Florida Senate - 2017 CS for CS for SB 454
By the Committees on Appropriations; and Banking and Insurance;
and Senator Brandes
576-03479-17 2017454c2
1 A bill to be entitled
2 An act relating to the regulation of insurance
3 companies; amending s. 177.041, F.S.; providing that a
4 specified property information report, rather than a
5 specified certification by an abstractor or a title
6 company, may be submitted as part of certain
7 information required in relation to the plat or replat
8 of a subdivision; amending ss. 177.091 and 197.502,
9 F.S.; conforming provisions to changes made by the
10 act; amending s. 215.555, F.S.; deleting a future
11 repeal of an exemption of medical malpractice
12 insurance premiums from certain emergency assessments
13 by the State Board of Administration relating to the
14 Florida Hurricane Catastrophe Fund; amending s.
15 624.407, F.S.; specifying the minimum surplus as to
16 policyholders for insurers that only transact in
17 specified forms of residential property insurance;
18 amending s. 624.424, F.S.; revising a requirement for
19 audit committees established by the boards of
20 directors of insurers, relating to relationships that
21 would interfere with the exercise of independent
22 judgment of committee members; amending s. 625.012,
23 F.S.; revising the allowable assets of insurers
24 relating to specified levied assessments; amending s.
25 627.062, F.S.; revising requirements for certain rate
26 filings by medical malpractice insurers; amending s.
27 627.0645, F.S.; adding certain medical malpractice
28 insurance to casualty insurance excluded from an
29 annual base rate filing requirement for rating
30 organizations; amending s. 627.4035, F.S.; revising
31 the methods of paying premiums for insurance
32 contracts; authorizing an insurer to impose a
33 specified insufficient funds fee if certain premium
34 payment methods are returned, are declined, or cannot
35 be processed; providing an exception; amending s.
36 627.421, F.S.; providing that an electronically
37 delivered document in an insurance policy meets
38 formatting requirements for printed documents under
39 certain conditions; amending s. 627.7295, F.S.;
40 conforming provisions to changes made by the act;
41 amending s. 627.7843, F.S.; replacing provisions
42 relating to ownership and encumbrance reports with
43 provisions relating to property information reports;
44 defining the term “property information report”;
45 prohibiting property information reports from setting
46 forth or implying certain assurances; providing
47 construction; specifying a limitation on the
48 contractual liability of issuers of property
49 information reports; requiring a specified disclosure
50 in property information reports; providing
51 applicability; providing an effective date.
52
53 Be It Enacted by the Legislature of the State of Florida:
54
55 Section 1. Subsection (2) of section 177.041, Florida
56 Statutes, is amended to read:
57 177.041 Boundary survey and title certification required.
58 Every plat or replat of a subdivision submitted to the approving
59 agency of the local governing body must be accompanied by:
60 (2) A title opinion of an attorney at law licensed in
61 Florida or a property information report certification by an
62 abstractor or a title company showing that record title to the
63 land as described and shown on the plat is in the name of the
64 person, persons, corporation, or entity executing the
65 dedication. The title opinion or property information report
66 must certification shall also show all mortgages not satisfied
67 or released of record nor otherwise terminated by law.
68 Section 2. Subsection (16) of section 177.091, Florida
69 Statutes, is amended to read:
70 177.091 Plats made for recording.—Every plat of a
71 subdivision offered for recording shall conform to the
72 following:
73 (16) Location and width of proposed easements and existing
74 easements identified in the title opinion or property
75 information report certification required by s. 177.041(2) must
76 shall be shown on the plat or in the notes or legend, and their
77 intended use shall be clearly stated. Where easements are not
78 coincident with property lines, they must be labeled with
79 bearings and distances and tied to the principal lot, tract, or
80 right-of-way.
81 Section 3. Paragraph (a) of subsection (5) of section
82 197.502, Florida Statutes, is amended to read:
83 197.502 Application for obtaining tax deed by holder of tax
84 sale certificate; fees.—
85 (5)(a) The tax collector may contract with a title company
86 or an abstract company to provide the minimum information
87 required in subsection (4), consistent with rules adopted by the
88 department. If additional information is required, the tax
89 collector must make a written request to the title or abstract
90 company stating the additional requirements. The tax collector
91 may select any title or abstract company, regardless of its
92 location, as long as the fee is reasonable, the minimum
93 information is submitted, and the title or abstract company is
94 authorized to do business in this state. The tax collector may
95 advertise and accept bids for the title or abstract company if
96 he or she considers it appropriate to do so.
97 1. The property information ownership and encumbrance
98 report must include the letterhead of the person, firm, or
99 company that makes the search, and the signature of the
100 individual who makes the search or of an officer of the firm.
101 The tax collector is not liable for payment to the firm unless
102 these requirements are met. The report may be submitted to the
103 tax collector in an electronic format.
104 2. The tax collector may not accept or pay for any title
105 search or abstract if financial responsibility is not assumed
106 for the search. However, reasonable restrictions as to the
107 liability or responsibility of the title or abstract company are
108 acceptable. Notwithstanding s. 627.7843(3), the tax collector
109 may contract for higher maximum liability limits.
110 3. In order to establish uniform prices for property
111 information ownership and encumbrance reports within the county,
112 the tax collector must ensure that the contract for property
113 information ownership and encumbrance reports include all
114 requests for title searches or abstracts for a given period of
115 time.
116 Section 4. Paragraph (b) of subsection (6) of section
117 215.555, Florida Statutes, is amended to read:
118 215.555 Florida Hurricane Catastrophe Fund.—
119 (6) REVENUE BONDS.—
120 (b) Emergency assessments.—
121 1. If the board determines that the amount of revenue
122 produced under subsection (5) is insufficient to fund the
123 obligations, costs, and expenses of the fund and the
124 corporation, including repayment of revenue bonds and that
125 portion of the debt service coverage not met by reimbursement
126 premiums, the board shall direct the Office of Insurance
127 Regulation to levy, by order, an emergency assessment on direct
128 premiums for all property and casualty lines of business in this
129 state, including property and casualty business of surplus lines
130 insurers regulated under part VIII of chapter 626, but not
131 including any workers’ compensation premiums or medical
132 malpractice premiums. As used in this subsection, the term
133 “property and casualty business” includes all lines of business
134 identified on Form 2, Exhibit of Premiums and Losses, in the
135 annual statement required of authorized insurers by s. 624.424
136 and any rule adopted under this section, except for those lines
137 identified as accident and health insurance and except for
138 policies written under the National Flood Insurance Program. The
139 assessment shall be specified as a percentage of direct written
140 premium and is subject to annual adjustments by the board in
141 order to meet debt obligations. The same percentage applies to
142 all policies in lines of business subject to the assessment
143 issued or renewed during the 12-month period beginning on the
144 effective date of the assessment.
145 2. A premium is not subject to an annual assessment under
146 this paragraph in excess of 6 percent of premium with respect to
147 obligations arising out of losses attributable to any one
148 contract year, and a premium is not subject to an aggregate
149 annual assessment under this paragraph in excess of 10 percent
150 of premium. An annual assessment under this paragraph continues
151 as long as the revenue bonds issued with respect to which the
152 assessment was imposed are outstanding, including any bonds the
153 proceeds of which were used to refund the revenue bonds, unless
154 adequate provision has been made for the payment of the bonds
155 under the documents authorizing issuance of the bonds.
156 3. Emergency assessments shall be collected from
157 policyholders. Emergency assessments shall be remitted by
158 insurers as a percentage of direct written premium for the
159 preceding calendar quarter as specified in the order from the
160 Office of Insurance Regulation. The office shall verify the
161 accurate and timely collection and remittance of emergency
162 assessments and shall report the information to the board in a
163 form and at a time specified by the board. Each insurer
164 collecting assessments shall provide the information with
165 respect to premiums and collections as may be required by the
166 office to enable the office to monitor and verify compliance
167 with this paragraph.
168 4. With respect to assessments of surplus lines premiums,
169 each surplus lines agent shall collect the assessment at the
170 same time as the agent collects the surplus lines tax required
171 by s. 626.932, and the surplus lines agent shall remit the
172 assessment to the Florida Surplus Lines Service Office created
173 by s. 626.921 at the same time as the agent remits the surplus
174 lines tax to the Florida Surplus Lines Service Office. The
175 emergency assessment on each insured procuring coverage and
176 filing under s. 626.938 shall be remitted by the insured to the
177 Florida Surplus Lines Service Office at the time the insured
178 pays the surplus lines tax to the Florida Surplus Lines Service
179 Office. The Florida Surplus Lines Service Office shall remit the
180 collected assessments to the fund or corporation as provided in
181 the order levied by the Office of Insurance Regulation. The
182 Florida Surplus Lines Service Office shall verify the proper
183 application of such emergency assessments and shall assist the
184 board in ensuring the accurate and timely collection and
185 remittance of assessments as required by the board. The Florida
186 Surplus Lines Service Office shall annually calculate the
187 aggregate written premium on property and casualty business,
188 other than workers’ compensation and medical malpractice,
189 procured through surplus lines agents and insureds procuring
190 coverage and filing under s. 626.938 and shall report the
191 information to the board in a form and at a time specified by
192 the board.
193 5. Any assessment authority not used for a particular
194 contract year may be used for a subsequent contract year. If,
195 for a subsequent contract year, the board determines that the
196 amount of revenue produced under subsection (5) is insufficient
197 to fund the obligations, costs, and expenses of the fund and the
198 corporation, including repayment of revenue bonds and that
199 portion of the debt service coverage not met by reimbursement
200 premiums, the board shall direct the Office of Insurance
201 Regulation to levy an emergency assessment up to an amount not
202 exceeding the amount of unused assessment authority from a
203 previous contract year or years, plus an additional 4 percent
204 provided that the assessments in the aggregate do not exceed the
205 limits specified in subparagraph 2.
206 6. The assessments otherwise payable to the corporation
207 under this paragraph shall be paid to the fund unless the Office
208 of Insurance Regulation and the Florida Surplus Lines Service
209 Office received a notice from the corporation and the fund,
210 which shall be conclusive and upon which they may rely without
211 further inquiry, that the corporation has issued bonds and the
212 fund has no agreements in effect with local governments under
213 paragraph (c). On or after the date of the notice and until the
214 date the corporation has no bonds outstanding, the fund shall
215 have no right, title, or interest in or to the assessments,
216 except as provided in the fund’s agreement with the corporation.
217 7. Emergency assessments are not premium and are not
218 subject to the premium tax, to the surplus lines tax, to any
219 fees, or to any commissions. An insurer is liable for all
220 assessments that it collects and must treat the failure of an
221 insured to pay an assessment as a failure to pay the premium. An
222 insurer is not liable for uncollectible assessments.
223 8. If an insurer is required to return an unearned premium,
224 it shall also return any collected assessment attributable to
225 the unearned premium. A credit adjustment to the collected
226 assessment may be made by the insurer with regard to future
227 remittances that are payable to the fund or corporation, but the
228 insurer is not entitled to a refund.
229 9. If a surplus lines insured or an insured who has
230 procured coverage and filed under s. 626.938 is entitled to the
231 return of an unearned premium, the Florida Surplus Lines Service
232 Office shall provide a credit or refund to the agent or such
233 insured for the collected assessment attributable to the
234 unearned premium before remitting the emergency assessment
235 collected to the fund or corporation.
236 10. The exemption of medical malpractice insurance premiums
237 from emergency assessments under this paragraph is repealed May
238 31, 2019, and medical malpractice insurance premiums shall be
239 subject to emergency assessments attributable to loss events
240 occurring in the contract years commencing on June 1, 2019.
241 Section 5. Subsection (1) of section 624.407, Florida
242 Statutes, is amended to read:
243 624.407 Surplus required; new insurers.—
244 (1) To receive authority to transact any one kind or
245 combinations of kinds of insurance, as defined in part V of this
246 chapter, an insurer applying for its original certificate of
247 authority in this state shall possess surplus as to
248 policyholders at least the greater of:
249 (a) For a property and casualty insurer, $5 million, or
250 $2.5 million for any other insurer;
251 (b) For life insurers, 4 percent of the insurer’s total
252 liabilities;
253 (c) For life and health insurers, 4 percent of the
254 insurer’s total liabilities, plus 6 percent of the insurer’s
255 liabilities relative to health insurance;
256 (d) For all insurers other than life insurers and life and
257 health insurers, 10 percent of the insurer’s total liabilities;
258 (e) Notwithstanding paragraph (a) or paragraph (d), for a
259 domestic insurer that transacts residential property insurance
260 and is:
261 1. Not a wholly owned subsidiary of an insurer domiciled in
262 any other state, $15 million.
263 2. A wholly owned subsidiary of an insurer domiciled in any
264 other state, $50 million; or
265 (f) Notwithstanding paragraphs (a), (d), and (e), for a
266 domestic insurer that only transacts limited sinkhole coverage
267 insurance for personal lines residential property pursuant to s.
268 627.7151, $7.5 million; or
269 (g) Notwithstanding paragraphs (a), (b), and (e), for an
270 insurer that only transacts residential property insurance in
271 the form of renter’s insurance, tenant’s coverage, cooperative
272 unit owner insurance, or any combination thereof, $10 million.
273 Section 6. Paragraph (c) of subsection (8) of section
274 624.424, Florida Statutes, is amended to read:
275 624.424 Annual statement and other information.—
276 (8)
277 (c) The board of directors of an insurer shall hire the
278 certified public accountant that prepares the audit required by
279 this subsection and the board shall establish an audit committee
280 of three or more directors of the insurer or an affiliated
281 company. The audit committee shall be responsible for discussing
282 audit findings and interacting with the certified public
283 accountant with regard to her or his findings. The audit
284 committee shall be comprised solely of members who are free from
285 any relationship that, in the opinion of its board of directors,
286 would interfere with the exercise of independent judgment as a
287 committee member. The audit committee shall report to the board
288 any findings of adverse financial conditions or significant
289 deficiencies in internal controls that have been noted by the
290 accountant. The insurer may request the office to waive this
291 requirement of the audit committee membership based upon unusual
292 hardship to the insurer.
293 Section 7. Subsection (15) of section 625.012, Florida
294 Statutes, is amended to read:
295 625.012 “Assets” defined.—In any determination of the
296 financial condition of an insurer, there shall be allowed as
297 “assets” only such assets as are owned by the insurer and which
298 consist of:
299 (15)(a) Assessments levied pursuant to s. 631.57(3)(a) and
300 (e) or s. 631.914 which that are paid before policy surcharges
301 are collected and result in a receivable for policy surcharges
302 to be collected in the future. This amount, to the extent it is
303 likely that it will be realized, meets the definition of an
304 admissible asset as specified in the National Association of
305 Insurance Commissioners’ Statement of Statutory Accounting
306 Principles No. 4. The asset shall be established and recorded
307 separately from the liability regardless of whether it is based
308 on a retrospective or prospective premium-based assessment. If
309 an insurer is unable to fully recoup the amount of the
310 assessment because of a reduction in writings or withdrawal from
311 the market, the amount recorded as an asset shall be reduced to
312 the amount reasonably expected to be recouped.
313 (b) Assessments levied as monthly installments pursuant to
314 s. 631.57(3)(e)3. or s. 631.914 which that are paid after policy
315 surcharges are collected so that the recognition of assets is
316 based on actual premium written offset by the obligation to the
317 Florida Insurance Guaranty Association or the Florida Workers’
318 Compensation Insurance Guaranty Association, Incorporated.
319 Section 8. Paragraph (e) of subsection (7) of section
320 627.062, Florida Statutes, is amended to read:
321 627.062 Rate standards.—
322 (7) The provisions of this subsection apply only to rates
323 for medical malpractice insurance and control to the extent of
324 any conflict with other provisions of this section.
325 (e) For medical malpractice rates subject to paragraph
326 (2)(a), the medical malpractice insurer shall make an annual
327 base a rate filing in accordance with s. 627.0645 under this
328 section, sworn to by at least two executive officers of the
329 insurer, at least once each calendar year.
330 Section 9. Subsection (1) of section 627.0645, Florida
331 Statutes, is amended to read:
332 627.0645 Annual filings.—
333 (1) Each rating organization filing rates for, and each
334 insurer writing, any line of property or casualty insurance to
335 which this part applies, except:
336 (a) Workers’ compensation and employer’s liability
337 insurance;
338 (b) Insurance as defined in ss. 624.604 and 624.605,
339 limited to coverage of commercial risks other than commercial
340 residential multiperil and medical malpractice insurance that is
341 subject to s. 627.062(2)(a) and (f); or
342 (c) Travel insurance, if issued as a master group policy
343 with a situs in another state where each certificateholder pays
344 less than $30 in premium for each covered trip and where the
345 insurer has written less than $1 million in annual written
346 premiums in the travel insurance product in this state during
347 the most recent calendar year,
348
349 shall make an annual base rate filing for each such line with
350 the office no later than 12 months after its previous base rate
351 filing, demonstrating that its rates are not inadequate.
352 Section 10. Section 627.4035, Florida Statutes, is amended
353 to read:
354 627.4035 Cash Payment of premiums; claims.—
355 (1)(a) The premiums for insurance contracts issued in this
356 state or covering risk located in this state must shall be paid
357 in cash consisting of coins, currency, checks, electronic
358 checks, drafts, or money orders or by using a debit card, credit
359 card, automatic electronic funds transfer, or payroll deduction
360 plan. By July 1, 2007, Insurers issuing personal lines
361 residential and commercial property policies shall provide a
362 premium payment plan option to their policyholders which allows
363 for a minimum of quarterly and semiannual payment of premiums.
364 Insurers may, but are not required to, offer monthly payment
365 plans. Insurers issuing such policies must submit their premium
366 payment plan option to the office for approval before use.
367 (b) If, due to insufficient funds, a payment of premium
368 under this subsection by debit card, credit card, electronic
369 funds transfer, or electronic check is returned, is declined, or
370 cannot be processed, the insurer may impose an insufficient
371 funds fee of up to $15 per occurrence pursuant to the policy
372 terms. However, the insurer may not charge the policyholder an
373 insufficient funds fee if the failure in payment resulted from
374 fraud or misuse on the policyholder’s account from which the
375 payment was made and such fraud or misuse was not attributed to
376 the policyholder.
377 (2) Subsection (1) is not applicable to:
378 (a) Reinsurance agreements;
379 (b) Pension plans;
380 (c) Premium loans, whether or not subject to an automatic
381 provision;
382 (d) Dividends, whether to purchase additional paid-up
383 insurance or to shorten the dividend payment period;
384 (e) Salary deduction plans;
385 (f) Preauthorized check plans;
386 (g) Waivers of premiums on disability;
387 (h) Nonforfeiture provisions affording benefits under
388 supplementary contracts; or
389 (i) Such other methods of paying for life insurance as may
390 be permitted by the commission pursuant to rule or regulation.
391 (3) All payments of claims made in this state under any
392 contract of insurance shall be paid:
393 (a) In cash consisting of coins, currency, checks, drafts,
394 or money orders and, if by check or draft, shall be in such form
395 as will comply with the standards for cash items adopted by the
396 Federal Reserve System to facilitate the sorting, routing, and
397 mechanized processing of such items; or
398 (b) If authorized in writing by the recipient or the
399 recipient’s representative, by debit card or any other form of
400 electronic transfer. Any fees or costs to be charged against the
401 recipient must be disclosed in writing to the recipient or the
402 recipient’s representative at the time of written authorization.
403 However, the written authorization requirement may be waived by
404 the recipient or the recipient’s representative if the insurer
405 verifies the identity of the insured or the insured’s recipient
406 and does not charge a fee for the transaction. If the funds are
407 misdirected, the insurer remains liable for the payment of the
408 claim.
409 Section 11. Subsection (5) is added to section 627.421,
410 Florida Statutes, to read:
411 627.421 Delivery of policy.—
412 (5) An electronically delivered document satisfies any
413 font, size, color, spacing, or other formatting requirement for
414 printed documents if the format in the electronically delivered
415 document has reasonably similar proportions or emphasis of the
416 characters relative to the rest of the electronic document or is
417 otherwise displayed in a reasonably conspicuous manner.
418 Section 12. Subsection (9) of section 627.7295, Florida
419 Statutes, is amended to read:
420 627.7295 Motor vehicle insurance contracts.—
421 (9)(a) In addition to the methods provided in s.
422 627.4035(1), premium for motor vehicle insurance contracts
423 issued in this state or covering risk located in this state may
424 be paid in cash in the form of a draft or drafts.
425 (b) If, due to insufficient funds, payment of premium under
426 this subsection by debit card, credit card, electronic funds
427 transfer, or electronic check is returned, is declined, or
428 cannot be processed, the insurer may impose an insufficient
429 funds fee of up to $15 per occurrence pursuant to the policy
430 terms.
431 Section 13. Section 627.7843, Florida Statutes, is amended
432 to read:
433 627.7843 Property information reports Ownership and
434 encumbrance reports.—
435 (1) As used in this section, the term “property information
436 report” means any report that contains the limitations of this
437 section and discloses documents or information appearing in the
438 Official Records as described in s. 28.222, in the records of a
439 county tax collector pertaining to ad valorem real property
440 taxes and special assessments imposed by a governmental
441 authority against real property, in the Secretary of State
442 filing office, or in another governmental filing office
443 pertaining to real or personal property. A property information
444 report may be issued by any person, including a Florida-licensed
445 title insurer, title agent, or title agency “ownership and
446 encumbrance report” means a report that discloses certain
447 defined documents imparting constructive notice and appearing in
448 the official records relating to specified real property.
449 (2) A property information An ownership and encumbrance
450 report may not directly or indirectly set forth or imply any
451 opinion, warranty, guarantee, insurance, or other similar
452 assurance and does not constitute title insurance as defined in
453 s. 624.608 as to the status of title to real property.
454 (3) The contractual liability of the issuer of a property
455 information report is limited to the person or persons expressly
456 identified by name in the property information report as the
457 recipient or recipients of the property information report and
458 may not exceed the amount paid for the property information
459 report. Only contractual remedies are available for an error or
460 omission that arises from a property information report. A
461 property information report must contain the following language:
462
463 “This report is not title insurance. Pursuant to s. 627.7843,
464 Florida Statutes, the maximum liability of the issuer of this
465 property information report for errors or omissions in this
466 property information report is limited to the amount paid for
467 this property information report, and is further limited to the
468 person(s) expressly identified by name in the property
469 information report as the recipient(s) of the property
470 information report.” Any ownership and encumbrance report or
471 similar report that is relied on or intended to be relied on by
472 a consumer must be on forms approved by the office, and must
473 provide for a maximum liability for incorrect information of not
474 more than $1,000.
475 (4) This section is not applicable to an opinion of title
476 issued by an attorney.
477 Section 14. This act shall take effect upon becoming a law.