on 2280 hand. 2281 (c)The occupancy of the providers facility is less than 2282 80 percent averaged over the 12-month period immediately 2283 preceding the annual report filed with the office pursuant to s. 2284 651.026. 2285 Section 51.Section 651.018, Florida Statutes, is amended 2286 to read: 2287 651.018Administrative supervision.The office may place a 2288 facility in administrative supervision pursuant to part VI of 2289 chapter 624 if the office finds that one or more of the 2290 following conditions exist, and until the condition is resolved 2291 to the satisfaction of the office: 2292 (1)The facility is insolvent or impaired. 2293 (2)The facility is at a regulatory action level, pursuant 2294 to s. 651.034. 2295 (3)The facility reports a negative debt service ratio. 2296 (4)Thefacility has failed to file a monthly, quarterly, 2297 or annual financial statement or an audited financial statement 2298 as required by this chapter. 2299 (5)The facility was issued a financial statement with a 2300 going concern issue by an independent certified public 2301 accountant. 2302 (6)The facility is found to be in hazardous financial 2303 condition pursuant to s. 651.113. 2304 (7)The facility has entered into a forbearance agreement 2305 with a lender. 2306 Section 52.Paragraph (a) of subsection (1) of section 2307 651.019, Florida Statutes, is amended to read: 2308 651.019New financing, additional financing, or 2309 refinancing. 2310 (1)(a)A provider shall provide a written general outline 2311 of the amount and the anticipated terms of any new financing or 2312 refinancing, and the intended use of proceeds, to the office and 2313 the residents council at least 30 days before the closing date 2314 of the financing or refinancing transaction. If there is a 2315 material change in the noticed information, a provider must 2316 shall provide an updated notice to the office and the residents 2317 council within 10 business days after the provider becomes aware 2318 of such change. 2319 Section 53.Section 651.0212, Florida Statutes, is created 2320 to read: 2321 651.0212General eligibility requirements to operate in 2322 this state. 2323 (1)The office must deny or revoke a providers authority 2324 to conduct business relating to continuing care in this state, 2325 including, but not limited to, the authority to enter into 2326 contracts, provide continuing care or continuing care at-home, 2327 or construct facilities for the purpose of providing continuing 2328 care in this state, if the office determines that any of the 2329 following applies to the providers management, officers, or 2330 directors: 2331 (a)They are incompetent or untrustworthy. 2332 (b)They lack sufficient experience in continuing care 2333 management, posing a risk to contract holders. 2334 (c)They lack the experience, ability, or reputation 2335 necessary to ensure a reasonable likelihood of successful 2336 operation. 2337 (d)They are affiliated, directly or indirectly, with 2338 individuals or entities whose business practices have harmed 2339 residents, stockholders, investors, creditors, or the public 2340 through asset manipulation, fraudulent accounting, or bad faith 2341 actions. 2342 (2)The office may deny or revoke a providers authority to 2343 conduct business relating to continuing care in this state, 2344 including, but not limited to, the authority to enter into 2345 contracts, provide continuing care or continuing care at-home, 2346 or construct facilities for the purpose of providing continuing 2347 care in this state, if the office determines that any general 2348 partner, stockholder, or incorporator who exercises or has the 2349 ability to exercise effective control of the provider, or who 2350 influences or has the ability to influence the providers 2351 business transactions, lacks the financial standing and business 2352 experience necessary for the providers successful operation. 2353 (3)The office may deny, suspend, or revoke a providers 2354 authority to conduct business relating to continuing care in 2355 this state, including, but not limited to, the authority to 2356 enter into contracts, provide continuing care or continuing care 2357 at-home, or construct facilities for the purpose of providing 2358 continuing care, if the office determines that any general 2359 partner, subscriber, stockholder, or incorporator who exercises 2360 or has the ability to exercise effective control of the 2361 provider, or who influences or has the ability to influence the 2362 providers business transactions, has been found guilty of, or 2363 has pleaded guilty or nolo contendere to, any felony or crime 2364 punishable by imprisonment of 1 year or more under the laws of 2365 the United States, any state, or any other country, if the crime 2366 involves moral turpitude, regardless of whether a judgment of 2367 conviction has been entered by the court. However, if a provider 2368 operates under a valid certificate of authority, the provider 2369 must immediately remove any such person from his or her role in 2370 the business upon discovery of the conditions set forth in this 2371 subsection or remove such person upon the order of the office. 2372 Failure to remove such person constitutes grounds for suspension 2373 or revocation of the providers certificate of authority. 2374 (4)The office may deny, suspend, or revoke a providers 2375 authority to conduct business relating to continuing care in 2376 this state, including, but not limited to, the authority to 2377 enter into contracts, provide continuing care or continuing care 2378 at-home, or construct facilities for providing continuing care, 2379 if the office determines that any general partner, subscriber, 2380 stockholder, or incorporator who exercises or has the ability to 2381 exercise effective control of the provider, or who influences or 2382 has the ability to influence the providers business 2383 transactions, is now or was previously affiliated, directly or 2384 indirectly, through ownership of 10 percent or more, with any 2385 business, corporation, or entity that has been found guilty of, 2386 or has pleaded guilty or nolo contendere to, any felony or crime 2387 punishable by imprisonment for 1 year or more under the laws of 2388 the United States, any state, or any other country. However, if 2389 a provider operates under a valid certificate of authority, the 2390 provider must immediately remove any such person from his or her 2391 role in the business or notify the office upon discovery of the 2392 conditions set forth in this subsection. Failure to remove the 2393 person, provide notice to the office, or comply with an order 2394 from the office to remove the person from his or her role 2395 constitutes grounds for suspension or revocation of the 2396 providers certificate of authority. 2397 Section 54.Subsections (4) and (5) of section 651.0215, 2398 Florida Statutes, are amended to read: 2399 651.0215Consolidated application for a provisional 2400 certificate of authority and a certificate of authority; 2401 required restrictions on use of entrance fees. 2402 (4)Within 30 45 days after receipt of the information 2403 required under subsection (2), the office shall examine the 2404 information and notify the applicant in writing, specifically 2405 requesting any additional information that the office is 2406 authorized to require. An application is deemed complete when 2407 the office receives all requested information and the applicant 2408 corrects any error or omission of which the applicant was timely 2409 notified or when the time for such notification has expired. 2410 Within 15 days after receipt of all of the requested additional 2411 information, the office shall notify the applicant in writing 2412 that all of the requested information has been received and that 2413 the application is deemed complete as of the date of the notice. 2414 Failure to notify the applicant in writing within the 15-day 2415 period constitutes acknowledgment by the office that it has 2416 received all requested additional information, and the 2417 application is deemed complete for purposes of review on the 2418 date the applicant files all of the required additional 2419 information. 2420 (5)Within 45 days After an application is deemed complete 2421 in accordance with the timeframes set forth in chapter 120 as 2422 set forth in subsection (4) and upon completion of the remaining 2423 requirements of this section, the office shall complete its 2424 review and issue or deny a certificate of authority to the 2425 applicant. If a certificate of authority is denied, the office 2426 must shall notify the applicant in writing, citing the specific 2427 failures to satisfy this chapter, and the applicant is entitled 2428 to an administrative hearing pursuant to chapter 120. 2429 Section 55.Subsections (3), (5), and (6) of section 2430 651.022, Florida Statutes, are amended to read: 2431 651.022Provisional certificate of authority; application. 2432 (3)In addition to the information required in subsection 2433 (2), an applicant for a provisional certificate of authority 2434 shall submit a feasibility study, prepared by an independent 2435 consultant, with appropriate financial, marketing, and actuarial 2436 assumptions for the first 5 years of operations. The feasibility 2437 study must include at least the following information: 2438 (a)A description of the proposed facility, including the 2439 location, size, anticipated completion date, and the proposed 2440 construction program. 2441 (b)An identification and evaluation of the primary and, if 2442 appropriate, the secondary market areas of the facility and the 2443 projected unit sales per month. 2444 (c)Projected revenues, including anticipated entrance 2445 fees; monthly service fees; nursing care revenues, if 2446 applicable; and all other sources of revenue. 2447 (d)Projected expenses, including staffing requirements and 2448 salaries; cost of property, plant, and equipment, including 2449 depreciation expense; interest expense; marketing expense; and 2450 other operating expenses. 2451 (e)A projected balance sheet. 2452 (f)Expectations of the financial condition of the project, 2453 including the projected cash flow, and an estimate of the funds 2454 anticipated to be necessary to cover startup losses. 2455 (g)The inflation factor, if any, assumed in the 2456 feasibility study for the proposed facility and how and where it 2457 is applied. 2458 (h)Project costs and the total amount of debt financing 2459 required, marketing projections, resident fees and charges, the 2460 competition, resident contract provisions, and other factors 2461 that affect the feasibility of the facility. 2462 (i)Appropriate population projections, including morbidity 2463 and mortality assumptions. 2464 (j)The name of the person who prepared the feasibility 2465 study and the experience of such person in preparing similar 2466 studies or otherwise consulting in the field of continuing care. 2467 The preparer of the feasibility study may be the provider or a 2468 contracted third party. 2469 (k)Any other information that the applicant deems relevant 2470 and appropriate to enable the office to make a more informed 2471 determination. 2472 (5)(a)Within 30 days after receipt of an application for a 2473 provisional certificate of authority, the office shall examine 2474 the application and shall notify the applicant in writing, 2475 specifically setting forth and specifically requesting any 2476 additional information the office is permitted by law to 2477 require. If the application submitted is determined by the 2478 office to be substantially incomplete so as to require 2479 substantial additional information, including biographical 2480 information, the office may return the application to the 2481 applicant with a written notice that the application as received 2482 is substantially incomplete and, therefore, unacceptable for 2483 filing without further action required by the office. Any filing 2484 fee received shall be refunded to the applicant. 2485 (b)Within 15 days after receipt of all of the requested 2486 additional information, the office shall notify the applicant in 2487 writing that all of the requested information has been received 2488 and the application is deemed to be complete as of the date of 2489 the notice. Failure to so notify the applicant in writing within 2490 the 15-day period shall constitute acknowledgment by the office 2491 that it has received all requested additional information, and 2492 the application shall be deemed to be complete for purposes of 2493 review upon the date of the filing of all of the requested 2494 additional information. 2495 (6)After an application is deemed complete in accordance 2496 with the timeframes set forth in chapter 120 Within 45 days 2497 after the date an application is deemed complete as set forth in 2498 paragraph (5)(b), the office shall complete its review and issue 2499 a provisional certificate of authority to the applicant based 2500 upon its review and a determination that the application meets 2501 all requirements of law, that the feasibility study was based on 2502 sufficient data and reasonable assumptions, and that the 2503 applicant will be able to provide continuing care or continuing 2504 care at-home as proposed and meet all financial and contractual 2505 obligations related to its operations, including the financial 2506 requirements of this chapter. If the application is denied, the 2507 office must shall notify the applicant in writing, citing the 2508 specific failures to meet the provisions of this chapter. Such 2509 denial entitles the applicant to a hearing pursuant to chapter 2510 120. 2511 Section 56.Subsections (2) and (3) of section 651.023, 2512 Florida Statutes, are amended to read: 2513 651.023Certificate of authority; application. 2514 (2)Within 30 days after receipt of the information 2515 required under subsection (1), the office shall examine such 2516 information and notify the provider in writing, specifically 2517 requesting any additional information the office is permitted by 2518 law to require. Within 15 days after receipt of all of the 2519 requested additional information, the office shall notify the 2520 provider in writing that all of the requested information has 2521 been received and the application is deemed to be complete as of 2522 the date of the notice. Failure to notify the applicant in 2523 writing within the 15-day period constitutes acknowledgment by 2524 the office that it has received all requested additional 2525 information, and the application shall be deemed complete for 2526 purposes of review on the date of filing all of the required 2527 additional information. 2528 (3)After an application is deemed complete in accordance 2529 with the timeframes set forth in chapter 120 Within 45 days 2530 after an application is deemed complete as set forth in 2531 subsection (2), and upon completion of the remaining 2532 requirements of this section, the office shall complete its 2533 review and issue or deny a certificate of authority to the 2534 holder of a provisional certificate of authority. If a 2535 certificate of authority is denied, the office must notify the 2536 holder of the provisional certificate in writing, citing the 2537 specific failures to satisfy the provisions of this chapter. If 2538 denied, the holder of the provisional certificate is entitled to 2539 an administrative hearing pursuant to chapter 120. 2540 Section 57.Present subsection (3) of section 651.024, 2541 Florida Statutes, is redesignated as subsection (5), and a new 2542 subsection (3) and subsection (4) are added to that section, to 2543 read: 2544 651.024Acquisition. 2545 (3)A bondholder that obtains consent rights from a 2546 provider which allow the bondholder to have oversight or 2547 decisionmaking authority over a facility or in the financial 2548 decisions of the facility is subject to s. 628.4615 and is not 2549 required to submit filings pursuant to s. 651.022, s. 651.023, 2550 or s. 651.0245. For purposes of this subsection, the term 2551 consent rights includes, but is not limited to, all of the 2552 following: 2553 (a)Approving or initiating the sale of a facility. 2554 (b)Approving or entering into an affiliation arrangement 2555 on behalf of the facility. 2556 (c)Approving or executing new or amended financing for the 2557 facility. 2558 (d)Approving or entering into a forbearance agreement for 2559 the facility. 2560 (4)A continuing care retirement community that enters into 2561 an affiliation agreement with another entity resulting in a 2562 change of officers, directors, or effective control is subject 2563 to s. 628.4615 and is not required to submit filings pursuant to 2564 s. 651.022, s. 651.023, or s. 651.0245. 2565 Section 58.Paragraph (a) of subsection (2), paragraph (a) 2566 of subsection (5), and subsection (6) of section 651.0246, 2567 Florida Statutes, are amended to read: 2568 651.0246Expansions. 2569 (2)A provider applying for expansion of a certificated 2570 facility must submit all of the following: 2571 (a)A feasibility study prepared by an independent 2572 certified public accountant. The feasibility study must include 2573 at least the following information: 2574 1.A description of the facility and proposed expansion, 2575 including the location, the size, the anticipated completion 2576 date, and the proposed construction program. 2577 2.An identification and evaluation of the primary and, if 2578 applicable, secondary market areas of the facility and the 2579 projected unit sales per month. 2580 3.Projected revenues, including anticipated entrance fees; 2581 monthly service fees; nursing care revenues, if applicable; and 2582 all other sources of revenue. 2583 4.Projected expenses, including for staffing requirements 2584 and salaries; the cost of property, plant, and equipment, 2585 including depreciation expense; interest expense; marketing 2586 expense; and other operating expenses. 2587 5.A projected balance sheet of the applicant. 2588 6.The expectations for the financial condition of the 2589 project, including the projected cash flow and an estimate of 2590 the funds anticipated to be necessary to cover startup losses. 2591 7.The inflation factor, if any, assumed in the study for 2592 the proposed expansion and how and where it is applied. 2593 8.Project costs; the total amount of debt financing 2594 required; marketing projections; resident rates, fees, and 2595 charges; the competition; resident contract provisions; and 2596 other factors that affect the feasibility of the facility. 2597 9.Appropriate population projections, including morbidity 2598 and mortality assumptions. 2599 10.The name of the person who prepared the feasibility 2600 study and his or her experience in preparing similar studies or 2601 otherwise consulting in the field of continuing care. 2602 11.Financial forecasts or projections prepared in 2603 accordance with standards adopted by the American Institute of 2604 Certified Public Accountants or in accordance with standards for 2605 feasibility studies for continuing care retirement communities 2606 adopted by the Actuarial Standards Board. 2607 12.An independent evaluation and examination opinion for 2608 the first 5 years of operations, or a comparable opinion 2609 acceptable to the office, by the certified public accountant who 2610 prepared the study, of the underlying assumptions used as a 2611 basis for the forecasts or projections in the study and that the 2612 assumptions are reasonable and proper and the project as 2613 proposed is feasible. 2614 13.The description of and plan for the ongoing operation 2615 of existing facilities. 2616 14.13.Any other information that the provider deems 2617 relevant and appropriate to provide to enable the office to make 2618 a more informed determination. 2619 2620 If any material change occurs in the facts set forth in an 2621 application filed with the office pursuant to this section, an 2622 amendment setting forth such change must be filed with the 2623 office within 10 business days after the applicant becomes aware 2624 of such change, and a copy of the amendment must be sent by 2625 registered mail to the principal office of the facility and to 2626 the principal office of the controlling company. 2627 (5)(a)Within 30 days after receipt of an application for 2628 expansion, the office shall examine the application and shall 2629 notify the applicant in writing, specifically requesting any 2630 additional information that the office is authorized to require. 2631 Within 15 days after the office receives all the requested 2632 additional information, the office shall notify the applicant in 2633 writing that the requested information has been received and 2634 that the application is deemed complete as of the date of the 2635 notice. Failure to notify the applicant in writing within the 2636 15-day period constitutes acknowledgment by the office that it 2637 has received all requested additional information, and the 2638 application is deemed complete for purposes of review on the 2639 date the applicant files all of the required additional 2640 information. If the application submitted is determined by the 2641 office to be substantially incomplete so as to require 2642 substantial additional information, including biographical 2643 information, the office may return the application to the 2644 applicant with a written notice stating that the application as 2645 received is substantially incomplete and, therefore, is 2646 unacceptable for filing without further action required by the 2647 office. Any filing fee received must be refunded to the 2648 applicant. 2649 (6)Within 45 30 days after the date on which an 2650 application is deemed complete as provided in paragraph (5)(b), 2651 the office shall complete its review and, based upon its review, 2652 approve an expansion by the applicant and issue a determination 2653 that the application meets all requirements of law, that the 2654 feasibility study was based on sufficient data and reasonable 2655 assumptions, and that the applicant will be able to provide 2656 continuing care or continuing care at-home as proposed and meet 2657 all financial and contractual obligations related to its 2658 operations, including the financial requirements of this 2659 chapter. If the application is denied, the office must notify 2660 the applicant in writing, citing the specific failures to meet 2661 the requirements of this chapter. The denial entitles the 2662 applicant to a hearing pursuant to chapter 120. 2663 Section 59.Present subsections (3) through (10) of section 2664 651.026, Florida Statutes, are redesignated as subsections (5) 2665 through (12), respectively, paragraphs (g) and (h) are added to 2666 subsection (2) and new subsections (3) and (4) are added to that 2667 section, and subsection (1), paragraphs (e) and (f) of 2668 subsection (2), and present subsection (6) of that section are 2669 amended, to read: 2670 651.026Annual reports. 2671 (1)Annually, on or before May 1, the provider shall file 2672 an annual report and such other information and data showing its 2673 condition as of the last day of the preceding calendar year, 2674 except as provided in subsection (7) (5). If the office does not 2675 receive the required information on or before May 1, a late fee 2676 may be charged pursuant to s. 651.015(2)(c). The office may 2677 approve an extension of up to 30 days. 2678 (2)The annual report shall be in such form as the 2679 commission prescribes and shall contain at least the following: 2680 (e)Each facility shall file with the office annually, 2681 together with the annual report required by this section, A 2682 computation of its minimum liquid reserve calculated in 2683 accordance with s. 651.035 on a form prescribed by the 2684 commission. 2685 (f)If, due to a change in generally accepted accounting 2686 principles, the balance sheet, statement of income and expenses, 2687 statement of equity or fund balances, or statement of cash flows 2688 is known by any other name or title, the annual report must 2689 contain Financial statements using the changed name names or 2690 title titles that most closely corresponds correspond to a 2691 balance sheet, statement of income and expenses, statement of 2692 equity or fund balances, and statement of changes in cash flows, 2693 in the event that, due to a change in generally accepted 2694 accounting principles, the balance sheet, statement of income 2695 and expenses, statement of equity or fund balances, or statement 2696 of cash flows is known by another name or title. 2697 (g)An accounts payable aging schedule that lists all 2698 outstanding repayment obligations and the corresponding amounts 2699 owed to each vendor. 2700 (h)Details on any debt that has been forgiven or deferred 2701 during the period. Details must include the entity the debt is 2702 due to, the amount forgiven or deferred, an explanation as to 2703 why the debt was forgiven or deferred, and whether the debt has 2704 been assumed by another party on behalf of the facility. 2705 (3)Each facility shall file with the office all escrow 2706 bank statements for the last quarter of the reporting period 2707 which support the funds held in each of the minimum liquid 2708 reserves bank accounts. The liquid reserves funds include the 2709 debt service reserve, the operating reserve, and the renewal and 2710 replacement reserve. 2711 (4)Any provider that has been placed into administrative 2712 supervision under s. 651.018 shall provide a compiled 2-year 2713 forecast, submitted on a form prescribed by the office, as long 2714 as the provider operates under administrative supervision. The 2715 compiled data in the 2-year forecast must be presented on a 2716 monthly basis. 2717 (8)(6)The workpapers, account analyses, descriptions of 2718 basic assumptions, and other information necessary for a full 2719 understanding of the annual statement of a provider as filed 2720 with the office shall be made available for visual inspection by 2721 the office at the facility or, if the office requests, at 2722 another agreed-upon site. Photocopies must be provided to the 2723 office upon request may not be made unless consented to by the 2724 provider. 2725 Section 60.Present subsections (2), (3), and (4) of 2726 section 651.0261, Florida Statutes, are redesignated as 2727 subsections (3), (4), and (5), respectively, a new subsection 2728 (2) is added to that section, and subsection (1) and present 2729 subsection (3) of that section are amended, to read: 2730 651.0261Quarterly and monthly statements. 2731 (1)Within 45 days after the end of each fiscal quarter, 2732 each provider shall file a quarterly unaudited financial 2733 statement of the provider or of the facility in the form 2734 prescribed by commission rule and days cash on hand, occupancy, 2735 debt service coverage ratio, and a detailed listing of the 2736 assets maintained in the liquid reserve as required under s. 2737 651.035. The last quarterly statement for a fiscal year is not 2738 required if a provider does not have pending a regulatory action 2739 level event, impairment, or a corrective action plan. If a 2740 provider falls below two or more of the thresholds set forth in 2741 s. 651.011(29) s. 651.011(26) at the end of any fiscal quarter, 2742 the provider shall submit to the office, at the same time as the 2743 quarterly statement, an explanation of the circumstances and a 2744 description of the actions it will take to meet the 2745 requirements. 2746 (2)Each provider shall file with the office quarterly, 2747 together with the quarterly statement required by this section: 2748 (a)All escrow bank statements for each quarter which 2749 support the funds held in each of the minimum liquid reserve 2750 bank account, including, but not limited to, the debt service 2751 reserve, the operating reserve, and the renewal and replacement 2752 reserve. 2753 (b)An accounts payable aging schedule that lists all 2754 outstanding repayment obligations and the corresponding amounts 2755 owed to vendors. 2756 (c)Details on any debt that has been forgiven or deferred 2757 during the period. Such details must include the entity the debt 2758 is due to, the amount forgiven or deferred, an explanation as to 2759 why the debt was forgiven or deferred, and whether the debt has 2760 been assumed by another party on behalf of the facility. If a 2761 facility is required to file monthly financial statements with 2762 the office, the facility is required to include details on 2763 forgiven or deferred debt with the monthly filing. 2764 (4)(3)A filing under subsection (3) (2) may be required if 2765 any of the following applies: 2766 (a)The provider is: 2767 1.Subject to administrative supervision proceedings; 2768 2.Subject to a corrective action plan resulting from a 2769 regulatory action level event and for up to 2 years after the 2770 factors that caused the regulatory action level event have been 2771 corrected; or 2772 3.Subject to delinquency or receivership proceedings or 2773 has filed for bankruptcy. 2774 (b)The provider or facility displays a declining financial 2775 position. 2776 (c)A change of ownership of the provider or facility has 2777 occurred within the previous 2 years. 2778 (d)The provider is found to be impaired. 2779 Section 61.Paragraph (c) of subsection (1), subsection 2780 (2), and paragraph (c) of subsection (5) of section 651.033, 2781 Florida Statutes, are amended, and subsection (7) is added to 2782 that section, to read: 2783 651.033Escrow accounts. 2784 (1)When funds are required to be deposited in an escrow 2785 account pursuant to s. 651.0215, s. 651.022, s. 651.023, s. 2786 651.0246, s. 651.035, or s. 651.055: 2787 (c)Any agreement establishing an escrow account required 2788 under this chapter is subject to approval by the office before 2789 execution. The agreement must be in writing and contain, in 2790 addition to any other provisions required by law, a provision 2791 whereby the escrow agent agrees to abide by the duties imposed 2792 by paragraphs (b) and (e), (3)(a) and (b), (5)(a), and 2793 subsection (6). 2794 (2)(a)As used in this subsection, the term emergency 2795 means conditions that exist beyond the control of the provider, 2796 such as severe damage to the providers physical premises caused 2797 by a natural or manmade disaster or another event of comparable 2798 gravity and severity. 2799 (b)Notwithstanding s. 651.035(7), in the event of an 2800 emergency and upon written petition by the provider to the 2801 office, on a form prescribed by the commission, the office may 2802 allow a withdrawal of up to 10 percent of the required minimum 2803 liquid reserve, consistent with the requirements governing how 2804 funds can be used under s. 651.035. Before submitting the 2805 petition to the office, the provider must meet with the office 2806 to review the emergency petition. In the meeting, the provider 2807 must address the details of the emergency, the circumstances 2808 leading to the need for an emergency petition, the providers 2809 plan to mitigate the emergency, the amount being requested, and 2810 the providers plan and timeline to restore the minimum liquid 2811 reserves into compliance with s. 651.035. The office shall have 2812 10 business 3 working days to deny the petition for the 2813 emergency 10-percent withdrawal. If the office fails to deny the 2814 petition within 10 business 3 working days, the petition is 2815 deemed to have been granted by the office. For purposes of this 2816 section, the term business day working day means each day that 2817 is not a Saturday, Sunday, or legal holiday as defined by 2818 Florida law. Also, for purposes of this section, the day the 2819 petition is received by the office is not counted as one of the 2820 10 3 days. 2821 (5)When funds are required to be deposited in an escrow 2822 account pursuant to s. 651.0215, s. 651.022, s. 651.023, s. 2823 651.0246, or s. 651.035, the following apply: 2824 (c)In accordance with the annual and quarterly filing 2825 deadlines set forth in ss. 651.026 and 651.0261 On or before the 2826 20th day of the month following the quarter for which the 2827 statement is due, the provider shall file with the office a copy 2828 of the escrow agents statement or, if the provider has not 2829 received the escrow agents statement, a copy of the written 2830 request to the escrow agent for the statement. 2831 (7)The escrow agent shall provide prompt written 2832 notification to the office upon withdrawal of any funds from an 2833 account required by s. 651.035. Any escrow agreement established 2834 to meet any requirement of s. 651.035 must contain this 2835 provision. 2836 Section 62.Subsection (2) of section 651.034, Florida 2837 Statutes, is amended to read: 2838 651.034Financial and operating requirements for 2839 providers. 2840 (2)Except when the offices remedial rights are suspended 2841 pursuant to s. 651.114(11)(a), The office must take action 2842 necessary to place an impaired provider under regulatory 2843 control, including administrative supervision or any remedy 2844 available under part I of chapter 631. An impairment is 2845 sufficient grounds for the department to be appointed as 2846 receiver as provided in chapter 631, except when the offices 2847 remedial rights are suspended pursuant to s. 651.114(11)(a). If 2848 the offices remedial rights are suspended pursuant to s. 2849 651.114(11)(a), the impaired provider must make available to the 2850 office copies of any corrective action plan approved by the 2851 third-party lender or trustee to cure the impairment and any 2852 related required report. For purposes of s. 631.051, impairment 2853 of a provider is defined according to the term impaired has 2854 the same meaning as in under s. 651.011. The office may forego 2855 taking action for up to 90 180 days after the impairment if the 2856 office finds there is a reasonable expectation that the 2857 impairment may be eliminated within the 90-day 180-day period. 2858 Section 63.Subsection (1), paragraph (b) of subsection 2859 (7), and subsection (8) of section 651.035, Florida Statutes, 2860 are amended to read: 2861 651.035Minimum liquid reserve requirements. 2862 (1)A provider shall maintain in escrow a minimum liquid 2863 reserve consisting of the following reserves, as applicable. 2864 Each established account must be separate and unique to a 2865 facility, unencumbered, and not commingled with any other funds 2866 from any other account, facility, affiliate, or obligated group. 2867 Funds held in escrow under paragraphs (a), (c), and (d) must be 2868 held completely separate from any funds held by a trustee under 2869 paragraph (b), meaning the debt service, operating, and renewal 2870 and replacement reserves must have their own distinct account 2871 number: 2872 (a)Each provider shall maintain in escrow as a debt 2873 service reserve the aggregate amount of all principal and 2874 interest payments due during the fiscal year on any mortgage 2875 loan or other long-term financing of the facility, including 2876 property taxes as recorded in the audited financial report 2877 required under s. 651.026. The amount must include any leasehold 2878 payments and all costs related to such payments. If principal 2879 payments are not due during the fiscal year, the provider must 2880 maintain in escrow as a minimum liquid reserve an amount equal 2881 to interest payments due during the next 12 months on any 2882 mortgage loan or other long-term financing of the facility, 2883 including property taxes. If a provider does not have a mortgage 2884 loan or other financing on the facility, the provider must 2885 deposit monthly in escrow as a minimum liquid reserve an amount 2886 equal to one-twelfth of the annual property tax liability as 2887 indicated in the most recent tax notice provided pursuant to s. 2888 197.322(3), and must annually pay property taxes out of such 2889 escrow. 2890 (b)A provider that has outstanding indebtedness that 2891 requires a debt service reserve to be held in escrow pursuant to 2892 a trust indenture or mortgage lien on the facility and for which 2893 the debt service reserve may only be used to pay principal and 2894 interest payments on the debt that the debtor is obligated to 2895 pay, and which may include property taxes and insurance, may 2896 include such debt service reserve in computing the minimum 2897 liquid reserve needed to satisfy this subsection if the provider 2898 furnishes to the office a copy of the agreement under which such 2899 debt service reserve is held, together with a statement of the 2900 amount being held in escrow for the debt service reserve, 2901 certified by the lender or trustee and the provider to be 2902 correct. The trustee shall provide the office with any 2903 information concerning the debt service reserve account upon 2904 request of the provider or the office. In addition, the trust 2905 indenture, loan agreement, or escrow agreement must provide that 2906 the provider, trustee, lender, escrow agent, or a person 2907 designated to act in its place shall notify the office in 2908 writing at least 10 days before the withdrawal of any portion of 2909 the debt service reserve funds required to be held in escrow as 2910 described in this paragraph. The notice must include an 2911 affidavit sworn to by the provider, the trustee, or a person 2912 designated to act in its place which includes the amount of the 2913 scheduled debt service payment, the payment due date, the amount 2914 of the withdrawal, the accounts from which the withdrawal will 2915 be made, and a plan with a schedule for replenishing the 2916 withdrawn funds. If the plan is revised by a consultant that is 2917 retained as prescribed in the providers financing documents, 2918 the revised plan must be submitted to the office within 10 days 2919 after the approval by the lender or trustee. If a debt service 2920 reserve is transferred from one financial institution or lender 2921 to another, the provider must provide notice to the office at 2922 least 10 days before the transfer takes place. The notice must 2923 include an affidavit sworn to by the provider and include the 2924 name of the institution where the debt service reserve is being 2925 transferred, the date of transfer, the amount being transferred, 2926 a copy of the agreement requiring the transfer to the new 2927 financial institution, and the contact information for the 2928 escrow agent of the new account. The new escrow agreement must 2929 comply with s. 651.033. Any funds held pursuant to this section 2930 do not negate the requirement to maintain an escrow account as 2931 required in paragraph (a). Any such separate debt service 2932 reserves are not subject to the transfer provisions set forth in 2933 subsection (8). 2934 (c)Each provider shall maintain in escrow an operating 2935 reserve equal to or greater than the following amounts: 2936 1.Thirty 30 percent of the total operating expenses 2937 projected in the feasibility study required by s. 651.023 for 2938 the first 12 months of operation. 2939 2.After the first 12 months of operation, 30 percent of 2940 the operating reserve in the annual report filed pursuant to s. 2941 651.026. 2942 3.Once a provider maintains an occupancy level in excess 2943 of 80 percent for at least 12 months and has presented in its 2944 most recent annual report that it has reached stabilized 2945 occupancy, 15 percent of the total operating reserve upon 2946 approval of the office. 2947 4.If the provider has been found to meet any of the 2948 following conditions, 30 percent of the total operating reserve: 2949 a.Is at regulatory action level under s. 651.034. 2950 b.Is placed under administrative supervision. 2951 c.Is in a hazardous financial condition under s. 651.113. 2952 d.Filed or has notified the office of its intent to file 2953 for bankruptcy. 2954 e.Failed to maintain minimum liquid reserve requirements 2955 under subsections (10) and (11). 2956 2957 Upon notice from the office that a condition identified in this 2958 subparagraph exists, the provider has 10 days within which to 2959 fund the operating reserve at 50 percent and provide evidence of 2960 the funding to the office. 2961 (d)Before reducing the operating reserve required under 2962 paragraph (c), the provider must obtain written approval from 2963 the office Thereafter, each provider shall maintain in escrow an 2964 operating reserve equal to 15 percent of the total operating 2965 expenses in the annual report filed pursuant to s. 651.026. 2966 (e)If a provider has been in operation for more than 12 2967 months, the total annual operating expenses must be determined 2968 by averaging the total annual operating expenses reported to the 2969 office by the number of annual reports filed with the office 2970 within the preceding 3-year period subject to adjustment if 2971 there is a change in the number of facilities owned. For 2972 purposes of this subsection, total annual operating expenses 2973 include all expenses of the facility except depreciation and 2974 amortization; interest and property taxes included in paragraph 2975 (a); extraordinary expenses that are adequately explained and 2976 documented in accordance with generally accepted accounting 2977 principles; liability insurance premiums in excess of those paid 2978 in calendar year 1999; and changes in the obligation to provide 2979 future services to current residents. For providers initially 2980 licensed during or after calendar year 1999, liability insurance 2981 must be included in the total operating expenses in an amount 2982 not to exceed the premium paid during the first 12 months of 2983 facility operation. The operating reserves required under this 2984 subsection must be in an unencumbered account held in escrow for 2985 the benefit of the residents. Such funds may not be encumbered 2986 or subject to any liens or charges by the escrow agent or 2987 judgments, garnishments, or creditors claims against the 2988 provider or facility. However, if a facility had a lien, 2989 mortgage, trust indenture, or similar debt instrument in place 2990 before January 1, 1993, which encumbered all or any part of the 2991 reserves required by this subsection and such funds were used to 2992 meet the requirements of this subsection, then such arrangement 2993 may be continued, unless a refinancing or acquisition has 2994 occurred, and the provider is in compliance with this 2995 subsection. 2996 (f)(d)Each provider shall maintain in escrow a renewal and 2997 replacement reserve equal to 15 percent of the total accumulated 2998 depreciation based on the audited financial statement required 2999 to be filed pursuant to s. 651.026, not to exceed 15 percent of 3000 the facilitys average operating expenses for the past 3 fiscal 3001 years based on the audited financial statements for each of 3002 those years. For a provider who is an operator of a facility but 3003 is not the owner and depreciation is not included as part of the 3004 providers financial statement, the renewal and replacement 3005 reserve required by this paragraph must equal 15 percent of the 3006 total operating expenses of the provider, as described in this 3007 section. Each provider licensed before October 1, 1983, shall 3008 fully fund the renewal and replacement reserve by October 1, 3009 2003, by multiplying the difference between the former escrow 3010 requirement and the present escrow requirement by the number of 3011 years the facility has been in operation after October 1, 1983. 3012 (7) 3013 (b)1.For all other proposed withdrawals, in order to 3014 receive the consent of the office, the provider must file 3015 documentation showing why the withdrawal is necessary for the 3016 continued operation of the facility and such additional 3017 information as the office reasonably requires. 3018 2.The office shall notify the provider when the filing is 3019 deemed complete. If the provider has complied with all prior 3020 requests for information, the filing is deemed complete after 30 3021 days without communication from the office. 3022 3.Within 30 days after the date a file is deemed complete, 3023 the office shall provide the provider with written notice of its 3024 approval or disapproval of the request. The provider may not 3025 withdraw funds until the office provides such written notice. 3026 The office may disapprove any request to withdraw such funds if 3027 it determines that the withdrawal is not in the best interest of 3028 the residents. 3029 (8)The office may order the immediate transfer of up to 3030 100 percent of the funds held in the minimum liquid reserve to 3031 the custody of the department pursuant to part III of chapter 3032 625 if the office finds that the provider is impaired or 3033 insolvent, if the facility is found to have withdrawn funds 3034 without approval by the office, or if the facility fails to fund 3035 the minimum liquid reserve required by subsection (10) or 3036 subsection (11). The office may order such a transfer regardless 3037 of whether the office has suspended or revoked, or intends to 3038 suspend or revoke, the certificate of authority of the provider. 3039 Section 64.Subsection (2) of section 651.043, Florida 3040 Statutes, is amended to read: 3041 651.043Approval of change in management. 3042 (2)A provider or management company shall notify the 3043 office, in writing or electronically, of any change in the 3044 information required by s. 651.022(2) management within 10 3045 business days. For each new management company or manager not 3046 employed by a management company, the provider shall submit to 3047 the office the information required by s. 651.022(2) and a copy 3048 of the written management contract, if applicable. 3049 Section 65.Subsection (1) of section 651.071, Florida 3050 Statutes, is amended to read: 3051 651.071Contracts as preferred claims on liquidation or 3052 receivership. 3053 (1)In the event of receivership or liquidation proceedings 3054 against a provider, all continuing care and continuing care at 3055 home contracts executed by a provider are deemed preferred 3056 claims against all assets owned by the provider.; however, Such 3057 claims are subordinate to any secured claim and must be treated 3058 with higher priority over all other claims, except Class 1 3059 claims. For purposes of s. 631.271, such contracts are deemed 3060 Class 2 claims. 3061 Section 66.Subsections (2) and (3) of section 651.085, 3062 Florida Statutes, are amended to read: 3063 651.085Quarterly meetings between residents and the 3064 governing body of the provider; resident representation before 3065 the governing body of the provider. 3066 (2)A residents council formed pursuant to s. 651.081, 3067 members of which are elected by the residents, shall nominate 3068 and elect a designated resident representative to represent them 3069 before the governing body of the provider on matters specified 3070 in subsection (3). The initial designated resident 3071 representative elected under this section shall be elected to 3072 serve at least 12 months. The designated resident representative 3073 does not have to be a current member of the residents council; 3074 however, such individual must be a resident, as defined in s. 3075 651.011. Designated resident representatives shall perform their 3076 duties in good faith. For providers that own or operate more 3077 than one facility in the state, each facility must have its own 3078 designated resident representative. 3079 (3)The designated resident representative shall be 3080 notified in writing or electronically by a representative of the 3081 provider at least 14 days in advance of any meeting of the full 3082 governing body at which the annual budget and proposed changes 3083 or increases in resident fees or services are on the agenda or 3084 will be discussed before presenting the increases in resident 3085 fees or services to all residents. The designated resident 3086 representative shall be invited to attend and participate in 3087 that portion of the meeting designated for the discussion of 3088 such changes. Designated resident representatives shall perform 3089 their duties in good faith. For providers that own or operate 3090 more than one facility in the state, each facility must have its 3091 own designated resident representative. 3092 Section 67.Section 651.087, Florida Statutes, is created 3093 to read: 3094 651.087Solicitation of loans from residents.In addition 3095 to any damages or civil penalties to which a provider, a person 3096 employed by a provider, or a person acting on behalf of a 3097 provider, including, but not limited to, a management company, 3098 who borrows from or pledges any personal funds of a resident 3099 other than the amount agreed to by a written contract approved 3100 by the office pursuant to s. 651.055 commits a misdemeanor of 3101 the first degree, punishable as provided in 775.082 or s. 3102 775.083. 3103 Section 68.Paragraphs (h) through (n) of subsection (2) of 3104 section 651.091, Florida Statutes, are redesignated as 3105 paragraphs (i) through (o), respectively, and a new paragraph 3106 (h) and paragraph (p) are added to that subsection, present 3107 paragraph (h) of subsection (2) and paragraph (d) of subsection 3108 (3) are amended, to read: 3109 651.091Availability, distribution, and posting of reports 3110 and records; requirement of full disclosure. 3111 (2)Every continuing care facility shall: 3112 (h)Post a notice of any bankruptcy proceedings in a 3113 prominent location within the facility which is accessible to 3114 all residents and the general public. Such notice must include a 3115 summary of the bankruptcy proceedings and specify where the full 3116 legal record of the bankruptcy proceedings can be inspected 3117 within the facility. The facility shall also designate and make 3118 available a management representative to discuss the bankruptcy 3119 proceedings and address questions from residents. The notice 3120 required under this paragraph must also include a listing of all 3121 court documents related to the bankruptcy proceedings and the 3122 designated representatives contact information. 3123 (i)(h)Deliver the information described in s. 651.085(4) 3124 in writing or electronically to the president or chair of the 3125 residents council and make supporting documentation available 3126 upon request. 3127 (p)Maintain records showing compliance with the 3128 requirements of this subsection, including how, where, and when 3129 the required information was provided. 3130 (3)Before entering into a contract to furnish continuing 3131 care or continuing care at-home, the provider undertaking to 3132 furnish the care, or the agent of the provider, shall make full 3133 disclosure, obtain written acknowledgment of receipt, and 3134 provide copies of the disclosure documents to the prospective 3135 resident or his or her legal representative, of the following 3136 information: 3137 (d)In keeping with the intent of this subsection relating 3138 to disclosure, the provider shall make available for review: 3139 1.Master plans approved by the providers board or 3140 governing body; and 3141 2.Any proposed or approved and any plans for expansion or 3142 phased development within the next 3 years, to the extent that 3143 the availability of such plans does not put at risk real estate, 3144 financing, acquisition, negotiations, or other implementation of 3145 operational plans and thus jeopardize the success of 3146 negotiations, operations, and development. 3147 Section 69.Section 651.104, Florida Statutes, is created 3148 to read: 3149 651.104Certificate of authority to act as a management 3150 company. 3151 (1)It is unlawful for any person to act as or hold himself 3152 or herself out to be management company for a continuing care 3153 retirement community in this state without a valid certificate 3154 of authority issued by the office pursuant to this section. A 3155 management company that was operating in this state as of June 3156 30, 2025, may continue to operate until January 1, 2026, as a 3157 management company without a certificate of authority and is not 3158 in violation of the requirement to possess a valid certificate 3159 of authority as a management company during that period of time. 3160 To qualify for and hold authority to act as a management company 3161 in this state, a management company must otherwise be in 3162 compliance pursuant to this section and with its organizational 3163 agreement. A person who, on or after January 1, 2026, does not 3164 hold a certificate of authority to act as a management company 3165 while operating as a management company is subject to a fine of 3166 $10,000 per violation per day. 3167 (2)A management company shall file with the office an 3168 application for a certificate of authority on a form adopted by 3169 the commission and furnished by the office. The application must 3170 include or have attached the following information and 3171 documents: 3172 (a)All basic organizational documents of the management 3173 company, such as the articles of incorporation, articles of 3174 association, partnership agreement, trade name certificate, 3175 trust agreement, shareholder agreement, and other applicable 3176 documents, and all amendments to those documents. 3177 (b)The bylaws, rules, and regulations or similar documents 3178 regulating the conduct or the internal affairs of the management 3179 company. 3180 (c)The names, addresses, official positions, and 3181 professional qualifications of the individuals employed or 3182 retained by the management company who are responsible for the 3183 conduct of the affairs of the management company, including all 3184 members of the board of directors, board of trustees, executive 3185 committee, or other governing board or committee, and the 3186 principal officers, or equivalent, or for a partnership or 3187 association of the management company, the partners or members. 3188 (d)Audited annual financial statements, prepared in 3189 accordance with generally accepted accounting principles, for 3190 the 2 most recent fiscal years, which prove that the applicant 3191 has a positive net worth in both fiscal years. If the applicant 3192 has been in existence for less than 2 fiscal years, the 3193 application must include financial statements or reports, 3194 certified by an officer of the applicant and prepared in 3195 accordance with generally accepted accounting principles, for 3196 any completed fiscal years and for any month during the current 3197 fiscal year for which such financial statements or reports have 3198 been completed. If the applicant reports net losses for either 3199 of the 2 most recent fiscal years, the applicant must provide 3200 pro forma financial statements up to the period of time that the 3201 applicant demonstrates 2 consecutive years of profitability. Pro 3202 forma financial statements must include the balance sheet, 3203 income statement, and cash flow statement. An audited financial 3204 statement or report prepared on a consolidated basis must 3205 include a columnar consolidating or combining worksheet that 3206 must be filed with the report and comply with the following: 3207 1.Amounts shown on the consolidated audited financial 3208 report must be shown on the worksheet; 3209 2.Amounts for each entity must be stated separately; and 3210 3.Explanations of consolidating and eliminating entries 3211 must be included. 3212 (e)Any information as the office may require in order to 3213 review the current financial condition of the applicant. 3214 (f)A statement describing the business plan, including 3215 information on staffing levels and activities proposed or 3216 ongoing, in this state and nationwide. The plan must provide 3217 details setting forth the applicants capability of providing a 3218 sufficient number of experienced and qualified personnel in the 3219 areas of issuing continuing care life contracts and managing 3220 continuing care retirement communities or similar communities, 3221 compliance with statutory requirements, and claims processing, 3222 recordkeeping, and underwriting. 3223 (g)If the applicant is not currently acting as a 3224 management company, a statement of the amounts and sources of 3225 the funds available for organization expenses and the proposed 3226 arrangements for reimbursement and compensation of incorporators 3227 or other principals. 3228 (h)Such other data, financial statements, and pertinent 3229 information as the commission or office may reasonably require 3230 with respect to the management company, its directors, or its 3231 trustees, or with respect to any parent, subsidiary, or 3232 affiliate, if the management company relies on a contractual or 3233 financial relationship with such parent, subsidiary, or 3234 affiliate in order to meet the financial requirements of this 3235 chapter, to determine the financial status of the management 3236 company and the management capabilities of its managers and 3237 owners. 3238 (3)An applicant must also submit all of the following for 3239 all individuals referenced in paragraph (2)(c): 3240 (a)A complete biographical statement on a form prescribed 3241 by the commission. 3242 (b)An independent background report as prescribed by the 3243 commission. 3244 (c)A full set of fingerprints to the office or to a 3245 vendor, entity, or agency authorized by s. 943.053(13). The 3246 office, vendor, entity, or agency, as applicable, shall forward 3247 the fingerprints to the Department of Law Enforcement for state 3248 processing, and the Department of Law Enforcement shall forward 3249 the fingerprints to the Federal Bureau of Investigation for 3250 national processing in accordance with s. 943.053 and 28 C.F.R. 3251 s. 20. 3252 (d)A self-disclosure of any administrative, civil, or 3253 criminal complaints, settlements, or discipline of the 3254 applicant, or any of the applicants affiliates, which relates 3255 to a violation of the insurance laws or continuing care 3256 retirement community laws, in any state. 3257 (4)(a)The applicant shall make available for inspection by 3258 the office copies of all contracts and contract templates 3259 relating to services provided by the management company to 3260 providers or other persons using the services of the management 3261 company. 3262 (b)The applicant shall also make available for inspection 3263 by the office copies of all contracts and contract templates 3264 with any provider. 3265 (5)The office may not issue a certificate of authority if 3266 it determines that the management company or any individual 3267 specified in paragraph (2)(c) is not competent, trustworthy, 3268 financially responsible, or of good personal and business 3269 reputation. 3270 (6)A certificate of authority issued under this section 3271 remains valid, unless suspended or revoked by the office, so 3272 long as the certificateholder continues in business in this 3273 state. 3274 Section 70.Section 651.1041, Florida Statutes, is created 3275 to read: 3276 651.1041Acquisition of a management company.An 3277 acquisition of a management company is governed by s. 628.4615 3278 as if the company were a specialty insurer. 3279 Section 71.Section 651.1043, Florida Statutes, is created 3280 to read: 3281 651.1043Management company annual and quarterly financial 3282 statements; notice of change of ownership; fines for 3283 noncompliance. 3284 (1)Each authorized management company shall annually file 3285 with the office a full and true statement of its financial 3286 condition, transactions, and affairs within 3 months after the 3287 end of the management companys fiscal year or within such 3288 extension of time as the office may grant for good cause. The 3289 statement must be for the preceding fiscal year and must be in 3290 such form and contain such matters as the commission prescribes 3291 and must be verified by at least two officers of the management 3292 company. 3293 (2)Each authorized management company shall also annually 3294 file an audited financial statement prepared in accordance with 3295 generally accepted accounting principles by an independent 3296 certified public accountant. The audited financial statement 3297 must be filed with the office within 3 months after the end of 3298 the management companys fiscal year and be for the preceding 3299 fiscal year. An audited financial statement prepared on a 3300 consolidated basis must include a columnar consolidating or 3301 combining worksheet that must be filed with the statement and 3302 must comply with all of the following: 3303 (a)Amounts shown on the consolidated audited financial 3304 statement must be shown on the worksheet. 3305 (b)Amounts for each entity must be stated separately. 3306 (c)Explanations of consolidating and eliminating entries 3307 must be included. 3308 (3)For the purpose of determining the financial status of 3309 the management company and the management capabilities of its 3310 managers and owners, the management company must submit such 3311 other data, financial statements, and pertinent information as 3312 the commission or office may reasonably require with respect to 3313 the management company, its directors, or its trustees, or with 3314 respect to any parent, subsidiary, or affiliate if the 3315 management company relies on a contractual or financial 3316 relationship with such parent, subsidiary, or affiliate in order 3317 to meet the financial requirements of this chapter. 3318 (4)For any material change in its ownership, a management 3319 company shall file an acquisition application as required by s. 3320 651.024. 3321 (5)Within 45 days after the end of each fiscal quarter, 3322 each management company shall file a quarterly unaudited 3323 financial statement in the form prescribed by commission rule. 3324 (6)If the office finds that such information is needed to 3325 properly monitor the financial condition of a management company 3326 or is otherwise needed to protect the public interest, the 3327 office may require the management company to file: 3328 (a)Within 25 days after the end of each month, a monthly 3329 unaudited financial statement of the management company in the 3330 form prescribed by the commission by rule. 3331 (b)For the purpose of determining the financial status of 3332 the management company and the management capabilities of its 3333 managers and owners, such other data, financial statements, and 3334 pertinent information as the office may reasonably require with 3335 respect to the management company, its directors, or its 3336 trustees, or with respect to any parent, subsidiary, or 3337 affiliate if the management company relies on a contractual or 3338 financial relationship with such parent, subsidiary, or 3339 affiliate in order to meet the financial requirements of this 3340 chapter. 3341 (7)Any management company that fails to file an annual 3342 financial report or quarterly financial report in the form and 3343 within the time required by this section shall forfeit to the 3344 office an amount set by order of the office which does not 3345 exceed $1,000 for each of the first 10 days of noncompliance and 3346 does not exceed $2,000 for each subsequent day of noncompliance. 3347 Upon notice by the office that the management company is not in 3348 compliance with this section, the management companys authority 3349 to perform in the capacity of a management company for any 3350 provider or facility in this state ceases until the office 3351 determines the management company to be in compliance. The 3352 office may not collect more than $100,000 under this subsection 3353 with respect to any particular report. 3354 (8)All moneys collected by the office under this section 3355 must be deposited to the credit of the Insurance Regulatory 3356 Trust Fund. 3357 (9)The commission may by rule require all or part of the 3358 statements or filings required under this section to be 3359 submitted by electronic means in a computer-readable form 3360 compatible with the electronic data format specified by the 3361 commission. 3362 Section 72.Section 651.1045, Florida Statutes, is created 3363 to read: 3364 651.1045Management company grounds for discretionary 3365 denial, suspension, or revocation of certificate of authority. 3366 (1)The office may deny an application or suspend or revoke 3367 the certificate of authority of any applicant or management 3368 company if it finds that any one or more of the following 3369 grounds applicable to the applicant or management company exist: 3370 (a)Failing to continue to meet the requirements for the 3371 certificate of authority originally granted. 3372 (b)Failing to meet one or more of the qualifications for 3373 the certificate of authority under this chapter. 3374 (c)Making a material misstatement or misrepresentation to 3375 obtain the certificate of authority or committing fraud in 3376 obtaining or in attempting to obtain the certificate of 3377 authority. 3378 (d)Demonstrating a lack of fitness or trustworthiness. 3379 (e)Engaging in fraudulent or dishonest practices of 3380 management in the conduct of business. 3381 (f)Misappropriating, converting, or withholding moneys. 3382 (g)Failing to comply with, or violating, any lawful order 3383 or rule issued by the office or commission or violating any 3384 provision of this chapter. 3385 (h)Becoming insolvent or financially impaired or 3386 conducting business in a manner that poses a risk to the public. 3387 (i)Refusing to be examined or to produce accounts, 3388 records, and files for examination, refusing to give information 3389 with respect to its affairs, or refusing to perform any other 3390 legal obligation under this chapter when required by the office. 3391 (j)Failing to comply with the requirements of s. 651.1043. 3392 (k)Failing to maintain full compliance with escrow 3393 accounts or funds as required by this chapter, if responsible 3394 for the day-to-day operations of the provider. 3395 (l)Failing to meet the requirements of this chapter for 3396 disclosure of information to residents concerning the facility, 3397 its ownership, its management, its development, or its financial 3398 condition, or failing to honor its continuing care or continuing 3399 care at-home contracts, if responsible for the day-to-day 3400 operations of the provider. 3401 (m)Having any cause for which issuance of the license 3402 could have been denied had it then existed and been known to the 3403 office. 3404 (n)Having owners, managers, officers, or directors who 3405 have been found guilty of, or have pleaded guilty or nolo 3406 contendere to, a felony in this state or any other state, 3407 regardless of whether a judgment or conviction was entered by 3408 the court having jurisdiction of such cases. 3409 (o)Engaging in unfair methods of competition or in unfair 3410 or deceptive acts or practices prohibited under part IX of 3411 chapter 626. 3412 (p)Demonstrating a pattern of bankrupt enterprises. 3413 (q)Including in ownership, control, or management any 3414 person who: 3415 1.Is not reputable and of responsible character; 3416 2.Is so lacking in management expertise as to make the 3417 operation of the provider hazardous to potential and existing 3418 residents; 3419 3.Is so lacking in management experience, ability, and 3420 standing as to jeopardize the reasonable promise of successful 3421 operation; 3422 4.Is affiliated, directly or indirectly, through ownership 3423 or control, with any person whose business operations are or 3424 have been marked by business practices or conduct that is 3425 detrimental to the public, contract holders, investors, or 3426 creditors; by manipulation of assets, finances, or accounts; or 3427 by bad faith; or 3428 5.Has business operations marked by business practices or 3429 conduct that is detrimental to the public, contract holders, 3430 investors, or creditors; by manipulation of assets, finances, or 3431 accounts; or by bad faith. 3432 (r)Failing to file a notice of change in management, 3433 failing to remove a disapproved manager, or persisting in 3434 appointing disapproved managers. 3435 (2)Revocation of a management companys certificate of 3436 authority under this section does not relieve a provider of the 3437 providers obligation to residents under the terms and 3438 conditions of any continuing care or continuing care at-home 3439 contract between the provider and residents or this chapter. The 3440 management company shall continue to file its annual statement 3441 and pay license fees to the office as required under this 3442 chapter as if the certificate of authority had continued in full 3443 force, but the management company may not issue any new 3444 contracts on behalf of a provider. 3445 (3)The office may seek an action in the circuit court of 3446 the Second Judicial Circuit, in and for Leon County, to enforce 3447 the offices order and the provisions of this section. 3448 Section 73.Subsections (1), (4), (5), and (6) of section 3449 651.105, Florida Statutes, are amended to read: 3450 651.105Examination. 3451 (1)The office may at any time, and shall at least once 3452 every 3 years, examine the business of any applicant for a 3453 certificate of authority and any provider or management company 3454 engaged in the execution of care contracts or engaged in the 3455 performance of obligations under such contracts, in the same 3456 manner as is provided for the examination of insurance companies 3457 pursuant to ss. 624.316 and 624.318. For a provider or 3458 management company as deemed accredited under s. 651.028, such 3459 examinations must take place at least once every 5 years. An 3460 examination covering the preceding 3 or 5 fiscal years of the 3461 provider or management company, as applicable, must be commenced 3462 within 12 months after the end of the most recent fiscal year 3463 covered by the examination. Such examination may include events 3464 subsequent to the end of the most recent fiscal year and the 3465 events of any prior period which relate to possible violations 3466 of this chapter or which affect the present financial condition 3467 of the provider or management company. At least once every 3 or 3468 5 fiscal years, as applicable, the office shall conduct an 3469 interview in person, telephonically, or through electronic 3470 communication with the current president or chair of the 3471 residents council, or another designated officer of the council 3472 if the president or chair is not available, as part of the 3473 examination process. The examinations must be made by a 3474 representative or examiner designated by the office whose 3475 compensation will be fixed by the office pursuant to s. 624.320. 3476 Routine examinations may be made by having the necessary 3477 documents submitted to the office,; and, for this purpose, 3478 financial documents and records conforming to commonly accepted 3479 accounting principles and practices, as required under s. 3480 651.026, are deemed adequate. The final written report of each 3481 examination must be filed with the office and, when so filed, 3482 constitutes a public record. Any provider or management company 3483 being examined shall, upon request, give reasonable and timely 3484 access to all of its records. The representative or examiner 3485 designated by the office may at any time examine the records and 3486 affairs and inspect the physical property of any provider or 3487 management company, whether in connection with a formal 3488 examination or not. 3489 (4)The office shall notify the provider or management 3490 company and the executive officer of the governing body of the 3491 provider or management company in writing of all deficiencies in 3492 its compliance with the provisions of this chapter and the rules 3493 adopted pursuant to this chapter and shall set a reasonable 3494 length of time for compliance by the provider or management 3495 company. In addition, the office shall require corrective action 3496 or request a corrective action plan from the provider or 3497 management company which plan demonstrates a good faith attempt 3498 to remedy the deficiencies by a specified date. If the provider 3499 or management company fails to comply within the established 3500 length of time, the office may initiate action against the 3501 provider or management company in accordance with the provisions 3502 of this chapter. 3503 (5)A provider or management company shall respond to 3504 written correspondence from the office and provide data, 3505 financial statements, and pertinent information as requested by 3506 the office. The office has standing to petition a circuit court 3507 for mandatory injunctive relief to compel access to and require 3508 the provider or management company to produce the documents, 3509 data, records, and other information requested by the office. 3510 The office may petition the circuit court in the county in which 3511 the facility is situated or the Circuit Court of Leon County to 3512 enforce this section. 3513 (6)Unless a provider is impaired or subject to a 3514 regulatory action level event, any parent, subsidiary, or 3515 affiliate is not subject to examination by the office as part of 3516 a routine examination. However, If a provider, or facility, or 3517 management company relies on a contractual or financial 3518 relationship with a parent, a subsidiary, or an affiliate in 3519 order to meet the financial requirements of this chapter, the 3520 office may examine any parent, subsidiary, or affiliate that has 3521 a contractual or financial relationship with the provider, or 3522 facility, or management company to the extent necessary to 3523 ascertain the financial condition of the provider or management 3524 company. For any provider that has been placed into 3525 administrative supervision under s. 651.018, any parent, 3526 subsidiary, or affiliate is subject to examination by the 3527 office. 3528 Section 74.Section 651.1065, Florida Statutes, is amended 3529 to read: 3530 651.1065Soliciting or accepting new continuing care 3531 contracts by impaired or insolvent facilities or providers. 3532 (1)Regardless of whether delinquency proceedings as to a 3533 continuing care facility have been or are to be initiated, a 3534 proprietor, a general partner, a member, an officer, a director, 3535 a trustee, or a manager, or a management company of a continuing 3536 care facility may not actively solicit, approve the solicitation 3537 or acceptance of, or accept new continuing care contracts in 3538 this state after the proprietor, general partner, member, 3539 officer, director, trustee, or manager, or a management company 3540 knew, or reasonably should have known, that the continuing care 3541 facility was impaired or insolvent except with the written 3542 permission of the office. If the facility has declared 3543 bankruptcy, the bankruptcy court or trustee appointed by the 3544 court has jurisdiction over such matters. The office must 3545 approve or disapprove the continued marketing of new contracts 3546 within 15 days after receiving a request from a provider. 3547 (2)A proprietor, a general partner, a member, an officer, 3548 a director, a trustee, or a manager, or a management company 3549 that who violates this section commits a felony of the third 3550 degree, punishable as provided in s. 775.082, s. 775.083, or s. 3551 775.084. 3552 Section 75.Subsections (2) and (3) of section 651.107, 3553 Florida Statutes, are amended to read: 3554 651.107Duration of suspension; obligations during 3555 suspension period; reinstatement. 3556 (2)During the period of suspension, the provider or 3557 management company shall file its annual statement and pay 3558 license fees and taxes as required under this chapter as if the 3559 certificate had continued in full force,; but the provider shall 3560 issue no new contracts. 3561 (3)Upon expiration of the suspension period, if within 3562 such period the certificate of authority has not otherwise 3563 terminated, the providers or management companys certificate 3564 of authority shall automatically be reinstated unless the office 3565 finds that the causes for the suspension have not been removed 3566 or that the provider or management company is otherwise not in 3567 compliance with the requirements of this chapter. If not so 3568 automatically reinstated, the certificate of authority shall be 3569 deemed to be revoked as of the end of the suspension period or 3570 upon failure of the provider or management company to continue 3571 the certificate during the suspension period, whichever event 3572 first occurs. 3573 Section 76.Subsection (2) of section 651.108, Florida 3574 Statutes, is amended to read: 3575 651.108Administrative fines. 3576 (2)If it is found that the provider or management company 3577 has knowingly and willfully violated a lawful order of the 3578 office or a provision of this chapter, the office may impose a 3579 fine of up to in an amount not to exceed $10,000 for each such 3580 violation. 3581 Section 77.Section 651.113, Florida Statutes, is created 3582 to read: 3583 651.113Hazardous facility or provider standards; offices 3584 evaluation and enforcement authority; immediate final order. 3585 (1)In determining whether the continued operation of any 3586 provider transacting business in this state may be deemed to be 3587 in hazardous financial condition, the office may consider, in 3588 the totality of the circumstances, any of the following: 3589 (a)Whether the providers or facilitys financial 3590 statements contain findings or conditions that the office 3591 considers detrimental to its financial stability. 3592 (b)Whether an independent auditor has identified 3593 significant financial risks or issued a going concern opinion. 3594 (c)Whether the providers or facilitys current or 3595 projected ratio of total assets, including required reserves, to 3596 total liabilities indicates financial impairment or 3597 deterioration, or trends suggest a potential decline in 3598 operations, working capital, or equity. 3599 (d)Whether the providers or facilitys current or 3600 projected ratio of current assets to current liabilities 3601 indicates financial impairment or deterioration, or trends 3602 suggest a potential decline in operations, working capital, or 3603 equity. 3604 (e)Whether the provider or facility is unable to carry out 3605 normal daily activities and meet its obligations as they become 3606 due, based on its current or projected cash flow and liquidity 3607 position. 3608 (f)Whether the providers or facilitys past-year 3609 operating losses or projected operating losses are significant 3610 enough to jeopardize daily operations or long-term viability. 3611 (g)Whether the insolvency of an affiliated provider or 3612 facility or other affiliated person results in legal liability 3613 of the provider or facility for payments and expenses of such 3614 magnitude as to jeopardize the providers or facilitys ability 3615 to meet its obligations as they become due, without substantial 3616 disposition of assets outside the ordinary course of business, 3617 any restructuring of debt, or externally forced revisions of its 3618 operations. 3619 (h)The age and collectability of payables and receivables. 3620 (i)Whether the provider or facility can demonstrate a 3621 significant reduction or resolution of a deteriorating financial 3622 condition. 3623 (j)Whether a startup provider, a facility undergoing 3624 expansion, or an entity refinancing its debt has developed a 3625 financial condition that could seriously jeopardize current or 3626 future operations. 3627 (k)Whether a facility has entered into a forbearance 3628 agreement with a lender based on an inability to make timely 3629 debt payments. 3630 (2)The provider or facility shall prepare a plan to 3631 address and correct any condition that has led to a hazardous 3632 financial condition. The plan must be presented to the office 3633 within 30 days after the date of the determination. 3634 (3)If the office determines that the continued operations 3635 of a provider or facility authorized to transact business in 3636 this state may be hazardous to its residents or to the general 3637 public, the office may issue an order requiring the provider or 3638 facility to do any of the following: 3639 (a)Obtain additional financing or revenues to maintain 3640 solvency. 3641 (b)Reduce expenses by specified methods or amounts. 3642 (c)Increase the operating reserve. 3643 (d)File reports to the office concerning the market value 3644 of the providers or facilitys assets. 3645 (e)Limit or withdraw from certain investments or 3646 discontinue certain investment practices to the extent the 3647 office deems necessary. 3648 (f)Document the adequacy of income and operating reserves 3649 in relation to expenses. 3650 (g)File, in addition to regular annual statements, interim 3651 financial reports on a form prescribed by the commission. 3652 (h)Correct corporate governance practice deficiencies and 3653 adopt and use governance practices acceptable to the office. 3654 (i)Provide a business plan acceptable to the office in 3655 order to continue to transact business in this state. 3656 (4)The office may, pursuant to ss. 120.569 and 120.57, in 3657 its discretion and without advance notice or hearing, issue an 3658 immediate final order to any insurer requiring the actions 3659 specified in subsection (3). 3660 (5)This section may not be interpreted to limit the powers 3661 granted to the office by any laws of this state, nor may it be 3662 interpreted to supersede any laws of this state. 3663 Section 78.Subsection (11) of section 651.114, Florida 3664 Statutes, is amended to read: 3665 651.114Delinquency proceedings; remedial rights. 3666 (11)(a)The rights of the office described in this section 3667 are subordinate to the rights of a trustee or lender pursuant to 3668 the terms of a resolution, ordinance, loan agreement, indenture 3669 of trust, mortgage, lease, security agreement, or other 3670 instrument creating or securing bonds or notes issued to finance 3671 a facility, and the office, subject to paragraph (c), may not 3672 exercise its remedial rights provided under this section and ss. 3673 651.018, 651.106, 651.108, and 651.116 with respect to a 3674 facility that is subject to a lien, mortgage, lease, or other 3675 encumbrance or trust indenture securing bonds or notes issued in 3676 connection with the financing of the facility, if the trustee or 3677 lender, by inclusion or by amendment to the loan documents or by 3678 a separate contract with the office, agrees that the rights of 3679 residents under a continuing care or continuing care at-home 3680 contract will be honored and will not be disturbed by a 3681 foreclosure or conveyance in lieu thereof as long as the 3682 resident: 3683 1.Is current in the payment of all monetary obligations 3684 required by the contract; 3685 2.Is in compliance and continues to comply with all 3686 provisions of the contract; and 3687 3.Has asserted no claim inconsistent with the rights of 3688 the trustee or lender. 3689 (b)This subsection does not require a trustee or lender 3690 to: 3691 1.Continue to engage in the marketing or resale of new 3692 continuing care or continuing care at-home contracts; 3693 2.Pay any rebate of entrance fees as may be required by a 3694 residents continuing care or continuing care at-home contract 3695 as of the date of acquisition of the facility by the trustee or 3696 lender and until expiration of the period described in paragraph 3697 (d); 3698 3.Be responsible for any act or omission of any owner or 3699 operator of the facility arising before the acquisition of the 3700 facility by the trustee or lender; or 3701 4.Provide services to the residents to the extent that the 3702 trustee or lender would be required to advance or expend funds 3703 that have not been designated or set aside for such purposes. 3704 (c)If the office determines, at any time during the 3705 suspension of its remedial rights as provided in paragraph (a), 3706 that: 3707 1.The trustee or lender is not in compliance with 3708 paragraph (a); 3709 2.A lender or trustee has assigned or has agreed to assign 3710 all or a portion of a delinquent or defaulted loan to a third 3711 party without the offices written consent; 3712 3.The provider engaged in the misappropriation, 3713 conversion, or illegal commitment or withdrawal of minimum 3714 liquid reserve or escrowed funds required under this chapter; 3715 4.The provider refused to be examined by the office 3716 pursuant to s. 651.105(1); or 3717 5.The provider refused to produce any relevant accounts, 3718 records, and files requested as part of an examination, 3719 3720 the office shall notify the trustee or lender in writing of its 3721 determination, setting forth the reasons giving rise to the 3722 determination and specifying those remedial rights afforded to 3723 the office which the office shall then reinstate. 3724 (d)Upon acquisition of a facility by a trustee or lender 3725 and evidence satisfactory to the office that the requirements of 3726 paragraph (a) have been met, the office shall issue a 90-day 3727 temporary certificate of authority granting the trustee or 3728 lender the authority to engage in the business of providing 3729 continuing care or continuing care at-home and to issue 3730 continuing care or continuing care at-home contracts subject to 3731 the offices right to immediately suspend or revoke the 3732 temporary certificate of authority if the office determines that 3733 any of the grounds described in s. 651.106 apply to the trustee 3734 or lender or that the terms of the contract used as the basis 3735 for the issuance of the temporary certificate of authority by 3736 the office have not been or are not being met by the trustee or 3737 lender since the date of acquisition. 3738 Section 79.Section 651.1165, Florida Statutes, is created 3739 to read: 3740 651.1165Recording of lien by the office. 3741 (1)The office may record with the county recorder of any 3742 county a notice of lien against the facilitys properties on 3743 behalf of all residents and contract holders who enter into life 3744 care contracts with the applicant to secure performance of the 3745 providers obligations to residents and contract holders 3746 pursuant to life care contracts. 3747 (2)From the time of the recording under subsection (1), 3748 there exists a lien for an amount equal to the reasonable value 3749 of services to be performed under a life care contract in favor 3750 of each resident and contract holder on the land and 3751 improvements of the facilitys properties owned by the provider, 3752 not exempt from execution, which are listed in the notice of 3753 lien filed pursuant to subsection (3) and which are located in 3754 the county in which the notice of lien is recorded. 3755 (3)The lien is perfected by the office by executing by 3756 affidavit the notice and claim of lien, which must contain: 3757 (a)The legal description of the lands and improvements to 3758 be charged with a lien. 3759 (b)The name of the owner of the property affected. 3760 (c)A statement that the lien has been filed by the office 3761 pursuant to this section. 3762 (4)The lien may be released or partially released at the 3763 request of the applicant if, in the judgment of the 3764 commissioner, such release or partial release inures to the 3765 benefit of the residents and contract holders and the 3766 performance of the providers obligations to the residents and 3767 contract holders. 3768 (5)The lien may be foreclosed by civil action. Any number 3769 of persons claiming liens against the same property pursuant to 3770 this section may join in the same action. If separate actions 3771 are commenced, the court may consolidate such actions. The court 3772 shall, as part of the costs, allow reasonable attorney fees for 3773 each claimant who is a party to the action. 3774 (6)In a civil action filed pursuant to this section, the 3775 judgment must be entered in favor of each resident and contract 3776 holder having a lien who has joined in the foreclosure action 3777 for the amount equal to the reasonable value of services to be 3778 performed under a life care contract in favor of each resident 3779 and contract holder. The court shall order the sheriff to sell 3780 any property subject to the lien at the time judgment is given, 3781 in the same manner as real and personal property is sold on 3782 execution. The lien for the reasonable value of services to be 3783 performed under a life care contract must be on equal footing 3784 with claims of other residents and contract holders. If a sale 3785 is ordered and the property sold and the proceeds of the sale 3786 are not sufficient to discharge all liens of residents and 3787 contract holders against the property, the proceeds must be 3788 prorated among the respective residents and contract holders. 3789 (7)The lien provided for in this section is preferred to 3790 all liens, mortgages, or other encumbrances upon the property 3791 attaching subsequently to the time the lien is recorded and is 3792 preferred to all unrecorded liens, mortgages, and other 3793 encumbrances. The amount secured by any lien having priority to 3794 the lien filed pursuant to this section may not be increased 3795 without prior approval of the office. 3796 (8)The office shall file a release of the lien upon proof 3797 of complete performance of all obligations to residents and 3798 contract holders pursuant to life care contracts. 3799 (9)The office may subordinate any lien filed pursuant to 3800 this section to the lien of a first mortgage or other long-term 3801 financing obtained by the provider, regardless of the time at 3802 which the subsequent lien attaches. 3803 Section 80.Paragraph (b) of subsection (4) of section 3804 624.307, Florida Statutes, is amended to read: 3805 624.307General powers; duties. 3806 (4)The department and office may each collect, propose, 3807 publish, and disseminate information relating to the subject 3808 matter of any duties imposed upon it by law. 3809 (b)The office shall publish all orders, data required by 3810 s. 627.915(2), reports required by s. 627.7154(3), and all 3811 reports that are not confidential and exempt on its website in a 3812 timely fashion. 3813 Section 81.Subsection (3) of section 627.642, Florida 3814 Statutes, is amended to read: 3815 627.642Outline of coverage. 3816 (3)In addition to the outline of coverage, a policy as 3817 specified in s. 627.6699(3)(j) s. 627.6699(3)(k) must be 3818 accompanied by an identification card that contains, at a 3819 minimum: 3820 (a)The name of the organization issuing the policy or the 3821 name of the organization administering the policy, whichever 3822 applies. 3823 (b)The name of the contract holder. 3824 (c)The type of plan only if the plan is filed in the 3825 state, an indication that the plan is self-funded, or the name 3826 of the network. 3827 (d)The member identification number, contract number, and 3828 policy or group number, if applicable. 3829 (e)A contact phone number or electronic address for 3830 authorizations and admission certifications. 3831 (f)A phone number or electronic address whereby the 3832 covered person or hospital, physician, or other person rendering 3833 services covered by the policy may obtain benefits verification 3834 and information in order to estimate patient financial 3835 responsibility, in compliance with privacy rules under the 3836 Health Insurance Portability and Accountability Act. 3837 (g)The national plan identifier, in accordance with the 3838 compliance date set forth by the federal Department of Health 3839 and Human Services. 3840 3841 The identification card must present the information in a 3842 readily identifiable manner or, alternatively, the information 3843 may be embedded on the card and available through magnetic 3844 stripe or smart card. The information may also be provided 3845 through other electronic technology. 3846 Section 82.Paragraph (a) of subsection (2), paragraphs 3847 (a), (e), and (g) of subsection (7), and paragraph (a) of 3848 subsection (8) of section 627.6475, Florida Statutes, are 3849 amended to read: 3850 627.6475Individual reinsurance pool. 3851 (2)DEFINITIONS.As used in this section: 3852 (a)Board, Carrier, and health benefit plan have the 3853 same meaning ascribed in s. 627.6699(3). 3854 (7)INDIVIDUAL HEALTH REINSURANCE PROGRAM. 3855 (a)The individual health reinsurance program shall operate 3856 subject to the supervision and control of the board of the small 3857 employer health reinsurance program established pursuant to s. 3858 627.6699(11). The board shall establish a separate, segregated 3859 account for eligible individuals reinsured pursuant to this 3860 section, which account may not be commingled with the small 3861 employer health reinsurance account. 3862 (e)1.Before March 1 of each calendar year, the board shall 3863 determine and report to the office the program net loss in the 3864 individual account for the previous year, including 3865 administrative expenses for that year and the incurred losses 3866 for that year, taking into account investment income and other 3867 appropriate gains and losses. 3868 2.Any net loss in the individual account for the year 3869 shall be recouped by assessing the carriers as follows: 3870 a.The operating losses of the program shall be assessed in 3871 the following order subject to the specified limitations. The 3872 first tier of assessments shall be made against reinsuring 3873 carriers in an amount that may not exceed 5 percent of each 3874 reinsuring carriers premiums for individual health insurance. 3875 If such assessments have been collected and additional moneys 3876 are needed, the board shall make a second tier of assessments in 3877 an amount that may not exceed 0.5 percent of each carriers 3878 health benefit plan premiums. 3879 b.Except as provided in paragraph (f), risk-assuming 3880 carriers are exempt from all assessments authorized pursuant to 3881 this section. The amount paid by a reinsuring carrier for the 3882 first tier of assessments shall be credited against any 3883 additional assessments made. 3884 c.The board shall equitably assess reinsuring carriers for 3885 operating losses of the individual account based on market 3886 share. The board shall annually assess each carrier a portion of 3887 the operating losses of the individual account. The first tier 3888 of assessments shall be determined by multiplying the operating 3889 losses by a fraction, the numerator of which equals the 3890 reinsuring carriers earned premium pertaining to direct 3891 writings of individual health insurance in the state during the 3892 calendar year for which the assessment is levied, and the 3893 denominator of which equals the total of all such premiums 3894 earned by reinsuring carriers in the state during that calendar 3895 year. The second tier of assessments shall be based on the 3896 premiums that all carriers, except risk-assuming carriers, 3897 earned on all health benefit plans written in this state. The 3898 board may levy interim assessments against reinsuring carriers 3899 to ensure the financial ability of the plan to cover claims 3900 expenses and administrative expenses paid or estimated to be 3901 paid in the operation of the plan for the calendar year prior to 3902 the associations anticipated receipt of annual assessments for 3903 that calendar year. Any interim assessment is due and payable 3904 within 30 days after receipt by a carrier of the interim 3905 assessment notice. Interim assessment payments shall be credited 3906 against the carriers annual assessment. Health benefit plan 3907 premiums and benefits paid by a carrier that are less than an 3908 amount determined by the board to justify the cost of collection 3909 may not be considered for purposes of determining assessments. 3910 d.Subject to the approval of the office, the board shall 3911 adjust the assessment formula for reinsuring carriers that are 3912 approved as federally qualified health maintenance organizations 3913 by the Secretary of Health and Human Services pursuant to 42 3914 U.S.C. s. 300e(c)(2)(A) to the extent, if any, that restrictions 3915 are placed on them which are not imposed on other carriers. 3916 3.Before March 1 of each year, the board shall determine 3917 and file with the office an estimate of the assessments needed 3918 to fund the losses incurred by the program in the individual 3919 account for the previous calendar year. 3920 4.If the board determines that the assessments needed to 3921 fund the losses incurred by the program in the individual 3922 account for the previous calendar year will exceed the amount 3923 specified in subparagraph 2., the board shall evaluate the 3924 operation of the program and report its findings and 3925 recommendations to the office in the format established in s. 3926 627.6699(11) for the comparable report for the small employer 3927 reinsurance program. 3928 (g)Except as otherwise provided in this section, the board 3929 and the office shall have all powers, duties, and 3930 responsibilities with respect to carriers that issue and 3931 reinsure individual health insurance, as specified for the board 3932 and the office in s. 627.6699(11) with respect to small employer 3933 carriers, including, but not limited to, the provisions of s. 3934 627.6699(11) relating to: 3935 1.Use of assessments that exceed the amount of actual 3936 losses and expenses. 3937 2.The annual determination of each carriers proportion of 3938 the assessment. 3939 3.Interest for late payment of assessments. 3940 4.Authority for the office to approve deferment of an 3941 assessment against a carrier. 3942 5.Limited immunity from legal actions or carriers. 3943 6.Development of standards for compensation to be paid to 3944 agents. Such standards shall be limited to those specifically 3945 enumerated in s. 627.6699(11)(d) s. 627.6699(12)(d). 3946 7.Monitoring compliance by carriers with this section. 3947 (8)STANDARDS TO ASSURE FAIR MARKETING. 3948 (a)Each health insurance issuer that offers individual 3949 health insurance shall actively market coverage to eligible 3950 individuals in the state. The provisions of s. 627.6699(11) s. 3951 627.6699(12) that apply to small employer carriers that market 3952 policies to small employers shall also apply to health insurance 3953 issuers that offer individual health insurance with respect to 3954 marketing policies to individuals. 3955 Section 83.Subsection (2) of section 627.657, Florida 3956 Statutes, is amended to read: 3957 627.657Provisions of group health insurance policies. 3958 (2)The medical policy as specified in s. 627.6699(3)(j) s. 3959 627.6699(3)(k) must be accompanied by an identification card 3960 that contains, at a minimum: 3961 (a)The name of the organization issuing the policy or name 3962 of the organization administering the policy, whichever applies. 3963 (b)The name of the certificateholder. 3964 (c)The type of plan only if the plan is filed in the 3965 state, an indication that the plan is self-funded, or the name 3966 of the network. 3967 (d)The member identification number, contract number, and 3968 policy or group number, if applicable. 3969 (e)A contact phone number or electronic address for 3970 authorizations and admission certifications. 3971 (f)A phone number or electronic address whereby the 3972 covered person or hospital, physician, or other person rendering 3973 services covered by the policy may obtain benefits verification 3974 and information in order to estimate patient financial 3975 responsibility, in compliance with privacy rules under the 3976 Health Insurance Portability and Accountability Act. 3977 (g)The national plan identifier, in accordance with the 3978 compliance date set forth by the federal Department of Health 3979 and Human Services. 3980 3981 The identification card must present the information in a 3982 readily identifiable manner or, alternatively, the information 3983 may be embedded on the card and available through magnetic 3984 stripe or smart card. The information may also be provided 3985 through other electronic technology. 3986 Section 84.Subsection (1) of section 627.66997, Florida 3987 Statutes, is amended to read: 3988 627.66997Stop-loss insurance. 3989 (1)A self-insured health benefit plan established or 3990 maintained by a small employer, as defined in s. 627.6699(3)(s) 3991 s. 627.6699(3)(v), is exempt from s. 627.6699 and may use a 3992 stop-loss insurance policy issued to the employer. For purposes 3993 of this subsection, the term stop-loss insurance policy means 3994 an insurance policy issued to a small employer which covers the 3995 small employers obligation for the excess cost of medical care 3996 on an equivalent basis per employee provided under a self 3997 insured health benefit plan. 3998 (a)A small employer stop-loss insurance policy is 3999 considered a health insurance policy and is subject to s. 4000 627.6699 if the policy has an aggregate attachment point that is 4001 lower than the greatest of: 4002 1.Two thousand dollars multiplied by the number of 4003 employees; 4004 2.One hundred twenty percent of expected claims, as 4005 determined by the stop-loss insurer in accordance with actuarial 4006 standards of practice; or 4007 3.Twenty thousand dollars. 4008 (b)Once claims under the small employer health benefit 4009 plan reach the aggregate attachment point set forth in paragraph 4010 (a), the stop-loss insurance policy authorized under this 4011 section must cover 100 percent of all claims that exceed the 4012 aggregate attachment point. 4013 Section 85.Reciprocal insurers licensed before July 1, 4014 2025, have until July 1, 2026, to comply with the changes made 4015 to subscribers advisory committees in s. 629.201, Florida 4016 Statutes. Reciprocal insurers licensed before July 1, 2025, have 4017 until July 1, 2028, to comply with the changes made to unearned 4018 premium reserve requirements imposed under s. 629.56, Florida 4019 Statutes. 4020 Section 86.Except as otherwise expressly provided in this 4021 act and except for this section, which shall take effect upon 4022 this act becoming a law, this act shall take effect July 1, 4023 2025.