Florida Senate - 2023                        COMMITTEE AMENDMENT
       Bill No. SB 7052
       
       
       
       
       
       
                                Ì451290ÆÎ451290                         
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  04/21/2023           .                                
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       The Committee on Fiscal Policy (Hutson) recommended the
       following:
       
    1         Senate Substitute for Amendment (592450) (with title
    2  amendment)
    3  
    4         Delete everything after the enacting clause
    5  and insert:
    6         Section 1. Paragraph (b) of subsection (10) of section
    7  624.307, Florida Statutes, is amended to read:
    8         624.307 General powers; duties.—
    9         (10)
   10         (b) Any person licensed or issued a certificate of
   11  authority by the department or the office shall respond, in
   12  writing or electronically, to the division within 14 20 days
   13  after receipt of a written request for documents and information
   14  from the division concerning a consumer complaint. The response
   15  must address the issues and allegations raised in the complaint
   16  and include any requested documents concerning the consumer
   17  complaint not subject to attorney-client or work-product
   18  privilege. The division may impose an administrative penalty for
   19  failure to comply with this paragraph of up to $5,000 $2,500 per
   20  violation upon any entity licensed by the department or the
   21  office and $250 for the first violation, $500 for the second
   22  violation, and up to $1,000 per for the third or subsequent
   23  violation by upon any individual licensed by the department or
   24  the office.
   25         Section 2. Present subsection (4) of section 624.315,
   26  Florida Statutes, is redesignated as subsection (5), and a new
   27  subsection (4) is added to that section, to read:
   28         624.315 Annual reports; quarterly reports report.—
   29         (4)(a)The office shall create a report detailing all
   30  actions of the office to enforce insurer compliance with this
   31  code and all rules and orders of the office or department during
   32  the previous year. For each of the following, the report must
   33  detail the insurer or other licensee or registrant against whom
   34  such action was taken; whether the office found any violation of
   35  law or rule by such party, and, if so, detail such violation;
   36  and the resolution of such action, including any penalties
   37  imposed by the office. The report must be published on the
   38  website of the office and submitted to the commission, the
   39  President of the Senate, the Speaker of the House of
   40  Representatives, and the legislative committees with
   41  jurisdiction over matters of insurance on or before January 31
   42  of each year. The report must include, but need not be limited
   43  to:
   44         1.The revocation, denial, or suspension of any license or
   45  registration issued by the office.
   46         2. All actions taken pursuant to s. 624.310.
   47         3.Fines imposed by the office for violations of this code.
   48         4.Consent orders entered into by the office.
   49         5.Examinations and investigations conducted and completed
   50  by the office pursuant to ss. 624.316 and 624.3161.
   51         6.Investigations conducted and completed, by line of
   52  insurance, for which the office found violations of law or rule
   53  but did not take enforcement action.
   54         (b)Each quarter, the office shall create a report
   55  detailing all actions of the office to enforce insurer
   56  compliance during the previous quarter. The report must include,
   57  but not be limited to, the subjects that must be included in the
   58  annual report under paragraph (a). The report must be submitted
   59  to the commission, the President of the Senate, the Speaker of
   60  the House of Representatives, and the legislative committees
   61  with jurisdiction over matters of insurance. The report is due
   62  on or before April 30, July 31, October 31, and January 31,
   63  respectively, for the immediately preceding quarter. The report
   64  due January 31 may be included within the annual report required
   65  under paragraph (a).
   66         (c)The office need not include within any report required
   67  under this subsection information that would violate any
   68  confidentiality provision included within any agreement, order,
   69  or consent order entered into or promulgated by the office.
   70         Section 3. Subsections (3) and (4) are added to section
   71  624.316, Florida Statutes, to read:
   72         624.316 Examination of insurers.—
   73         (3) The office shall create, and the commission shall adopt
   74  by rule, a risk-based selection methodology for scheduling
   75  examinations of insurers subject to this section. This
   76  requirement does not restrict the authority of the office to
   77  conduct examinations under this section as often as it deems
   78  advisable. Such methodology must include all of the following:
   79         (a)Use of a risk-focused analysis to prioritize financial
   80  examinations of insurers when such reporting indicates a decline
   81  in the insurer’s financial condition.
   82         (b)Consideration of:
   83         1.Level of capitalization and identification of
   84  unfavorable trends;
   85         2.Negative trends in profitability or cash flow from
   86  operations;
   87         3.National Association of Insurance Commissioners
   88  Insurance Regulatory Information System ratio results;
   89         4.Risk-based capital and risk-based capital trend test
   90  results;
   91         5.The structure and complexity of the insurer;
   92         6.Changes in the insurer’s officers or board of directors;
   93         7.Changes in the insurer’s business strategy or
   94  operations;
   95         8.Findings and recommendations from an examination made
   96  pursuant to s. 624.316 or s. 624.3161;
   97         9. Current or pending regulatory actions by the office or
   98  the department;
   99         10.Information obtained from other regulatory agencies or
  100  independent organization ratings and reports; and
  101         11.The impact of an insurer’s insolvency on policyholders
  102  of the insurer and the public generally.
  103         (c)Prioritization of property insurers for which the
  104  office identifies significant concerns about an insurer’s
  105  solvency pursuant to s. 627.7154.
  106         (d)Any other matters the office deems necessary to
  107  consider for the protection of the public.
  108         (4)To facilitate the development of the methodology for
  109  scheduling examinations pursuant to this section, the commission
  110  may adopt by rule the National Association of Insurance
  111  Commissioners Financial Analysis Handbook, to the extent that
  112  the handbook is consistent with and does not negate the
  113  requirements of this section.
  114         Section 4. Subsection (7) of section 624.3161, Florida
  115  Statutes, is amended, and subsection (8) is added to that
  116  section, to read:
  117         624.3161 Market conduct examinations.—
  118         (7) Notwithstanding subsection (1), any authorized insurer
  119  transacting residential property insurance business in this
  120  state:
  121         (a) May be subject to an additional market conduct
  122  examination after a hurricane if, at any time more than 90 days
  123  after the end of the hurricane, the insurer:
  124         (a) is among the top 20 percent of insurers based upon a
  125  calculation of the ratio of hurricane-related property insurance
  126  claims filed to the number of property insurance policies in
  127  force;
  128         (b) Must be subject to a market conduct examination after a
  129  hurricane if, at any time more than 90 days after the end of the
  130  hurricane, the insurer:
  131         1. Is among the top 20 percent of insurers based upon a
  132  calculation of the ratio of hurricane claim-related consumer
  133  complaints made about that insurer to the department to the
  134  insurer’s total number of hurricane-related claims;
  135         2.Is among the top 20 percent of insurers based upon a
  136  calculation of the ratio of hurricane claims closed without
  137  payment to the insurer’s total number of hurricane claims;
  138         3.(c) Has made significant payments to its managing general
  139  agent since the hurricane; or
  140         4.(d) Is identified by the office as necessitating a market
  141  conduct exam for any other reason.
  142  
  143  All relevant criteria under this section and s. 624.316 shall be
  144  applied to the market conduct examination under this subsection.
  145  Such an examination must be initiated within 18 months after the
  146  landfall of a hurricane that results in an executive order or a
  147  state of emergency issued by the Governor. The requirements of
  148  this subsection do not limit the authority of the office to
  149  conduct at any time a market conduct examination of a property
  150  insurer in the aftermath of a hurricane. This subsection does
  151  not require the office to conduct multiple market conduct
  152  examinations of the same insurer when multiple hurricanes make
  153  landfall in this state in a single calendar year. An examination
  154  of an insurer under this subsection must also include an
  155  examination of its managing general agent as if it were the
  156  insurer.
  157         (8) The office shall create, and the commission shall adopt
  158  by rule, a selection methodology for scheduling and conducting
  159  market conduct examinations of insurers and other entities
  160  regulated by the office. This requirement does not restrict the
  161  authority of the office to conduct market conduct examinations
  162  as often as it deems necessary. Such selection methodology must
  163  prioritize market conduct examinations of insurers and other
  164  entities regulated by the office to whom any of the following
  165  conditions applies:
  166         (a)An insurance regulator in another state has initiated
  167  or taken regulatory action against the insurer or entity
  168  regarding an act or omission of such insurer which, if committed
  169  in this state, would constitute a violation of the laws of this
  170  state or any rule or order of the office or department.
  171         (b)Given the insurer’s market share in this state, the
  172  department or the office has received a disproportionate number
  173  of the following types of claims-handling complaints against the
  174  insurer:
  175         1.Failure to timely communicate with respect to claims;
  176         2.Failure to timely pay claims;
  177         3.Untimely payments giving rise to the payment of
  178  statutory interest;
  179         4.Failure to adjust and pay claims in accordance with the
  180  terms and conditions of the policy or contract and in compliance
  181  with state law;
  182         5.Violations of part IX of chapter 626, the Unfair
  183  Insurance Trade Practices Act;
  184         6.Failure to use licensed and duly appointed claims
  185  adjusters;
  186         7.Failure to maintain reasonable claims records; or
  187         8.Failure to adhere to the company’s claims-handling
  188  manual.
  189         (c)The results of a National Association of Insurance
  190  Commissioners Market Conduct Annual Statement indicate that the
  191  insurer is a negative outlier with regard to particular metrics.
  192         (d)There is evidence that the insurer is violating or has
  193  violated the Unfair Insurance Trade Practices Act.
  194         (e)The insurer meets the criteria in subsection (7).
  195         (f)Any other conditions the office deems necessary for the
  196  protection of the public.
  197  
  198  The office shall present the proposed rule required by this
  199  subsection to the commission no later than October 1, 2023. In
  200  addition to the methodology required by this subsection, the
  201  rule must provide criteria for how the office, in coordination
  202  with the department, will determine what constitutes a
  203  disproportionate number of claims-handling complaints described
  204  in paragraph (b).
  205         Section 5. Section 624.4211, Florida Statutes, is amended
  206  to read:
  207         624.4211 Administrative fine in lieu of suspension or
  208  revocation.—
  209         (1) If the office finds that one or more grounds exist for
  210  the discretionary revocation or suspension of a certificate of
  211  authority issued under this chapter, the office may, in lieu of
  212  such revocation or suspension, impose a fine upon the insurer.
  213         (2)(a) With respect to a any nonwillful violation, such
  214  fine may not exceed:
  215         1.Twenty-five thousand dollars per violation, up to an
  216  aggregate amount of $100,000 for all nonwillful violations
  217  arising out of the same action, related to a covered loss or
  218  claim caused by an emergency for which the Governor declared a
  219  state of emergency pursuant to s. 252.36.
  220         2.Twelve thousand five hundred dollars $5,000 per
  221  violation, up to. In no event shall such fine exceed an
  222  aggregate amount of $50,000 $20,000 for all other nonwillful
  223  violations arising out of the same action.
  224         (b) If an insurer discovers a nonwillful violation, the
  225  insurer shall correct the violation and, if restitution is due,
  226  make restitution to all affected persons. Such restitution shall
  227  include interest at 12 percent per year from either the date of
  228  the violation or the date of inception of the affected person’s
  229  policy, at the insurer’s option. The restitution may be a credit
  230  against future premiums due, provided that interest accumulates
  231  until the premiums are due. If the amount of restitution due to
  232  any person is $50 or more and the insurer wishes to credit it
  233  against future premiums, it shall notify such person that she or
  234  he may receive a check instead of a credit. If the credit is on
  235  a policy that is not renewed, the insurer shall pay the
  236  restitution to the person to whom it is due.
  237         (3)(a) With respect to a any knowing and willful violation
  238  of a lawful order or rule of the office or commission or a
  239  provision of this code, the office may impose a fine upon the
  240  insurer in an amount not to exceed:
  241         1.Two hundred thousand dollars for each such violation, up
  242  to an aggregate amount of $1 million for all knowing and willful
  243  violations arising out of the same action, related to a covered
  244  loss or claim caused by an emergency for which the Governor
  245  declared a state of emergency pursuant to s. 252.36.
  246         2.One hundred thousand dollars $40,000 for each such
  247  violation, up to. In no event shall such fine exceed an
  248  aggregate amount of $500,000 $200,000 for all other knowing and
  249  willful violations arising out of the same action.
  250         (b) In addition to such fines, the insurer shall make
  251  restitution when due in accordance with subsection (2).
  252         (4) The failure of an insurer to make restitution when due
  253  as required under this section constitutes a willful violation
  254  of this code. However, if an insurer in good faith is uncertain
  255  as to whether any restitution is due or as to the amount of such
  256  restitution, it shall promptly notify the office of the
  257  circumstances; and the failure to make restitution pending a
  258  determination thereof shall not constitute a violation of this
  259  code.
  260         Section 6. Section 624.4301, Florida Statutes, is created
  261  to read:
  262         624.4301 Notice of temporary discontinuance of writing new
  263  residential property insurance policies.—
  264         (1)Any authorized insurer, before temporarily suspending
  265  writing new residential property insurance policies in this
  266  state, must give notice to the office of the insurer’s reasons
  267  for such action, the effective dates of the temporary
  268  suspension, and the proposed communication to its agents. Such
  269  notice must be provided on a form approved by the office and
  270  adopted by the commission. The insurer shall submit such notice
  271  to the office the earlier of 20 business days before the
  272  effective date of the temporary suspension of writing or 5
  273  business days before notifying its agents of the temporary
  274  suspension of writing. The insurer must provide any other
  275  information requested by the office related to the insurer’s
  276  temporary suspension of writing. The requirements of this
  277  section do not apply to a temporary suspension of writing new
  278  business made in response to a hurricane that may make landfall
  279  in this state if such temporary suspension ceases within 72
  280  hours after hurricane conditions are no longer present in this
  281  state.
  282         (2)The commission may adopt rules to administer this
  283  section.
  284         Section 7. Section 624.805, Florida Statutes, is created to
  285  read:
  286         624.805 Hazardous insurer standards; office’s evaluation
  287  and enforcement authority; immediate final order.—
  288         (1)In determining whether the continued operation of any
  289  insurer transacting business in this state may be deemed to be
  290  hazardous to its policyholders or creditors or to the general
  291  public, the office may consider, in the totality of the
  292  circumstances of such insurer, any of the following:
  293         (a)Adverse findings reported in financial condition or
  294  market conduct examination reports, audit reports, or actuarial
  295  opinions, reports, or summaries.
  296         (b)The National Association of Insurance Commissioners
  297  Insurance Regulatory Information System and its other financial
  298  analysis solvency tools and reports.
  299         (c)Whether the insurer has made adequate provisions,
  300  according to presently accepted actuarial standards of practice,
  301  for the anticipated cash flows required to cover its contractual
  302  obligations and related expenses.
  303         (d)The ability of an assuming reinsurer to perform and
  304  whether the insurer’s reinsurance program provides sufficient
  305  protection for the insurer’s remaining surplus after taking into
  306  account the insurer’s cash flow and the classes of business
  307  written, as well as the financial condition of the assuming
  308  reinsurer.
  309         (e)Whether the insurer’s operating loss in the last 12
  310  month period, including, but not limited to, net capital gain or
  311  loss, change in nonadmitted assets, and cash dividends paid to
  312  shareholders is greater than 50 percent of the insurer’s
  313  remaining surplus as regards policyholders in excess of the
  314  minimum required.
  315         (f)Whether the insurer’s operating loss in the last 12
  316  month period, excluding net capital gains, is greater than 20
  317  percent of the insurer’s remaining surplus as regards
  318  policyholders in excess of the minimum required.
  319         (g)Whether a reinsurer, an obligor, or any entity within
  320  the insurer’s insurance holding company system is insolvent,
  321  threatened with insolvency, or delinquent in payment of its
  322  monetary or other obligations, and which in the opinion of the
  323  office may affect the solvency of the insurer.
  324         (h)Contingent liabilities, pledges, or guaranties that
  325  individually or collectively involve a total amount that in the
  326  opinion of the office may affect the solvency of the insurer.
  327         (i)Whether any affiliate, as defined in s. 624.10(1), of
  328  the insurer is delinquent in the transmitting to, or payment of,
  329  net premiums to the insurer.
  330         (j)The age and collectability of receivables.
  331         (k)Whether the management of the insurer, including
  332  officers, directors, or any other person who directly or
  333  indirectly controls the operation of the insurer, fails to
  334  possess and demonstrate the competence, fitness, and reputation
  335  deemed necessary to serve the insurer in such position.
  336         (l)Whether management of the insurer has failed to respond
  337  to inquiries relative to the condition of the insurer or has
  338  furnished false or misleading information to the office
  339  concerning an inquiry.
  340         (m)Whether the insurer has failed to meet financial and
  341  holding company filing requirements in the absence of a reason
  342  satisfactory to the office.
  343         (n)Whether management of the insurer has filed any false
  344  or misleading sworn financial statement, has released a false or
  345  misleading financial statement to lending institutions or to the
  346  general public, has made a false or misleading entry, or has
  347  omitted an entry of material amount in the books of the insurer.
  348         (o)Whether the insurer has grown so rapidly and to such an
  349  extent that it lacks adequate financial and administrative
  350  capacity to meet its obligations in a timely manner.
  351         (p)Whether the insurer has experienced, or will experience
  352  in the foreseeable future, cash flow or liquidity problems.
  353         (q)Whether management has established reserves that do not
  354  comply with minimum standards established by state insurance
  355  laws and regulations, statutory accounting standards, sound
  356  actuarial principles, and standards of practice.
  357         (r)Whether management persistently engages in material
  358  under-reserving that results in adverse development.
  359         (s)Whether transactions among affiliates, subsidiaries, or
  360  controlling persons for which the insurer receives assets or
  361  capital gains, or both, do not provide sufficient value,
  362  liquidity, or diversity to assure the insurer’s ability to meet
  363  its outstanding obligations as they mature.
  364         (t)The ratio of the annual premium volume to surplus or of
  365  its liabilities to surplus in relation to loss experience, the
  366  kinds of risks insured, or both.
  367         (u)Whether the insurer’s asset portfolio, when viewed in
  368  light of current economic conditions and indications of
  369  financial or operational leverage, is of sufficient value,
  370  liquidity, or diversity to assure the company’s ability to meet
  371  its outstanding obligations as they mature.
  372         (v)Whether the excess of surplus as regards policyholders
  373  above the insurer’s statutorily required surplus as regards
  374  policyholders has decreased by more than 50 percent in the
  375  preceding 12-month period.
  376         (w)As to a residential property insurer, whether it has
  377  sufficient capital, surplus, and reinsurance to withstand
  378  significant weather events, including, but not limited to,
  379  hurricanes.
  380         (x) Whether the insurer’s required surplus, capital, or
  381  capital stock is impaired to an extent prohibited by law.
  382         (y) Whether the insurer continues to write new business
  383  when it has not maintained the required surplus or capital.
  384         (z) Whether the insurer moves to dissolve or liquidate
  385  without first having made provisions satisfactory to the office
  386  for liabilities arising from insurance policies issued by the
  387  insurer.
  388         (aa)Whether the insurer has incurred substantial new debt,
  389  has had to rely on frequent or substantial capital infusions,
  390  has a highly leveraged balance sheet, or relies increasingly on
  391  other entities, including, but not limited to, affiliates,
  392  third-party administrators, managing general agents, or
  393  management companies.
  394         (bb) Whether the insurer meets one or more of the grounds
  395  in s. 631.051 for the appointment of the department as receiver.
  396         (cc)Any other finding determined by the office to be
  397  hazardous to the insurer’s policyholders or creditors or to the
  398  general public.
  399         (2)For the purposes of making a determination of an
  400  insurer’s financial condition under the Florida Insurance Code,
  401  the office may:
  402         (a)Disregard any credit or amount receivable resulting
  403  from transactions with a reinsurer that is insolvent, impaired,
  404  or otherwise subject to a delinquency proceeding;
  405         (b)Make appropriate adjustments, including disallowance to
  406  asset values attributable to investments in or transactions with
  407  parents, subsidiaries, or affiliates, consistent with the
  408  National Association of Insurance Commissioners Accounting
  409  Practices and Procedures Manual and state laws and rules;
  410         (c)Refuse to recognize the stated value of accounts
  411  receivable if the ability to collect receivables is highly
  412  speculative in view of the age of the account or the financial
  413  condition of the debtor; or
  414         (d)Increase the insurer’s liability, in an amount equal to
  415  any contingent liability, pledge, or guarantee not otherwise
  416  included, if there is a substantial risk that the insurer will
  417  be called upon to meet the obligation undertaken within the next
  418  12-month period.
  419         (3)If the office determines that the continued operations
  420  of an insurer authorized to transact business in this state may
  421  be hazardous to its policyholders or creditors or to the general
  422  public, the office may issue an order requiring the insurer to
  423  do any of the following:
  424         (a)Reduce the total amount of present and potential
  425  liability for policy benefits by procuring additional
  426  reinsurance.
  427         (b)Reduce, suspend, or limit the volume of business being
  428  accepted or renewed.
  429         (c)Reduce general insurance and commission expenses by
  430  specified methods or amounts.
  431         (d)Increase the insurer’s capital and surplus.
  432         (e)Suspend or limit the declaration and payment of
  433  dividends by an insurer to its stockholders or to its
  434  policyholders.
  435         (f)File reports in a form acceptable to the office
  436  concerning the market value of the insurer’s assets.
  437         (g)Limit or withdraw from certain investments or
  438  discontinue certain investment practices to the extent the
  439  office deems necessary.
  440         (h)Document the adequacy of premium rates in relation to
  441  the risks insured.
  442         (i)File, in addition to regular annual statements, interim
  443  financial reports on a form prescribed by the commission and
  444  adopted by the National Association of Insurance Commissioners.
  445         (j)Correct corporate governance practice deficiencies and
  446  adopt and use governance practices acceptable to the office.
  447         (k)Provide a business plan to the office in order to
  448  continue to transact business in this state.
  449         (l)Notwithstanding any other law limiting the frequency or
  450  amount of rate adjustments, adjust rates for any non-life
  451  insurance product written by the insurer which the office
  452  considers necessary to improve the financial condition of the
  453  insurer.
  454         (4)This section may not be interpreted to limit the powers
  455  granted to the office by any laws of this state, nor may it be
  456  interpreted to supersede any laws of this state.
  457         (5)The office may, pursuant to ss. 120.569 and 120.57, in
  458  its discretion and without advance notice or hearing, issue an
  459  immediate final order to any insurer requiring the actions
  460  listed in subsection (3).
  461         Section 8. Subsection (11) of section 624.81, Florida
  462  Statutes, is amended to read:
  463         624.81 Notice to comply with written requirements of
  464  office; noncompliance.—
  465         (11) The commission may adopt rules to define standards of
  466  hazardous financial condition and corrective action
  467  substantially similar to that indicated in the National
  468  Association of Insurance Commissioners’ 1997 “Model Regulation
  469  to Define Standards and Commissioner’s Authority for Companies
  470  Deemed to be in Hazardous Financial Condition,” which are
  471  necessary to implement the provisions of this part.
  472         Section 9. Section 624.865, Florida Statutes, is created to
  473  read:
  474         624.865 Rulemaking.—The commission may adopt rules to
  475  administer ss. 624.80-624.87. Such rules must protect the
  476  interests of insureds, claimants, insurers, and the public.
  477         Section 10. Paragraph (d) of subsection (2) and paragraph
  478  (b) of subsection (3) of section 628.8015, Florida Statutes, is
  479  amended to read:
  480         628.8015 Own-risk and solvency assessment; corporate
  481  governance annual disclosure.—
  482         (2) OWN-RISK AND SOLVENCY ASSESSMENT.—
  483         (d) Exemption.—
  484         1. An insurer is exempt from the requirements of this
  485  subsection if:
  486         a. The insurer has annual direct written and unaffiliated
  487  assumed premium, including international direct and assumed
  488  premium, but excluding premiums reinsured with the Federal Crop
  489  Insurance Corporation and the National Flood Insurance Program,
  490  of less than $500 million; or
  491         b. The insurer is a member of an insurance group and the
  492  insurance group has annual direct written and unaffiliated
  493  assumed premium, including international direct and assumed
  494  premium, but excluding premiums reinsured with the Federal Crop
  495  Insurance Corporation and the National Flood Insurance Program,
  496  of less than $1 billion.
  497         2. If an insurer is:
  498         a. Exempt under sub-subparagraph 1.a., but the insurance
  499  group of which the insurer is a member is not exempt under sub
  500  subparagraph 1.b., the ORSA summary report must include every
  501  insurer within the insurance group. The insurer may satisfy this
  502  requirement by submitting more than one ORSA summary report for
  503  any combination of insurers if any combination of reports
  504  includes every insurer within the insurance group.
  505         b. Not exempt under sub-subparagraph 1.a., but the
  506  insurance group of which it is a member is exempt under sub
  507  subparagraph 1.b., the insurer must submit to the office the
  508  ORSA summary report applicable only to that insurer.
  509         3. The office may require an exempt insurer to maintain a
  510  risk management framework, conduct an ORSA, and file an ORSA
  511  summary report:
  512         a. Based on unique circumstances, including, but not
  513  limited to, the type and volume of business written, ownership
  514  and organizational structure, federal agency requests, and
  515  international supervisor requests;
  516         b. If the insurer has risk-based capital for a company
  517  action level event pursuant to s. 624.4085(3), meets one or more
  518  of the standards of an insurer deemed to be in hazardous
  519  financial condition under s. 624.805 as defined in rules adopted
  520  by the commission pursuant to s. 624.81(11), or exhibits
  521  qualities of an insurer in hazardous financial condition as
  522  determined by the office; or
  523         c. If the office determines it is in the best interest of
  524  the state.
  525         4. If an exempt insurer becomes disqualified for an
  526  exemption because of changes in premium as reported on the most
  527  recent annual statement of the insurer or annual statements of
  528  the insurers within the insurance group of which the insurer is
  529  a member, the insurer must comply with the requirements of this
  530  section effective 1 year after the year in which the insurer
  531  exceeded the premium thresholds.
  532         (3) CORPORATE GOVERNANCE ANNUAL DISCLOSURE.—
  533         (b) Disclosure requirement.—
  534         1.a. An insurer, or insurer member of an insurance group,
  535  of which the office is the lead state regulator, as determined
  536  by the procedures in the most recent National Association of
  537  Insurance Commissioners Financial Analysis Handbook, shall
  538  submit a corporate governance annual disclosure to the office by
  539  June 1 of each calendar year. The initial corporate governance
  540  annual disclosure must be submitted by December 31, 2018.
  541         b. An insurer or insurance group not required to submit a
  542  corporate governance annual disclosure under sub-subparagraph a.
  543  shall do so at the request of the office, but not more than once
  544  per calendar year. The insurer or insurance group shall notify
  545  the office of the proposed submission date within 30 days after
  546  the request of the office.
  547         c. Before December 31, 2018, the office may require an
  548  insurer or insurance group to provide a corporate governance
  549  annual disclosure:
  550         (I) Based on unique circumstances, including, but not
  551  limited to, the type and volume of business written, the
  552  ownership and organizational structure, federal agency requests,
  553  and international supervisor requests;
  554         (II) If the insurer has risk-based capital for a company
  555  action level event pursuant to s. 624.4085(3), meets one or more
  556  of the standards of an insurer deemed to be in hazardous
  557  financial condition under s. 624.805 as defined in rules adopted
  558  pursuant to s. 624.81(11), or exhibits qualities of an insurer
  559  in hazardous financial condition as determined by the office;
  560         (III) If the insurer is the member of an insurer group of
  561  which the office acts as the lead state regulator as determined
  562  by the procedures in the most recent National Association of
  563  Insurance Commissioners Financial Analysis Handbook; or
  564         (IV) If the office determines that it is in the best
  565  interest of the state.
  566         2. The chief executive officer or corporate secretary of
  567  the insurer or the insurance group must sign the corporate
  568  governance annual disclosure attesting that, to the best of his
  569  or her knowledge and belief, the insurer has implemented the
  570  corporate governance practices and provided a copy of the
  571  disclosure to the board of directors or the appropriate board
  572  committee.
  573         3.a. Depending on the structure of its system of corporate
  574  governance, the insurer or insurance group may provide corporate
  575  governance information at one of the following levels:
  576         (I) The ultimate controlling parent level;
  577         (II) An intermediate holding company level; or
  578         (III) The individual legal entity level.
  579         b. The insurer or insurance group may make the corporate
  580  governance annual disclosure at:
  581         (I) The level used to determine the risk appetite of the
  582  insurer or insurance group;
  583         (II) The level at which the earnings, capital, liquidity,
  584  operations, and reputation of the insurer are collectively
  585  overseen and the supervision of those factors is coordinated and
  586  exercised; or
  587         (III) The level at which legal liability for failure of
  588  general corporate governance duties would be placed.
  589  
  590  An insurer or insurance group must indicate the level of
  591  reporting used and explain any subsequent changes in the
  592  reporting level.
  593         4. The review of the corporate governance annual disclosure
  594  and any additional requests for information shall be made
  595  through the lead state as determined by the procedures in the
  596  most recent National Association of Insurance Commissioners
  597  Financial Analysis Handbook.
  598         5. An insurer or insurance group may comply with this
  599  paragraph by cross-referencing other existing relevant and
  600  applicable documents, including, but not limited to, the ORSA
  601  summary report, Holding Company Form B or F filings, Securities
  602  and Exchange Commission proxy statements, or foreign regulatory
  603  reporting requirements, if the documents contain information
  604  substantially similar to the information described in paragraph
  605  (c). The insurer or insurance group shall clearly identify and
  606  reference the specific location of the relevant and applicable
  607  information within the corporate governance annual disclosure
  608  and attach the referenced document if it has not already been
  609  filed with, or made available to, the office.
  610         6. Each year following the initial filing of the corporate
  611  governance annual disclosure, the insurer or insurance group
  612  shall file an amended version of the previously filed corporate
  613  governance annual disclosure indicating changes that have been
  614  made. If changes have not been made in the previously filed
  615  disclosure, the insurer or insurance group should so indicate.
  616         Section 11. Paragraph (c) of subsection (3) of section
  617  626.207, Florida Statutes, is amended to read:
  618         626.207 Disqualification of applicants and licensees;
  619  penalties against licensees; rulemaking authority.—
  620         (3) An applicant who has been found guilty of or has
  621  pleaded guilty or nolo contendere to a crime not included in
  622  subsection (2), regardless of adjudication, is subject to:
  623         (c) A 7-year disqualifying period for all misdemeanors
  624  directly related to the financial services business or any
  625  violation of the Florida Insurance Code.
  626         Section 12. Subsections (2) and (3) of section 626.9521,
  627  Florida Statutes, are amended to read:
  628         626.9521 Unfair methods of competition and unfair or
  629  deceptive acts or practices prohibited; penalties.—
  630         (2) Except as provided in subsection (3), any person who
  631  violates any provision of this part is subject to a fine in an
  632  amount not greater than $12,500 $5,000 for each nonwillful
  633  violation and not greater than $100,000 $40,000 for each willful
  634  violation. Fines under this subsection imposed against an
  635  insurer may not exceed an aggregate amount of $50,000 $20,000
  636  for all nonwillful violations arising out of the same action or
  637  an aggregate amount of $500,000 $200,000 for all willful
  638  violations arising out of the same action. The fines may be
  639  imposed in addition to any other applicable penalty.
  640         (3)(a) If a person violates s. 626.9541(1)(l), the offense
  641  known as “twisting,” or violates s. 626.9541(1)(aa), the offense
  642  known as “churning,” the person commits a misdemeanor of the
  643  first degree, punishable as provided in s. 775.082, and an
  644  administrative fine not greater than $12,500 $5,000 shall be
  645  imposed for each nonwillful violation or an administrative fine
  646  not greater than $187,500 $75,000 shall be imposed for each
  647  willful violation. To impose an administrative fine for a
  648  willful violation under this paragraph, the practice of
  649  “churning” or “twisting” must involve fraudulent conduct.
  650         (b) If a person violates s. 626.9541(1)(ee) by willfully
  651  submitting fraudulent signatures on an application or policy
  652  related document, the person commits a felony of the third
  653  degree, punishable as provided in s. 775.082, and an
  654  administrative fine not greater than $12,500 $5,000 shall be
  655  imposed for each nonwillful violation or an administrative fine
  656  not greater than $187,500 $75,000 shall be imposed for each
  657  willful violation.
  658         (c) If a person violates any provision of this part and
  659  such violation is related to a covered loss or covered claim
  660  caused by an emergency for which the Governor declared a state
  661  of emergency pursuant to s. 252.36, such person is subject to a
  662  fine in an amount not greater than $25,000 for each nonwillful
  663  violation and not greater than $200,000 for each willful
  664  violation. Fines imposed under this paragraph against an insurer
  665  may not exceed an aggregate amount of $100,000 for all
  666  nonwillful violations arising out of the same action or an
  667  aggregate amount of $1 million for all willful violations
  668  arising out of the same action.
  669         (d) Administrative fines under paragraphs (a) and (b) this
  670  subsection may not exceed an aggregate amount of $125,000
  671  $50,000 for all nonwillful violations arising out of the same
  672  action or an aggregate amount of $625,000 $250,000 for all
  673  willful violations arising out of the same action.
  674         Section 13. Paragraphs (i) and (w) of subsection (1) of
  675  section 626.9541, Florida Statutes, are amended to read:
  676         626.9541 Unfair methods of competition and unfair or
  677  deceptive acts or practices defined.—
  678         (1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE
  679  ACTS.—The following are defined as unfair methods of competition
  680  and unfair or deceptive acts or practices:
  681         (i) Unfair claim settlement practices.—
  682         1. Attempting to settle claims on the basis of an
  683  application, when serving as a binder or intended to become a
  684  part of the policy, or any other material document which was
  685  altered without notice to, or knowledge or consent of, the
  686  insured;
  687         2. A material misrepresentation made to an insured or any
  688  other person having an interest in the proceeds payable under
  689  such contract or policy, for the purpose and with the intent of
  690  effecting settlement of such claims, loss, or damage under such
  691  contract or policy on less favorable terms than those provided
  692  in, and contemplated by, such contract or policy;
  693         3. Committing or performing with such frequency as to
  694  indicate a general business practice any of the following:
  695         a. Failing to adopt and implement standards for the proper
  696  investigation of claims;
  697         b. Misrepresenting pertinent facts or insurance policy
  698  provisions relating to coverages at issue;
  699         c. Failing to acknowledge and act promptly upon
  700  communications with respect to claims;
  701         d. Denying claims without conducting reasonable
  702  investigations based upon available information;
  703         e. Failing to affirm or deny full or partial coverage of
  704  claims, and, as to partial coverage, the dollar amount or extent
  705  of coverage, or failing to provide a written statement that the
  706  claim is being investigated, upon the written request of the
  707  insured within 30 days after proof-of-loss statements have been
  708  completed;
  709         f. Failing to promptly provide a reasonable explanation in
  710  writing to the insured of the basis in the insurance policy, in
  711  relation to the facts or applicable law, for denial of a claim
  712  or for the offer of a compromise settlement;
  713         g. Failing to promptly notify the insured of any additional
  714  information necessary for the processing of a claim;
  715         h. Failing to clearly explain the nature of the requested
  716  information and the reasons why such information is necessary;
  717  or
  718         i. Failing to pay personal injury protection insurance
  719  claims within the time periods required by s. 627.736(4)(b). The
  720  office may order the insurer to pay restitution to a
  721  policyholder, medical provider, or other claimant, including
  722  interest at a rate consistent with the amount set forth in s.
  723  55.03(1), for the time period within which an insurer fails to
  724  pay claims as required by law. Restitution is in addition to any
  725  other penalties allowed by law, including, but not limited to,
  726  the suspension of the insurer’s certificate of authority; or
  727         j.Altering or amending an insurance adjuster’s report
  728  without:
  729         (I)Providing a detailed explanation as to why any change
  730  that has the effect of reducing the estimate of the loss was
  731  made; and
  732         (II)Including on the report or as an addendum to the
  733  report a detailed list of all changes made to the report and the
  734  identity of the person who ordered each change; or
  735         (III)Retaining all versions of the report, and including
  736  within each such version, for each change made within such
  737  version of the report, the identity of each person who made or
  738  ordered such change; or
  739         4. Failing to pay undisputed amounts of partial or full
  740  benefits owed under first-party property insurance policies
  741  within 60 days after an insurer receives notice of a residential
  742  property insurance claim, determines the amounts of partial or
  743  full benefits, and agrees to coverage, unless payment of the
  744  undisputed benefits is prevented by factors beyond the control
  745  of the insurer as defined in s. 627.70131(5).
  746         (w) Soliciting or accepting new or renewal insurance risks
  747  by insolvent or impaired insurer or receipt of certain bonuses
  748  by an officer or director of an insolvent insurer prohibited;
  749  penalty.—
  750         1. Whether or not delinquency proceedings as to the insurer
  751  have been or are to be initiated, but while such insolvency or
  752  impairment exists, no director or officer of an insurer, except
  753  with the written permission of the office, shall authorize or
  754  permit the insurer to solicit or accept new or renewal insurance
  755  risks in this state after such director or officer knew, or
  756  reasonably should have known, that the insurer was insolvent or
  757  impaired.
  758         2.Regardless of whether delinquency proceedings as to the
  759  insurer have been or are to be initiated, but while such
  760  insolvency or impairment exists, a director or an officer of an
  761  impaired insurer may not receive a bonus from such insurer, nor
  762  may such director or officer receive a bonus from a holding
  763  company or an affiliate that shares common ownership or control
  764  with such insurer.
  765         3.As used in this paragraph, the term:
  766         a.“Bonus” means a payment, in addition to an officer’s or
  767  a director’s usual compensation, which is in addition to any
  768  amounts contracted for or otherwise legally due.
  769         b. “Impaired” includes impairment of capital or surplus, as
  770  defined in s. 631.011(12) and (13).
  771         4.2. Any such director or officer, upon conviction of a
  772  violation of this paragraph, commits is guilty of a felony of
  773  the third degree, punishable as provided in s. 775.082, s.
  774  775.083, or s. 775.084.
  775         Section 14. Subsection (6) of section 626.989, Florida
  776  Statutes, is amended, and subsection (10) is added to that
  777  section, to read:
  778         626.989 Investigation by department or Division of
  779  Investigative and Forensic Services; compliance; immunity;
  780  confidential information; reports to division; division
  781  investigator’s power of arrest.—
  782         (6)(a) Any person, other than an insurer, agent, or other
  783  person licensed under the code, or an employee thereof, having
  784  knowledge or who believes that a fraudulent insurance act or any
  785  other act or practice which, upon conviction, constitutes a
  786  felony or a misdemeanor under the code, or under s. 817.234, is
  787  being or has been committed may send to the Division of
  788  Investigative and Forensic Services a report or information
  789  pertinent to such knowledge or belief and such additional
  790  information relative thereto as the department may request. Any
  791  professional practitioner licensed or regulated by the
  792  Department of Business and Professional Regulation, except as
  793  otherwise provided by law, any medical review committee as
  794  defined in s. 766.101, any private medical review committee, and
  795  any insurer, agent, or other person licensed under the code, or
  796  an employee thereof, having knowledge or who believes that a
  797  fraudulent insurance act or any other act or practice which,
  798  upon conviction, constitutes a felony or a misdemeanor under the
  799  code, or under s. 817.234, is being or has been committed shall
  800  send to the Division of Investigative and Forensic Services a
  801  report or information pertinent to such knowledge or belief and
  802  such additional information relative thereto as the department
  803  may require.
  804         (b) The Division of Investigative and Forensic Services
  805  shall review such information or reports and select such
  806  information or reports as, in its judgment, may require further
  807  investigation. It shall then cause an independent examination of
  808  the facts surrounding such information or report to be made to
  809  determine the extent, if any, to which a fraudulent insurance
  810  act or any other act or practice which, upon conviction,
  811  constitutes a felony or a misdemeanor under the code, or under
  812  s. 817.234, is being committed.
  813         (c) The Division of Investigative and Forensic Services
  814  shall report any alleged violations of law which its
  815  investigations disclose to the appropriate licensing agency and
  816  state attorney or other prosecuting agency having jurisdiction,
  817  including, but not limited to, the statewide prosecutor for
  818  crimes that impact two or more judicial circuits in this state,
  819  with respect to any such violation, as provided in s. 624.310.
  820  If prosecution by the state attorney or other prosecuting agency
  821  having jurisdiction with respect to such violation is not begun
  822  within 60 days of the division’s report, the state attorney or
  823  other prosecuting agency having jurisdiction with respect to
  824  such violation shall inform the division of the reasons for the
  825  lack of prosecution.
  826         (10)The Division of Investigative and Forensic Services
  827  Bureau of Insurance Fraud shall prepare and submit a performance
  828  report to the President of the Senate and the Speaker of the
  829  House of Representatives by January 1 of each year. The annual
  830  report must include, but need not be limited to:
  831         (a) The total number of initial referrals received, cases
  832  opened, cases presented for prosecution, cases closed, and
  833  convictions resulting from cases presented for prosecution by
  834  the Bureau of Insurance Fraud, by type of insurance fraud and
  835  circuit.
  836         (b) The number of referrals received from insurers, the
  837  office, and the Division of Consumer Services of the department,
  838  and the outcome of those referrals.
  839         (c) The number of investigations undertaken by the Bureau
  840  of Insurance Fraud which were not the result of a referral from
  841  an insurer and the outcome of those referrals.
  842         (d) The number of investigations that resulted in a
  843  referral to a regulatory agency and the disposition of those
  844  referrals.
  845         (e) The number of cases presented by the Bureau of
  846  Insurance Fraud which local prosecutors or the statewide
  847  prosecutor declined to prosecute and the reasons provided for
  848  declining prosecution.
  849         (f)A summary of the annual report required under s.
  850  626.9896.
  851         (g)The total number of employees assigned to the Bureau of
  852  Insurance Fraud, delineated by location of staff assigned, and
  853  the number and location of employees assigned to the Bureau of
  854  Insurance Fraud who were assigned to work other types of fraud
  855  cases.
  856         (h) The average caseload and turnaround time by type of
  857  case for each investigator.
  858         (i) The training provided during the year to insurance
  859  fraud investigators.
  860         Section 15. Subsections (1), (3), and (4) of section
  861  627.0629, Florida Statutes, are amended to read:
  862         627.0629 Residential property insurance; rate filings.—
  863         (1) It is the intent of the Legislature that insurers
  864  provide savings to consumers who install or implement windstorm
  865  damage mitigation techniques, alterations, or solutions to their
  866  properties to prevent windstorm losses. A rate filing for
  867  residential property insurance must include actuarially
  868  reasonable discounts, credits, or other rate differentials, or
  869  appropriate reductions in deductibles, for properties on which
  870  fixtures or construction techniques demonstrated to reduce the
  871  amount of loss in a windstorm have been installed or
  872  implemented. The fixtures or construction techniques must
  873  include, but are not limited to, fixtures or construction
  874  techniques that enhance roof strength, roof covering
  875  performance, roof-to-wall strength, wall-to-floor-to-foundation
  876  strength, opening protection, and window, door, and skylight
  877  strength. Credits, discounts, or other rate differentials, or
  878  appropriate reductions in deductibles, for fixtures and
  879  construction techniques that meet the minimum requirements of
  880  the Florida Building Code must be included in the rate filing.
  881  The office shall determine the discounts, credits, other rate
  882  differentials, and appropriate reductions in deductibles that
  883  reflect the full actuarial value of such revaluation, which may
  884  be used by insurers in rate filings. Effective October 1, 2023,
  885  each insurer subject to the requirements of this section must
  886  provide information on the insurer’s website describing the
  887  hurricane mitigation discounts available to policyholders. Such
  888  information must be accessible on, or through a hyperlink
  889  located on, the home page of the insurer’s website or the
  890  primary page of the insurer’s website for property insurance
  891  policyholders or applicants for such coverage in this state. On
  892  or before January 1, 2025, and every 5 years thereafter, the
  893  office shall reevaluate and update the fixtures or construction
  894  techniques demonstrated to reduce the amount of loss in a
  895  windstorm and the discounts, credits, other rate differentials,
  896  and appropriate reductions in deductibles that reflect the full
  897  actuarial value of such fixtures or construction techniques. The
  898  office shall adopt rules and forms necessitated by such
  899  reevaluation.
  900         (3) A rate filing made on or after July 1, 1995, for mobile
  901  home owner insurance must include appropriate discounts,
  902  credits, or other rate differentials for mobile homes
  903  constructed to comply with American Society of Civil Engineers
  904  Standard ANSI/ASCE 7-88, adopted by the United States Department
  905  of Housing and Urban Development on July 13, 1994, and that also
  906  comply with all applicable tie-down requirements provided by
  907  state law.
  908         (4) The Legislature finds that separate consideration and
  909  notice of hurricane insurance premiums will assist consumers by
  910  providing greater assurance that hurricane premiums are lawful
  911  and by providing more complete information regarding the
  912  components of property insurance premiums. Effective January 1,
  913  1997, A rate filing for residential property insurance shall be
  914  separated into two components, rates for hurricane coverage and
  915  rates for all other coverages. A premium notice reflecting a
  916  rate implemented on the basis of such a filing shall separately
  917  indicate the premium for hurricane coverage and the premium for
  918  all other coverages.
  919         Section 16. Paragraph (ll) is added to subsection (6) of
  920  section 627.351, Florida Statutes, to read:
  921         627.351 Insurance risk apportionment plans.—
  922         (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
  923         (ll) The corporation may not determine that a risk is
  924  ineligible for coverage with the corporation solely because such
  925  risk has unrepaired damage caused by a covered loss that is the
  926  subject of a claim that has been filed with the Florida
  927  Insurance Guaranty Association. This paragraph applies to a risk
  928  until the earlier of 36 months after the date the Florida
  929  Insurance Guaranty Association began servicing such claim or the
  930  Florida Insurance Guaranty Association closes the claim.
  931         Section 17. Subsection (4) of section 627.410, Florida
  932  Statutes, is amended to read:
  933         627.410 Filing, approval of forms.—
  934         (4) The office may, by order, exempt from the requirements
  935  of this section for so long as it deems proper any insurance
  936  document or form or type thereof as specified in such order, to
  937  which, in its opinion, this section may not practicably be
  938  applied, or the filing and approval of which are, in its
  939  opinion, not desirable or necessary for the protection of the
  940  public. The office may not exempt from the requirements of this
  941  section the insurance documents or forms of any insurer, against
  942  whom the office enters a final order determining that such
  943  insurer violated any provision of this code, for a period of 36
  944  months after the date of such order, and may not be deemed
  945  approved under subsection (2).
  946         Section 18. Section 627.4108, Florida Statutes, is created
  947  to read:
  948         627.4108 Claims-handling manuals; submission; attestation.—
  949         (1) Each authorized residential property insurer conducting
  950  business in this state must create and use a claims-handling
  951  manual that provides guidelines and procedures and that complies
  952  with the requirements of this code and comports to usual and
  953  customary industry claims-handling practices. Such manual must
  954  include guidelines and procedures for:
  955         (a)Initially receiving and acknowledging initial receipt
  956  of the claim and reviewing and evaluating the claim;
  957         (b)Communicating with policyholders, beginning with the
  958  receipt of the claim and continuing until closure of the claim;
  959         (c)Setting the claim reserve;
  960         (d)Investigating the claim, including conducting
  961  inspections of the property that is the subject of the claim;
  962         (e)Making preliminary estimates and estimates of the
  963  covered damages to the insured property and communicating such
  964  estimates to the policyholder;
  965         (f)The payment, partial payment, or denial of the claim
  966  and communicating such claim decision to the policyholder;
  967         (g)Closing claims; and
  968         (h)Any aspect of the claims-handling process which the
  969  office determines should be included in the claims-handling
  970  manual in order to:
  971         1.Comply with the laws of this state or rules or orders of
  972  the office or department;
  973         2.Ensure the claims-handling manual comports with usual
  974  and customary industry claims-handling guidelines; or
  975         3.Protect policyholders of the insurer or the general
  976  public.
  977         (2) At any time, the office may request that a residential
  978  property insurer submit a physical or electronic copy of the
  979  insurer’s currently applicable, or otherwise specifically
  980  requested, claims-handling manuals. Upon receiving such a
  981  request, a residential property insurer must submit to the
  982  office within 5 business days:
  983         (a)A true and correct copy of each claims-handling manual
  984  requested; and
  985         (b)An attestation, on a form prescribed by the commission,
  986  that certifies:
  987         1.That the insurer has provided a true and correct copy of
  988  each currently applicable, or otherwise specifically requested,
  989  claims-handling manual; and
  990         2.The timeframe for which each submitted claims-handling
  991  manual was or is in effect.
  992         (3)(a)Annually, each authorized residential property
  993  insurer must certify and attest, on a form prescribed by the
  994  commission, that:
  995         1.Each of the insurer’s current claims-handling manuals
  996  complies with the requirements of this code and comports to
  997  usual and customary industry claims-handling practices; and
  998         2.The insurer maintains adequate resources available to
  999  implement the requirements of each of its claims-handling
 1000  manuals at all times, including during natural disasters and
 1001  catastrophic events.
 1002         (b)Such attestation must be submitted to the office:
 1003         1. On or before August 1, 2023; and
 1004         2. Annually thereafter, on or before May 1 of each calendar
 1005  year.
 1006         (4)The commission is authorized, and all conditions are
 1007  deemed met, to adopt emergency rules under s. 120.54(4), for the
 1008  purpose of implementing this section. Notwithstanding any other
 1009  law, emergency rules adopted under this section are effective
 1010  for 6 months after adoption and may be renewed during the
 1011  pendency of procedures to adopt permanent rules addressing the
 1012  subject of the emergency rules.
 1013         Section 19. Paragraph (d) of subsection (2) of section
 1014  627.4133, Florida Statutes, is amended to read:
 1015         627.4133 Notice of cancellation, nonrenewal, or renewal
 1016  premium.—
 1017         (2) With respect to any personal lines or commercial
 1018  residential property insurance policy, including, but not
 1019  limited to, any homeowner, mobile home owner, farmowner,
 1020  condominium association, condominium unit owner, apartment
 1021  building, or other policy covering a residential structure or
 1022  its contents:
 1023         (d)1. Upon a declaration of an emergency pursuant to s.
 1024  252.36 and the filing of an order by the Commissioner of
 1025  Insurance Regulation, An authorized insurer may not cancel or
 1026  nonrenew a personal residential or commercial residential
 1027  property insurance policy covering a dwelling or residential
 1028  property located in this state:
 1029         a.For a period of 90 days after the dwelling or
 1030  residential property has been repaired, if such property which
 1031  has been damaged as a result of a hurricane or wind loss that is
 1032  the subject of the declaration of emergency pursuant to s.
 1033  252.36 and the filing of an order by the Commissioner of
 1034  Insurance Regulation for a period of 90 days after the dwelling
 1035  or residential property has been repaired. A structure is deemed
 1036  to be repaired when substantially completed and restored to the
 1037  extent that it is insurable by another authorized insurer that
 1038  is writing policies in this state.
 1039         b.Until the earlier of when the dwelling or residential
 1040  property has been repaired or 1 year after the insurer issues
 1041  the final claim payment, if such property was damaged by any
 1042  covered peril and sub-subparagraph a. does not apply.
 1043         2. However, an insurer or agent may cancel or nonrenew such
 1044  a policy prior to the repair of the dwelling or residential
 1045  property:
 1046         a. Upon 10 days’ notice for nonpayment of premium; or
 1047         b. Upon 45 days’ notice:
 1048         (I) For a material misstatement or fraud related to the
 1049  claim;
 1050         (II) If the insurer determines that the insured has
 1051  unreasonably caused a delay in the repair of the dwelling; or
 1052         (III) If the insurer has paid policy limits.
 1053         3. If the insurer elects to nonrenew a policy covering a
 1054  property that has been damaged, the insurer shall provide at
 1055  least 90 days’ notice to the insured that the insurer intends to
 1056  nonrenew the policy 90 days after the dwelling or residential
 1057  property has been repaired. Nothing in this paragraph shall
 1058  prevent the insurer from canceling or nonrenewing the policy 90
 1059  days after the repairs are complete for the same reasons the
 1060  insurer would otherwise have canceled or nonrenewed the policy
 1061  but for the limitations of subparagraph 1. The Financial
 1062  Services Commission may adopt rules, and the Commissioner of
 1063  Insurance Regulation may issue orders, necessary to implement
 1064  this paragraph.
 1065         4. This paragraph shall also apply to personal residential
 1066  and commercial residential policies covering property that was
 1067  damaged as the result of Hurricane Ian or Hurricane Nicole
 1068  Tropical Storm Bonnie, Hurricane Charley, Hurricane Frances,
 1069  Hurricane Ivan, or Hurricane Jeanne.
 1070         5.For purposes of this paragraph:
 1071         a.A structure is deemed to be repaired when substantially
 1072  completed and restored to the extent that it is insurable by
 1073  another authorized insurer writing policies in this state.
 1074         b.The term insurer” means an authorized insurer.
 1075         Section 20. Subsection (3) is added to section 627.426,
 1076  Florida Statutes, to read:
 1077         627.426 Claims administration.—
 1078         (3)(a)Upon receiving actual notice of an incident or a
 1079  loss that could give rise to a covered liability claim under an
 1080  insurance policy, each liability insurer must do all of the
 1081  following:
 1082         1.Assign a licensed and appointed insurance adjuster to
 1083  investigate the extent of the insured’s probable exposure and
 1084  diligently attempt to resolve any questions concerning the
 1085  existence or extent of the insured’s coverage.
 1086         2. Evaluate the claim fairly, honestly, and with due regard
 1087  for the interests of the insured based on available information;
 1088  consider the extent of the claimant’s recoverable damages; and
 1089  consider the information in a reasonable and prudent manner.
 1090         3.Request from the insured or claimant additional relevant
 1091  information the insurer reasonably deems necessary to evaluate
 1092  whether to settle a claim.
 1093         4. Conduct all oral and written communications with the
 1094  insured with honesty and candor.
 1095         5.Make reasonable efforts to explain to persons not
 1096  represented by counsel matters requiring expertise beyond the
 1097  level normally expected of a layperson with no training in
 1098  insurance or claims-handling issues.
 1099         6.Retain all written and recorded communications and
 1100  create and retain a summary of all verbal communications in a
 1101  reasonable manner for a period of not less than 5 years after
 1102  the later of the entry of a judgment against the insured in
 1103  excess of policy limits becoming final or the conclusion of the
 1104  extracontractual claim, if any, including any related appeals.
 1105         7.Within 30 days after a request, provide the insured with
 1106  all communications related to the insurer’s handling of the
 1107  claim which are not privileged as to the insured.
 1108         8.Provide, upon request and at the insurer’s expense,
 1109  reasonable accommodations necessary to communicate effectively
 1110  with an insured covered under the Americans with Disabilities
 1111  Act.
 1112         9. Communicate to an insured all of the following within 15
 1113  days after notice of the existence of a third-party claim:
 1114         a.The identity of any other person or entity the insurer
 1115  has reason to believe may be liable.
 1116         b.The insurer’s evaluation of the claim, given the facts
 1117  known by the insurer at that time.
 1118         c.The likelihood and possible extent of an excess
 1119  judgment.
 1120         d.Steps the insured can take to avoid exposure to an
 1121  excess judgment, including the right to secure personal counsel
 1122  at the insured’s expense.
 1123         e.The insured’s duty to cooperate with the insurer,
 1124  including any specific requests required because of a settlement
 1125  opportunity or by the insurer in accordance with the policy, the
 1126  purpose of the required cooperation, and the consequences of
 1127  refusing to cooperate.
 1128         f.Any settlement demands or offers.
 1129         10. Initiate settlement negotiations by tendering its
 1130  policy limits to the claimant in exchange for a general release
 1131  of the insured if the facts available to the insurer indicate
 1132  that the insured’s liability is likely to exceed the policy
 1133  limits.
 1134         11. Give fair consideration to a settlement offer that is
 1135  not unreasonable under the facts available to the insurer and
 1136  settle in exchange for a general release of the insured, if
 1137  possible, when a reasonably prudent person, faced with the
 1138  prospect of paying the total probable exposure of the insured,
 1139  would do so. The insurer shall provide reasonable assistance to
 1140  the insured to comply with the insured’s obligations to
 1141  cooperate and act reasonably to attempt to satisfy any
 1142  conditions of a claimant’s settlement offer. If it is not
 1143  possible to settle a liability claim within the available policy
 1144  limits in exchange for a general release of the insured, the
 1145  insurer shall act reasonably to attempt to minimize the excess
 1146  exposure to the insured.
 1147         12. Attempt to minimize the magnitude of possible excess
 1148  judgments against the insured when multiple claims arise out of
 1149  a single occurrence and the combined value of all claims exceeds
 1150  the total of all applicable policy limits. The insurer is
 1151  entitled to great discretion to decide how much to offer each
 1152  respective claimant in its attempt to settle with such claimant
 1153  in exchange for a general release of the insured. This
 1154  subparagraph may not be interpreted to prevent an insurer from
 1155  using either process provided under s. 624.155(6). An insurer
 1156  does not violate this subsection simply because it is unable to
 1157  settle all claims in a multiple claimant case.
 1158         13. Attempt to settle the claim in exchange for a general
 1159  release of all insureds against whom a claim may be presented if
 1160  a loss creates the potential for a third-party claim against
 1161  more than one insured. If it is not possible to settle in
 1162  exchange for a general release of all insureds, the insurer, in
 1163  consultation with the insureds, must attempt to enter into
 1164  reasonable settlements of claims against certain insureds in
 1165  exchange for a general release of such insureds to the exclusion
 1166  of other insureds.
 1167         14. Respond to any request for insurance information in
 1168  compliance with s. 626.9372 or s. 627.4137, as applicable.
 1169         15. Take reasonable measures to preserve evidence, for a
 1170  reasonable period of time, which is needed for the defense of
 1171  the liability claim if it appears the insured’s probable
 1172  exposure is greater than policy limits.
 1173         16. Comply with subsections (1) and (2), if applicable.
 1174         17. Comply with the Unfair Insurance Trade Practices Act.
 1175         (b)As used in this subsection, the term “actual notice”
 1176  means the insurer’s receipt of notice of an incident or a loss
 1177  that could give rise to a covered claim that is communicated to
 1178  the insurer or an agent of the insurer:
 1179         1.By any manner permitted by the policy or other documents
 1180  provided to the insured by the insurer;
 1181         2.Through the claims link on the insurer’s website; or
 1182         3.Through the e-mail address designated by the insurer
 1183  under s. 624.422.
 1184         (c)In determining whether an insurer violated this
 1185  subsection, it is relevant whether the insured, claimant, and
 1186  any representative of the insured or claimant was acting in good
 1187  faith toward the insurer in furnishing information regarding the
 1188  claim, in making demands of the insurer, in setting deadlines,
 1189  and in attempting to settle the claim. Such matters include
 1190  whether:
 1191         1.The insured met its duty to cooperate with the insurer
 1192  in the defense of the claim and in making settlements by taking
 1193  reasonable actions requested by the claimant or required by the
 1194  policy which are necessary to assist the insurer in settling a
 1195  covered claim, including:
 1196         a.Executing affidavits regarding the facts within the
 1197  insured’s knowledge regarding the covered loss; and
 1198         b.Providing documents, including if reasonably necessary
 1199  to settle a covered claim valued in excess of policy limits and
 1200  upon the request of the claimant, a summary of the insured’s
 1201  assets, liabilities, obligations, other insurance policies that
 1202  may provide coverage for the claim, and the name and contact
 1203  information of the insured’s employer when the insured is a
 1204  natural person who was acting in the course and scope of
 1205  employment when the incident giving rise to the claim occurred.
 1206         2.The claimant and any claimant’s representative:
 1207         a.Acted honestly in furnishing information regarding the
 1208  claim;
 1209         b.Acted reasonably in setting deadlines; and
 1210         c.Refrained from taking actions that may be reasonably
 1211  expected to prevent an insurer from accepting the settlement
 1212  demand, such as providing insufficient detail within the demand,
 1213  providing unreasonable deadlines for acceptance of the demand,
 1214  or including unreasonable conditions to settlement.
 1215         (d)Any violation of this subsection, when found by the
 1216  office in any investigation or examination, constitutes a
 1217  violation of the Florida Insurance Code and is subject to any
 1218  applicable enforcement provisions therein. Administrative fines
 1219  imposed for violations of this subsection are subject to a 2.0
 1220  multiplier and may exceed the limits on fine amounts and
 1221  aggregate fine amounts provided for under this code.
 1222         (e)This subsection does not create a civil cause of
 1223  action, nor does it abrogate or diminish any civil cause of
 1224  action currently existing in statutory or common law.
 1225         (f)Any proceedings, determinations, or enforcement actions
 1226  taken by the office against an insurer for violations of this
 1227  subsection are not admissible in any civil action.
 1228         Section 21. Paragraph (a) of subsection (10) of section
 1229  627.701, Florida Statutes, is amended to read:
 1230         627.701 Liability of insureds; coinsurance; deductibles.—
 1231         (10)(a) Notwithstanding any other provision of law, an
 1232  insurer issuing a personal lines residential property insurance
 1233  policy may include in such policy a separate roof deductible
 1234  that meets all of the following requirements:
 1235         1. The insurer has complied with the offer requirements
 1236  under subsection (7) regarding a deductible applicable to losses
 1237  from perils other than a hurricane.
 1238         2. The roof deductible may not exceed the lesser of 2
 1239  percent of the Coverage A limit of the policy or 50 percent of
 1240  the cost to replace the roof.
 1241         3. The premium that a policyholder is charged for the
 1242  policy includes an actuarially sound credit or premium discount
 1243  for the roof deductible.
 1244         4. The roof deductible applies only to a claim adjusted on
 1245  a replacement cost basis.
 1246         5. The roof deductible does not apply to any of the
 1247  following events:
 1248         a. A total loss to a primary structure in accordance with
 1249  the valued policy law under s. 627.702 which is caused by a
 1250  covered peril.
 1251         b. A roof loss resulting from a hurricane as defined in s.
 1252  627.4025(2)(c).
 1253         c. A roof loss resulting from a tree fall or other hazard
 1254  that damages the roof and punctures the roof deck.
 1255         d. A roof loss requiring the repair of less than 50 percent
 1256  of the roof.
 1257  
 1258  If a roof deductible is applied, no other deductible under the
 1259  policy may be applied to the loss or to any other loss to the
 1260  property caused by the same covered peril.
 1261         Section 22. Subsection (2) of section 627.70132, Florida
 1262  Statutes, is amended to read:
 1263         627.70132 Notice of property insurance claim.—
 1264         (2) A claim or reopened claim, but not a supplemental
 1265  claim, under an insurance policy that provides property
 1266  insurance, as defined in s. 624.604, including a property
 1267  insurance policy issued by an eligible surplus lines insurer,
 1268  for loss or damage caused by any peril is barred unless notice
 1269  of the claim was given to the insurer in accordance with the
 1270  terms of the policy within 1 year after the date of loss. A
 1271  supplemental claim is barred unless notice of the supplemental
 1272  claim was given to the insurer in accordance with the terms of
 1273  the policy within 18 months after the date of loss. The time
 1274  limitations of this subsection are tolled during any term of
 1275  deployment to a combat zone or combat support posting which
 1276  materially affects the ability of a servicemember as defined in
 1277  s. 250.01 to file a claim, supplemental claim, or reopened
 1278  claim.
 1279         Section 23. Chapter 2022-271, Laws of Florida, shall not be
 1280  construed to impair any right under an insurance contract in
 1281  effect on or before the effective date of that chapter law. To
 1282  the extent that chapter 2022-271, Laws of Florida, affects a
 1283  right under an insurance contract, that chapter law applies to
 1284  an insurance contract issued or renewed after the effective date
 1285  of that chapter law. This section is intended to clarify
 1286  existing law and is remedial in nature.
 1287         Section 24. (1)Every residential property insurer and
 1288  every motor vehicle insurer rate filing made or pending with the
 1289  Office of Insurance Regulation on or after July 1, 2023, must
 1290  reflect the projected savings or reduction in claim frequency,
 1291  claim severity, and loss adjustment expenses, including for
 1292  attorney fees, payment of attorney fees to claimants, and any
 1293  other reduction actuarially indicated, due to the combined
 1294  effect of the applicable provisions of chapters 2021-77, 2022
 1295  268, 2022-271, and 2023-15, Laws of Florida, in order to ensure
 1296  that rates for such insurance accurately reflect the risk of
 1297  providing such insurance.
 1298         (2)The Office of Insurance Regulation must consider in its
 1299  review of such rate filings the projected savings or reduction
 1300  in claim frequency, claim severity, and loss adjustment
 1301  expenses, including for attorney fees, payment of attorney fees
 1302  to claimants, and any other reduction actuarially indicated, due
 1303  to the combined effect of the applicable provisions of chapters
 1304  2021-77, 2022-268, 2022-271, and 2023-15, Laws of Florida. The
 1305  office may develop methodology and data that incorporate
 1306  generally accepted actuarial techniques and standards to be used
 1307  in its review of rate filings governed by this section. The
 1308  office may contract with an appropriate vendor to advise the
 1309  office in developing such methodology and data to consider. Such
 1310  methodology and data are not intended to create a mandatory
 1311  minimum rate decrease for all motor vehicle insurers and
 1312  property insurers, respectively, but rather to ensure that the
 1313  rates for such coverage meet the requirements of s. 627.062,
 1314  Florida Statutes, and thus are not excessive, inadequate, or
 1315  unfairly discriminatory and allow such insurers a reasonable
 1316  rate of return.
 1317         (3)This section does not apply to rate filings made
 1318  pursuant to s. 627.062(2)(k), Florida Statutes.
 1319         (4)For the 2023-2024 fiscal year, the sum of $500,000 in
 1320  nonrecurring funds is appropriated from the Insurance Regulatory
 1321  Trust Fund in the Department of Financial Services to the Office
 1322  of Insurance Regulation to implement this section.
 1323         Section 25. For the 2023-2024 fiscal year, 18 full-time
 1324  equivalent positions with associated salary rate of 1,116,500
 1325  are authorized and the sum of $1,879,129 in recurring funds and
 1326  $185,086 in nonrecurring funds is appropriated from the
 1327  Insurance Regulatory Trust Fund to the Office of Insurance
 1328  Regulation to implement this act.
 1329         Section 26. For the 2023-2024 fiscal year, seven full-time
 1330  equivalent positions with associated salary rate of 350,000 are
 1331  authorized and the sum of $574,036 in recurring funds and
 1332  $33,467 in nonrecurring funds is appropriated from the Insurance
 1333  Regulatory Trust Fund to the Department of Financial Services to
 1334  implement this act.
 1335         Section 27. This act shall take effect July 1, 2023.
 1336  
 1337  ================= T I T L E  A M E N D M E N T ================
 1338  And the title is amended as follows:
 1339         Delete everything before the enacting clause
 1340  and insert:
 1341                        A bill to be entitled                      
 1342         An act relating to insurer accountability; amending s.
 1343         624.307, F.S.; authorizing electronic responses to
 1344         certain requests from the Division of Consumer
 1345         Services of the Department of Financial Services
 1346         concerning consumer complaints; revising the timeframe
 1347         in which responses must be made; revising
 1348         administrative penalties; amending s. 624.315, F.S.;
 1349         requiring the Office of Insurance Regulation to
 1350         annually and quarterly create and publish specified
 1351         reports relating to the enforcement of insurer
 1352         compliance; requiring the office to submit such
 1353         reports to the Financial Services Commission and the
 1354         Legislature by specified dates; amending s. 624.316,
 1355         F.S.; requiring the office to create a specified
 1356         methodology for scheduling examinations of insurers;
 1357         specifying requirements for such methodology;
 1358         providing construction; authorizing the commission to
 1359         adopt rules; amending s. 624.3161, F.S.; revising
 1360         requirements and conditions for certain insurer market
 1361         conduct examinations after a hurricane; providing
 1362         construction; requiring the office to create, and the
 1363         commission to adopt by rule, a specified selection
 1364         methodology for examinations; specifying requirements
 1365         for such methodology; specifying rulemaking
 1366         requirements; amending s. 624.4211, F.S.; revising
 1367         administrative fines the office may impose in lieu of
 1368         revocation or suspension; creating s. 624.4301, F.S.;
 1369         specifying requirements for residential property
 1370         insurers temporarily suspending writing new policies
 1371         in notifying the office; authorizing the commission to
 1372         adopt rules; creating s. 624.805, F.S.; specifying
 1373         factors the office may consider in determining whether
 1374         the continued operation of an insurer may be deemed to
 1375         be hazardous to its policyholders or creditors or to
 1376         the general public; specifying actions the office may
 1377         take in determining an insurer’s financial condition;
 1378         authorizing the office to issue an order requiring a
 1379         hazardous insurer to take specified actions; providing
 1380         construction; authorizing the office to issue
 1381         immediate final orders; amending s. 624.81, F.S.;
 1382         deleting certain rulemaking authority of the
 1383         commission; creating s. 624.865, F.S.; authorizing the
 1384         commission to adopt certain rules; amending s.
 1385         628.8015, F.S.; conforming provisions to changes made
 1386         by the act; amending s. 626.207, F.S.; revising a
 1387         condition for disqualification of an insurance
 1388         representative applicant or licensee; amending s.
 1389         626.9521, F.S.; revising and specifying applicable
 1390         fines for unfair methods of competition and unfair or
 1391         deceptive acts or practices; amending s. 626.9541,
 1392         F.S.; adding an unfair claim settlement practice by an
 1393         insurer; prohibiting an officer or a director of an
 1394         impaired insurer from receiving a bonus from such
 1395         insurer or from certain holding companies or
 1396         affiliates; defining the term “bonus”; providing a
 1397         criminal penalty; amending s. 626.989, F.S.; revising
 1398         a reporting requirement for the department’s Division
 1399         of Investigative and Forensic Services; requiring the
 1400         division to submit an annual performance report to the
 1401         Legislature; specifying requirements for the report;
 1402         amending s. 627.0629, F.S.; specifying requirements
 1403         for residential property insurers in providing certain
 1404         hurricane mitigation discount information to
 1405         policyholders in a specified manner; specifying
 1406         requirements for the office in reevaluating and
 1407         updating certain fixtures and construction techniques;
 1408         deleting obsolete dates; amending s. 627.351, F.S.;
 1409         prohibiting Citizens Property Insurance Corporation
 1410         from determining that a risk is ineligible for
 1411         coverage solely on a specified basis; providing
 1412         applicability; amending s. 627.410, F.S.; prohibiting
 1413         the office from exempting specified insurers from form
 1414         filing requirements for a specified period; providing
 1415         construction; creating s. 627.4108, F.S.; specifying
 1416         requirements for residential property insurers in
 1417         creating and using claims-handling manuals;
 1418         authorizing the office to request submission of such
 1419         manuals; providing requirements for such submissions;
 1420         requiring authorized insurers to annually submit a
 1421         certified attestation to the office; authorizing the
 1422         commission to adopt emergency rules; amending s.
 1423         627.4133, F.S.; revising prohibitions on insurers
 1424         against the cancellation or nonrenewal of property
 1425         insurance policies; revising applicability; providing
 1426         construction; defining the term “insurer”; amending s.
 1427         627.426, F.S.; specifying duties of a liability
 1428         insurer upon receiving actual notice of certain
 1429         incidents or losses; defining the term “actual
 1430         notice”; providing construction; specifying penalties;
 1431         amending s. 627.701, F.S.; providing that if a roof
 1432         deductible is applied under a personal lines
 1433         residential property insurance policy, no other
 1434         deductible under the policy may be applied to any
 1435         other loss to the property caused by the same covered
 1436         peril; amending s. 627.70132, F.S.; providing for the
 1437         tolling of certain timeframes for filing notices of
 1438         property insurance claims for servicemembers under
 1439         specified circumstances; providing construction
 1440         relating to chapter 2022-271, Laws of Florida;
 1441         requiring residential property insurers and motor
 1442         vehicle insurer rate filings to reflect certain
 1443         projected savings and reductions in expenses;
 1444         specifying requirements for the office in reviewing
 1445         rate filings; authorizing the office to develop
 1446         certain methodology and data and contract with a
 1447         vendor for a certain purpose; providing applicability;
 1448         providing appropriations; providing an effective date.