Florida Senate - 2025 CS for SB 1740 By the Committee on Banking and Insurance; and Senators Ingoglia and Sharief 597-02493-25 20251740c1 1 A bill to be entitled 2 An act relating to insurance; amending s. 215.5586, 3 F.S.; revising legislative intent; specifying that 4 hurricane mitigation grants funded through the My Safe 5 Florida Home Program may be awarded only under certain 6 circumstances; requiring the Department of Financial 7 Services to require that certain mitigation 8 improvements be made as a condition of reimbursing a 9 homeowner approved for a grant; amending ss. 624.407 10 and 624.408, F.S.; revising the surplus required for 11 certain insurers applying for their original 12 certificates of authority and to maintain their 13 certificates of authority, respectively; amending s. 14 624.4073, F.S.; specifying prohibitions for persons 15 who were officers or directors of an insolvent 16 insurer, attorneys in fact of a reciprocal insurer, or 17 officers or directors of an attorney in fact of a 18 reciprocal insurer; providing applicability; requiring 19 the Office of Insurance Regulation to prohibit 20 insurers or reciprocal insurers from paying any 21 compensation to certain persons for certain violations 22 until a specified time; amending s. 627.062, F.S.; 23 prohibiting the office from requesting an insurer 24 waive a deemed approval for residential property 25 insurance rate filing under certain circumstances; 26 prohibiting the office from issuing a notice of intent 27 to disapprove a residential property insurance rate 28 filing under certain circumstances; creating s. 29 627.4263, F.S.; defining terms; requiring that 30 insurers decisions to deny claims be made by 31 qualified human professionals; specifying the duties 32 of qualified human professionals; requiring an insurer 33 to maintain certain records; prohibiting using 34 artificial intelligence, machine learning systems, or 35 algorithms as the sole basis for determining whether 36 to deny a claim; requiring insurers to include certain 37 information in denial communications to claimants; 38 requiring that certain insurers detail certain 39 information in its claims handling manual; authorizing 40 the office to conduct market conduct examinations and 41 investigations under certain circumstances; providing 42 an effective date. 43 44 Be It Enacted by the Legislature of the State of Florida: 45 46 Section 1.Section 215.5586, Florida Statutes, is amended 47 to read: 48 215.5586My Safe Florida Home Program. There is 49 established within the Department of Financial Services the My 50 Safe Florida Home Program. The department shall provide fiscal 51 accountability, contract management, and strategic leadership 52 for the program, consistent with this section. This section does 53 not create an entitlement for property owners or obligate the 54 state in any way to fund the inspection or retrofitting of 55 residential property in this state. Implementation of this 56 program is subject to annual legislative appropriations. It is 57 the intent of the Legislature that, subject to the availability 58 of funds, the My Safe Florida Home Program provide licensed 59 inspectors to perform hurricane mitigation inspections of 60 eligible homes and grants to fund hurricane mitigation projects 61 that result in property insurance credits, discounts, or other 62 rate differentials on those homes. The department shall 63 implement the program in such a manner that the total amount of 64 funding requested by accepted applications, whether for 65 inspections, grants, or other services or assistance, does not 66 exceed the total amount of available funds. If, after 67 applications are processed and approved, funds remain available, 68 the department may accept applications up to the available 69 amount. The program shall develop and implement a comprehensive 70 and coordinated approach for hurricane damage mitigation 71 pursuant to the requirements provided in this section. 72 (1)HURRICANE MITIGATION INSPECTIONS. 73 (a)To be eligible for a hurricane mitigation inspection 74 under the program: 75 1.A home must be a single-family, detached residential 76 property or a townhouse as defined in s. 481.203; 77 2.A home must be site-built and owner-occupied; and 78 3.The homeowner must have been granted a homestead 79 exemption on the home under chapter 196. 80 (b)1.An application for a hurricane mitigation inspection 81 must contain a signed or electronically verified statement made 82 under penalty of perjury that the applicant has submitted only 83 one inspection application on the home or that the application 84 is allowed under subparagraph 2., and the application must have 85 documents attached which demonstrate that the applicant meets 86 the requirements of paragraph (a). 87 2.An applicant may submit a subsequent hurricane 88 mitigation inspection application for the same home only if: 89 a.The original hurricane mitigation inspection application 90 has been denied or withdrawn because of errors or omissions in 91 the application; 92 b.The original hurricane mitigation inspection application 93 was denied or withdrawn because the home did not meet the 94 eligibility criteria for an inspection at the time of the 95 previous application, and the homeowner reasonably believes the 96 home now is eligible for an inspection; or 97 c.The programs eligibility requirements for an inspection 98 have changed since the original application date, and the 99 applicant reasonably believes the home is eligible under the new 100 requirements. 101 (c)An applicant meeting the requirements of paragraph (a) 102 may receive an inspection of a home under the program without 103 being eligible for a grant under subsection (2) or applying for 104 such grant. 105 (d)Licensed inspectors are to provide home inspections of 106 eligible homes to determine what mitigation measures are needed, 107 what insurance premium discounts may be available, and what 108 improvements to existing residential properties are needed to 109 reduce the propertys vulnerability to hurricane damage. An 110 inspector may inspect a townhouse as defined in s. 481.203 to 111 determine if opening protection mitigation as listed in 112 subparagraph (2)(e)1. would provide improvements to mitigate 113 hurricane damage. 114 (e)The department shall contract with wind certification 115 entities to provide hurricane mitigation inspections. The 116 inspections provided to homeowners, at a minimum, must include: 117 1.A home inspection and report that summarizes the results 118 and identifies recommended improvements a homeowner may take to 119 mitigate hurricane damage. 120 2.A range of cost estimates regarding the recommended 121 mitigation improvements. 122 3.Information regarding estimated premium discounts, 123 correlated to the current mitigation features and the 124 recommended mitigation improvements identified by the 125 inspection. 126 (f)To qualify for selection by the department as a wind 127 certification entity to provide hurricane mitigation 128 inspections, the entity must, at a minimum, meet the following 129 requirements: 130 1.Use hurricane mitigation inspectors who are licensed or 131 certified as: 132 a.A building inspector under s. 468.607; 133 b.A general, building, or residential contractor under s. 134 489.111; 135 c.A professional engineer under s. 471.015; 136 d.A professional architect under s. 481.213; or 137 e.A home inspector under s. 468.8314 and who have 138 completed at least 3 hours of hurricane mitigation training 139 approved by the Construction Industry Licensing Board, which 140 training must include hurricane mitigation techniques, 141 compliance with the uniform mitigation verification form, and 142 completion of a proficiency exam. 143 2.Use hurricane mitigation inspectors who also have 144 undergone drug testing and a background screening. The 145 department may conduct criminal record checks of inspectors used 146 by wind certification entities. Inspectors must submit a set of 147 fingerprints to the department for state and national criminal 148 history checks and must pay the fingerprint processing fee set 149 forth in s. 624.501. The fingerprints must be sent by the 150 department to the Department of Law Enforcement and forwarded to 151 the Federal Bureau of Investigation for processing. The results 152 must be returned to the department for screening. The 153 fingerprints must be taken by a law enforcement agency, 154 designated examination center, or other department-approved 155 entity. 156 3.Provide a quality assurance program including a 157 reinspection component. 158 (2)HURRICANE MITIGATION GRANTS.Financial grants shall be 159 used by homeowners to make improvements recommended by an 160 inspection which increase resistance to hurricane damage. 161 (a)A homeowner is eligible for a hurricane mitigation 162 grant if all of the following criteria are met: 163 1.The home must be eligible for an inspection under 164 subsection (1). 165 2.The home must be a dwelling with an insured value of 166 $700,000 or less. Homeowners who are low-income persons, as 167 defined in s. 420.0004(11), are exempt from this requirement. 168 3.The home must undergo an acceptable hurricane mitigation 169 inspection as provided in subsection (1). 170 4.The building permit application for initial construction 171 of the home must have been made before January 1, 2008. 172 5.The homeowner must agree to make his or her home 173 available for inspection once a mitigation project is completed. 174 6.The homeowner must agree to provide to the department 175 information received from the homeowners insurer identifying 176 the discounts realized by the homeowner because of the 177 mitigation improvements funded through the program. 178 (b)1.An application for a grant must contain a signed or 179 electronically verified statement made under penalty of perjury 180 that the applicant has submitted only one grant application or 181 that the application is allowed under subparagraph 2., and the 182 application must have documents attached demonstrating that the 183 applicant meets the requirements of paragraph (a). 184 2.An applicant may submit a subsequent grant application 185 if: 186 a.The original grant application was denied or withdrawn 187 because the application contained errors or omissions; 188 b.The original grant application was denied or withdrawn 189 because the home did not meet the eligibility criteria for a 190 grant at the time of the previous application, and the homeowner 191 reasonably believes that the home now is eligible for a grant; 192 or 193 c.The programs eligibility requirements for a grant have 194 changed since the original application date, and the applicant 195 reasonably believes that he or she is an eligible homeowner 196 under the new requirements. 197 3.A grant application must include a statement from the 198 homeowner which contains the name and state license number of 199 the contractor that the homeowner acknowledges as the intended 200 contractor for the mitigation work. The program must 201 electronically verify that the contractors state license number 202 is accurate and up to date before grant approval. 203 (c)All grants must be matched on the basis of $1 provided 204 by the applicant for $2 provided by the state up to a maximum 205 state contribution of $10,000 toward the actual cost of the 206 mitigation project, except as provided in paragraph (h). 207 (d)All hurricane mitigation performed under the program 208 must be based upon the securing of all required local permits 209 and inspections and must be performed by properly licensed 210 contractors. 211 (e)When recommended by a hurricane mitigation inspection, 212 grants for eligible homes may be used for the following 213 improvements: 214 1.Opening protection, including exterior doors, garage 215 doors, windows, and skylights. 216 2.Reinforcing roof-to-wall connections. 217 3.Improving the strength of roof-deck attachments. 218 4.Secondary water resistance for roof. 219 (f)When recommended by a hurricane mitigation inspection, 220 grants for townhouses, as defined in s. 481.203, may only be 221 used for opening protection. 222 (g)A grant may be awarded only for each mitigation 223 improvement that, when applied to the home, will result in a 224 property insurance mitigation credit, discount, or other rate 225 differential. If necessary for the home to qualify for a 226 mitigation credit, discount, or other rate differential, the 227 department must may require that improvements be made to all 228 openings, including exterior doors, garage doors, windows, and 229 skylights, as a condition of reimbursing a homeowner approved 230 for a grant. The department may adopt, by rule, the maximum 231 grant allowances for any improvement allowable under paragraph 232 (e) or paragraph (f). 233 (h)Low-income homeowners, as defined in s. 420.0004(11), 234 who otherwise meet the applicable requirements of this 235 subsection are eligible for a grant of up to $10,000 and are not 236 required to provide a matching amount to receive the grant. 237 (i)1.The department shall develop a process that ensures 238 the most efficient means to collect and verify inspection 239 applications and grant applications to determine eligibility. 240 The department may direct hurricane mitigation inspectors to 241 collect and verify grant application information or use the 242 Internet or other electronic means to collect information and 243 determine eligibility. 244 2.The department shall prioritize the review and approval 245 of such inspection applications and grant applications in the 246 following order: 247 a.First, applications from low-income persons, as defined 248 in s. 420.0004, who are at least 60 years old; 249 b.Second, applications from all other low-income persons, 250 as defined in s. 420.0004; 251 c.Third, applications from moderate-income persons, as 252 defined in s. 420.0004, who are at least 60 years old; 253 d.Fourth, applications from all other moderate-income 254 persons, as defined in s. 420.0004; and 255 e.Last, all other applications. 256 3.The department shall start accepting inspection 257 applications and grant applications no earlier than the 258 effective date of a legislative appropriation funding 259 inspections and grants, as follows: 260 a.Initially, from applicants prioritized under sub 261 subparagraph 2.a.; 262 b.From applicants prioritized under sub-subparagraph 2.b., 263 beginning 15 days after the program initially starts accepting 264 applications; 265 c.From applicants prioritized under sub-subparagraph 2.c., 266 beginning 30 days after the program initially starts accepting 267 applications; 268 d.From applicants described in sub-subparagraph 2.d., 269 beginning 45 days after the program initially starts accepting 270 applications; and 271 e.From all other applicants, beginning 60 days after the 272 program initially starts accepting applications. 273 4.The program may accept a certification directly from a 274 low-income homeowner or moderate-income homeowner who meets the 275 requirements of s. 420.0004(11) or (12), respectively, if the 276 homeowner provides such certification in a signed or 277 electronically verified statement made under penalty of perjury. 278 (j)A homeowner who receives a grant shall finalize 279 construction and request a final inspection, or request an 280 extension for an additional 6 months, within 1 year after grant 281 approval. If a homeowner fails to comply with this paragraph, 282 his or her application is deemed abandoned and the grant money 283 reverts to the department. 284 (3)REQUESTS FOR INFORMATION.The department may request 285 that an applicant provide additional information. An application 286 is deemed withdrawn by the applicant if the department does not 287 receive a response to its request for additional information 288 within 60 days after the notification of any apparent error or 289 omission. 290 (4)EDUCATION, CONSUMER AWARENESS, AND OUTREACH. 291 (a)The department may undertake a statewide multimedia 292 public outreach and advertising campaign to inform consumers of 293 the availability and benefits of hurricane inspections and of 294 the safety and financial benefits of residential hurricane 295 damage mitigation. The department may seek out and use local, 296 state, federal, and private funds to support the campaign. 297 (b)The program may develop brochures for distribution to 298 Citizens Property Insurance Corporation and other licensed 299 entities or nonprofits that work with the department to educate 300 the public on the benefits of the program. Citizens Property 301 Insurance Corporation must distribute the brochure to 302 policyholders of the corporation each year the program is 303 funded. The brochures may be made available electronically. 304 (5)FUNDING.The department may seek out and leverage 305 local, state, federal, or private funds to enhance the financial 306 resources of the program. 307 (6)RULES.The department shall adopt rules pursuant to ss. 308 120.536(1) and 120.54 to govern the program; implement the 309 provisions of this section; including rules governing hurricane 310 mitigation inspections and grants, mitigation contractors, and 311 training of inspectors and contractors; and carry out the duties 312 of the department under this section. 313 (7)HURRICANE MITIGATION INSPECTOR LIST.The department 314 shall develop and maintain as a public record a current list of 315 hurricane mitigation inspectors authorized to conduct hurricane 316 mitigation inspections pursuant to this section. 317 (8)CONTRACT MANAGEMENT. 318 (a)The department may contract with third parties for 319 grants management, inspection services, contractor services for 320 low-income homeowners, information technology, educational 321 outreach, and auditing services. Such contracts are considered 322 direct costs of the program and are not subject to 323 administrative cost limits. The department shall contract with 324 providers that have a demonstrated record of successful business 325 operations in areas directly related to the services to be 326 provided and shall ensure the highest accountability for use of 327 state funds, consistent with this section. 328 (b)The department shall implement a quality assurance and 329 reinspection program that determines whether initial inspections 330 and home improvements are completed in a manner consistent with 331 the intent of the program. The department may use valid random 332 sampling in order to perform the quality assurance portion of 333 the program. 334 (9)INTENT.It is the intent of the Legislature that grants 335 made to residential property owners under this section shall be 336 considered disaster-relief assistance within the meaning of s. 337 139 of the Internal Revenue Code of 1986, as amended. 338 (10)REPORTS.The department shall make an annual report on 339 the activities of the program that shall account for the use of 340 state funds and indicate the number of inspections requested, 341 the number of inspections performed, the number of grant 342 applications received, the number and value of grants approved, 343 and the estimated average annual amount of insurance premium 344 discounts and total estimated annual amount of insurance premium 345 discounts homeowners received from insurers as a result of 346 mitigation funded through the program. The report must be 347 delivered to the President of the Senate and the Speaker of the 348 House of Representatives by February 1 of each year. 349 Section 2.Subsection (1) of section 624.407, Florida 350 Statutes, is amended to read: 351 624.407Surplus required; new insurers. 352 (1)To receive authority to transact any one kind or 353 combinations of kinds of insurance, as defined in part V of this 354 chapter, an insurer applying for its original certificate of 355 authority in this state shall possess surplus as to 356 policyholders at least the greater of: 357 (a)For a property and casualty insurer, $5 million, or 358 $2.5 million for any other insurer; 359 (b)For life insurers, 4 percent of the insurers total 360 liabilities; 361 (c)For life and health insurers, 4 percent of the 362 insurers total liabilities, plus 6 percent of the insurers 363 liabilities relative to health insurance; 364 (d)For all insurers other than life insurers and life and 365 health insurers, 10 percent of the insurers total liabilities; 366 (e)Notwithstanding paragraph (a) or paragraph (d), for a 367 domestic insurer that transacts residential property insurance 368 and is: 369 1.Not a wholly owned subsidiary of an insurer domiciled in 370 any other state, $35 $15 million. 371 2.A wholly owned subsidiary of an insurer domiciled in any 372 other state, $50 million; 373 (f)Notwithstanding paragraphs (a), (d), and (e), for a 374 domestic insurer that only transacts limited sinkhole coverage 375 insurance for personal lines residential property pursuant to s. 376 627.7151, $10 $7.5 million; or 377 (g)Notwithstanding paragraphs (a), (d), and (e), for an 378 insurer that only transacts residential property insurance in 379 the form of renters insurance, tenants coverage, cooperative 380 unit owner insurance, or any combination thereof, $12.5 $10 381 million. 382 Section 3.Section 624.4073, Florida Statutes, is amended 383 to read: 384 624.4073Officers and directors or attorneys in fact of 385 insolvent insurers. 386 (1)Any person who was an officer or director of an insurer 387 doing business in this state and who served in that capacity 388 within the 2-year period before the date the insurer became 389 insolvent, for any insolvency that occurs on or after July 1, 390 2002, but before July 1, 2025, may not thereafter serve as an 391 officer or director of an insurer authorized in this state or 392 have direct or indirect control over the selection or 393 appointment of an officer or director through contract, trust, 394 or by operation of law. 395 (2)Any person who was an officer or director of an insurer 396 doing business in this state, was the attorney in fact of a 397 reciprocal insurer doing business in this state, or was an 398 officer or director of an attorney in fact of a reciprocal 399 insurer doing business in this state and who served in that 400 capacity within the 5-year period before the date such insurer 401 or reciprocal insurer became insolvent, for any insolvency that 402 occurs on or after July 1, 2025, may not thereafter do any of 403 the following: 404 (a)Serve as an officer or a director of an insurer 405 authorized in this state. 406 (b)Serve as an officer or a director of a managing general 407 agent of an insurer authorized in this state. 408 (c)Serve as an attorney in fact or as an officer or a 409 director of the attorney in fact of a reciprocal insurer 410 authorized in this state. 411 (d)Serve as an officer or a director of an affiliate of an 412 insurer authorized in this state which provides services to such 413 insurer. 414 (e)Exercise direct or indirect control through contract, 415 trust, or by operation of law over the selection or appointment 416 of any position specified in paragraphs (a)-(d), unless the 417 officer or director demonstrates that his or her personal 418 actions or omissions were not a significant contributing cause 419 to the insolvency. 420 (3)(a)The prohibitions in subsections (1) and (2) do not 421 apply if the officer, director, or attorney in fact 422 demonstrates, and the office determines, that his or her 423 personal actions or omissions were not a significant 424 contributing cause to the insolvency. 425 (b)For any violation of paragraph (2)(b), paragraph 426 (2)(c), or paragraph (2)(d), the office shall prohibit an 427 insurer or reciprocal insurer authorized in this state from 428 paying any compensation to a managing general agent, affiliate, 429 or attorney in fact that has an officer or director or is an 430 attorney in fact that engaged in such violation until the office 431 determines the violation has been remedied. 432 Section 4.Paragraphs (f) through (i) of subsection (1) of 433 section 624.408, Florida Statutes, are amended to read: 434 624.408Surplus required; current insurers. 435 (1)To maintain a certificate of authority to transact any 436 one kind or combinations of kinds of insurance, as defined in 437 part V of this chapter, an insurer in this state must at all 438 times maintain surplus as to policyholders at least the greater 439 of: 440 (f)For residential property insurers not holding a 441 certificate of authority before July 1, 2025 2011, $35 $15 442 million. 443 (g)For residential property insurers holding a certificate 444 of authority before July 1, 2025 2011, and until June 30, 2030 445 2016, $15 $5 million; on or after July 1, 2030 2016, and until 446 June 30, 2035 2021, $25 $10 million; on or after July 1, 2035 447 2021, $35 $15 million. 448 (h)Notwithstanding paragraphs (e), (f), and (g), for a 449 domestic insurer that only transacts limited sinkhole coverage 450 insurance for personal lines residential property pursuant to s. 451 627.7151:, $7.5 million. 452 1.For such an insurer that does not hold a certificate of 453 authority before July 1, 2025, $10 million. 454 2.For such an insurer holding a certificate of authority 455 before July 1, 2025, and until June 30, 2030, $7.5 million; on 456 or after July 1, 2030, and until June 30, 2035, $8.75 million; 457 on or after July 1, 2035, $10 million. 458 (i)Notwithstanding paragraphs (a), (d), and (e), for an 459 insurer that only transacts residential property insurance in 460 the form of renters insurance, tenants coverage, cooperative 461 unit owner insurance, or any combination thereof:, $10 million. 462 1.For such an insurer that does not hold a certificate of 463 authority before July 1, 2025, $12.5 million. 464 2.For such an insurer holding a certificate of authority 465 before July 1, 2025, and until June 30, 2030, $10 million; on or 466 after July 1, 2030, and until June 30, 2035, $11.25 million; on 467 or after July 1, 2035, $12.5 million. 468 469 The office may reduce the surplus requirement in paragraphs (f) 470 and (g) if the insurer is not writing new business, has premiums 471 in force of less than $1 million per year in residential 472 property insurance, or is a mutual insurance company. 473 Section 5.Paragraph (a) of subsection (2) of section 474 627.062, Florida Statutes, is amended to read: 475 627.062Rate standards. 476 (2)As to all such classes of insurance: 477 (a)Insurers or rating organizations shall establish and 478 use rates, rating schedules, or rating manuals that allow the 479 insurer a reasonable rate of return on the classes of insurance 480 written in this state. A copy of rates, rating schedules, rating 481 manuals, premium credits or discount schedules, and surcharge 482 schedules, and changes thereto, must be filed with the office 483 under one of the following procedures: 484 1.If the filing is made at least 90 days before the 485 proposed effective date and is not implemented during the 486 offices review of the filing and any proceeding and judicial 487 review, such filing is considered a file and use filing. In 488 such case, the office shall finalize its review by issuance of a 489 notice of intent to approve or a notice of intent to disapprove 490 within 90 days after receipt of the filing. If the 90-day period 491 ends on a weekend or a holiday under s. 110.117(1)(a)-(i), it 492 must be extended until the conclusion of the next business day. 493 The notice of intent to approve and the notice of intent to 494 disapprove constitute agency action for purposes of the 495 Administrative Procedure Act. Requests for supporting 496 information, requests for mathematical or mechanical 497 corrections, or notifications notification to the insurer by the 498 office of its preliminary findings do does not toll the 90-day 499 period during any such proceedings and subsequent judicial 500 review. The rate is shall be deemed approved if the office does 501 not issue a notice of intent to approve or a notice of intent to 502 disapprove within 90 days after receipt of the filing. The 503 office may not request that an insurer waive such deemed 504 approval for any residential property insurance rate filing in 505 which the insurer proposes a rate decrease, provided that the 506 decrease is not solely due to a reduction in coverage or changes 507 to policy forms. The office may not issue a notice of intent to 508 disapprove a residential property insurance rate filing in which 509 the insurer proposes a rate decrease unless it has completed a 510 finalized review. 511 2.If the filing is not made in accordance with 512 subparagraph 1., such filing must be made as soon as 513 practicable, but within 30 days after the effective date, and is 514 considered a use and file filing. An insurer making a use and 515 file filing is potentially subject to an order by the office to 516 return to policyholders those portions of rates found to be 517 excessive, as provided in paragraph (h). 518 3.For all property insurance filings made or submitted 519 after January 25, 2007, but before May 1, 2012, an insurer 520 seeking a rate that is greater than the rate most recently 521 approved by the office shall make a file and use filing. For 522 purposes of this subparagraph, motor vehicle collision and 523 comprehensive coverages are not considered property coverages. 524 525 The provisions of this subsection do not apply to workers 526 compensation, employers liability insurance, and motor vehicle 527 insurance. 528 Section 6.Section 627.4263, Florida Statutes, is created 529 to read: 530 627.4263Use of algorithms, artificial intelligence 531 systems, and machine learning systems in claims handling. 532 (1)As used in this section: 533 (a)Algorithm means a clearly specified mathematical 534 process for computation that uses rules designed to give 535 prescribed results. 536 (b)Artificial intelligence system means a machine-based 537 system that may have varying levels of autonomy and that can, 538 for a given set of objectives, generate outputs such as 539 predictions, recommendations, content, or other outputs 540 influencing decisions made in real or virtual environments. 541 (c)Machine learning system means an artificial 542 intelligence system that has the ability to learn from provided 543 data without being explicitly programmed. 544 (d)Qualified human professional means an individual who, 545 under the Florida Insurance Code, may have authority to adjust 546 or deny a claim or a portion of a claim and has such authority 547 over a particular claim. 548 (2)An insurers decision to deny a claim or any portion of 549 a claim must be made by a qualified human professional. 550 (3)A qualified human professional must also: 551 (a)Analyze the facts of the claim and the terms of the 552 insurance policy independently of any system or algorithm. 553 (b)Review the accuracy of any output generated by such a 554 system or algorithm. 555 (c)Conduct any review of a claim adjustment or claim 556 decision that was made by another qualified human professional. 557 (4)An insurer shall maintain detailed records of the 558 activities of qualified human professionals that are required 559 under this section, including: 560 (a)The name and title of the qualified human professional 561 who made the decision to deny the claim or a portion of the 562 claim and of any qualified human professional who reviewed the 563 claim adjustment or claim decision. 564 (b)The date and time of the claim decision and of any 565 review of the claim adjustment. 566 (c)Documentation of the basis for the denial of the claim 567 or a portion of the claim, including any information provided by 568 an algorithm, artificial intelligence system, or machine 569 learning system. 570 (5)An artificial intelligence system, a machine learning 571 system, or an algorithm may not serve as the sole basis for 572 determining whether to deny a claim. 573 (6)In all denial communications to a claimant, an insurer 574 shall: 575 (a)Clearly identify the qualified human professional who 576 made the decision to deny the claim or a portion of the claim. 577 (b)Include a statement affirming that an algorithm, an 578 artificial intelligence system, or a machine learning system did 579 not serve as the sole basis for determining whether to deny the 580 claim. 581 (7)An insurer that uses an algorithm, an artificial 582 intelligence system, or a machine learning system as part of its 583 claims handling process must detail in its claims handling 584 manual the manner in which such systems are used and the manner 585 in which the insurer complies with this section. 586 (8)The office may conduct market conduct examinations and 587 investigations or use any method it deems necessary to verify 588 compliance with this section. 589 Section 7.This act shall take effect July 1, 2025.