Senate Bill 1372e3

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  1                      A bill to be entitled

  2         An act relating to insurance; amending ss.

  3         624.425, 624.428, 624.478, 626.112, F.S.;

  4         requiring agents to be appointed; amending s.

  5         624.501, F.S.; clarifying application of fees

  6         for title insurance agents; amending s.

  7         626.022, F.S.; providing for applicability of

  8         ch. 626, F.S.; amending s. 626.051, F.S.;

  9         revising the definition of the term "life

10         agent"; prescribing requirements for soliciting

11         or selling variable life insurance, variable

12         annuity contracts, and other indeterminate

13         value contracts; amending s. 626.062, F.S.;

14         conforming a cross-reference; amending ss.

15         626.141, 626.171, 626.181, 626.211, 626.221,

16         626.266, 626.281, 626.311, 626.511, 626.521,

17         626.561, 626.611, 626.621, 626.641, 626.651,

18         626.727, 626.730, 626.732, 626.733, 626.877,

19         F.S.; including customer representatives within

20         and deleting claims investigators from

21         application of certain provisions; excluding

22         solicitors; authorizing the department to

23         secure a credit and character report on certain

24         persons; providing limits; providing

25         requirements of the department; amending s.

26         626.451, F.S.; requiring law enforcement

27         agencies, the state attorney's office, and

28         court clerks to notify the department of agents

29         found guilty of felonies; amending s. 626.201,

30         F.S.; providing for interrogatories before

31         reinstatement; amending s. 626.321, F.S.;


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  1         authorizing certain entities that hold a

  2         limited license for credit life or disability

  3         insurance to sell credit property insurance;

  4         authorizing persons who hold a limited license

  5         for credit insurance to hold certain additional

  6         licenses; amending s. 626.331, F.S.; requiring

  7         licensure of certain agents for certain

  8         appointments; providing that an appointment fee

  9         is not refundable; amending s. 626.342, F.S.;

10         prohibiting furnishing supplies to certain

11         agents; amending s. 626.541, F.S.; specifying

12         names and addresses required of certain

13         personnel of corporations; amending s. 626.592,

14         F.S.; revising provisions relating to

15         designation of primary agents; amending s.

16         626.601, F.S.; authorizing the department to

17         initiate investigation of agents or other

18         licensees under certain conditions; amending s.

19         626.681, F.S.; providing for administrative

20         fines in addition to certain actions;

21         increasing such fines; amending s. 626.691,

22         F.S.; authorizing the department to place

23         certain persons on probation in addition to

24         suspending, revoking, or refusing to renew a

25         license or appointment; creating s. 626.692,

26         F.S.; providing for restitution under certain

27         circumstances; amending s. 626.7351, F.S.;

28         specifying additional qualifications for a

29         customer representative's license; amending s.

30         626.739, F.S.; specifying a temporary license

31         as general lines insurance agent; amending s.


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  1         626.741, F.S.; authorizing the department to

  2         issue a customer representative license to

  3         certain persons; providing a limitation;

  4         providing procedures for agent licensure of

  5         certain persons under certain circumstances;

  6         providing for cancellation of a nonresident

  7         agent's license; amending ss. 626.792, 626.835,

  8         F.S.; providing procedures for issuing a

  9         resident agent's license to certain persons;

10         amending s. 626.837, F.S.; clarifying

11         conditions of placing certain excess or

12         rejected risks; amending s. 626.8411, F.S.;

13         conforming a cross-reference; amending s.

14         626.8417, F.S.; revising the qualifications for

15         licensure as a title insurance agent; amending

16         s. 626.8418, F.S.; increasing the amount of the

17         deposit or bond of a title insurance agency;

18         specifying that the bond of a title insurance

19         agency must be posted with the department and

20         must inure to the benefit of damaged insurers

21         and insureds; amending ss. 626.8437, 626.844,

22         F.S.; clarifying application of grounds for

23         refusal, suspension, or revocation of license

24         or appointment; amending s. 626.8443, F.S.;

25         providing additional limitations on activities

26         during suspension or after revocation of a

27         license; amending s. 626.852, F.S.; providing

28         for applicability; amending s. 626.858, F.S.;

29         revising the definition of the term

30         "nonresident adjuster" to define "nonresident

31         company employee adjuster"; creating s.


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  1         626.8582, F.S.; defining the term "nonresident

  2         public adjuster"; creating s. 626.8884, F.S.;

  3         defining the term "nonresident independent

  4         adjuster"; amending s. 626.865, F.S.;

  5         increasing the bonding requirements for public

  6         adjusters; amending s. 626.873, F.S.; providing

  7         for licensure and qualifications for resident

  8         company employee adjusters; creating s.

  9         626.8732, F.S.; providing for licensure and

10         qualifications for nonresident public

11         adjusters; creating s. 626.8734, F.S.;

12         providing for licensure and qualifications for

13         nonresident independent adjusters; creating s.

14         626.8736, F.S.; providing for service of

15         process on nonresident independent adjusters

16         and on nonresident public adjusters; creating

17         s. 626.8737, F.S.; establishing a retaliatory

18         tax provision regarding certain fines, taxes,

19         penalties, license fees, monetary deposits,

20         securities, or other obligations, limitations,

21         or prohibitions imposed by another state upon

22         Florida resident insurance adjusters in

23         connection with the issuance of, or activities

24         under, a nonresident adjuster's license under

25         that state's laws; creating s. 626.8738, F.S.;

26         providing a criminal penalty for acting as a

27         resident or nonresident public adjuster without

28         the required license; amending s. 626.869,

29         F.S.; requiring certain continuing education

30         courses; clarifying requirements of such

31         courses; amending s. 626.8695, F.S.; providing


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  1         for notice to the department; requiring

  2         designation of primary adjuster on forms

  3         prescribed by the department; amending s.

  4         626.872, F.S.; prohibiting the department from

  5         issuing a temporary adjuster's license to

  6         certain persons; amending s. 626.873, F.S.;

  7         providing procedures for licensing certain

  8         persons as resident adjusters; providing for

  9         cancellation of nonresident adjuster's license;

10         amending s. 626.875, F.S; prescribing time for

11         keeping adjusters' records; amending s.

12         626.918, F.S.; allowing the department to

13         approve a surplus lines insurer's election of

14         alternative surplus requirements only if the

15         election was filed before a specified date;

16         amending s. 626.922, F.S.; requiring surplus

17         lines agents to perform certain duties relating

18         to evidence of insurance; amending s. 626.928,

19         F.S.; increasing bonds for surplus lines

20         agents; amending ss. 626.927, 626.9271,

21         626.929, 626.935, 626.944, F.S.; requiring

22         appointment in addition to licensure of certain

23         persons; amending s. 627.745, F.S.; clarifying

24         a provision related to final examination;

25         amending s. 634.420, F.S.; clarifying

26         application of accountability provisions;

27         amending s. 634.317, F.S.; providing for

28         responsibility and accountability of sales

29         representatives; amending s. 642.036, F.S.;

30         deleting requirement that the addresses of

31         certain agents be filed with the department;


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  1         repealing s. 626.112(6), F.S., relating to

  2         licensing of claims investigators; amending s.

  3         624.412, F.S.; deleting provisions relating to

  4         minimum trust deposits by alien insurers;

  5         amending s. 627.681, F.S.; prescribing terms

  6         for credit life insurance and credit disability

  7         insurance; repealing s. 626.532, F.S., relating

  8         to insurance vending machine licenses;

  9         repealing s. 626.857, F.S., relating to the

10         definition of "claims investigator"; creating

11         s. 624.4072, F.S.; exempting minority-owned

12         property and casualty insurers from prescribed

13         taxes and assessments for specified period;

14         specifying conditions; amending s. 440.49,

15         F.S., creating the Special Disability Trust

16         Fund Privatization Commission; providing

17         purpose; providing for members; providing

18         duties; providing for adoption of rules;

19         creating the Special Disability Trust Fund

20         Financing Corporation; providing purposes;

21         providing for a board of directors; providing

22         powers and duties of the corporation;

23         authorizing the Division of Workers'

24         Compensation to enter into service contracts

25         for certain purposes; authorizing the

26         corporation to issue evidences of indebtedness;

27         authorizing the corporation to validate bond

28         obligations; exempting the corporation from

29         certain taxes and assessments; providing

30         application; providing for reversion of the

31         assets to the State upon dissolution of the


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  1         corporation; providing for the State Board of

  2         Administration to be a trustee of the

  3         corporation's securities; authorizing the

  4         commission to issue a request for proposal for

  5         administration of the claims of the fund;

  6         authorizing the transfer and assumption of the

  7         liabilities of the Special Disability Trust

  8         Fund to a qualified entity if it is determined

  9         by the commission that such an arrangement

10         would be more cost effective than the current

11         administration by the division; authorizing the

12         Auditor General to examine and audit the

13         records of the corporation; providing an

14         appropriation; amending s. 215.555, F.S.;

15         revising the method of reimbursement to

16         insurers under the Florida Hurricane

17         Catastrophe Fund; amending s. 624.316, F.S.;

18         deleting certain rulemaking authority of the

19         Department of Insurance relating to insurer

20         compliance; amending s. 624.426, F.S.;

21         providing that certain transferred policies are

22         exempt from the resident agent and

23         countersignature law; amending s. 624.610,

24         F.S.; specifying purposes of regulation of

25         reinsurance; correcting cross references;

26         amending s. 627.7275, F.S.; modifying coverage

27         requirements and premiums relating to motor

28         vehicle property damage liability; amending s.

29         627.9126, F.S.; authorizing the Department of

30         Insurance to sample claims or actions for

31         damages; amending s. 627.913, F.S.; revising


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  1         requirements for annual reports by products

  2         liability insurers; repealing s. 624.22, F.S.,

  3         relating to purposes of regulation of

  4         reinsurance; providing for future repeal;

  5         creating s. 624.123, F.S.; providing

  6         definitions; authorizing licensed agents to

  7         sell international health insurance policies to

  8         residents of foreign countries at international

  9         airports; requiring a specified disclaimer;

10         providing exemptions from regulation under the

11         Insurance Code; specifying applicable

12         provisions; creating s. 627.192, F.S.;

13         providing purposes; providing definitions;

14         authorizing certain lessors to secure workers'

15         compensation insurance coverage on leased

16         employees under certain circumstances;

17         providing procedures; requiring such lessors to

18         provide certain information to insurers for

19         certain purposes; providing for cancellation or

20         nonrenewal of such insurance under certain

21         circumstances; providing for notice; providing

22         an exception; providing for assigning an

23         experience modification factor to lessees under

24         a terminated employee leasing arrangement;

25         requiring notice; providing application;

26         prohibiting lessees from entering into employee

27         leasing relationships or from being eligible

28         for certain workers' compensation coverage

29         under certain circumstances; requiring insurers

30         to conduct audits of employee leasing companies

31         for certain purposes; specifying procedures;


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  1         requiring the insured to pay additional

  2         premiums if the lessor or lessee fails to

  3         provide certain audit access; providing an

  4         exception; providing application; providing

  5         effective dates.

  6

  7  Be It Enacted by the Legislature of the State of Florida:

  8

  9         Section 1.  Section 624.425, Florida Statutes, is

10  amended to read:

11         624.425  Resident agent and countersignature required,

12  property, casualty, surety insurance.--

13         (1)  Except as stated in s. 624.426, no authorized

14  property, casualty, or surety insurer shall assume direct

15  liability as to a subject of insurance resident, located, or

16  to be performed in this state unless the policy or contract of

17  insurance is issued by or through, and is countersigned by, a

18  local producing agent who is a resident of this state,

19  regularly commissioned and licensed currently as an agent and

20  appointed as an agent for of the insurer under this code. If

21  two or more authorized insurers issue a single policy of

22  insurance against legal liability for loss or damage to person

23  or property caused by the nuclear energy hazard, or a single

24  policy insuring against loss or damage to property by

25  radioactive contamination, whether or not also insuring

26  against one or more other perils proper to insure against in

27  this state, such policy if otherwise lawful may be

28  countersigned on behalf of all of the insurers by a licensed

29  and appointed resident agent of any insurer appearing thereon.

30  Such agent shall receive on each policy or contract the full

31  and usual commission allowed and paid by the insurer to its


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  1  agents on business written or transacted by them for the

  2  insurer.

  3         (2)  If any subject of insurance referred to in

  4  subsection (1) is insured under a policy, or contract, or

  5  certificate of renewal or continuation thereof, issued in

  6  another state and covering also property and risks outside

  7  this state, a certificate evidencing such insurance as to

  8  subjects located, resident, or to be performed in this state,

  9  shall be issued by or through and shall be countersigned by

10  the insurer's commissioned and appointed licensed local

11  producing agent resident in this state in the same manner and

12  subject to the same conditions as is provided in subsection

13  (1) as to policies and contracts; except that the compensation

14  to be paid to the agent may relate only to the Florida portion

15  of the insurance risks represented by such policy or contract.

16         (3)  An agent shall not sign or countersign in blank

17  any policy to be issued outside her or his office, or

18  countersign in blank any countersignature endorsement

19  therefor, or certificate issued thereunder.  An agent may give

20  a written power of attorney to the issuing insurance company

21  to countersign such documents by imprinting his name, or the

22  name of the agency or other entity with which the agent may be

23  sharing commission pursuant to s. 626.753(1)(a) and (2),

24  thereon in lieu of manually countersigning such documents; but

25  an agent shall not give a power of attorney to any other

26  person to countersign any such document in her or his name

27  unless the person so authorized is directly employed by the

28  agent and by no other person, and is so employed in the office

29  of the agent.

30         (4)  This section shall not be deemed to prohibit

31  insurers from using salaried licensed and appointed agents for


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  1  the production and servicing of business in this state and the

  2  issuance and countersignature by such agents of insurance

  3  policies or contracts, when required under subsection (1), and

  4  without payment of commission therefor.

  5         (5)  This section shall not be deemed to prohibit an

  6  insurer from authorizing an agent who is not regularly

  7  commissioned and appointed licensed currently as an agent of

  8  the insurer from countersigning a policy or contract of

  9  insurance issued pursuant to the provisions of ss. 627.311 and

10  627.351.  This section does not apply to reissuance of

11  insurance policies or endorsements thereto which are part of a

12  mass reissuance of such policies or endorsements and do not

13  involve a change of premium or payment of agent's commissions.

14         Section 2.  Subsections (1) and (2) of section 624.428,

15  Florida Statutes, are amended to read:

16         624.428  Licensed agent law, life and health

17  insurances.--

18         (1)  No life insurer shall deliver or issue for

19  delivery in this state any policy of life insurance, master

20  group life insurance contract, master credit life policy or

21  agreement, annuity contract, or contract or policy of health

22  insurance, unless the application for such policy or contract

23  is taken by, and the delivery of such policy or contract is

24  made through, an insurance agent of the insurer duly licensed

25  and appointed under the law of this state, who shall receive

26  the usual commission due to an agent from such insurer.

27         (2)  Each such insurer shall maintain a licensed and

28  appointed agent at all times for the purpose of and through

29  whom policies or contracts issued or delivered in this state

30  shall be serviced.

31


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  1         Section 3.  Section 624.478, Florida Statutes, is

  2  amended to read:

  3         624.478  Use of agents.--A commercial self-insurance

  4  fund shall use an agent or agents licensed under parts I and

  5  II of chapter 626 to perform any of the activities described

  6  in s. 626.041(2).  A commercial self-insurance fund shall have

  7  the authority to appoint license agents in accordance with

  8  parts I and II of chapter 626, and the fund and its appointed

  9  licensed agents shall be subject to the requirements of such

10  provisions.

11         Section 4.  Subsections (16), (17), and (29) of section

12  624.501, Florida Statutes, are amended to read:

13         624.501  Filing, license, appointment, and

14  miscellaneous fees.--The department shall collect in advance,

15  and persons so served shall pay to it in advance, fees,

16  licenses, and miscellaneous charges as follows:

17         (16)  Issuance, reissuance, reinstatement, modification

18  resulting in a modified license being issued, or duplicate

19  copy of any insurance representative license, or an

20  appointment being reinstated.............................$5.00

21         (17)  Additional appointment license continuation fees

22  as prescribed in chapter 626.............................$5.00

23         (29)  Title insurance agents:

24         (a)  Agent's original appointment or biennial renewal

25  or continuation thereof, each insurer and agency's biennial

26  license fee:

27         Appointment fee..................................$42.00

28         State tax.........................................12.00

29         County tax.........................................6.00

30  Total...................................................$60.00

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  1         (b)  Agency original appointment license fee or

  2  biennial renewal or continuation thereof, each insurer:

  3         Appointment Licensing fee........................$42.00

  4         State tax.........................................12.00

  5         County tax.........................................6.00

  6  Total...................................................$60.00

  7         (c)  Filing for title insurance agent's license:

  8         Application for filing, each filing, filing

  9  fee.....................................................$10.00

10         (d)  Additional appointment continuation fee as

11  prescribed by s. 626.843.................................$5.00

12         (e)  Title insurer and title insurance agency

13  administrative surcharge:

14         1.  On or before January 30 of each calendar year, each

15  title insurer shall pay to the department for each licensed

16  title insurance agency appointed by the title insurer and for

17  each retail office of the insurer on January 1 of that

18  calendar year an administrative surcharge of $200.00.

19         2.  On or before January 30 of each calendar year, each

20  licensed title insurance agency shall remit to the department

21  an administrative surcharge of $200.00.

22

23  The administrative surcharge may be used solely to defray the

24  costs to the department in its examination or audit of title

25  insurance agencies agents and retail offices of title insurers

26  and to gather title insurance data for statistical purposes in

27  its regulation of title insurance.

28         Section 5.  Section 626.022, Florida Statutes, is

29  amended to read:

30         626.022  Scope of part.--

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  1         (1)  This part applies as to insurance agents,

  2  solicitors, service representatives, adjusters, and insurance

  3  agencies; as to any and all kinds of insurance; and as to

  4  stock insurers, mutual insurers, reciprocal insurers, and all

  5  other types of insurers, except that:

  6         (a)  It does not apply as to reinsurance, except that

  7  ss. 626.011-626.031, ss. 626.102-626.181, ss. 626.191-626.211,

  8  ss. 626.291-626.301, s. 626.331, ss. 626.342-626.521, ss.

  9  626.541-626.591, and ss. 626.601-626.711 shall apply as to

10  reinsurance intermediaries as defined in s. 626.7492.

11         (b)  The applicability of this chapter as to fraternal

12  benefit societies shall be as provided in chapter 632.

13         (c)  It does not apply to a bail bond agent, as defined

14  in s. 648.25, except as provided in chapter 648 or chapter

15  903.

16         (2)  For the purposes of this part, "insurance" also

17  includes annuity contracts.

18         Section 6.  Subsections (1) and (2) of section 626.051,

19  Florida Statutes, are amended to read:

20         626.051  "Life agent" defined.--

21         (1)(a)  For the purposes of this part, a "life agent"

22  is a person who represents one representing an insurer as to

23  life insurance and annuity contracts.  The term also includes

24  an agent appointed as such as to life insurance, fixed-dollar

25  annuity contracts, or variable contracts, and health insurance

26  contracts by the same insurer.

27         (b)  A person may not solicit or sell variable life

28  insurance, variable annuity contracts, or any other

29  indeterminate value or variable contract as defined in s.

30  627.8015, unless the person has successfully completed a

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  1  licensure examination relating to variable annuity contracts

  2  authorized and approved by the department.

  3         (2)  Except as provided in s. 626.112(6)(7), with

  4  respect to any such insurances or contracts, no person shall,

  5  unless licensed as an agent:

  6         (a)  Solicit insurance or annuities or procure

  7  applications; or

  8         (b)  In this state engage or hold himself or herself

  9  out as engaging in the business of analyzing or abstracting

10  insurance policies or of counseling or advising or giving

11  opinions to persons relative to insurance or insurance

12  contracts other than:

13         1.  As a consulting actuary advising an insurer; or

14         2.  As to the counseling and advising of labor unions,

15  associations, trustees, employers or other business entities,

16  the subsidiaries and affiliates of each, relative to their

17  interests and those of their members or employees under

18  insurance benefit plans.

19         Section 7.  Subsection (2) of section 626.062, Florida

20  Statutes, is amended to read:

21         626.062  "Health agent" defined.--

22         (2)  Except as provided in s. 626.112(6)(7), with

23  respect to such insurance, no person shall, unless licensed as

24  an agent:

25         (a)  Solicit insurance or procure applications; or

26         (b)  In this state engage or hold himself or herself

27  out as engaging in the business of analyzing or abstracting

28  insurance policies or of counseling or advising or giving

29  opinions to persons relative to insurance contracts other

30  than:

31         1.  As a consulting actuary advising insurers; or


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  1         2.  As to the counseling and advising of labor unions,

  2  associations, trustees, employers or other business entities,

  3  the subsidiaries and affiliates of each, relative to their

  4  interests and those of their members or employees under

  5  insurance benefit plans.

  6         Section 8.  Section 626.112, Florida Statutes, is

  7  amended to read:

  8         626.112  License and appointment required; agents,

  9  customer representatives, solicitors, adjusters, insurance

10  agencies, service representatives, managing general agents,

11  claims investigators.--

12         (1)  No person shall be, act as, or advertise or hold

13  himself or herself out to be an insurance agent, customer

14  representative, solicitor, or adjuster unless he or she is

15  currently licensed and appointed.

16         (2)  No agent, customer representative, or solicitor

17  shall solicit or otherwise transact as agent, customer

18  representative, or solicitor, or represent or hold himself or

19  herself out to be an agent, customer representative, or

20  solicitor as to, any kind or kinds of insurance as to which he

21  or she is not then licensed and appointed.

22         (3)  No person shall act as an adjuster as to any class

23  of business for which he or she is not then licensed and

24  appointed.

25         (4)  No person shall be, act as, or represent or hold

26  himself or herself out to be a service representative unless

27  he or she then holds a currently effective service

28  representative license and appointment. This subsection does

29  not apply as to similar representatives or employees of

30  casualty insurers whose duties are restricted to health

31  insurance.


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  1         (5)  No person shall be, act as, or represent or hold

  2  himself or herself out to be a managing general agent unless

  3  he or she then holds a currently effective managing general

  4  agent license and appointment.

  5         (6)  No person shall be, act as, or represent or hold

  6  himself or herself out to be a claims investigator, or perform

  7  any of the functions of a claims investigator, unless he or

  8  she then holds a currently effective claims investigator

  9  license and appointment.

10         (6)(7)  An individual employed by a life or health

11  insurer as an officer or other salaried representative may

12  solicit and effect contracts of life insurance or annuities or

13  of health insurance, without being licensed as an agent, when

14  and only when he or she is accompanied by and solicits for and

15  on the behalf of a licensed and appointed agent.

16         (7)(8)(a)  No individual, firm, partnership,

17  corporation, association, or any other entity shall act in its

18  own name or under a trade name, directly or indirectly, as an

19  insurance agency, when required to be licensed by this

20  subsection, unless it complies with s. 626.172 with respect to

21  possessing an insurance agency license for each place of

22  business at which it engages in any activity which may be

23  performed only by a licensed insurance agent or solicitor.

24         (b)  An insurance agency shall, as a condition

25  precedent to continuing business, obtain an insurance agency

26  license if the department finds that, with respect to any

27  majority owner, partner, manager, director, officer, or other

28  person who manages or controls the agency, any person has,

29  subsequent to the effective date of this act:

30         1.  Been found guilty of, or has pleaded guilty or nolo

31  contendere to, a felony in this state or any other state


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    CS for SB 1372                                 Third Engrossed



  1  relating to the business of insurance or to an insurance

  2  agency, without regard to whether a judgment of conviction has

  3  been entered by the court having jurisdiction of the cases.

  4         2.  Employed any individual in a managerial capacity or

  5  in a capacity dealing with the public who is under an order of

  6  revocation or suspension issued by the department.  An

  7  insurance agency may request, on forms prescribed by the

  8  department, verification of any person's license status. If a

  9  request is mailed within 5 working days after an employee is

10  hired, and the employee's license is currently suspended or

11  revoked, the agency shall not be required to obtain a license,

12  if the unlicensed person's employment is immediately

13  terminated.

14         3.  Operated the agency or permitted the agency to be

15  operated in violation of s. 626.747.

16         4.  With such frequency as to have made the operation

17  of the agency hazardous to the insurance-buying public or

18  other persons:

19         a.  Solicited or handled controlled business.  This

20  subparagraph shall not prohibit the licensing of any lending

21  or financing institution or creditor, with respect to

22  insurance only, under credit life or disability insurance

23  policies of borrowers from the institutions, which policies

24  are subject to part IX of chapter 627.

25         b.  Misappropriated, converted, or unlawfully withheld

26  moneys belonging to insurers, insureds, beneficiaries, or

27  others and received in the conduct of business under the

28  license.

29         c.  Unlawfully rebated, attempted to unlawfully rebate,

30  or unlawfully divided or offered to divide commissions with

31  another.


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    CS for SB 1372                                 Third Engrossed



  1         d.  Misrepresented any insurance policy or annuity

  2  contract, or used deception with regard to any policy or

  3  contract, done either in person or by any form of

  4  dissemination of information or advertising.

  5         e.  Violated any provision of this code or any other

  6  law applicable to the business of insurance in the course of

  7  dealing under the license.

  8         f.  Violated any lawful order or rule of the

  9  department.

10         g.  Failed or refused, upon demand, to pay over to any

11  insurer he or she represents or has represented any money

12  coming into his or her hands belonging to the insurer.

13         h.  Violated the provision against twisting as defined

14  in s. 626.9541(1)(l).

15         i.  In the conduct of business, engaged in unfair

16  methods of competition or in unfair or deceptive acts or

17  practices, as prohibited under part X of this chapter.

18         j.  Willfully overinsured any property insurance risk.

19         k.  Engaged in fraudulent or dishonest practices in the

20  conduct of business arising out of activities related to

21  insurance or the insurance agency.

22         l.  Demonstrated lack of fitness or trustworthiness to

23  engage in the business of insurance arising out of activities

24  related to insurance or the insurance agency.

25         m.  Authorized or knowingly allowed individuals to

26  transact insurance who were not then licensed as required by

27  this code.

28         5.  Knowingly employed any person who within the

29  preceding 3 years has had his or her relationship with an

30  agency terminated in accordance with paragraph (d).

31


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    CS for SB 1372                                 Third Engrossed



  1         6.  Willfully circumvented the requirements or

  2  prohibitions of this code.

  3         (c)  An agency required to be licensed in accordance

  4  with paragraph (b) shall remain so licensed for a period of 3

  5  years from the date of licensure unless the license is

  6  suspended or revoked in accordance with law.  The department

  7  may revoke or suspend the agency authority to do business for

  8  activities occurring during the time the agency is licensed,

  9  regardless of whether the licensing period has terminated.

10         (d)  Notwithstanding the provisions of this subsection,

11  no insurance agency shall be required to apply for an agency

12  license if such agency can prove to the department that:

13         1.  The agency is severing its relationship with each

14  majority owner, partner, manager, director, officer, or other

15  person who managed or controlled such agency and who violated

16  any of the provisions of paragraph (b).

17         2.  No such majority owner, partner, manager, director,

18  officer, or other person who managed such agency is to be

19  affiliated with such agency in any capacity for a period of 3

20  years from the date of such severance.

21         Section 9.  Section 626.141, Florida Statutes, is

22  amended to read:

23         626.141  Violation not to affect validity of

24  insurance.--An insurance contract which is otherwise valid and

25  binding as between the parties thereto shall not be rendered

26  invalid by reason of having been solicited, handled, or

27  procured by or through an unlicensed agent, customer

28  representative, or solicitor or an agent, customer

29  representative, or solicitor who has not been appointed.

30         Section 10.  Subsections (1) and (6) of section

31  626.171, Florida Statutes, are amended to read:


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    CS for SB 1372                                 Third Engrossed



  1         626.171  Application for license.--

  2         (1)  The department shall not issue a license as agent,

  3  customer representative, solicitor, adjuster, insurance

  4  agency, service representative, managing general agent, or

  5  reinsurance intermediary, or claims investigator, to any

  6  person except upon written application therefor filed with it,

  7  qualification therefor, and payment in advance of all

  8  applicable fees.  Any such application shall be made under the

  9  oath of the applicant and be signed by the applicant.

10         (6)  The application for license filing fee prescribed

11  in s. 624.501 is shall not be subject to refund.

12         Section 11.  Section 626.181, Florida Statutes, is

13  amended to read:

14         626.181  Number of applications for licensure

15  required.--After a license as agent, customer representative,

16  solicitor, or adjuster has been issued to an individual, the

17  same individual shall not be required to take another

18  examination for a similar license, regardless, in the case of

19  an agent, of the number of insurers to be represented by him

20  or her as agent, unless:

21         (1)  Specifically ordered by the department to complete

22  a new application for license; or

23         (2)  During any period of 24 months since the filing of

24  the original license application, such individual was not

25  appointed as an agent, customer representative, solicitor, or

26  adjuster, unless the failure to be so appointed was due to

27  military service, in which event the period within which a new

28  application is not required may, in the discretion of the

29  department, be extended to 12 months following the date of

30  discharge from military service if the military service does

31  not exceed 3 years, but in no event to extend under this


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    CS for SB 1372                                 Third Engrossed



  1  clause for a period of more than 4 years from the date of

  2  filing of the original application for license.

  3         Section 12.  Section 626.201, Florida Statutes, is

  4  amended to read:

  5         626.201  Investigation.--The department may propound

  6  any reasonable interrogatories in addition to those contained

  7  in the application, to any applicant for license or

  8  appointment, or on any renewal, reinstatement, or continuation

  9  thereof, relating to his or her qualifications, residence,

10  prospective place of business, and any other matter which, in

11  the opinion of the department, is deemed necessary or

12  advisable for the protection of the public and to ascertain

13  the applicant's qualifications.  The department may, upon

14  completion of the application, make such further investigation

15  as it may deem advisable of the applicant's character,

16  experience, background, and fitness for the license or

17  appointment.  Such an inquiry or investigation shall be in

18  addition to any examination required to be taken by the

19  applicant as hereinafter in this chapter provided.

20         Section 13.  Subsection (2) of section 626.211, Florida

21  Statutes, is amended to read:

22         626.211  Approval, disapproval of application.--

23         (2)  Upon approval of an applicant for license as

24  agent, customer representative, solicitor, or adjuster who is

25  subject to written examination, the department shall notify

26  the applicant when and where he or she may take the required

27  examination.

28         Section 14.  Paragraphs (c) and (d) of subsection (2)

29  and subsection (3) of section 626.221, Florida Statutes, are

30  amended to read:

31         626.221  Examination requirement; exemptions.--


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    CS for SB 1372                                 Third Engrossed



  1         (2)  However, no such examination shall be necessary in

  2  any of the following cases:

  3         (c)  In the discretion of the department, an applicant

  4  for reinstatement of license or appointment as an agent,

  5  customer representative, or adjuster whose license has been

  6  suspended within 2 years prior to the date of application or

  7  written request for reinstatement.

  8         (d)  An applicant who, within 2 years prior to

  9  application for license and appointment as an agent, customer

10  representative, or adjuster, was a full-time salaried employee

11  of the department and had continuously been such an employee

12  with responsible insurance duties for not less than 2 years

13  and who had been a licensee within 2 years prior to employment

14  by the department with the same class of license as that being

15  applied for.

16         (3)  An individual who is already licensed as a

17  solicitor or customer representative shall not be licensed as

18  a general lines agent without application and examination for

19  such license.

20         Section 15.  Section 626.266, Florida Statutes, is

21  amended to read:

22         626.266  Printing of examinations or related materials

23  to preserve examination security.--A contract let for the

24  development, administration, or grading of examinations or

25  related materials by the Department of Insurance pursuant to

26  the various agent, customer representative, solicitor, or

27  adjuster licensing and examination provisions of this code may

28  include the printing or furnishing of these examinations or

29  related materials in order to preserve security.  Any such

30  contract shall be let as a contract for a contractual service

31  pursuant to s. 287.057.


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    CS for SB 1372                                 Third Engrossed



  1         Section 16.  Subsection (2) of section 626.281, Florida

  2  Statutes, is amended to read:

  3         626.281  Reexamination.--

  4         (2)  The department may require any individual whose

  5  license as an agent, customer representative, or adjuster has

  6  expired or has been suspended to pass an examination prior to

  7  reinstating or relicensing the individual as to any class of

  8  license.  The examination fee shall be paid as to each

  9  examination.

10         Section 17.  Subsection (1) of section 626.311, Florida

11  Statutes, is amended to read:

12         626.311  Scope of license.--

13         (1)  Except as to limited licenses, the applicant for

14  license as a general lines agent or customer representative

15  solicitor shall qualify for all property, marine, casualty,

16  and surety lines except bail bonds which require a separate

17  license under chapter 648.  The license of a general lines

18  agent may also cover health insurance if health insurance is

19  included in the agent's appointment by an insurer as to which

20  the licensee is also appointed as agent for property or

21  casualty or surety insurance.  The license of a customer

22  representative solicitor shall provide, in substance, that it

23  covers all of such classes of insurance that his or her

24  appointing general lines agent or agency is currently so

25  authorized to transact under the general lines agent's license

26  and appointments.  No such license shall be issued limited to

27  particular classes of insurance except for bail bonds which

28  require a separate license under chapter 648.

29         Section 18.  Subsection (1) of section 626.321, Florida

30  Statutes, is amended to read:

31         626.321  Limited licenses.--


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    CS for SB 1372                                 Third Engrossed



  1         (1)  The department shall issue to a qualified

  2  individual, or a qualified individual or entity under

  3  paragraphs (c), (d), and (e), a license as agent authorized to

  4  transact a limited class of business in any of the following

  5  categories:

  6         (a)  Motor vehicle physical damage and mechanical

  7  breakdown insurance.--License covering insurance against only

  8  the loss of or damage to any motor vehicle which is designed

  9  for use upon a highway, including trailers and semitrailers

10  designed for use with such vehicles. Such license also covers

11  insurance against the failure of an original or replacement

12  part to perform any function for which it was designed.  The

13  applicant for such a license shall pass a written examination

14  covering motor vehicle physical damage insurance and

15  mechanical breakdown insurance.  No individual while so

16  licensed shall hold a license as an agent or solicitor as to

17  any other or additional kind or class of insurance coverage

18  except as to a limited license for credit life and disability

19  insurances as provided in paragraph (e).

20         (b)  Industrial fire insurance or burglary

21  insurance.--License covering only industrial fire insurance or

22  burglary insurance.  The applicant for such a license shall

23  pass a written examination covering such insurance.  No

24  individual while so licensed shall hold a license as an agent

25  or solicitor as to any other or additional kind or class of

26  insurance coverage except as to life and health insurances.

27         (c)  Personal accident insurance.--License covering

28  only policies of personal accident insurance covering the

29  risks of travel, except as provided in subparagraph 2.  The

30  license may be issued only:

31


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    CS for SB 1372                                 Third Engrossed



  1         1.  To a full-time salaried employee of a common

  2  carrier or a full-time salaried employee or owner of a

  3  transportation ticket agency and may authorize the sale of

  4  such ticket policies only in connection with the sale of

  5  transportation tickets, or to the full-time salaried employee

  6  of such an agent.  No such policy shall be for a duration of

  7  more than 48 hours or for the duration of a specified one-way

  8  trip or round trip.

  9         2.  To a full-time salaried employee of a business

10  which offers motor vehicles for rent or lease, or to a

11  business office of a business which offers motor vehicles for

12  rent or lease if insurance sales activities authorized by the

13  license are limited to full-time salaried employees.  A

14  business office licensed or a person licensed pursuant to this

15  subparagraph may, as an agent of an insurer, transact

16  insurance that provides coverage for accidental personal

17  injury or death of the lessee and any passenger who is riding

18  or driving with the covered lessee in the rental motor vehicle

19  if the lease or rental agreement is for not more than 30 days,

20  or if the lessee is not provided coverage for more than 30

21  consecutive days per lease period; however, if the lease is

22  extended beyond 30 days, the coverage may be extended one time

23  only for a period not to exceed an additional 30 days.

24         (d)  Baggage and motor vehicle excess liability

25  insurance.--

26         1.  License covering only insurance of personal effects

27  except as provided in subparagraph 2.  The license may be

28  issued only:

29         a.  To a full-time salaried employee of a common

30  carrier or a full-time salaried employee or owner of a

31  transportation ticket agency, which person is engaged in the


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    CS for SB 1372                                 Third Engrossed



  1  sale or handling of transportation of baggage and personal

  2  effects of travelers, and may authorize the sale of such

  3  insurance only in connection with such transportation; or

  4         b.  To the full-time salaried employee of a licensed

  5  general lines agent, a full-time salaried employee of a

  6  business which offers motor vehicles for rent or lease, or to

  7  a business office of a business which offers motor vehicles

  8  for rent or lease if insurance sales activities authorized by

  9  the license are limited to full-time salaried employees.

10

11  The purchaser of baggage insurance shall be provided written

12  information disclosing that the insured's homeowner's policy

13  may provide coverage for loss of personal effects and that the

14  purchase of such insurance is not required in connection with

15  the purchase of tickets or in connection with the lease or

16  rental of a motor vehicle.

17         2.  A business office licensed pursuant to subparagraph

18  1., or a person licensed pursuant to subparagraph 1. who is a

19  full-time salaried employee of a business which offers motor

20  vehicles for rent or lease, may include lessees under a master

21  contract providing coverage to the lessor or may transact

22  excess motor vehicle liability insurance providing coverage in

23  excess of the standard liability limits provided by the lessor

24  in its lease to a person renting or leasing a motor vehicle

25  from the licensee's employer for liability arising in

26  connection with the negligent operation of the leased or

27  rented motor vehicle, provided that the lease or rental

28  agreement is for not more than 30 days; that the lessee is not

29  provided coverage for more than 30 consecutive days per lease

30  period, and, if the lease is extended beyond 30 days, the

31  coverage may be extended one time only for a period not to


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    CS for SB 1372                                 Third Engrossed



  1  exceed an additional 30 days; that the lessee is given written

  2  notice that his or her personal insurance policy providing

  3  coverage on an owned motor vehicle may provide additional

  4  excess coverage; and that the purchase of the insurance is not

  5  required in connection with the lease or rental of a motor

  6  vehicle.  The excess liability insurance may be provided to

  7  the lessee as an additional insured on a policy issued to the

  8  licensee's employer.

  9         3.  A business office licensed pursuant to subparagraph

10  1., or a person licensed pursuant to subparagraph 1. who is a

11  full-time salaried employee of a business which offers motor

12  vehicles for rent or lease, may, as an agent of an insurer,

13  transact insurance that provides coverage for the liability of

14  the lessee to the lessor for damage to the leased or rented

15  motor vehicle if:

16         a.  The lease or rental agreement is for not more than

17  30 days; or the lessee is not provided coverage for more than

18  30 consecutive days per lease period, but, if the lease is

19  extended beyond 30 days, the coverage may be extended one time

20  only for a period not to exceed an additional 30 days;

21         b.  The lessee is given written notice that his

22  personal insurance policy that provides coverage on an owned

23  motor vehicle may provide such coverage with or without a

24  deductible; and

25         c.  The purchase of the insurance is not required in

26  connection with the lease or rental of a motor vehicle.

27         (e)  Credit life or disability insurance.--License

28  covering only credit life or disability insurance.  The

29  license may be issued only to an individual employed by a life

30  or health insurer as an officer or other salaried or

31  commissioned representative, or to an individual employed by


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    CS for SB 1372                                 Third Engrossed



  1  or associated with a lending or financing institution or

  2  creditor, and may authorize the sale of such insurance only

  3  with respect to borrowers or debtors of such lending or

  4  financing institution or creditor.  However, only the

  5  individual or entity whose tax identification number is used

  6  in receiving or is credited with receiving the commission from

  7  the sale of such insurance shall be the licensed agent of the

  8  insurer.  No individual while so licensed shall hold a license

  9  as an agent or solicitor as to any other or additional kind or

10  class of life or health insurance coverage. An entity other

11  than a lending or financial institution defined in s. 626.988

12  holding a limited license under this paragraph shall also be

13  authorized to sell credit property insurance.

14         (f)  Credit insurance.--License covering only credit

15  insurance, as such insurance is defined in s. 624.605(1)(i),

16  and no individual so licensed shall, during the same period,

17  hold a license as an agent or solicitor as to any other or

18  additional kind of life or health insurance with the exception

19  of credit life or disability insurance as defined in paragraph

20  (e).

21         Section 19.  Subsections (3) and (4) of section

22  626.331, Florida Statutes, are amended to read:

23         626.331  Number of appointments permitted or

24  required.--

25         (3)  The department may issue a single appointment

26  covering both life and health insurances to an individual

27  licensed qualified as to both such kinds of insurance and

28  appointed as agent as to both such kinds by the same insurer.

29         (4)  If requested in writing by the applicant or payor

30  entitled thereto within 60 days after the denial or

31  disapproval of an appointment, the department shall refund to


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    CS for SB 1372                                 Third Engrossed



  1  the applicant or payor entitled thereto any state and county

  2  taxes received by it in connection with the application for

  3  the appointment.  The appointment fee is not subject to

  4  refund. No refund shall be made under any circumstances after

  5  issuance of an appointment.  No refund shall be made if the

  6  applicable appointment year has commenced before receipt by

  7  the department of the request for cancellation of the

  8  appointment and refund.

  9         Section 20.  Section 626.342, Florida Statutes, is

10  amended to read:

11         626.342  Furnishing supplies to unlicensed life,

12  health, or general lines agent prohibited; civil liability and

13  penalty.--

14         (1)  An No insurer, a managing general agent, or an

15  agent, directly or through any representative, may not shall

16  furnish to any agent any blank forms, applications,

17  stationery, or other supplies to be used in soliciting,

18  negotiating, or effecting contracts of insurance on its behalf

19  unless such blank forms, applications, stationery, or other

20  supplies relate to a class of business with respect to which

21  the agent is licensed and appointed, whether for that insurer

22  or another insurer.

23         (2)  Any insurer, general agent, or agent who furnishes

24  any of the supplies specified in subsection (1) to any agent

25  or prospective agent not appointed to represent the insurer

26  and who accepts from or writes any insurance business for such

27  agent or agency is shall be subject to civil liability to any

28  insured of such insurer to the same extent and in the same

29  manner as if such agent or prospective agent had been

30  appointed or authorized by the insurer or such agent to act in

31  its or his or her behalf.  The provisions of this subsection


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    CS for SB 1372                                 Third Engrossed



  1  do not apply to insurance risk apportionment plans under s.

  2  627.351.

  3         (3)  This section does not apply to the placing of

  4  surplus lines business under the provisions of ss.

  5  626.913-626.937.

  6         Section 21.  Subsections (5) and (6) are added to

  7  section 626.451, Florida Statutes, to read:

  8         626.451  Appointment of agent or other

  9  representative.--

10         (5)  Any law enforcement agency or state attorney's

11  office that is aware that an agent, adjuster, service

12  representative, solicitor, customer representative, or

13  managing general agent has pleaded guilty or nolo contendere

14  to or has been found guilty of a felony shall notify the

15  department of such fact.

16         (6)  Upon the filing of an information or indictment

17  against an agent, adjuster, service representative, solicitor,

18  customer representative, or managing general agent, the state

19  attorney shall immediately furnish the department a certified

20  copy of the information or indictment.

21         Section 22.  Subsection (1) of section 626.511, Florida

22  Statutes, 1996 Supplement, is amended to read:

23         626.511  Reasons for termination; confidential

24  information.--

25         (1)  Any insurer terminating the appointment of an

26  agent; any general lines agent terminating the appointment of

27  a solicitor, customer representative, or a crop hail or

28  multiple-peril crop insurance agent; and any employer

29  terminating the appointment of an adjuster, service

30  representative, or managing general agent, or claims

31  investigator, whether such termination is by direct action of


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    CS for SB 1372                                 Third Engrossed



  1  the appointing insurer, agent, or employer or by failure to

  2  renew or continue the appointment as provided, shall file with

  3  the department a statement of the reasons, if any, for and the

  4  facts relative to such termination.  In the case of

  5  termination of the appointment of an agent, such information

  6  may be filed by the insurer or by the general agent of the

  7  insurer.

  8         (2)  In the case of terminations by failure to renew or

  9  continue the appointment, the information required under

10  subsection (1) shall be filed with the department as soon as

11  possible, and at all events within 30 days, after the date

12  notice of intention not to so renew or continue was filed with

13  the department as required in this chapter.  In all other

14  cases, the information required under subsection (1) shall be

15  filed with the department at the time, or at all events within

16  10 days after, notice of the termination was filed with the

17  department.

18         (3)  Any information, document, record, or statement

19  furnished to the department under subsection (1) is

20  confidential and exempt from the provisions of s. 119.07(1).

21         Section 23.  Subsections (1) and (3) of section

22  626.521, Florida Statutes, are amended to read:

23         626.521  Character, credit reports.--

24         (1)  As to each applicant who for the first time in

25  this state is applying and qualifying for a license as agent,

26  solicitor, adjuster, service representative, customer

27  representative, or managing general agent, or claims

28  investigator, the appointing insurer or its manager or general

29  agent in this state, in the case of agents, or the appointing

30  general lines agent, in the case of solicitors or customer

31  representatives, or the employer, in the case of service


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    CS for SB 1372                                 Third Engrossed



  1  representatives and claims investigators and of adjusters who

  2  are not to be self-employed, shall coincidentally with such

  3  appointment or employment secure and thereafter keep on file a

  4  full detailed credit and character report made by an

  5  established and reputable independent reporting service,

  6  relative to the individual so appointed or employed.

  7         (3)  As to an applicant for an adjuster's or

  8  reinsurance intermediary's license who is to be self-employed,

  9  the department may secure, at the cost of the applicant, a

10  full detailed credit and character report made by an

11  established and reputable independent reporting service

12  relative to the applicant.

13         Section 24.  Subsections (1) and (2) of section

14  626.541, Florida Statutes, are amended to read:

15         626.541  Firm, corporate, and business names; officers;

16  associates; notice of changes.--

17         (1)  Any licensed agent or adjuster doing business

18  under a firm or corporate name or under any business name

19  other than his or her own individual name shall annually on or

20  before January 1 file with the department, on forms furnished

21  by it, a written statement of the firm, corporate, or business

22  name being so used, the address of any office or offices or

23  places of business making use of such name, and the name and

24  social security number of each officer and director and the

25  president of the corporation and of each individual associated

26  in such firm or corporation as to the insurance transactions

27  thereof or in the use of such business name.

28         (2)  In the event of any change of such name, or of any

29  of the officers and such directors or president, or of any of

30  such addresses, or in the personnel so associated, written

31  notice of such change shall be filed with the department


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  1  within 60 days by or on behalf of those licensees terminating

  2  any such firm, corporate, or business name or continuing to

  3  operate thereunder.

  4         Section 25.  Subsections (1) and (3) of section

  5  626.561, Florida Statutes, are amended to read:

  6         626.561  Reporting and accounting for funds.--

  7         (1)  All premiums, return premiums, or other funds

  8  belonging to insurers or others received by an agent, customer

  9  representative, solicitor, or adjuster in transactions under

10  his or her license are shall be trust funds so received by the

11  licensee in a fiduciary capacity. An agent shall keep the

12  funds belonging to each insurer for which he or she is not

13  appointed, other than a surplus lines insurer, in a separate

14  account so as to allow the department to properly audit such

15  funds. The licensee in the applicable regular course of

16  business shall account for and pay the same to the insurer,

17  insured, or other person entitled thereto.

18         (3)  Any agent, customer representative, solicitor, or

19  adjuster who, not being lawfully entitled thereto, either

20  temporarily or permanently diverts or misappropriates

21  appropriates such funds or any portion thereof to his or her

22  own use or deprives the other person of a benefit therefrom

23  commits the offense specified below:

24         (a)  If the funds diverted or misappropriated

25  appropriated to his or her own use are $300 or less, a

26  misdemeanor of the first degree, punishable as provided in s.

27  775.082 or s. 775.083.

28         (b)  If the funds diverted or misappropriated

29  appropriated to his or her own use are more than $300, but

30  less than $20,000, a felony of the third degree, punishable as

31  provided in s. 775.082, s. 775.083, or s. 775.084.


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  1         (c)  If the funds diverted or misappropriated

  2  appropriated to his or her own use are $20,000 or more, but

  3  less than $100,000, a felony of the second degree, punishable

  4  as provided in s. 775.082, s. 775.083, or s. 775.084.

  5         (d)  If the funds diverted or misappropriated

  6  appropriated to his or her own use are $100,000 or more, a

  7  felony of the first degree, punishable as provided in s.

  8  775.082, s. 775.083, or s. 775.084.

  9         Section 26.  Subsections (1), (2), (4), and (7) of

10  section 626.592, Florida Statutes, are amended to read:

11         626.592  Primary agents.--

12         (1)  On or before January 1, 1990, and annually

13  thereafter, Each person operating an insurance agency and each

14  location of a multiple location agency shall designate a

15  primary agent for each insurance agency location and shall

16  file the name of the person so designated, and the address of

17  the insurance agency location where he or she is primary

18  agent, with the Department of Insurance, on a form approved by

19  the department.  The designation of the primary agent may be

20  changed at the option of the agency and any change shall be

21  effective upon notification to the department. Notice of

22  change must be sent to the department within 30 days after

23  such change.

24         (2)  For the purpose of this section, a "primary agent"

25  is the licensed agent who is responsible for the hiring and

26  supervision of all individuals within an insurance agency

27  location whether such individuals who deal with the public in

28  the solicitation or negotiation of insurance contracts or in

29  the collection or accounting of moneys from the general

30  public. An agent may be designated as primary agent for only

31  one insurance agency location.


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  1         (4)  The department may suspend or revoke the license

  2  of the primary agent if the an insurance agency employs any

  3  person who has had a license denied or any person whose

  4  license is currently suspended or revoked.  However, when a

  5  person has been denied a license for failure to pass a

  6  required examination, he or she may be employed to perform

  7  clerical or administrative functions for which licensure is

  8  not required.

  9         (7)  An No insurance agency location may not shall

10  conduct the business of insurance unless a primary agent is

11  designated at all times. Failure to designate a primary agent,

12  on a form prescribed by the department, within 30 days after

13  agency inception or change of primary agent designation,

14  constitutes as required under this section shall constitute

15  grounds for requiring that the agency obtain a license in

16  accordance with ss. 626.112 and 626.172.

17         Section 27.  Subsection (1) of section 626.601, Florida

18  Statutes, is amended to read:

19         626.601  Improper conduct; inquiry; fingerprinting.--

20         (1)  The department may, upon its own motion or, and

21  shall, upon a written complaint signed by any interested

22  person and filed with the department, inquire into any alleged

23  improper conduct of any licensed agent, solicitor, adjuster,

24  service representative, managing general agent, customer

25  representative, title insurance agent, or title insurance

26  agency or claims investigator under this code. The department

27  may thereafter initiate an investigation of any such licensee

28  if it has reasonable cause to believe that the licensee has

29  violated any provision of the insurance code. During the

30  course of its investigation, the department shall contact the

31  licensee being investigated unless it determines that


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  1  contacting such person could jeopardize the successful

  2  completion of the investigation or cause injury to the public.

  3         Section 28.  Section 626.611, Florida Statutes, is

  4  amended to read:

  5         626.611  Grounds for compulsory refusal, suspension, or

  6  revocation of agent's, title agency's, solicitor's,

  7  adjuster's, customer representative's, service

  8  representative's, or managing general agent's, or claims

  9  investigator's license or appointment.--The department shall

10  deny an application for, suspend, revoke, or refuse to renew

11  or continue the license or appointment of any applicant,

12  agent, title agency, solicitor, adjuster, customer

13  representative, service representative, or managing general

14  agent, or claims investigator, and it shall suspend or revoke

15  the eligibility to hold a license or appointment of any such

16  person, if it finds that as to the applicant, licensee, or

17  appointee any one or more of the following applicable grounds

18  exist:

19         (1)  Lack of one or more of the qualifications for the

20  license or appointment as specified in this code.

21         (2)  Material misstatement, misrepresentation, or fraud

22  in obtaining the license or appointment or in attempting to

23  obtain the license or appointment.

24         (3)  Failure to pass to the satisfaction of the

25  department any examination required under this code.

26         (4)  If the license or appointment is willfully used,

27  or to be used, to circumvent any of the requirements or

28  prohibitions of this code.

29         (5)  Willful misrepresentation of any insurance policy

30  or annuity contract or willful deception with regard to any

31


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  1  such policy or contract, done either in person or by any form

  2  of dissemination of information or advertising.

  3         (6)  If, as an adjuster, claims investigator, or agent

  4  licensed and appointed to adjust claims under this code, he or

  5  she has materially misrepresented to an insured or other

  6  interested party the terms and coverage of an insurance

  7  contract with intent and for the purpose of effecting

  8  settlement of claim for loss or damage or benefit under such

  9  contract on less favorable terms than those provided in and

10  contemplated by the contract.

11         (7)  Demonstrated lack of fitness or trustworthiness to

12  engage in the business of insurance.

13         (8)  Demonstrated lack of reasonably adequate knowledge

14  and technical competence to engage in the transactions

15  authorized by the license or appointment.

16         (9)  Fraudulent or dishonest practices in the conduct

17  of business under the license or appointment.

18         (10)  Misappropriation, conversion, or unlawful

19  withholding of moneys belonging to insurers or insureds or

20  beneficiaries or to others and received in conduct of business

21  under the license or appointment.

22         (11)  Unlawfully rebating, attempting to unlawfully

23  rebate, or unlawfully dividing or offering to divide his or

24  her commission with another.

25         (12)  Having obtained or attempted to obtain, or having

26  used or using, a license or appointment as agent, customer

27  representative, or solicitor for the purpose of soliciting or

28  handling "controlled business" as defined in s. 626.730 with

29  respect to general lines agents, s. 626.784 with respect to

30  life agents, and s. 626.830 with respect to health agents.

31


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  1         (13)  Willful failure to comply with, or willful

  2  violation of, any proper order or rule of the department or

  3  willful violation of any provision of this code.

  4         (14)  Having been found guilty of or having pleaded

  5  guilty or nolo contendere to a felony or a crime punishable by

  6  imprisonment of 1 year or more under the law of the United

  7  States of America or of any state thereof or under the law of

  8  any other country which involves moral turpitude, without

  9  regard to whether a judgment of conviction has been entered by

10  the court having jurisdiction of such cases.

11         (15)  Fraudulent or dishonest practice in submitting or

12  aiding or abetting any person in the submission of an

13  application for workers' compensation coverage under chapter

14  440 containing false or misleading information as to employee

15  payroll or classification for the purpose of avoiding or

16  reducing the amount of premium due for such coverage.

17         Section 29.  Section 626.621, Florida Statutes, is

18  amended to read:

19         626.621  Grounds for discretionary refusal, suspension,

20  or revocation of agent's, solicitor's, adjuster's, customer

21  representative's, service representative's, or managing

22  general agent's, or claims investigator's license or

23  appointment.--The department may, in its discretion, deny an

24  application for, suspend, revoke, or refuse to renew or

25  continue the license or appointment of any applicant, agent,

26  solicitor, adjuster, customer representative, service

27  representative, or managing general agent, or claims

28  investigator, and it may suspend or revoke the eligibility to

29  hold a license or appointment of any such person, if it finds

30  that as to the applicant, licensee, or appointee any one or

31  more of the following applicable grounds exist under


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  1  circumstances for which such denial, suspension, revocation,

  2  or refusal is not mandatory under s. 626.611:

  3         (1)  Any cause for which issuance of the license or

  4  appointment could have been refused had it then existed and

  5  been known to the department.

  6         (2)  Violation of any provision of this code or of any

  7  other law applicable to the business of insurance in the

  8  course of dealing under the license or appointment.

  9         (3)  Violation of any lawful order or rule of the

10  department.

11         (4)  Failure or refusal, upon demand, to pay over to

12  any insurer he or she represents or has represented any money

13  coming into his or her hands belonging to the insurer.

14         (5)  Violation of the provision against twisting, as

15  defined in s. 626.9541(1)(l).

16         (6)  In the conduct of business under the license or

17  appointment, engaging in unfair methods of competition or in

18  unfair or deceptive acts or practices, as prohibited under

19  part X of this chapter, or having otherwise shown himself or

20  herself to be a source of injury or loss to the public or

21  detrimental to the public interest.

22         (7)  Willful overinsurance of any property or health

23  insurance risk.

24         (8)  Having been found guilty of or having pleaded

25  guilty or nolo contendere to a felony or a crime punishable by

26  imprisonment of 1 year or more under the law of the United

27  States of America or of any state thereof or under the law of

28  any other country, without regard to whether a judgment of

29  conviction has been entered by the court having jurisdiction

30  of such cases.

31         (9)  If a life agent, violation of the code of ethics.


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  1         (10)  Cheating on an examination required for licensure

  2  or violating test center or examination procedures published

  3  orally, in writing, or electronically at the test site by

  4  authorized representatives of the examination program

  5  administrator.  Communication of test center and examination

  6  procedures must be clearly established and documented.

  7         (11)  Failure to inform the department in writing

  8  within 30 days after pleading guilty or nolo contendere to, or

  9  being convicted or found guilty of, any felony or a crime

10  punishable by imprisonment of 1 year or more under the law of

11  the United States or of any state thereof, or under the law of

12  any other country without regard to whether a judgment of

13  conviction has been entered by the court having jurisdiction

14  of the case.

15         (12)  Knowingly aiding, assisting, procuring, advising,

16  or abetting any person in the violation of or to violate a

17  provision of the insurance code or any order or rule of the

18  department.

19         Section 30.  Subsections (2), (3), and (4) of section

20  626.641, Florida Statutes, are amended to read:

21         626.641  Duration of suspension or revocation.--

22         (2)  No person or appointee under any license or

23  appointment revoked by the department, nor any person whose

24  eligibility to hold same has been revoked by the department,

25  shall have the right to apply for another license or

26  appointment under this code within 2 years from the effective

27  date of such revocation or, if judicial review of such

28  revocation is sought, within 2 years from the date of final

29  court order or decree affirming the revocation.  The

30  department shall not, however, grant a new license or

31  appointment or reinstate eligibility to hold such license or


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    CS for SB 1372                                 Third Engrossed



  1  appointment if it finds that the circumstance or circumstances

  2  for which the eligibility was revoked or for which the

  3  previous license or appointment was revoked still exist or are

  4  likely to recur; if an individual's license as agent, customer

  5  representative, or solicitor or eligibility to hold same has

  6  been revoked upon the ground specified in s. 626.611(12), the

  7  department shall refuse to grant or issue any new license or

  8  appointment so applied for.

  9         (3)  If licenses as agent, customer representative, or

10  solicitor, or the eligibility to hold same, as to the same

11  individual have been revoked at two separate times, the

12  department shall not thereafter grant or issue any license

13  under this code as to such individual.

14         (4)  During the period of suspension or revocation of

15  the license or appointment, the former licensee or appointee

16  shall not engage in or attempt or profess to engage in any

17  transaction or business for which a license or appointment is

18  required under this code or directly or indirectly own,

19  control, or be employed in any manner by any insurance agent

20  or agency or adjuster or adjusting firm.

21         Section 31.  Section 626.651, Florida Statutes, is

22  amended to read:

23         626.651  Effect of suspension, revocation upon

24  associated licenses and appointments and licensees and

25  appointees.--

26         (1)  Upon suspension, revocation, or refusal to renew

27  or continue any one license of an agent, customer

28  representative, or solicitor, or upon suspension or revocation

29  of eligibility to hold a license or appointment, the

30  department shall at the same time likewise suspend or revoke

31


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    CS for SB 1372                                 Third Engrossed



  1  all other licenses, appointments, or status of eligibility

  2  held by the licensee or appointee under this code.

  3         (2)  In case of the suspension or revocation of license

  4  and appointments of any general lines agent, or in case of

  5  suspension or revocation of eligibility, the license and

  6  appointments of any and all other agents who are members of

  7  such agency, whether incorporated or unincorporated, and any

  8  and all solicitors or customer representatives employed by

  9  such agency, who knowingly are parties to the act which formed

10  the ground for the suspension or revocation may likewise be

11  suspended or revoked.

12         Section 32.  Section 626.681, Florida Statutes, is

13  amended to read:

14         626.681  Administrative fine in lieu of or in addition

15  to suspension, revocation, or refusal of license or

16  appointment.--

17         (1)  Except as to insurance agencies, if the department

18  finds that one or more grounds exist for the suspension,

19  revocation, or refusal to issue, renew, or continue any

20  license or appointment issued under this chapter, the

21  department may, in its discretion, in lieu of or in addition

22  to such suspension or, revocation, or in lieu of such refusal,

23  and except on a second offense or when such suspension,

24  revocation, or refusal is mandatory, impose upon the licensee

25  or appointee an administrative penalty in an amount up to $500

26  or, if the department has found willful misconduct or willful

27  violation on the part of the licensee or appointee, up to

28  $3,500 $2,500.  The administrative penalty may, in the

29  discretion of the department, be augmented by an amount equal

30  to any commissions received by or accruing to the credit of

31  the licensee or appointee in connection with any transaction


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    CS for SB 1372                                 Third Engrossed



  1  as to which the grounds for suspension, revocation, or refusal

  2  related.

  3         (2)  With respect to insurance agencies, if the

  4  department finds that one or more grounds exist for the

  5  suspension, revocation, or refusal to issue, renew, or

  6  continue any license issued under this chapter, the department

  7  may, in its discretion, in lieu of or in addition to such

  8  suspension or, revocation, or in lieu of such refusal, impose

  9  upon the licensee an administrative penalty in an amount not

10  to exceed $10,000 per violation.  The administrative penalty

11  may, in the discretion of the department, be augmented by an

12  amount equal to any commissions received by or accruing to the

13  credit of the licensee in connection with any transaction as

14  to which the grounds for suspension, revocation, or refusal

15  related.

16         (3)  The department may allow the licensee or appointee

17  a reasonable period, not to exceed 30 days, within which to

18  pay to the department the amount of the penalty so imposed.

19  If the licensee or appointee fails to pay the penalty in its

20  entirety to the department within the period so allowed, the

21  license, or appointments, or status of the licensee or

22  appointee shall stand suspended or revoked or issuance,

23  renewal, or continuation shall be refused, as the case may be,

24  upon expiration of such period.

25         Section 33.  Section 626.691, Florida Statutes, is

26  amended to read:

27         626.691  Probation.--

28         (1)  If the department finds that one or more grounds

29  exist for the suspension, revocation, or refusal to renew or

30  continue any license or appointment issued under this part,

31  the department may, in its discretion, except when an


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    CS for SB 1372                                 Third Engrossed



  1  administrative fine is not permissible under s. 626.681 or

  2  when such suspension, revocation, or refusal is mandatory, in

  3  lieu of or in addition to such suspension or, revocation, or

  4  in lieu of such refusal, or in connection with any

  5  administrative monetary penalty imposed under s. 626.681,

  6  place the offending licensee or appointee on probation for a

  7  period, not to exceed 2 years, as specified by the department

  8  in its order.

  9         (2)  As a condition to such probation or in connection

10  therewith, the department may specify in its order reasonable

11  terms and conditions to be fulfilled by the probationer during

12  the probation period.  If during the probation period the

13  department has good cause to believe that the probationer has

14  violated a term or condition such terms and conditions or any

15  of them, it shall suspend, revoke, or refuse to issue, renew,

16  or continue the license or appointment of the probationer, as

17  upon the original ground or grounds referred to in subsection

18  (1).

19         Section 34.  Section 626.692, Florida Statutes, is

20  created to read:

21         626.692  Restitution.--If any ground exists for the

22  suspension, revocation, or refusal of a license or

23  appointment, the department may, in addition to any other

24  penalty authorized under this chapter, order the licensee to

25  pay restitution to any person who has been deprived of money

26  by the licensee's misappropriation, conversion, or unlawful

27  withholding of moneys belonging to insurers, insureds,

28  beneficiaries, or others.  In no instance shall the amount of

29  restitution required to be paid under this section exceed the

30  amount of money misappropriated, converted, or unlawfully

31


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  1  withheld.  Nothing in this section limits or restricts a

  2  person's right to seek other remedies as provided for by law.

  3         Section 35.  Section 626.727, Florida Statutes, is

  4  amended to read:

  5         626.727  Scope of this part.--This part applies only as

  6  to:

  7         (1)  General lines agents, as defined in s. 626.041;

  8         (2)  Solicitors, as defined in s. 626.071; and

  9         (3)  Customer representatives as defined in s. 626.072;

10  and

11         (4)(3)  Service representatives, as defined in s.

12  626.081, or managing general agents, as defined in s. 626.091.

13         Section 36.  Section 626.730, Florida Statutes, is

14  amended to read:

15         626.730  Purpose of license.--

16         (1)  The purpose of a license issued under this code to

17  a general lines agent, customer representative, or solicitor

18  is to authorize and enable the licensee actively and in good

19  faith to engage in the insurance business as such an agent,

20  customer representative, or solicitor with respect to the

21  general public and to facilitate the public supervision of

22  such activities in the public interest, and not for the

23  purpose of enabling the licensee to receive a rebate of

24  premium in the form of commission or other compensation as an

25  agent, customer representative, or solicitor or enabling the

26  licensee to receive commissions or other compensation based

27  upon insurance solicited or procured by or through him or her

28  upon his or her own interests or those of other persons with

29  whom he or she is closely associated in capacities other than

30  that of insurance agent, customer representative, or

31  solicitor.


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  1         (2)  The department shall not grant, renew, continue,

  2  or permit to exist any license or appointment as such agent,

  3  customer representative, or solicitor as to any applicant

  4  therefor or licensee or appointee thereunder if it finds that

  5  the license or appointment has been, is being, or will

  6  probably be used by the applicant, or licensee, or appointee

  7  for the purpose of securing rebates or commissions on

  8  "controlled business," that is, on insurance written on his or

  9  her own interests or those of his or her family or of any

10  firm, corporation, or association with which he or she is

11  associated, directly or indirectly, or in which he or she has

12  an interest other than as to the insurance thereof.

13         Section 37.  Subsection (3) of section 626.732, Florida

14  Statutes, is amended to read:

15         626.732  Requirement as to knowledge, experience, or

16  instruction.--

17         (3)  An individual who was or became qualified to sit

18  for an agent's, customer representative's, or adjuster's

19  examination at or during the time he or she was employed by

20  the department and who, while so employed, was employed in

21  responsible insurance duties as a full-time bona fide employee

22  shall be permitted to take an examination if application for

23  such examination is made within 90 days after the date of

24  termination of his or her employment with the department.

25         Section 38.  Section 626.733, Florida Statutes, is

26  amended to read:

27         626.733  Agency firms and corporations; special

28  requirements.--If a sole proprietorship, partnership,

29  corporation, or association holds an agency contract, all

30  members thereof who solicit, negotiate, or effect insurance

31  contracts, and all officers and stockholders of the


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    CS for SB 1372                                 Third Engrossed



  1  corporation who solicit, negotiate, or effect insurance

  2  contracts, are required to qualify and be licensed

  3  individually as agents, solicitors, or customer

  4  representatives; and all of such agents must be individually

  5  appointed as to each property and casualty insurer entering

  6  into an agency contract with such agency.  Each such

  7  appointing insurer as soon as known to it shall comply with

  8  this section and shall determine and require that each agent

  9  so associated in or so connected with such agency is likewise

10  appointed as to the same such insurer and for the same type

11  and class of license.  However, no insurer is required to

12  comply with the provisions of this section if such insurer

13  satisfactorily demonstrates to the department that the insurer

14  has issued an aggregate net written premium, in an agency, in

15  an amount of $25,000 or less.

16         Section 39.  Subsection (2) of section 626.7351,

17  Florida Statutes, is amended to read:

18         626.7351  Qualifications for customer representative's

19  license.--The department shall not grant or issue a license as

20  customer representative to any individual found by it to be

21  untrustworthy or incompetent, or who does not meet each of the

22  following qualifications:

23         (2)(a)  The applicant is a bona fide resident of this

24  state and will actually reside in the state at least 6 months

25  out of the year.  An individual who is a bona fide resident of

26  this state shall be deemed to meet the residence requirements

27  of this subsection, notwithstanding the existence at the time

28  of application for license of a license in his or her name on

29  the records of another state as a resident licensee of the

30  other state, if the applicant furnishes a letter of clearance

31  satisfactory to the department that the resident licenses have


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  1  been canceled or changed to a nonresident basis and that he or

  2  she is in good standing.

  3         (b)  The applicant is a resident of another state

  4  sharing a common boundary with this state and has been

  5  employed in this state for a period of not less than 6 months

  6  by a Florida resident general lines agent licensed and

  7  appointed under this chapter.  The applicant licensed under

  8  this subsection must meet all other requirements as described

  9  in this chapter and must, under the direct supervision of a

10  licensed and appointed Florida resident general lines agent,

11  conduct business solely within the confines of the office of

12  the agent or agency whom he or she represents in this state.

13         Section 40.  Subsection (1) of section 626.739, Florida

14  Statutes, is amended to read:

15         626.739  Temporary license; death, disability, absence

16  of agent.--

17         (1)  The department may, in its discretion, issue a

18  temporary license authorizing appointment as a general lines

19  insurance as agent to a licensed agent's employee, family

20  member, business associate, or personal representative for the

21  purpose of continuing or winding up the business affairs of

22  the agent or agency, all subject to the following conditions:

23         (a)  The agent so being replaced must have died become

24  deceased or become unable to perform his or her duties as

25  agent because of military service or illness or other physical

26  or mental disability.

27         (b)  There must be No other person connected with the

28  agent's business who is licensed as a general lines agent.

29         (c)  The proposed temporary licensee is must be

30  qualified as for a regular general lines agent's license under

31


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  1  this code except as to residence, examination, education, or

  2  experience.

  3         (d)  Application for the temporary license has been

  4  must be made by the applicant upon statements and affidavit

  5  filed with the department on forms as prescribed and furnished

  6  by it.

  7         (e)  The temporary license must shall be issued and be

  8  valid for 4 months and may shall not be renewed either to the

  9  then holder of the temporary license or to any other person

10  for or on behalf of the agent or agency.

11         (f)  Under a temporary license and appointment the

12  licensee does shall not represent as agent any insurer not

13  last represented by the agent so being replaced, and is not

14  nor be licensed or appointed as to any additional kind or

15  classification of insurance than those covered by the last

16  existing agency appointments of the replaced agent, except

17  that, if during the temporary license period an insurer

18  withdraws from the agency, the temporary licensee may be

19  appointed by another like insurer only for the period

20  remaining under the temporary license.

21         (g)  The holder of a temporary license may be granted a

22  regular agent's license upon taking and successfully

23  completing a classroom course or correspondence course in

24  insurance or having the insurance employment experience as

25  prescribed in s. 626.732 and passing an examination as

26  required by s. 626.221.

27         Section 41.  Subsections (1) and (2) of section

28  626.741, Florida Statutes, are amended, present subsection (5)

29  of that section is renumbered as subsection (7), and new

30  subsections (5) and (6) are added to that section, to read:

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  1         626.741  Nonresident agents; licensing and

  2  restrictions.--

  3         (1)  The department may, upon written application and

  4  the payment of the fees as specified in s. 624.501, issue a

  5  license as:

  6         (a)  A general lines agent to an individual who is

  7  otherwise qualified therefor, but who is not a resident of

  8  this state, if by the laws of the state of the individual's

  9  residence, residents of this state may be licensed in like

10  manner as a nonresident agent of his state.

11         (b)  A customer representative to an individual who is

12  otherwise qualified therefor, who is not a resident of this

13  state, but who is a resident of a state that shares a common

14  boundary with this state.

15         (2)  The department shall not, however, issue any

16  license and appointment to any nonresident who has an office

17  or place of business in this state, or who has any direct or

18  indirect pecuniary interest in any insurance agent, insurance

19  agency, or in any solicitor licensed as a resident of this

20  state; nor to any individual who does not, at the time of

21  issuance and throughout the existence of the Florida license,

22  hold a license as agent or broker issued by the state of his

23  or her residence; nor to any individual who is employed by any

24  insurer as a service representative or who is a managing

25  general agent in any state, whether or not also licensed in

26  another state as an agent or broker.  The foregoing

27  requirement to hold a similar license in the applicant's state

28  of residence does not apply to customer representatives unless

29  the home state licenses residents of that state in a like

30  manner.  The prohibition against having an office or place of

31  business in this state does not apply to customer


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  1  representatives who are required to conduct business solely

  2  within the confines of the office of a licensed and appointed

  3  Florida resident general lines agent in this state. The

  4  department shall have discretion to refuse to issue any

  5  license or appointment to a nonresident when it has reason to

  6  believe that the applicant by ruse or subterfuge is attempting

  7  to avoid the intent and prohibitions contained in this

  8  subsection or to believe that any of the grounds exist as for

  9  suspension or revocation of license as set forth in ss.

10  626.611 and 626.621.

11         (5)  Any individual who holds a Florida nonresident

12  agent's license, upon becoming a resident of this state may,

13  for a period not to exceed 90 days, continue to transact

14  insurance in this state under the nonresident license and

15  appointment.  Such individual must make application for

16  resident licensure and must become licensed as a resident

17  agent within 90 days of becoming a resident of this state.

18         (6)  Upon becoming a resident of this state, an

19  individual who holds a Florida nonresident agent's license is

20  no longer eligible for licensure as a nonresident agent if

21  such individual fails to make application for a resident

22  license and become licensed as a resident agent within 90

23  days.  His license and any appointments shall be canceled

24  immediately.  He may apply for a resident license pursuant to

25  s. 626.731.

26         (7)(5)  Except as provided in this section and ss.

27  626.742 and 626.743, nonresident agents shall be subject to

28  the same requirements as apply to agents resident in this

29  state.

30

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  1         Section 42.  Present subsection (7) of section 626.792,

  2  Florida Statutes, is renumbered as subsection (8) and amended,

  3  and a new subsection (7) is added to that section, to read:

  4         626.792  Nonresident agents.--

  5         (7)  Any individual who holds a Florida nonresident

  6  agent's license, upon becoming a resident of this state may,

  7  for a period not to exceed 90 days, continue to transact

  8  insurance in this state under the nonresident license and

  9  appointment.  Such individual must make application for

10  resident licensure and must become licensed as a resident

11  agent within 90 days after becoming a resident of this state.

12         (8)(7)  Upon becoming a resident of this state, an

13  individual who holds a Florida nonresident agent's license is

14  no longer eligible for licensure as a nonresident agent if

15  such individual fails to make application for a resident

16  license and become licensed as a resident agent within 90

17  days. and His license and any appointments shall be canceled

18  immediately.  He may apply for a resident license pursuant to

19  s. 626.785.

20         Section 43.  Present subsection (7) of section 626.835,

21  Florida Statutes, is renumbered as subsection (8) and amended,

22  and a new subsection (7) is added to that section, to read:

23         626.835  Nonresident agents.--

24         (7)  Any individual who holds a Florida nonresident

25  agent's license, upon becoming a resident of this state may,

26  for a period not to exceed 90 days, continue to transact

27  insurance in this state under the nonresident license and

28  appointment.  Such individual must make application for

29  resident licensure and must become licensed as a resident

30  agent within 90 days of becoming a resident of this state.

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  1         (8)(7)  Upon becoming a resident of this state, an

  2  individual who holds a Florida nonresident agent's license is

  3  no longer eligible for licensure as a nonresident agent if

  4  such individual fails to make application for a resident

  5  license and become licensed as a resident agent within 90

  6  days. and His or her license and any appointments shall be

  7  canceled immediately.  The individual may apply for a resident

  8  license pursuant to s. 626.831.

  9         Section 44.  Subsection (1) of section 626.837, Florida

10  Statutes, is amended to read:

11         626.837  Excess or rejected business.--

12         (1)  A licensed health agent may place excess or

13  rejected risks within the class of business for which he or

14  she is licensed and appointed, and which the insurer

15  appointing the agent is authorized to transact, with any other

16  authorized insurer without being required to secure an

17  appointment as to such other insurer, but subject to the

18  agent's agreement with the insurer appointing licensing him or

19  her.

20         Section 45.  Paragraph (a) of subsection (2) of section

21  626.8411, Florida Statutes, is amended to read:

22         626.8411  Application of Florida Insurance Code

23  provisions to title insurance agents or agencies.--

24         (2)  The following provisions of part I do not apply to

25  title insurance agents or title insurance agencies:

26         (a)  Section 626.112(7)(8), relating to licensing of

27  insurance agencies.

28         Section 46.  Paragraph (a) of subsection (3) of section

29  626.8417, Florida Statutes, is amended to read:

30

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  1         626.8417  Title insurance agent's license; application

  2  and qualification; errors and omissions insurance; bond and

  3  deposit requirements; exemptions.--

  4         (3)  The department shall not grant or issue a license

  5  as title agent to any individual found by it to be

  6  untrustworthy or incompetent, who does not meet the

  7  qualifications for examination specified in s. 626.8414, or

  8  who does not meet the following qualifications:

  9         (a)  Within the 4 years immediately preceding the date

10  of the application for license, the applicant must have

11  completed a 40-hour classroom course in title insurance, as

12  approved by the department, or must have had at least 12

13  months of experience in responsible title insurance duties,

14  while working in the title insurance business as a

15  substantially full-time, bona fide employee of a title agency,

16  title agent, or title insurer, or attorney who conducts real

17  estate closing transactions and issues title insurance

18  policies but who is exempt from licensure pursuant to

19  paragraph (4)(a).  If an applicant's qualifications are based

20  upon the periods of employment at responsible title insurance

21  duties, the applicant must submit, with the application for

22  license on a form prescribed by the department, the affidavit

23  of the applicant and of the employer setting forth the period

24  of such employment, that the employment was substantially full

25  time, and giving a brief abstract of the nature of the duties

26  performed by the applicant.

27         Section 47.  Subsection (2) of section 626.8418,

28  Florida Statutes, is amended to read:

29         626.8418  Application for title insurance agency

30  license.--Prior to doing business in this state as a title

31


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  1  insurance agency, a title insurance agency must meet all of

  2  the following requirements:

  3         (2)  The applicant must have deposited with the

  4  department securities of the type eligible for deposit under

  5  s. 625.52 and having at all times a market value of not less

  6  than $35,000.  In place of such deposit, the title insurance

  7  agency may post a surety bond of like amount payable to the

  8  department for the benefit of any appointing insurer damaged

  9  by a violation by the title insurance agency of its contract

10  with the appointing insurer. If a properly documented claim is

11  timely filed with the department by a damaged title insurer,

12  the department may remit an appropriate amount of the deposit

13  or the proceeds that are received from the surety in payment

14  of the claim damaged insurer making claim on the bond. The

15  required deposit or bond must be made by the title insurance

16  agency, and a title insurer may not provide the deposit or

17  bond directly or indirectly on behalf of the title insurance

18  agency.  The deposit or bond must secure the performance by

19  the title insurance agency of its duties and responsibilities

20  under the issuing agency contracts with each title insurer

21  underwriter for which it is appointed.  The agency may

22  exchange or substitute other securities of like quality and

23  value for securities on deposit, may receive the interest and

24  other income accruing on such securities, and may inspect the

25  deposit at all reasonable times.  Such deposit or bond must

26  remain unimpaired as long as the title insurance agency

27  continues in business in this state and until 1 year after

28  termination of all title insurance agency appointments

29  licenses held by the title insurance agency. The title

30  insurance agency is entitled to the return of the deposit or

31  bond together with accrued interest after such year has


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  1  passed, if no claim has been made against the deposit or bond.

  2  If a surety bond is unavailable generally, the department may

  3  adopt rules for alternative methods to comply with this

  4  subsection. With respect to such alternative methods for

  5  compliance, the department must be guided by the past business

  6  performance and good reputation and character of the proposed

  7  title insurance agency. A surety bond is deemed to be

  8  unavailable generally if the prevailing annual premium exceeds

  9  25 percent of the principal amount of the bond.

10         Section 48.  Section 626.8437, Florida Statutes, is

11  amended to read:

12         626.8437  Grounds for compulsory refusal, suspension,

13  or revocation of license or appointment.--The department shall

14  deny, suspend, revoke, or refuse to renew or continue the

15  license or appointment of any title insurance agent or agency,

16  and it shall suspend or revoke the eligibility to hold a

17  license or appointment of such person, if it finds that as to

18  the applicant, licensee, appointee, or any principal thereof,

19  any one or more of the following grounds exist:

20         (1)  Lack of one or more of the qualifications for the

21  license or appointment as specified in ss. s. 626.8417,

22  626.8418, and 626.8419.

23         (2)  Material misstatement, misrepresentation, or fraud

24  in obtaining, or attempting to obtain, the license or

25  appointment.

26         (3)  Willful misrepresentation of any title insurance

27  policy, guarantee of title, binder, or commitment, or willful

28  deception with regard to any such policy, guarantee, binder,

29  or commitment, done either in person or by any form of

30  dissemination of information or advertising.

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  1         (4)  Demonstrated lack of fitness or trustworthiness to

  2  represent a title insurer in the issuance of its commitments,

  3  binders, policies of title insurance, or guarantees of title.

  4         (5)  Demonstrated lack of reasonably adequate knowledge

  5  and technical competence to engage in the transactions

  6  authorized by the license or appointment.

  7         (6)  Fraudulent or dishonest practices in the conduct

  8  of business under the license or appointment.

  9         (7)  Misappropriation, conversion, or unlawful

10  withholding of moneys belonging to title insurers or insureds

11  or others and received in conduct of business under the

12  license or appointment.

13         (8)  Unlawful rebating, or attempting to unlawfully

14  rebate, or unlawfully dividing, or offering to unlawfully

15  divide, title insurance premiums, fees, or charges with

16  another, as prohibited by s. 626.9541(1)(h)3.

17         (9)  Willful failure to comply with, or willful

18  violation of, any proper order or rule of the department or

19  willful violation of any provision of this act.

20         (10)  The licensee if an individual, or the partners if

21  a partnership, or owner if a sole proprietorship, or the

22  officers if a corporation, having been found guilty of or

23  having pleaded guilty or nolo contendere to a felony or a

24  crime punishable by imprisonment of 1 year or more under the

25  law of the United States or of any state or under the law of

26  any other country which involves moral turpitude, without

27  regard to whether a judgment of conviction has been entered by

28  the court having jurisdiction of such cases.

29         Section 49.  Section 626.844, Florida Statutes, is

30  amended to read:

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  1         626.844  Grounds for discretionary refusal, suspension,

  2  or revocation of license or appointment.--The department may,

  3  in its discretion, deny, suspend, revoke, or refuse to renew

  4  or continue the license or appointment of any title insurance

  5  agent or agency, and it may suspend or revoke the eligibility

  6  to hold a license or appointment of any such title insurance

  7  agent or agency person if it finds that as to the applicant or

  8  licensee or appointee, or any principal thereof, any one or

  9  more of the following grounds exist under circumstances for

10  which such denial, suspension, revocation, or refusal is not

11  mandatory under s. 626.8437:

12         (1)  Any cause for which issuance of the license or

13  appointment could have been refused had it then existed and

14  been known to the department.

15         (2)  Violation of any provision of this act in the

16  course of dealing under the license or appointment.

17         (3)  Violation of any lawful order or rule of the

18  department.

19         (4)  Failure or refusal upon demand to pay over to any

20  title insurer that the appointee represents or has represented

21  any money coming into the hands of such appointee and

22  belonging to the title insurer.

23         (5)  Engaging in unfair methods of competition or in

24  unfair or deceptive acts or practices in the conduct of

25  business, as prohibited under part X of this chapter, or

26  having otherwise shown himself or herself to be a source of

27  injury or loss to the public or to be detrimental to the

28  public interest.

29         (6)  The licensee if an individual, or the partners if

30  a partnership, or owner if a sole proprietorship, or the

31  officers if a corporation, having been found guilty of or


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  1  having pleaded guilty or nolo contendere to a felony or a

  2  crime punishable by imprisonment of 1 year or more under the

  3  law of the United States or of any state or under the law of

  4  any other country, without regard to whether a judgment of

  5  conviction has been entered by the court having jurisdiction

  6  of such cases.

  7         Section 50.  Subsections (1), (3), and (4) of section

  8  626.8443, Florida Statutes, are amended to read:

  9         626.8443  Duration of suspension or revocation.--

10         (1)  The department shall, in its order suspending a

11  title insurance agent's or agency's license or appointment or

12  in its order suspending the eligibility of a person to hold or

13  apply for such license or appointment, specify the period

14  during which the suspension is to be in effect, but such

15  period shall not exceed 1 year.  The license, or appointment,

16  or eligibility shall remain suspended during the period so

17  specified, subject, however, to any rescission or modification

18  of the order by the department, or modification or reversal

19  thereof by the court, prior to expiration of the suspension

20  period.  A license, and appointment, or eligibility which has

21  been suspended may not be reinstated except upon request for

22  such reinstatement, but the department shall not grant such

23  reinstatement if it finds that the circumstance or

24  circumstances for which the license, appointment, and

25  eligibility was suspended still exist or are likely to recur.

26         (3)  If licenses of any person as a title insurance

27  agent or agency has have been revoked twice, the department

28  shall not thereafter grant or issue a title insurance agent's

29  or agency's license to such person.

30         (4)  During the period of suspension or after

31  revocation of the license and appointment, the former licensee


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  1  shall not engage in or attempt to profess to engage in any

  2  transaction or business for which a license or appointment is

  3  required under this code or directly or indirectly own,

  4  control, or be employed in any manner by any insurance agent

  5  or agency or adjuster or adjusting firm act.

  6         Section 51.  Subsections (1) and (2) of section

  7  626.852, Florida Statutes, are amended to read:

  8         626.852  Scope of this part.--

  9         (1)  This part applies only as to insurance adjusters

10  and claims investigators as defined hereinafter in this part

11  defined.

12         (2)  Unless otherwise required by context, the term

13  "adjusters" as used in this part applies to all licensees

14  defined herein as any type of adjuster or as a claims

15  investigator.

16         Section 52.  Section 626.858, Florida Statutes, is

17  amended to read:

18         626.858  "Nonresident company employee adjuster"

19  defined.--A "nonresident company employee adjuster" is a

20  person who:

21         (1)  Is not a resident of this state;

22         (2)  Is a currently licensed or authorized adjuster in

23  his or her home state for the type or kinds of insurance for

24  which he or she intends to adjust claims for in this state;

25  and

26         (3)  Is an employee of an insurer, or other insurers

27  under the common control or ownership of such insurer,

28  admitted to do business in this state.; and

29         (4)  Does not maintain an office in this state for the

30  purpose of adjusting losses in this state.

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  1         Section 53.  Section 626.8582, Florida Statutes, is

  2  created to read:

  3         626.8582  "Nonresident public adjuster" defined.--A

  4  "nonresident public adjuster" is a person who:

  5         (1)  Is not a resident of this state;

  6         (2)  Is a currently licensed public adjuster in his or

  7  her state of residence for the type or kinds of insurance for

  8  which the licensee intends to adjust claims in this state or,

  9  if a resident of a state that does not license public

10  adjusters, has passed the department's adjuster examination as

11  prescribed in s. 626.8732(1)(b); and

12         (3)  Is a self-employed public adjuster or associated

13  with or employed by a public adjusting firm or other public

14  adjuster.

15         Section 54.  Section 626.8584, Florida Statutes, is

16  created to read:

17         626.8584  "Nonresident independent adjuster"

18  defined.--A "nonresident independent adjuster" is a person

19  who:

20         (1)  Is not a resident of this state;

21         (2)  Is a currently licensed independent adjuster in

22  his or her state of residence for the type or kinds of

23  insurance for which the licensee intends to adjust claims in

24  this state or, if a resident of a state that does not license

25  independent adjusters, has passed the department's adjuster

26  examination as prescribed in s. 626.8734(1)(b); and

27         (3)  Is a self-employed independent adjuster or

28  associated with or employed by an independent adjusting firm

29  or other independent adjuster.

30         Section 55.  Subsection (2) of section 626.865, Florida

31  Statutes, is amended to read:


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  1         626.865  Public adjuster's qualifications, bond.--

  2         (2)  At the time of application for license as a public

  3  adjuster, the applicant shall file with the department a bond

  4  executed and issued by a surety insurer authorized to transact

  5  such business in this state, in the amount of $50,000 $5,000,

  6  conditioned for the faithful performance of his or her duties

  7  as a public adjuster under the license applied for.  The bond

  8  shall be in favor of the department and shall specifically

  9  authorize recovery by the department of the damages sustained

10  in case the licensee is guilty of fraud or unfair practices in

11  connection with his or her business as public adjuster. The

12  aggregate liability of the surety for all such damages shall

13  in no event exceed the amount of the bond.  Such bond shall

14  not be terminated unless at least 30 days' written notice is

15  given to the licensee and filed with the department.

16         Section 56.  Section 626.873, Florida Statutes, is

17  amended to read:

18         626.873  Nonresident company employee adjusters.--The

19  department shall, upon application therefor, issue a license

20  to an applicant for a nonresident adjuster's license upon

21  determining that the applicant has paid the applicable license

22  fees required under s. 624.501 and:

23         (1)  Is a currently licensed insurance adjuster in his

24  or her home state, if such state requires a license.

25         (2)  Is an employee of an insurer, or a wholly owned

26  subsidiary of an insurer, admitted to do business in this

27  state.

28         (3)  Does not maintain an office in this state for the

29  purpose of adjusting losses in this state.

30         (3)(4)  Has filed a certificate or letter of

31  authorization from the insurance department of his or her home


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  1  state, if such state requires an adjuster to be licensed,

  2  stating that he or she holds a current license or

  3  authorization to adjust insurance losses.  Such certificate or

  4  authorization must be signed by the insurance commissioner, or

  5  his or her deputy, of the adjuster's home state and must

  6  reflect whether or not the adjuster has ever had his or her

  7  license or authorization in the adjuster's home state

  8  suspended or revoked and, if such is the case, the reason for

  9  such action.

10         Section 57.  Section 626.8732, Florida Statutes, is

11  created to read:

12         626.8732  Nonresident public adjuster's qualifications,

13  bond.--

14         (1)  The department shall, upon application therefor,

15  issue a license to an applicant for a nonresident public

16  adjuster's license upon determining that the applicant has

17  paid the applicable license fees required under s. 624.501

18  and:

19         (a)  Is a natural person at least 18 years of age.

20         (b)  Has passed to the satisfaction of the department a

21  written Florida public adjuster's examination of the scope

22  prescribed in s. 626.241(6); however, the requirement for such

23  an examination does not apply to any of the following:

24         1.  An applicant who is licensed as a resident public

25  adjuster in his or her state of residence, when that state

26  requires the passing of a written examination in order to

27  obtain the license and a reciprocal agreement with the

28  appropriate official of that state has been entered into by

29  the department; or

30         2.  An applicant who is licensed as a nonresident

31  public adjuster in a state other than his or her state of


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  1  residence when the state of licensure requires the passing of

  2  a written examination in order to obtain the license and a

  3  reciprocal agreement with the appropriate official of the

  4  state of licensure has been entered into by the department.

  5         (c)  Is self-employed as a public adjuster or

  6  associated with or employed by a public adjusting firm or

  7  other public adjuster. Applicants licensed as nonresident

  8  public adjusters under this section must be appointed as such

  9  in accordance with the provisions of ss. 626.112 and 626.451.

10  Appointment fees in the amount specified in s. 624.501 must be

11  paid to the department in advance. The appointment of a

12  nonresident public adjuster shall continue in force until

13  suspended, revoked, or otherwise terminated, but subject to

14  biennial renewal or continuation by the licensee in accordance

15  with procedures prescribed in s. 626.381 for licensees in

16  general.

17         (d)  Is trustworthy and has such business reputation as

18  would reasonably assure that he or she will conduct his or her

19  business as a nonresident public adjuster fairly and in good

20  faith and without detriment to the public.

21         (e)  Has had sufficient experience, training, or

22  instruction concerning the adjusting of damages or losses

23  under insurance contracts, other than life and annuity

24  contracts; is sufficiently informed as to the terms and

25  effects of the provisions of those types of insurance

26  contracts; and possesses adequate knowledge of the laws of

27  this state relating to such contracts as to enable and qualify

28  him or her to engage in the business of insurance adjuster

29  fairly and without injury to the public or any member thereof

30  with whom he or she may have business as a public adjuster.

31


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  1         (2)  The applicant shall furnish the following with his

  2  or her application:

  3         (a)  A complete set of his or her fingerprints. The

  4  applicant's fingerprints must be certified by an authorized

  5  law enforcement officer. The department may not authorize an

  6  applicant to take the required examination or issue a

  7  nonresident public adjuster's license to the applicant until

  8  the department has received a report from the Florida

  9  Department of Law Enforcement and the Federal Bureau of

10  Investigation relative to the existence or nonexistence of a

11  criminal history report based on the applicant's fingerprints.

12         (b)  If currently licensed as a resident public

13  adjuster in the applicant's state of residence, a certificate

14  or letter of authorization from the licensing authority of the

15  applicant's state of residence, stating that the applicant

16  holds a current or comparable license to act as a public

17  adjuster. The certificate or letter of authorization must be

18  signed by the insurance commissioner or his or her deputy or

19  the appropriate licensing official and must disclose whether

20  the adjuster has ever had any license or eligibility to hold

21  any license declined, denied, suspended, revoked, or placed on

22  probation or whether an administrative fine or penalty has

23  been levied against the adjuster and, if so, the reason for

24  the action.

25         (c)  If the applicant's state of residence does not

26  require licensure as a public adjuster and the applicant has

27  been licensed as a resident insurance adjuster, agent, broker,

28  or other insurance representative in his or her state of

29  residence or any other state within the past 3 years, a

30  certificate or letter of authorization from the licensing

31  authority stating that the applicant holds or has held a


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  1  license to act as such an insurance adjuster, agent, or other

  2  insurance representative. The certificate or letter of

  3  authorization must be signed by the insurance commissioner or

  4  his or her deputy or the appropriate licensing official and

  5  must disclose whether or not the adjuster, agent, or other

  6  insurance representative has ever had any license or

  7  eligibility to hold any license declined, denied, suspended,

  8  revoked, or placed on probation or whether an administrative

  9  fine or penalty has been levied against the adjuster and, if

10  so, the reason for the action.

11         (3)  At the time of application for license as a

12  nonresident public adjuster, the applicant shall file with the

13  department a bond executed and issued by a surety insurer

14  authorized to transact surety business in this state, in the

15  amount of $50,000, conditioned for the faithful performance of

16  his or her duties as a nonresident public adjuster under the

17  license applied for. The bond must be in favor of the

18  department and must specifically authorize recovery by the

19  department of the damages sustained if the licensee commits

20  fraud or unfair practices in connection with his or her

21  business as nonresident public adjuster. The aggregate

22  liability of the surety for all the damages may not exceed the

23  amount of the bond. The bond may not be terminated unless at

24  least 30 days' written notice is given to the licensee and

25  filed with the department.

26         (4)  The usual and customary records pertaining to

27  transactions under the license of a nonresident public

28  adjuster must be retained for at least 3 years after

29  completion of the adjustment and must be made available in

30  this state to the department upon request. The failure of a

31  nonresident public adjuster to properly maintain records and


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  1  make them available to the department upon request constitutes

  2  grounds for the immediate suspension of the license issued

  3  under this section.

  4         (5)  After licensure as a nonresident public adjuster,

  5  as a condition of doing business in this state, the licensee

  6  must annually on or before January 1, on a form prescribed by

  7  the department, submit an affidavit certifying that the

  8  licensee is familiar with and understands the insurance code

  9  and rules adopted thereunder and the provisions of the

10  contracts negotiated or to be negotiated. Compliance with this

11  filing requirement is a condition precedent to the issuance,

12  continuation, reinstatement, or renewal of a nonresident

13  public adjuster's appointment.

14         Section 58.  Section 626.8734, Florida Statutes, is

15  created to read:

16         626.8734  Nonresident independent adjuster's

17  qualifications.--

18         (1)  The department shall, upon application therefor,

19  issue a license to an applicant for a nonresident independent

20  adjuster's license upon determining that the applicant has

21  paid the applicable license fees required under s. 624.501

22  and:

23         (a)  Is a natural person at least 18 years of age.

24         (b)  Has passed to the satisfaction of the department a

25  written Florida independent adjuster's examination of the

26  scope prescribed in s. 626.214(6); however, the requirement

27  for the examination does not apply to any of the following:

28         1.  An applicant who is licensed as a resident

29  independent adjuster in his or her state of residence when

30  that state requires the passing of a written examination in

31  order to obtain the license and a reciprocal agreement with


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  1  the appropriate official of that state has been entered into

  2  by the department; or

  3         2.  An applicant who is licensed as a nonresident

  4  independent adjuster in a state other than his or her state of

  5  residence when the state of licensure requires the passing of

  6  a written examination in order to obtain the license and a

  7  reciprocal agreement with the appropriate official of the

  8  state of licensure has been entered into by the department.

  9         (c)  Is self-employed or associated with or employed by

10  an independent adjusting firm or other independent adjuster.

11  Applicants licensed as nonresident independent adjusters under

12  this section must be appointed as such in accordance with the

13  provisions of ss. 626.112 and 626.451. Appointment fees in the

14  amount specified in s. 624.501 must be paid to the department

15  in advance. The appointment of a nonresident independent

16  adjuster shall continue in force until suspended, revoked, or

17  otherwise terminated, but subject to biennial renewal or

18  continuation by the licensee in accordance with procedures

19  prescribed in s. 626.381 for licensees in general.

20         (d)  Is trustworthy and has such business reputation as

21  would reasonably assure that he or she will conduct his

22  business as a nonresident independent adjuster fairly and in

23  good faith and without detriment to the public.

24         (e)  Has had sufficient experience, training, or

25  instruction concerning the adjusting of damages or losses

26  under insurance contracts, other than life and annuity

27  contracts; is sufficiently informed as to the terms and

28  effects of the provisions of those types of insurance

29  contracts; and possesses adequate knowledge of the laws of

30  this state relating to such contracts as to enable and qualify

31  him or her to engage in the business of insurance adjuster


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  1  fairly and without injury to the public or any member thereof

  2  with whom he or she may have business as an independent

  3  adjuster.

  4         (2)  The applicant shall furnish the following with his

  5  or her application:

  6         (a)  A complete set of his or her fingerprints. The

  7  applicant's fingerprints must be certified by an authorized

  8  law enforcement officer.

  9         (b)  If currently licensed as a resident independent

10  adjuster in the applicant's state of residence, a certificate

11  or letter of authorization from the licensing authority of the

12  applicant's state of residence, stating that the applicant

13  holds a current license to act as an independent adjuster.

14  Such certificate or letter of authorization must be signed by

15  the insurance commissioner or his or her deputy or the

16  appropriate licensing official and must disclose whether the

17  adjuster has ever had any license or eligibility to hold any

18  license declined, denied, suspended, revoked or placed on

19  probation or whether an administrative fine or penalty has

20  been levied against the adjuster and, if so, the reason for

21  the action.

22         (c)  If the applicant's state of residence does not

23  require licensure as an independent adjuster and the applicant

24  has been licensed as a resident insurance adjuster, agent,

25  broker, or other insurance representative in his state of

26  residence or any other state within the past 3 years, a

27  certificate or letter of authorization from the licensing

28  authority stating that the applicant holds or has held a

29  license to act as an insurance adjuster, agent, or other

30  insurance representative. The certificate or letter of

31  authorization must be signed by the insurance commissioner or


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  1  his or her deputy or the appropriate licensing official and

  2  must disclose whether the adjuster, agent, or other insurance

  3  representative has ever had any license or eligibility to hold

  4  any license declined, denied, suspended, revoked or placed on

  5  probation or whether an administrative fine or penalty has

  6  been levied against the adjuster and, if so, the reason for

  7  the action.

  8         (3)  The usual and customary records pertaining to

  9  transactions under the license of a nonresident independent

10  adjuster must be retained for at least 3 years after

11  completion of the adjustment and must be made available in

12  this state to the department upon request. The failure of a

13  nonresident independent adjuster to properly maintain records

14  and make them available to the the department upon request

15  constitutes grounds for the immediate suspension of the

16  license issued under this section.

17         (4)  After licensure as a nonresident independent

18  adjuster, as a condition of doing business in this state, the

19  licensee must annually on or before January 1, on a form

20  prescribed by the department, submit an affidavit certifying

21  that the licensee is familiar with and understands the

22  insurance laws and administrative rules of this state and the

23  provisions of the contracts negotiated or to be negotiated.

24  Compliance with this filing requirement is a condition

25  precedent to the issuance, continuation, reinstatement, or

26  renewal of a nonresident independent adjuster's appointment.

27         Section 59.  Section 626.8736, Florida Statutes, is

28  created to read:

29         626.8736  Nonresident independent or public adjusters;

30  service of process.--

31


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  1         (1)  Each licensed nonresident independent or public

  2  adjuster shall appoint the Insurance Commissioner and

  3  Treasurer and his or her successors in office as his or her

  4  attorney to receive service of legal process issued against

  5  the nonresident independent or public adjuster in this state,

  6  upon causes of action arising within this state out of

  7  transactions under his license and appointment. Service upon

  8  the Insurance Commissioner and Treasurer as attorney shall

  9  constitute effective legal service upon the nonresident

10  independent or public adjuster.

11         (2)  The appointment of the Insurance Commissioner and

12  Treasurer for service of process shall be irrevocable for as

13  long as there could be any cause of action against the

14  nonresident independent or public adjuster arising out of his

15  or her insurance transactions in this state.

16         (3)  Duplicate copies of legal process against the

17  nonresident independent or public adjuster shall be served

18  upon the Insurance Commissioner and Treasurer by a person

19  competent to serve a summons.

20         (4)  Upon receiving the service, the Insurance

21  Commissioner and Treasurer shall forthwith send one of the

22  copies of the process, by registered mail with return receipt

23  requested, to the defendant nonresident independent or public

24  adjuster at his or her last address of record with the

25  department.

26         (5)  The Insurance Commissioner and Treasurer shall

27  keep a record of the day and hour of service upon him or her

28  of all legal process received under this section.

29         Section 60.  Section 626.8737, Florida Statutes, is

30  created to read:

31


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  1         626.8737  Nonresident adjusters; retaliatory

  2  provision.--When under the laws of any other state any fine,

  3  tax, penalty, license fee, deposit of money, or security or

  4  other obligation, limitation, or prohibition is imposed upon

  5  resident insurance adjusters of this state in connection with

  6  the issuance of, and activities under, a nonresident

  7  adjuster's license under the laws of that state as to Florida

  8  resident insurance adjusters, then so long as these laws

  9  continue in force or are so administered, the same

10  requirements, obligations, limitations, and prohibitions, of

11  whatever kind, shall be imposed upon every insurance adjuster

12  of that other state when doing business in this state under a

13  nonresident adjuster's license issued under this part.

14         Section 61.  Section 626.8738, Florida Statutes, is

15  created to read:

16         626.8738  Penalty for violation.--In addition to any

17  other remedy imposed pursuant to this code, any person who

18  acts as a resident or nonresident public adjuster or holds

19  himself or herself out to be a public adjuster to adjust

20  claims in this state, without being licensed by the department

21  as a public adjuster and appointed as a public adjuster,

22  commits a felony of the third degree, punishable as provided

23  in s. 775.082, s. 775.083, or s. 775.084. Each act in

24  violation of this section constitutes a separate offense.

25         Section 62.  Subsection (5) of section 626.869, Florida

26  Statutes, is amended to read:

27         626.869  License, adjusters.--

28         (5)  Any person holding a license for 24 consecutive

29  months or longer and appointment and who engages in adjusting

30  workers' compensation insurance must, beginning in their birth

31  month and every 2 years thereafter, have completed 24 hours of


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  1  courses, 2 hours of which relate to ethics, in subjects shall

  2  certify to the department every 2 years, at least 90 days

  3  prior to the renewal date of his or her appointment, the fact

  4  that the licensee has completed a course of instruction

  5  designed to inform the licensee regarding as to the current

  6  workers' compensation laws of this state, so as to enable him

  7  or her to engage in such business as a workers' compensation

  8  insurance adjuster fairly and without injury to the public and

  9  to adjust all claims in accordance with the policy or contract

10  and the workers' compensation laws of this state.  In order to

11  qualify as an eligible course under this subsection, the

12  course must shall:

13         (a)  Have a Consist of 24 hours of classroom

14  instruction in the workers' compensation laws and practices of

15  this state, 2 hours of which shall relate to ethics, with the

16  course outline approved by the department.  It is not required

17  that the 24 hours of classroom instruction take place in one

18  course.

19         (b)  Be taught at a school training facility or other

20  location approved by the department.

21         (c)  Be taught by instructors with at least 5 years of

22  experience in the area of workers' compensation, general lines

23  of insurance, or other persons approved by the department.

24  However, a member of The Florida Bar is shall be exempt from

25  the 5 years' experience requirement.

26         (d)  Furnish the attendee a certificate of completion.

27  The sponsor of the course provider shall send a roster copy of

28  the certificate of completion to the department in a format

29  prescribed by the department.

30         Section 63.  Section 626.8695, Florida Statutes, is

31  amended to read:


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  1         626.8695  Primary adjuster.--

  2         (1)  On or before January 1, 1993, and annually

  3  thereafter, Each person operating an adjusting firm and each

  4  location of a multiple location adjusting firm must designate

  5  a primary adjuster for each such firm or location and must

  6  file with the department the name of such primary adjuster and

  7  the address of the firm or location where he or she is the

  8  primary adjuster, on a form approved by the department.  The

  9  designation of the primary adjuster may be changed at the

10  option of the adjusting firm.  Any such change is effective

11  upon notification to the department. Notice of change must be

12  sent to the department within 30 days after such change.

13         (2)(a)  For purposes of this section, a "primary

14  adjuster" is the licensed adjuster who is responsible for the

15  hiring and supervision of all individuals within an adjusting

16  firm location who deal with the public and who acts in the

17  capacity of a public adjuster as defined in s. 626.854, or an

18  independent adjuster as defined in s. 626.855.  An adjuster

19  may be designated as a primary adjuster for only one adjusting

20  firm location.

21         (b)  For purposes of this section, an "adjusting firm"

22  is a location where an independent or public adjuster is

23  engaged in the business of insurance.

24         (3)  The department may suspend or revoke the license

25  of the primary adjuster if the an adjusting firm employs any

26  person who has had a license denied or any person whose

27  license is currently suspended or revoked.  However, if a

28  person has been denied a license for failure to pass a

29  required examination, he or she may be employed to perform

30  clerical or administrative functions for which licensure is

31  not required.


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  1         (4)  The primary adjuster in an unincorporated

  2  adjusting firm, or the primary adjuster in an incorporated

  3  adjusting firm in which no officer, director, or stockholder

  4  is an adjuster, is responsible and accountable for the acts of

  5  salaried employees under his or her direct supervision and

  6  control while acting on behalf of the adjusting firm.  Nothing

  7  in this section renders any person criminally liable or

  8  subject to any disciplinary proceedings for any act unless the

  9  person personally committed or knew or should have known of

10  the act and of the facts constituting a violation of this

11  code.

12         (5)  The department may suspend or revoke the license

13  of any adjuster who is employed by a person whose license is

14  currently suspended or revoked.

15         (6)  An No adjusting firm location may not conduct the

16  business of insurance unless a primary adjuster is designated.

17  Failure of the person operating the adjusting firm to

18  designate a primary adjuster for the firm, or for each

19  location, as applicable, on a form prescribed by the

20  department within 30 days after inception of the firm or

21  change of primary adjuster designation, constitutes grounds

22  for requiring the adjusting firm to obtain an adjusting firm

23  license pursuant to s. 626.8696.

24         (7)  Any adjusting firm may request, on a form

25  prescribed by the department, verification from the department

26  of any person's current licensure status.  If a request is

27  mailed to the department within 5 working days after the date

28  an adjuster is hired, and the department subsequently notifies

29  the adjusting firm that an employee's license is currently

30  suspended, revoked, or has been denied, the license of the

31  primary adjuster shall not be revoked or suspended if the


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  1  unlicensed person is immediately dismissed from employment as

  2  an adjuster with the firm.

  3         Section 64.  Subsection (5) is added to section

  4  626.872, Florida Statutes, to read:

  5         626.872  Temporary license.--

  6         (5)  The department shall not issue a temporary license

  7  as an independent adjuster or as a company employee adjuster

  8  to any individual who has ever held such a license in this

  9  state.

10         Section 65.  Section 626.873, Florida Statutes, is

11  amended to read:

12         626.873  Nonresident adjusters.--

13         (1)  The department shall, upon application therefor,

14  issue a license to an applicant for a nonresident adjuster's

15  license upon determining that the applicant has paid the

16  applicable license fees required under s. 624.501 and:

17         (a)(1)  Is a currently licensed insurance adjuster in

18  his or her home state, if such state requires a license.

19         (b)(2)  Is an employee of an insurer admitted to do

20  business in this state.

21         (c)(3)  Does not maintain an office in this state for

22  the purpose of adjusting losses in this state.

23         (d)(4)  Has filed a certificate or letter of

24  authorization from the insurance department of his or her home

25  state, if such state requires an adjuster to be licensed,

26  stating that he or she holds a current license or

27  authorization to adjust insurance losses.  Such certificate or

28  authorization must be signed by the insurance commissioner, or

29  his or her deputy, of the adjuster's home state and must

30  reflect whether or not the adjuster has ever had his or her

31  license or authorization in the adjuster's home state


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  1  suspended or revoked and, if such is the case, the reason for

  2  such action.

  3         (2)  Any individual who holds a Florida nonresident

  4  adjuster's license, upon becoming a resident of this state

  5  may, for a period not to exceed 90 days, continue to adjust

  6  claims in this state under his or her nonresident license and

  7  appointment. Such individual must make application for

  8  resident licensure and must become licensed as a resident

  9  adjuster within 90 days of becoming a resident of this state.

10         (3)  Upon becoming a resident of this state, an

11  individual who holds a Florida nonresident adjuster's license

12  is no longer eligible for licensure as a nonresident adjuster

13  if such individual fails to make application for a resident

14  license and become licensed as a resident adjuster within 90

15  days.  Such individual may apply for a resident license

16  pursuant to s. 626.865, s. 626.866, or s. 626.867.

17         Section 66.  Subsection (2) of section 626.875, Florida

18  Statutes, is amended to read:

19         626.875  Office and records.--

20         (2)  The records of the adjuster relating to a

21  particular claim or loss shall be so retained in the

22  adjuster's place of business for a period of not less than 3

23  years 1 year after completion of the adjustment.  This

24  provision shall not be deemed to prohibit return or delivery

25  to the insurer or insured of documents furnished to or

26  prepared by the adjuster and required by the insurer or

27  insured to be returned or delivered thereto.

28         Section 67.  Section 626.877, Florida Statutes, is

29  amended to read:

30         626.877  Adjustments to comply with insurance contract

31  and law.--Every adjuster and claims investigator shall adjust


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  1  or investigate every claim, damage, or loss made or occurring

  2  under an insurance contract, in accordance with the terms and

  3  conditions of the contract and of the applicable laws of this

  4  state.

  5         Section 68.  Effective upon this act becoming a law,

  6  subsection (2) of section 626.918, Florida Statutes, is

  7  amended to read:

  8         626.918  Eligible surplus lines insurers.--

  9         (2)  No unauthorized insurer shall be or become an

10  eligible surplus lines insurer unless made eligible by the

11  department in accordance with the following conditions:

12         (a)  Eligibility of the insurer must be requested in

13  writing by a Florida-licensed surplus lines agent;

14         (b)  The insurer must be currently an authorized

15  insurer in the state or country of its domicile as to the kind

16  or kinds of insurance proposed to be so placed and must have

17  been such an insurer for not less than the 3 years next

18  preceding or must be the wholly owned subsidiary of such

19  authorized insurer or must be the wholly owned subsidiary of

20  an already eligible surplus lines insurer as to the kind or

21  kinds of insurance proposed for a period of not less than the

22  3 years next preceding. However, the department may waive the

23  3-year requirement if the insurer provides a product or

24  service not readily available to the consumers of this state

25  or has operated successfully for a period of at least 1 year

26  next preceding and has capital and surplus of not less than

27  $25 million;

28         (c)  Before granting eligibility, the requesting

29  surplus lines agent or the insurer shall furnish the

30  department with a duly authenticated copy of its current

31  annual financial statement in the English language and with


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    CS for SB 1372                                 Third Engrossed



  1  all monetary values therein expressed in United States

  2  dollars, at an exchange rate (in the case of statements

  3  originally made in the currencies of other countries)

  4  then-current and shown in the statement, and with such

  5  additional information relative to the insurer as the

  6  department may request;

  7         (d)1.  The insurer must have and maintain surplus as to

  8  policyholders of not less than $15 million; in addition, an

  9  alien insurer must also have and maintain in the United States

10  a trust fund for the protection of all its policyholders in

11  the United States under terms deemed by the department to be

12  reasonably adequate, in an amount not less than 5.4 million.

13  Any such surplus as to policyholders or trust fund shall be

14  represented by investments consisting of eligible investments

15  for like funds of like domestic insurers under part II of

16  chapter 625 provided, however, that in the case of an alien

17  insurance company, any such surplus as to policyholders may be

18  represented by investments permitted by the domestic regulator

19  of such alien insurance company if such investments are

20  substantially similar in terms of quality, liquidity, and

21  security to eligible investments for like funds of like

22  domestic insurers under part II of chapter 625;

23         2.  For those surplus lines insurers that were eligible

24  on January 1, 1994, and that maintained their eligibility

25  thereafter, the required surplus as to policyholders shall be:

26         a.  On December 31, 1994, and until December 30, 1995,

27  $2.5 million.

28         b.  On December 31, 1995, and until December 30, 1996,

29  $3.5 million.

30         c.  On December 31, 1996, and until December 30, 1997,

31  $4.5 million.


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  1         d.  On December 31, 1997, and until December 30, 1998,

  2  $5.5 million.

  3         e.  On December 31, 1998, and until December 30, 1999,

  4  $6.5 million.

  5         f.  On December 31, 1999, and until December 30, 2000,

  6  $8 million.

  7         g.  On December 31, 2000, and until December 30, 2001,

  8  $9.5 million.

  9         h.  On December 31, 2001, and until December 30, 2002,

10  $11 million.

11         i.  On December 31, 2002, and until December 30, 2003,

12  $13 million.

13         j.  On December 31, 2003, and thereafter, $15 million.

14         3.  The capital and surplus requirements as set forth

15  in subparagraph 2. do not apply in the case of an insurance

16  exchange created by the laws of individual states, where the

17  exchange maintains capital and surplus pursuant to the

18  requirements of that state, or maintains capital and surplus

19  in an amount not less than $50 million in the aggregate. For

20  an insurance exchange which maintains funds in the amount of

21  at least $12 million for the protection of all insurance

22  exchange policyholders, each individual syndicate shall

23  maintain minimum capital and surplus in an amount not less

24  than $3 million. If the insurance exchange does not maintain

25  funds in the amount of at least $12 million for the protection

26  of all insurance exchange policyholders, each individual

27  syndicate shall meet the minimum capital and surplus

28  requirements set forth in subparagraph 2.;

29         4.  A surplus lines insurer which is a member of an

30  insurance holding company that includes a member which is a

31  Florida domestic insurer as set forth in its holding company


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  1  registration statement, as set forth in s. 628.801 and rules

  2  adopted promulgated thereunder, may elect to maintain surplus

  3  as to policyholders in an amount equal to the requirements of

  4  s. 624.408, subject to the requirement that the surplus lines

  5  insurer shall at all times be in compliance with the

  6  requirements of chapter 625.

  7

  8  The election shall be submitted to the department and shall be

  9  effective upon the department's being satisfied that the

10  requirements of subparagraph 4. this sub-subparagraph have

11  been met.  The initial date of election shall be the date of

12  department approval. The election approval application shall

13  be on a form adopted by department rule. The department may

14  approve an election form submitted pursuant to subparagraph 4.

15  only if it was on file with the department before February 28,

16  1998;

17         (e)  The insurer must be of good reputation as to the

18  providing of service to its policyholders and the payment of

19  losses and claims;

20         (f)  The insurer must be eligible, as for authority to

21  transact insurance in this state, under s. 624.404(3); and

22         (g)  This subsection does not apply as to unauthorized

23  insurers made eligible under s. 626.917 as to wet marine and

24  aviation risks.

25         Section 69.  Subsection (1) of section 626.922, Florida

26  Statutes, is amended to read:

27         626.922  Evidence of the insurance; changes; penalty.--

28         (1)  Upon placing a surplus lines coverage, the surplus

29  lines agent shall promptly issue and deliver to the insured

30  evidence of the insurance consisting either of the policy as

31  issued by the insurer or, if such policy is not then


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    CS for SB 1372                                 Third Engrossed



  1  available, a certificate, cover note, or other confirmation of

  2  insurance.  Such document shall be executed or countersigned

  3  by the surplus lines agent and shall show the description and

  4  location of the subject of the insurance; coverage,

  5  conditions, and term of the insurance; the premium and rate

  6  charged and taxes collected from the insured; and the name and

  7  address of the insured and insurer.  If the direct risk is

  8  assumed by more than one insurer, the document shall state the

  9  name and address and proportion of the entire direct risk

10  assumed by each insurer. A surplus lines agent may not

11  delegate the duty to issue any such document to producing

12  general lines agents without prior written authority from the

13  surplus lines insurer. A general lines agent may issue any

14  such document only if the agent has prior written authority

15  from the surplus lines agent. The surplus lines agent must

16  maintain copies of the authorization from the surplus lines

17  insurer and the delegation to the producing general lines

18  agent. The producing agent must maintain copies of the written

19  delegation from the surplus lines agent and copies of any

20  evidence of coverage or certificate of insurance which the

21  producing agent issues or delivers. Any evidence of coverage

22  issued by a producing agent pursuant to this section must

23  include the name and address of the authorizing surplus lines

24  agent.

25         Section 70.  Section 626.928, Florida Statutes, is

26  amended to read:

27         626.928  Surplus lines agent's bond.--Prior to issuance

28  of license, the applicant shall file with the department, and

29  thereafter for as long as any such license remains in effect,

30  shall keep in force and unimpaired, a bond in favor of the

31  department in the penal sum of not less than $50,000 $5,000,


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  1  aggregate liability, with authorized corporate surety or

  2  sureties approved by the department.  The department may, in

  3  its discretion, require a bond in a larger amount commensurate

  4  with the volume of surplus lines business transacted or to be

  5  transacted by a particular surplus lines agent.  The bond

  6  shall be conditioned that the surplus lines agent will

  7  faithfully conduct business under the license in accordance

  8  with the provisions of the Surplus Lines Law and rules and

  9  regulations of the department for the effectuation thereof and

10  that the licensee will promptly remit to the department the

11  taxes as provided for by such law.  No such bond shall be

12  terminated unless not less than 30 days' prior written notice

13  thereof is given the licensee and filed with the department.

14         Section 71.  Subsections (4) and (7) of section

15  626.927, Florida Statutes, are amended to read:

16         626.927  Licensing of surplus lines agent.--

17         (4)  License and appointment fees in the amount

18  specified in s. 624.501 shall be paid to the department in

19  advance. The license and appointment of a surplus lines agent

20  continue in force until suspended, revoked, or otherwise

21  terminated.  The appointment of a surplus lines agent

22  continues in force until suspended, revoked, or terminated,

23  but is subject to biennial renewal or continuation by the

24  licensee in accordance with procedures prescribed in s.

25  626.381 for agents in general.

26         (7)  Any individual who has been licensed by the

27  department as a surplus lines agent as provided in this

28  section may be subsequently appointed licensed without

29  additional written examination if his or her application for

30  appointment license is filed with the department within 24

31  months next following the date of cancellation or expiration


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  1  of the prior appointment license.  The department may, in its

  2  discretion, require any individual to take and successfully

  3  pass an examination as for original issuance of license as a

  4  condition precedent to the reinstatement renewal or

  5  continuation of the licensee's current license or

  6  reinstatement or continuation of the licensee's appointment.

  7         Section 72.  Subsections (1) and (2) of section

  8  626.9271, Florida Statutes, are amended to read:

  9         626.9271  Temporary license; death, disability, absence

10  of surplus lines agent.--

11         (1)  The department may, in its discretion, issue a

12  temporary license and appointment as a surplus lines agent to

13  a licensed surplus lines agent's employee, family member,

14  business associate, or personal representative for the purpose

15  of continuing or winding up the business affairs of the

16  surplus lines agent or agency, all subject to the following

17  conditions:

18         (a)  The surplus lines agent being replaced must have

19  died become deceased or become unable to perform his or her

20  duties as agent because of military service or illness or

21  other physical or mental disability.

22         (b)  There must be no other person connected with the

23  surplus lines agent's business who is licensed as a surplus

24  lines agent.

25         (c)  The proposed temporary licensee must be qualified

26  as for a regular surplus lines agent's license under this code

27  except as to residence, examination, education, or experience.

28         (d)  Application for the temporary license and

29  appointment must be made by the applicant upon statements and

30  affidavit filed with the department on forms as prescribed and

31  furnished by it.


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  1         (e)  The temporary license and appointment shall be

  2  issued and be valid for a period of not over 4 months, and may

  3  shall not be renewed either to the then holder of the

  4  temporary license or to any other person for or on behalf of

  5  the surplus lines agent or agency.

  6         (2)  The applicant for a temporary license and

  7  appointment shall pay to the department, prior to the issuance

  8  thereof, the applicable license and appointment fees fee as

  9  specified therefor in s. 624.501.

10         Section 73.  Subsections (1) and (2) of section

11  626.929, Florida Statutes, are amended to read:

12         626.929  Origination, acceptance, placement of surplus

13  lines business.--

14         (1)  A resident general lines agent while licensed and

15  appointed as a surplus lines agent under this part may

16  originate surplus lines business and may accept surplus lines

17  business from any other originating Florida-licensed general

18  lines agent appointed and licensed as to the kind or kinds of

19  insurance involved and may compensate such agent therefor.

20         (2)  A managing general agent while licensed and

21  appointed as a surplus lines agent under this part may accept

22  and place solely such surplus lines business as is originated

23  by a Florida-licensed general lines agent appointed and

24  licensed as to the kind or kinds of insurance involved and may

25  compensate such agent therefor.

26         Section 74.  Subsections (1), (2), and (3) of section

27  626.935, Florida Statutes, are amended to read:

28         626.935  Suspension, revocation, or refusal of surplus

29  lines agent's license.--

30         (1)  The department shall deny an application for,

31  suspend, revoke, or refuse to renew the appointment license of


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    CS for SB 1372                                 Third Engrossed



  1  a surplus lines agent and all other licenses and appointments

  2  held by the licensee under this code, upon any one or more of

  3  the following grounds:

  4         (a)  Removal of the licensee's office from the state.

  5         (b)  Removal of the accounts and records of his or her

  6  surplus lines business from this state during the period when

  7  such accounts and records are required to be maintained under

  8  s. 626.930.

  9         (c)  Closure of the licensee's office for a period of

10  more than 30 consecutive days.

11         (d)  Failure to make and file his or her quarterly

12  reports when due as required by s. 626.931.

13         (e)  Failure to pay the tax on surplus lines premiums,

14  as provided for in this Surplus Lines Law.

15         (f)  Failure to maintain the bond as required by s.

16  626.928.

17         (g)  Suspension, revocation, or refusal to renew or

18  continue the license or appointment as a general lines agent,

19  service representative, or managing general agent.

20         (h)  Lack of qualifications as for an original surplus

21  lines agent's license.

22         (i)  Violation of this Surplus Lines Law.

23         (j)  For any other applicable cause for which the

24  license of a general lines agent could be suspended, revoked,

25  or refused under s. 626.611.

26         (2)  The department may, in its discretion, deny an

27  application for, suspend, revoke, or refuse to renew the

28  license or appointment of any surplus lines agent upon any

29  applicable ground for which a general lines agent's license

30  could be suspended, revoked, or refused under s. 626.621.

31


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    CS for SB 1372                                 Third Engrossed



  1         (3)  In the suspension or revocation of, or the refusal

  2  to issue or renew, the license or appointment of a surplus

  3  lines agent, the department shall follow the same procedures,

  4  as applicable, as provided for suspension, revocation, or

  5  refusal of licenses of general lines agents, but subject to s.

  6  626.936 as to failure to file a quarterly report or pay the

  7  tax.

  8         Section 75.  Subsections (3) and (4) of section

  9  626.944, Florida Statutes, are amended to read:

10         626.944  Qualifications for health care risk

11  managers.--

12         (3)  The department shall issue a license and an

13  appointment, beginning on June 1, 1986, to practice health

14  care risk management to any applicant who qualifies under this

15  section and submits the license and appointment fees fee as

16  set forth in s. 624.501.  Licenses and appointments shall be

17  issued and canceled in the same manner as provided in part I

18  of this chapter.

19         (4)  The department shall renew a health care risk

20  manager appointment license in accordance with procedures

21  prescribed in s. 626.381 for agents in general.

22         Section 76.  Subsection (3) of section 627.745, Florida

23  Statutes, is amended to read:

24         627.745  Mediation of claims.--

25         (3)(a)  The department shall approve appoint mediators

26  to conduct mediations pursuant to this section.  All mediators

27  must file an application under oath for approval as a

28  mediator.

29         (b)  To qualify for approval appointment as a mediator,

30  a person must shall meet the following qualifications:

31


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    CS for SB 1372                                 Third Engrossed



  1         1.  Possess a masters or doctorate degree in

  2  psychology, counseling, business, accounting, or economics, be

  3  a member of The Florida Bar, be licensed as a certified public

  4  accountant, or demonstrate that the applicant for approval

  5  appointment has been actively engaged as a qualified mediator

  6  for at least 4 years prior to July 1, 1990.

  7         2.  Within 4 years immediately preceding the date the

  8  application for approval is filed with the department, have

  9  completed a minimum of a 40-hour training program approved by

10  the department and successfully passed a final an examination

11  included in the training program and approved by the

12  department.  The training program shall include and address

13  all of the following:

14         a.  Mediation theory.

15         b.  Mediation process and techniques.

16         c.  Standards of conduct for mediators.

17         d.  Conflict management and intervention skills.

18         e.  Insurance nomenclature.

19         Section 77.  Section 634.317, Florida Statutes, is

20  amended to read:

21         634.317  License and appointment required.--No person

22  may solicit, negotiate, or effectuate home warranty contracts

23  for remuneration in this state unless such person is licensed

24  and appointed as a sales representative. A licensed and

25  appointed sales representative shall be directly responsible

26  and accountable for all acts of the licensee's employees.

27         Section 78.  Section 634.420, Florida Statutes, is

28  amended to read:

29         634.420  License and appointment of sales

30  representatives.--Sales representatives for service warranty

31  associations or insurers shall be licensed, appointed,


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    CS for SB 1372                                 Third Engrossed



  1  renewed, continued, reinstated, or terminated in accordance

  2  with procedures as prescribed in chapter 626 for insurance

  3  representatives in general.  However, they shall be exempt

  4  from all other provisions of chapter 626, including

  5  fingerprinting, photo identification, education, and

  6  examination. License, appointment, and other fees shall be

  7  those prescribed in s. 624.501.  A licensed and appointed

  8  sales representative shall be directly responsible and

  9  accountable for all acts of the licensed sales

10  representative's her or his employees or other

11  representatives.  Each service warranty association or insurer

12  shall, on forms prescribed by the department, within 30 days

13  after termination of the appointment, notify the department of

14  such termination.  No employee or sales representative of a

15  service warranty association or insurer may directly or

16  indirectly solicit or negotiate insurance contracts, or hold

17  herself or himself out in any manner to be an insurance agent

18  or solicitor, unless so qualified, licensed, and appointed

19  therefor under the insurance code.

20         Section 79.  Section 642.036, Florida Statutes, is

21  amended to read:

22         642.036  Sales representatives to be licensed and

23  appointed.--

24         (1)  Sales representatives of legal expense insurers

25  shall be licensed, appointed, renewed, continued, reinstated,

26  or terminated as prescribed in chapter 626 for insurance

27  representatives in general, and shall pay the license and

28  appointment fees prescribed in s. 624.501.  No employee or

29  sales representative of an insurer may directly or indirectly

30  solicit or negotiate insurance contracts, or hold herself or

31  himself out in any manner to be an insurance agent or


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  1  solicitor, unless so qualified, licensed, and appointed

  2  therefor under the insurance code.

  3         (2)  Each casualty insurer shall, on or before March 1

  4  of each odd-numbered year, file with the department the name

  5  and business address of each licensed general lines agent or

  6  solicitor who solicits, negotiates, sells, or executes legal

  7  expense insurance contracts on behalf of the casualty insurer.

  8         Section 80.  Section 624.412, Florida Statutes, is

  9  amended to read:

10         624.412  Deposit of alien insurers.--

11         (1)  An alien insurer shall not have authority to

12  transact insurance in this state unless it has and maintains

13  within the United States as trust deposits with public

14  officials having supervision over insurers, or with trustees,

15  public depositories, or trust institutions approved by the

16  department, assets available for discharge of its United

17  States insurance obligations, which assets shall be in amount

18  not less than the outstanding reserves and other liabilities

19  of the insurer arising out of its insurance transactions in

20  the United States together with the amount of surplus as to

21  policyholders required by s. 624.408 of a domestic stock

22  insurer transacting like kinds of insurance.

23         (2)  The amount so held on deposit under subsection (1)

24  is, for the purposes of this code, deemed to be minimum

25  surplus of the insurer required to be maintained.

26         (2)(3)  Any such deposit made in this state shall be

27  held for the protection of the insurer's policyholders or

28  policyholders and creditors in the United States and shall be

29  subject to the applicable provisions of part III of chapter

30  625 and chapter 630.

31


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  1         Section 81.  Section 624.4072, Florida Statutes, is

  2  created to read:

  3         624.4072  Minority owned property and casualty

  4  insurers; limited exemption for taxation and assessments.--

  5         (1)  A minority business that is at least 51 percent

  6  owned by minority persons, as defined in s. 288.703(3),

  7  initially issued a certificate of authority in this state as

  8  an authorized insurer after May 1, 1998, to write property and

  9  casualty insurance shall be exempt, for a period not to exceed

10  5 years from the date of receiving its certificate of

11  authority, from the following taxes and assessments:

12         (a)  Taxes imposed under ss. 624.509, 175.101, and

13  185.08;

14         (b)  Assessments by the Florida Residential Property

15  and Casualty Joint Underwriting Association or by the Florida

16  Windstorm Underwriting Association, as provided under s.

17  627.351, except for emergency assessments collected from

18  policyholders pursuant to s. 627.351(2)(b)2.d.(III) and

19  (6)(b)3.d. Any such insurer shall be a member insurer of the

20  Florida Windstorm Underwriting Association and the Florida

21  Residential Property and Casualty Joint Underwriting

22  Association. The premiums of such insurer shall be included in

23  determining, for the Florida Windstorm Underwriting

24  Association, the aggregate statewide direct written premium

25  for property insurance and in determining, for the Florida

26  Residential Property and Casualty Joint Underwriting

27  Association, the aggregate statewide direct written premium

28  for the subject lines of business for all member insurers.

29         (2)  Subsection (1) applies only to personal lines and

30  commercial lines residential property insurance policies as

31  defined in s. 627.4025, and applies only to an insurer that


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  1  has employees in this state and has a home office or a

  2  regional office in this state.  With respect to any tax year

  3  or assessment year, the exemptions provided by subsection (1)

  4  apply only if during the year an average of at least 10

  5  percent of the insurer's Florida residential property policies

  6  in force covered properties located in enterprise zones

  7  designated pursuant to s. 290.0065.

  8         (3)  The provision of the definition of "minority

  9  person" in s. 288.703(3) that requires residency in Florida

10  shall not apply to the term "minority person" as used in this

11  section or s. 627.3511.

12         (4)  This section is repealed effective July 1, 2003,

13  and the tax and assessment exemptions authorized by this

14  section shall terminate on such date.

15         Section 82.  Section 624.123, Florida Statutes, is

16  created to read:

17         624.123  Certain international health insurance

18  policies; exemption from code.--

19         (1)  International health insurance policies and

20  applications may be solicited and sold in this state at any

21  international airport to a resident of a foreign country. Such

22  international health insurance policies shall be solicited and

23  sold only by a licensed health insurance agent and unwritten

24  only by an admitted insurer. For purposes of this subsection:

25         (a)  "International airport" means any airport in

26  Florida with U. S. Customs service, which enplanes more than 1

27  million passengers per year.

28         (b)  "International health insurance policy" means

29  health insurance, as defined in s. 627.6561(5)(a)2., which is

30  offered to an individual, covering only a resident of a

31  foreign country on an annual basis.


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  1         (c)  "Resident of a foreign country" does not include

  2  any United States citizen, any natural person maintaining his

  3  or her residence in this country, or any natural person

  4  staying in this state continuously for more than 120 days.

  5         (2)  Any international health insurance policy sold,

  6  and any application provided, to residents of foreign

  7  countries pursuant to this subsection shall contain the

  8  following conspicuous, boldfaced disclaimer in at least 12

  9  point type:  "This individual health insurance policy may be

10  sold only to a person not a resident of the United States.

11  This policy does not comply with coverage, underwriting, and

12  other provisions of the Florida Insurance Code, and must

13  comply with coverage, underwriting, and other insurance

14  regulatory provisions of your country of residence."

15         (3)  Any insurer underwriting international health

16  insurance policies pursuant to this subsection is subject to

17  all applicable provisions of the Insurance Code, except as

18  otherwise provided in this subsection. International health

19  insurance policies are not subject to any form approval, rate

20  approval, underwriting restrictions, guaranteed availability,

21  or coverage mandates provided in the Insurance Code. Health

22  insurance agents who are licensed and appointed pursuant to

23  chapter 626 may solicit, sell, effect, collect premium on, and

24  deliver international health insurance policies in accordance

25  with this section. Solicitation or sale of an international

26  health insurance policy to a U. S. citizen or to a natural

27  person not a resident of a foreign country is a willful

28  violation of the provisions of s. 626.611.

29         (4)  Any international health insurance policy or

30  application solicited, provided, entered into, issued, or

31  delivered pursuant to this subsection is exempt from all


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    CS for SB 1372                                 Third Engrossed



  1  provisions of the Insurance Code, except that such policy,

  2  contract, or agreement is subject to the provisions of ss.

  3  624.155, 624.316, 624.3161, 626.951, 626.9511, 626.9521,

  4  626.9541, 626.9551, 626.9561, 626.9571, 626.9581, 626.9591,

  5  626.9601, 627.413, 627.4145, 627.428, and 627.6043.

  6         Section 83.  Present subsections (3) and (4) of section

  7  627.681, Florida Statutes, are renumbered as subsections (4)

  8  and (5), respectively, and a new subsection (3) is added to

  9  that section, to read:

10         627.681  Term and evidence of insurance.--

11         (3)  Notwithstanding s. 627.6785(3), the term of credit

12  life or credit disability insurance may be for less than the

13  term of the indebtedness. However, except for the age

14  limitations referred to in s. 627.6785(3), the term shall

15  extend for at least 5 years or for the term of the

16  indebtedness, whichever is less.

17         Section 84.  Section 440.49, Florida Statutes, is

18  amended to read:

19         440.49  Limitation of liability for subsequent injury

20  through Special Disability Trust Fund.--

21         (1)  LEGISLATIVE INTENT.--Whereas it is often difficult

22  for workers with disabilities to achieve employment or to

23  become reemployed following an injury, and it is the desire of

24  the Legislature to facilitate the return of these workers to

25  the workplace, it is the purpose of this section to encourage

26  the employment, reemployment, and accommodation of the

27  physically disabled by reducing an employer's insurance

28  premium for reemploying an injured worker, to decrease

29  litigation between carriers on apportionment issues, and to

30  protect employers from excess liability for compensation and

31  medical expense when an injury to a physically disabled worker


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    CS for SB 1372                                 Third Engrossed



  1  merges with, aggravates, or accelerates her or his preexisting

  2  permanent physical impairment to cause either a greater

  3  disability or permanent impairment, or an increase in

  4  expenditures for temporary compensation or medical benefits

  5  than would have resulted from the injury alone. The division

  6  or the administrator shall inform all employers of the

  7  existence and function of the fund and shall interpret

  8  eligibility requirements liberally. However, this subsection

  9  shall not be construed to create or provide any benefits for

10  injured employees or their dependents not otherwise provided

11  by this chapter. The entitlement of an injured employee or her

12  or his dependents to compensation under this chapter shall be

13  determined without regard to this subsection, the provisions

14  of which shall be considered only in determining whether an

15  employer or carrier who has paid compensation under this

16  chapter is entitled to reimbursement from the Special

17  Disability Trust Fund.

18         (2)  DEFINITIONS.--As used in this section, the term:

19         (a)  "Permanent physical impairment" means and is

20  limited to the conditions listed in paragraph (6)(a).

21         (b)  "Preferred worker" means a worker who, because of

22  a permanent impairment resulting from a compensable injury or

23  occupational disease, is unable to return to the worker's

24  regular employment.

25         (c)  "Merger" describes or means that:

26         1.  If the permanent physical impairment had not

27  existed, the subsequent accident or occupational disease would

28  not have occurred;

29         2.  The permanent disability or permanent impairment

30  resulting from the subsequent accident or occupational disease

31  is materially and substantially greater than that which would


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    CS for SB 1372                                 Third Engrossed



  1  have resulted had the permanent physical impairment not

  2  existed, and the employer has been required to pay, and has

  3  paid, permanent total disability or permanent impairment

  4  benefits for that materially and substantially greater

  5  disability;

  6         3.  The preexisting permanent physical impairment is

  7  aggravated or accelerated as a result of the subsequent injury

  8  or occupational disease, or the preexisting impairment has

  9  contributed, medically and circumstantially, to the need for

10  temporary compensation, medical, or attendant care and the

11  employer has been required to pay, and has paid, temporary

12  compensation, medical, or attendant care benefits for the

13  aggravated preexisting permanent impairment; or

14         4.  Death would not have been accelerated if the

15  permanent physical impairment had not existed.

16         (d)  "Excess permanent compensation" means that

17  compensation for permanent impairment, or permanent total

18  disability or death benefits, for which the employer or

19  carrier is otherwise entitled to reimbursement from the

20  Special Disability Trust Fund.

21         (e)  "Administrator" means the entity selected by the

22  commission to review, allow, deny, compromise, controvert, and

23  litigate claims of the Special Disability Trust Fund.

24         (f)  "Corporation" means the Special Disability Trust

25  Fund Financing Corporation, as created under subsection (14).

26         (g)  "Commission" means the Special Disability Trust

27  Fund Privatization Commission, as created under subsection

28  (13).

29         (3)  DEDUCTIBLE.--Reimbursement may not be obtained for

30  the first $10,000 of benefits paid which otherwise qualify for

31  reimbursement under this section. This deductible does not


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    CS for SB 1372                                 Third Engrossed



  1  apply to claims by employers for reimbursement under

  2  subparagraph (b)3.

  3         (4)  PERMANENT IMPAIRMENT OR PERMANENT TOTAL

  4  DISABILITY, TEMPORARY BENEFITS, MEDICAL BENEFITS, OR ATTENDANT

  5  CARE AFTER OTHER PHYSICAL IMPAIRMENT.--

  6         (a)  Permanent impairment.--If an employee who has a

  7  preexisting permanent physical impairment incurs a subsequent

  8  permanent impairment from injury or occupational disease

  9  arising out of, and in the course of, her or his employment

10  which merges with the preexisting permanent physical

11  impairment to cause a permanent impairment, the employer

12  shall, in the first instance, pay all benefits provided by

13  this chapter; but, subject to the limitations specified in

14  subsection (6), such employer shall be reimbursed from the

15  Special Disability Trust Fund created by subsection (8) for 50

16  percent of all impairment benefits which the employer has been

17  required to provide pursuant to s. 440.15(3)(a) as a result of

18  the subsequent accident or occupational disease.

19         (b)  Permanent total disability.--If an employee who

20  has a preexisting permanent physical impairment incurs a

21  subsequent permanent impairment from injury or occupational

22  disease arising out of, and in the course of, her or his

23  employment which merges with the preexisting permanent

24  physical impairment to cause permanent total disability, the

25  employer shall, in the first instance, pay all benefits

26  provided by this chapter; but, subject to the limitations

27  specified in subsection (6), such employer shall be reimbursed

28  from the Special Disability Trust Fund created by subsection

29  (8) for 50 percent of all compensation for permanent total

30  disability.

31


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    CS for SB 1372                                 Third Engrossed



  1         (c)  Temporary compensation and medical benefits;

  2  aggravation or acceleration of preexisting condition or

  3  circumstantial causation.--If an employee who has a

  4  preexisting permanent physical impairment experiences an

  5  aggravation or acceleration of the preexisting permanent

  6  physical impairment as a result of an injury or occupational

  7  disease arising out of and in the course of her or his

  8  employment, or suffers an injury as a result of a merger as

  9  defined in subparagraph (1)(b)2., the employer shall provide

10  all benefits provided by this chapter, but, subject to the

11  limitations specified in subsection (7), the employer shall be

12  reimbursed by the Special Disability Trust Fund created by

13  subsection (8) for 50 percent of its payments for temporary,

14  medical, and attendant care benefits.

15         (5)  WHEN DEATH RESULTS.--If death results from the

16  subsequent permanent impairment contemplated in paragraph (c)

17  within 1 year after the subsequent injury, or within 5 years

18  after the subsequent injury when disability has been

19  continuous since the subsequent injury, and it is determined

20  that the death resulted from a merger, the employer shall, in

21  the first instance, pay the funeral expenses and the death

22  benefits prescribed by this chapter; but, subject to the

23  limitations specified in subsection (6), she or he shall be

24  reimbursed from the Special Disability Trust Fund created by

25  subsection (8) for the last 50 percent of all compensation

26  allowable and paid for such death and for 50 percent of the

27  amount paid as funeral expenses.

28         (6)  EMPLOYER KNOWLEDGE, EFFECT ON REIMBURSEMENT.--

29         (a)  Reimbursement is not allowed under this section

30  unless it is established that the employer knew of the

31  preexisting permanent physical impairment prior to the


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    CS for SB 1372                                 Third Engrossed



  1  occurrence of the subsequent injury or occupational disease,

  2  and that the permanent physical impairment is one of the

  3  following:

  4         1.  Epilepsy.

  5         2.  Diabetes.

  6         3.  Cardiac disease.

  7         4.  Amputation of foot, leg, arm, or hand.

  8         5.  Total loss of sight of one or both eyes or a

  9  partial loss of corrected vision of more than 75 percent

10  bilaterally.

11         6.  Residual disability from poliomyelitis.

12         7.  Cerebral palsy.

13         8.  Multiple sclerosis.

14         9.  Parkinson's disease.

15         10.  Meniscectomy.

16         11.  Patellectomy.

17         12.  Ruptured cruciate ligament.

18         13.  Hemophilia.

19         14.  Chronic osteomyelitis.

20         15.  Surgical or spontaneous fusion of a major

21  weight-bearing joint.

22         16.  Hyperinsulinism.

23         17.  Muscular dystrophy.

24         18.  Thrombophlebitis.

25         19.  Herniated intervertebral disk.

26         20.  Surgical removal of an intervertebral disk or

27  spinal fusion.

28         21.  One or more back injuries or a disease process of

29  the back resulting in disability over a total of 120 or more

30  days, if substantiated by a doctor's opinion that there was a

31  preexisting impairment to the claimant's back.


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    CS for SB 1372                                 Third Engrossed



  1         22.  Total deafness.

  2         23.  Mental retardation, provided the employee's

  3  intelligence quotient is such that she or he falls within the

  4  lowest 2 percentile of the general population. However, it

  5  shall not be necessary for the employer to know the employee's

  6  actual intelligence quotient or actual relative ranking in

  7  relation to the intelligence quotient of the general

  8  population.

  9         24.  Any permanent physical condition which, prior to

10  the industrial accident or occupational disease, constitutes a

11  20-percent impairment of a member or of the body as a whole.

12         25.  Obesity, provided the employee is 30 percent or

13  more over the average weight designated for her or his height

14  and age in the Table of Average Weight of Americans by Height

15  and Age prepared by the Society of Actuaries using data from

16  the 1979 Build and Blood Pressure Study.

17         26.  Any permanent physical impairment as defined in s.

18  440.15(3) which is a result of a prior industrial accident

19  with the same employer or the employer's parent company,

20  subsidiary, sister company, or affiliate located within the

21  geographical boundaries of this state.

22         (b)  The Special Disability Trust Fund is not liable

23  for any costs, interest, penalties, or attorneys' fees.

24         (c)  An employer's or carrier's right to apportionment

25  or deduction pursuant to ss. 440.02(1), 440.15(5)(b), and

26  440.151(1)(c) does not preclude reimbursement from such fund,

27  except when the merger comes within the definition of

28  subparagraph (2)(b)2. and such apportionment or deduction

29  relieves the employer or carrier from providing the materially

30  and substantially greater permanent disability benefits

31  otherwise contemplated in those paragraphs.


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    CS for SB 1372                                 Third Engrossed



  1         (7)  REIMBURSEMENT OF EMPLOYER.--

  2         (a)  The right to reimbursement as provided in this

  3  section is barred unless written notice of claim of the right

  4  to such reimbursement is filed by the employer or carrier

  5  entitled to such reimbursement with the division or

  6  administrator at Tallahassee within 2 years after the date the

  7  employee last reached maximum medical improvement, or within 2

  8  years after the date of the first payment of compensation for

  9  permanent total disability, wage loss, or death, whichever is

10  later. The notice of claim must contain such information as

11  the division by rule requires or as established by the

12  administrator; and the employer or carrier claiming

13  reimbursement shall furnish such evidence in support of the

14  claim as the division or administrator reasonably may require.

15         (b)  For notice of claims on the Special Disability

16  Trust Fund filed on or after July 1, 1978, the Special

17  Disability Trust Fund shall, within 120 days after receipt of

18  notice that a carrier has paid, been required to pay, or

19  accepted liability for excess compensation, serve notice of

20  the acceptance of the claim for reimbursement.

21         (c)  A proof of claim must be filed on each notice of

22  claim on file as of June 30, 1997, within 1 year after July 1,

23  1997, or the right to reimbursement of the claim shall be

24  barred. A notice of claim on file on or before June 30, 1997,

25  may be withdrawn and refiled if, at the time refiled, the

26  notice of claim remains within the limitation period specified

27  in paragraph (a).  Such refiling shall not toll, extend, or

28  otherwise alter in any way the limitation period applicable to

29  the withdrawn and subsequently refiled notice of claim. Each

30  proof of claim filed shall be accompanied by a proof-of-claim

31  fee as provided in paragraph (9)(d). The Special Disability


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    CS for SB 1372                                 Third Engrossed



  1  Trust Fund shall, within 120 days after receipt of the proof

  2  of claim, serve notice of the acceptance of the claim for

  3  reimbursement. This paragraph shall apply to all claims

  4  notwithstanding the provisions of subsection (12).

  5         (d)  Each notice of claim filed or refiled on or after

  6  July 1, 1997, must be accompanied by a notification fee as

  7  provided in paragraph (9)(d).  A proof of claim must be filed

  8  within 1 year after the date the notice of claim is filed or

  9  refiled, accompanied by a proof-of-claim fee as provided in

10  paragraph (9)(d), or the claim shall be barred.  The

11  notification fee shall be waived if both the notice of claim

12  and proof of claim are submitted together as a single filing.

13  The Special Disability Trust Fund shall, within 180 days after

14  receipt of the proof of claim, serve notice of the acceptance

15  of the claim for reimbursement.  This paragraph shall apply to

16  all claims notwithstanding the provisions of subsection (12).

17         (e)  For dates of accident on or after January 1, 1994,

18  the Special Disability Trust Fund shall, within 120 days of

19  receipt of notice that a carrier has been required to pay, and

20  has paid over $10,000 in benefits, serve notice of the

21  acceptance of the claim for reimbursement. Failure of the

22  Special Disability Trust Fund to serve notice of acceptance

23  shall give rise to the right to request a hearing on the claim

24  for reimbursement. If the Special Disability Trust Fund

25  through its representative denies or controverts the claim,

26  the right to such reimbursement shall be barred unless an

27  application for a hearing thereon is filed with the division

28  or administrator at Tallahassee within 60 days after notice to

29  the employer or carrier of such denial or controversion. When

30  such application for a hearing is timely filed, the claim

31  shall be heard and determined in accordance with the procedure


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    CS for SB 1372                                 Third Engrossed



  1  prescribed in s. 440.25, to the extent that such procedure is

  2  applicable, and in accordance with the workers' compensation

  3  rules of procedure. In such proceeding on a claim for

  4  reimbursement, the Special Disability Trust Fund shall be made

  5  the party respondent, and no findings of fact made with

  6  respect to the claim of the injured employee or the dependents

  7  for compensation, including any finding made or order entered

  8  pursuant to s. 440.20(12), shall be res judicata. The Special

  9  Disability Trust Fund may not be joined or made a party to any

10  controversy or dispute between an employee and the dependents

11  and the employer or between two or more employers or carriers

12  without the written consent of the fund.

13         (f)  When it has been determined that an employer or

14  carrier is entitled to reimbursement in any amount, the

15  employer or carrier shall be reimbursed annually from the

16  Special Disability Trust Fund for the compensation and medical

17  benefits paid by the employer or carrier for which the

18  employer or carrier is entitled to reimbursement, upon filing

19  request therefor and submitting evidence of such payment in

20  accordance with rules prescribed by the division, which rules

21  may include parameters for annual audits. The Special

22  Disability Trust Fund shall pay the approved reimbursement

23  requests on a first-in, first-out basis reflecting the order

24  in which the reimbursement requests were received.

25         (8)  PREFERRED WORKER PROGRAM.--The division or

26  administrator shall issue identity cards to preferred workers

27  upon request by qualified employees and shall reimburse an

28  employer, from the Special Disability Trust Fund, for the cost

29  of workers' compensation premium related to the preferred

30  workers payroll for up to 3 years of continuous employment

31  upon satisfactory evidence of placement and issuance of


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    CS for SB 1372                                 Third Engrossed



  1  payroll and classification records and upon the employee's

  2  certification of employment.

  3         (9)  SPECIAL DISABILITY TRUST FUND.--

  4         (a)  There is established in the State Treasury a

  5  special fund to be known as the "Special Disability Trust

  6  Fund," which shall be available only for the purposes stated

  7  in this section; and the assets thereof may not at any time be

  8  appropriated or diverted to any other use or purpose. The

  9  Treasurer shall be the custodian of such fund, and all moneys

10  and securities in such fund shall be held in trust by such

11  Treasurer and shall not be the money or property of the state.

12  The Treasurer is authorized to disburse moneys from such fund

13  only when approved by the division or corporation and upon the

14  order of the Comptroller. The Treasurer shall deposit any

15  moneys paid into such fund into such depository banks as the

16  division or corporation may designate and is authorized to

17  invest any portion of the fund which, in the opinion of the

18  division, is not needed for current requirements, in the same

19  manner and subject to all the provisions of the law with

20  respect to the deposits of state funds by such Treasurer. All

21  interest earned by such portion of the fund as may be invested

22  by the Treasurer shall be collected by her or him and placed

23  to the credit of such fund.

24         (b)1.  The Special Disability Trust Fund shall be

25  maintained by annual assessments upon the insurance companies

26  writing compensation insurance in the state, the commercial

27  self-insurers under ss. 624.462 and 624.4621, the assessable

28  mutuals under s. 628.601, and the self-insurers under this

29  chapter, which assessments shall become due and be paid

30  quarterly at the same time and in addition to the assessments

31  provided in s. 440.51. The division shall estimate annually in


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    CS for SB 1372                                 Third Engrossed



  1  advance the amount necessary for the administration of this

  2  subsection and the maintenance of this fund and shall make

  3  such assessment in the manner hereinafter provided.

  4         2.  The annual assessment shall be calculated to

  5  produce during the ensuing fiscal year an amount which, when

  6  combined with that part of the balance in the fund on June 30

  7  of the current fiscal year which is in excess of $100,000, is

  8  equal to the average of:

  9         a.  The sum of disbursements from the fund during the

10  immediate past 3 calendar years, and

11         b.  Two times the disbursements of the most recent

12  calendar year.

13

14  Such amount shall be prorated among the insurance companies

15  writing compensation insurance in the state and the

16  self-insurers.

17         3.  The net premiums written by the companies for

18  workers' compensation in this state and the net premium

19  written applicable to the self-insurers in this state are the

20  basis for computing the amount to be assessed as a percentage

21  of net premiums. Such payments shall be made by each insurance

22  company and self-insurer to the division for the Special

23  Disability Trust Fund in accordance with such regulations as

24  the division prescribes.

25         4.  The Treasurer is authorized to receive and credit

26  to such Special Disability Trust Fund any sum or sums that may

27  at any time be contributed to the state by the United States

28  under any Act of Congress, or otherwise, to which the state

29  may be or become entitled by reason of any payments made out

30  of such fund.

31


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    CS for SB 1372                                 Third Engrossed



  1         (c)  Notwithstanding the Special Disability Trust Fund

  2  assessment rate calculated pursuant to this section, the rate

  3  assessed shall not exceed 4.52 percent.

  4         (d)  The Special Disability Trust Fund shall be

  5  supplemented by a $250 notification fee on each notice of

  6  claim filed or refiled after July 1, 1997, and a $500 fee on

  7  each proof of claim filed in accordance with subsection (7).

  8  Revenues from the fee shall be deposited into the Special

  9  Disability Trust Fund and are exempt from the deduction

10  required by s. 215.20. The fees provided in this paragraph

11  shall not be imposed upon any insurer which is in receivership

12  with the Department of Insurance.

13         (e)  The Department of Labor and Employment Security or

14  administrator shall report annually on the status of the

15  Special Disability Trust Fund.  The report shall update the

16  estimated undiscounted and discounted fund liability, as

17  determined by an independent actuary the projected change in

18  fund liability, change in the total number of notices of claim

19  on file with the fund in addition to the number of newly filed

20  notices of claim, change in the number of proofs of claim

21  processed by the fund, and the fee revenues refunded and

22  revenues applied to pay down the liability of the fund, the

23  average time required to reimburse accepted claims, and the

24  average administrative costs per claim.  The department or

25  administrator shall submit its initial report to the Governor,

26  the President of the Senate, and the Speaker of the House of

27  Representatives by March 1, 1998, for the period ending

28  February 1, 1998, with additional reports submitted by

29  December 1 of each year, 1998, and December 1, 1999.

30         (10)  DIVISION ADMINISTRATION OF FUND; CLAIMS; ADVISORY

31  COMMITTEE; EXPENSES.--The division or administrator shall


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    CS for SB 1372                                 Third Engrossed



  1  administer the Special Disability Trust Fund with authority to

  2  allow, deny, compromise, controvert, and litigate claims made

  3  against it and to designate an attorney to represent it in

  4  proceedings involving claims against the fund, including

  5  negotiation and consummation of settlements, hearings before

  6  judges of compensation claims, and judicial review. The

  7  division or administrator or the attorney designated by it

  8  shall be given notice of all hearings and proceedings

  9  involving the rights or obligations of such fund and shall

10  have authority to make expenditures for such medical

11  examinations, expert witness fees, depositions, transcripts of

12  testimony, and the like as may be necessary to the proper

13  defense of any claim. The division shall appoint an advisory

14  committee composed of representatives of management,

15  compensation insurance carriers, and self-insurers to aid it

16  in formulating policies with respect to conservation of the

17  fund, who shall serve without compensation for such terms as

18  specified by it, but be reimbursed for travel expenses as

19  provided in s. 112.061. All expenditures made in connection

20  with conservation of the fund, including the salary of the

21  attorney designated to represent it and necessary travel

22  expenses, shall be allowed and paid from the Special

23  Disability Trust Fund as provided in this section upon the

24  presentation of itemized vouchers therefor approved by the

25  division.

26         (11)  EFFECTIVE DATES.--This section does not apply to

27  any case in which the accident causing the subsequent injury

28  or death or the disablement or death from a subsequent

29  occupational disease occurred prior to July 1, 1955, or on or

30  after January 1, 1998.  In no event shall the Special

31  Disability Trust Fund be liable for, or reimburse employers or


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    CS for SB 1372                                 Third Engrossed



  1  carriers for, any case in which the accident causing the

  2  subsequent injury or death or the disablement or death from a

  3  subsequent occupational disease occurred on or after January

  4  1, 1998.  The Special Disability Trust Fund shall continue to

  5  reimburse employers or carriers for subsequent injuries

  6  occurring prior to January 1, 1998, and the division shall

  7  continue to assess for and the division or administrator shall

  8  fund reimbursements as provided in subsection (9) for this

  9  purpose.

10         (12)  REIMBURSEMENT FROM THE SPECIAL DISABILITY TRUST

11  FUND.--The applicable law for the purposes of determining

12  entitlement to reimbursement from the Special Disability Trust

13  Fund is the law in effect on the date the accident occurred.

14         (13)(a)  The Special Disability Trust Fund

15  Privatization Commission is created to evaluate and determine

16  the feasibility of privatizing the Special Disability Trust

17  Fund.  The commission shall determine the liabilities of the

18  fund and the costs to presently administer the Special

19  Disability Trust Fund.  The commission may develop and issue a

20  request for proposal to transfer the liabilities of the

21  Special Disability Trust Fund to a qualified entity.  The

22  commission is authorized to select and contract with a

23  qualified entity, only if the commission determines that such

24  an arrangement would substantially reduce the costs and be

25  more effective than the current administration of the Special

26  Disability Trust Fund.  The commission may adopt rules

27  necessary for the performance of its assigned duties and

28  responsibilities.

29         (b)  Consistent with the closing of the fund provided

30  in subsection (11), the Special Disability Trust Fund

31  Privatization Commission is authorized to contract with an


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    CS for SB 1372                                 Third Engrossed



  1  administrator to review, allow, deny, compromise, controvert,

  2  and litigate claims of the Special Disability Trust Fund under

  3  this section.  The Commission, in consultation with the

  4  division, is authorized to contract with a qualified entity to

  5  assume the reimbursement obligations of the Special Disability

  6  Trust Fund for claims which have previously have accepted for

  7  reimbursement by the Special Disability Trust Fund and claims

  8  which are determined to be reimbursable by the Special

  9  Disability Trust Fund.  The qualified entity and the

10  administrator shall not be affiliates of the other, and shall

11  not establish or maintain a financial or contractual agreement

12  with each other for purposes of this section. On or before

13  July 1, 1999, the commission, in consultation with the

14  division, may develop and issue a request for proposal for the

15  transfer and assumption of liabilities, and administration of

16  certain functions related to claims of the Special Disability

17  Trust Fund. The administrator shall have experience in

18  workers' compensation claims management of sufficient scope

19  and size to undertake the duties and responsibilities of this

20  section and shall demonstrate the ability to meet the criteria

21  established by the commission, which shall include the ability

22  to substantially reduce the overall costs of reviewing and

23  reimbursing claims, and to settle and extinguish the

24  liabilities of the Special Disability Trust Fund in a more

25  cost efficient and more timely manner than presently provided

26  by the division. In the event liabilities on the Special

27  Disabilities Trust Fund are transferred to and assumed by a

28  qualified entity, such entity shall provide the state with

29  financial assurance as to the satisfaction of any such

30  liabilities or claims and the state and the Special Disability

31  Trust Fund shall have no further liability with respect to


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    CS for SB 1372                                 Third Engrossed



  1  those liabilities and claims. The financial assurances may

  2  include, but are not limited to, cash reserves, reinsurance,

  3  guarantees, or letters of credit.

  4         (c)  The commission shall be composed of three members,

  5  one member selected by the Governor; one selected by the

  6  Insurance Commissioner; and one selected by the Comptroller.

  7         (d)  The commission is authorized to appoint and employ

  8  such officers, agents, and employees as the commission deems

  9  advisable to operate and manage the affairs of the commission,

10  which officers, agents, and employees may be employees of the

11  division or the State Board of Administration. The commission

12  shall contract with consultants deemed necessary to determine

13  the liabilities of the Special Disability Trust Fund, as of

14  December 31, 1998, and the feasibility of privatizing the

15  Special Disability Trust Fund.

16         (14)  Florida Special Disability Trust Fund Financing

17  Corporation.--

18         (a)  The Legislature finds that:

19         1.  The liabilities of the Special Disability Trust

20  Fund are substantial and that the extinguishment of these

21  liabilities in a cost effective and timely manner are of

22  paramount importance to the state. In connection therewith, in

23  the event that the commission determines that it is more cost

24  effective and in the best interest of the Special Disabilities

25  Trust Fund and the state to finance the liabilities of the

26  Special Disabilities Trust Fund through the issuance of bonds,

27  notes or other evidence of indebtedness, it shall request the

28  assistance of the corporation to issue such bonds, notes or

29  other evidences of indebtedness.

30         2.  The Legislature finds that the creation of a public

31  benefits corporation and the issuance of bonds or other forms


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    CS for SB 1372                                 Third Engrossed



  1  of indebtedness under this section is consistent with the

  2  underlying public purpose of reducing and ultimately

  3  eliminating the liabilities of the Special Disability Trust

  4  Fund. The purpose of the corporation and the subsequent bond

  5  issuance is to fund and pay the liabilities of the Special

  6  Disability Trust Fund, ensure the existence of a sufficient

  7  funding source for reimbursements to employers and carriers,

  8  and reduce the overall costs of the program provided by the

  9  state by employers and carriers.

10         (b)  In the event the commission determines that it is

11  more cost effective and in the best interest of the Special

12  Disability Trust Fund, the state, insurers, and employers to

13  finance the liabilities of the Special Disability Trust Fund

14  through the issuance of bonds, notes, or other evidences of

15  indebtedness, there is created a public benefits corporation

16  to be known as the Special Disability Trust Fund Financing

17  Corporation.

18         1.  The corporation shall operate under a three-member

19  board of directors consisting of the Governor or a designee,

20  the Treasurer or a designee, and the Comptroller or a

21  designee.

22         2.  The corporation has all of the powers of

23  corporations under chapter 607 and under chapter 617.

24         3.  The corporation may issue bonds, notes, or other

25  evidences of indebtedness and engage in such other financial

26  transactions as are necessary to provide sufficient funds to

27  achieve the purposes of this section.

28         4.  The corporation may invest in any of the

29  investments authorized under s. 215.47.

30         5.  There shall be no liability on the part of, and no

31  cause of action shall arise against, any board members or


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    CS for SB 1372                                 Third Engrossed



  1  employees of the corporation or the state for any actions

  2  taken by them in the performance of their duties under this

  3  paragraph.

  4         6.  The corporation may appoint and employ such

  5  officers, agents, and employees as the corporation deems

  6  advisable to operate and manage the affairs of the

  7  corporation, which officers, agents, and employees may be

  8  employees of the division or the State Board of

  9  Administration. The administrative costs and fees incurred by

10  the corporation, and employee salaries, shall be paid from

11  bond revenues.  The corporation and the division shall have

12  the power to contract with each other for expenses incurred in

13  connection with the transfer, assumption, and settlement of

14  liabilities of the Special Disability Trust Fund.

15         7.  In addition to bonding, the corporation may also

16  borrow from, or enter into other financing arrangements with,

17  any market sources at interest rates not exceeding prevailing

18  interest rates.

19         (c)1.  The proceeds of revenue bonds issued by this

20  corporation may be used to pay obligations of the Special

21  Disability Trust Fund made pursuant to this section; to

22  finance or replace previously existing borrowings or financial

23  arrangements; to pay interest on bonds; to fund reserves for

24  the bonds; to pay expenses incident to the issuance or sale of

25  any bonds issued under this subsection, or for such other

26  purposes related to the financial obligations of the Special

27  Disability Trust Fund as the corporation may determine. The

28  corporation may pledge all or a portion of the revenues

29  collected under subsection (9) to secure such revenue bonds,

30  and may execute such agreements between the corporation and

31


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  1  the division, necessary or desirable in connection with the

  2  issuance of any revenue bonds.

  3         2.  The corporation may contract with the State Board

  4  of Administration to serve as trustee with respect to debt

  5  obligations issued by the corporation as provided by this

  6  section and to hold, administer, and invest proceeds of such

  7  debt obligations and other funds of the corporation. The State

  8  Board of Administration may perform such services and may

  9  contract with others to provide all or a part of such services

10  and to recover the costs and expenses of providing such

11  services.  The investment of proceeds of debt obligations or

12  other funds of the corporation and contracts of funds held in

13  trust by the State Board of Administration, whether directly

14  or indirectly related to the investments or contracts, are

15  exempt from the provisions of chapter 287.

16         (d)1.  Revenue bonds may not be issued under this

17  subsection until validated under chapter 75. In any suit,

18  action, or proceeding involving the validity or enforceability

19  of any bond issued under this subsection, or the security

20  therefor, any such bond reciting in substance that it has been

21  issued by the corporation in connection with any purpose of

22  this section shall be conclusively deemed to have been carried

23  out in accordance with the mandates herein. In actions under

24  chapter 75 to validate any bonds issued by the corporation,

25  the notice required by s. 75.06 shall be published only in

26  Leon County and in two newspapers of general circulation in

27  the state, and the complaint and order of the court shall be

28  served only on the State Attorney of the Second Judicial

29  Circuit. The validation of at least the first obligations

30  incurred pursuant to this subsection shall be appealed to the

31  Supreme Court, to be handled on an expedited basis.


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  1         2.  The state hereby covenants with holders of bonds of

  2  the corporation that the state will not repeal or abrogate the

  3  power of the division to levy the assessments and to collect

  4  the proceeds of the revenues pledged to the payment of such

  5  bonds as long as any such bonds remain outstanding unless

  6  adequate provision has been made for the payment of such bonds

  7  pursuant to the documents authorizing the issuance of such

  8  bonds.

  9         3.  The corporation and its corporate existence shall

10  continue until terminated by law; however, no such law shall

11  take effect as long as the corporation has bonds outstanding

12  unless adequate provision has been made for the payment of

13  such bonds pursuant to the documents authorizing the issuance

14  of such bonds. Upon termination of the existence of the

15  corporation, all of its rights and properties in excess of its

16  obligations shall pass to and be vested in the state.

17         (e)1.  The funds, credit, property, or taxing power of

18  the state or political subdivisions of the state shall not be

19  pledged for the payment of such bonds. The bonds of the

20  corporation are not a debt of the state or of any political

21  subdivision, and neither the state nor any political

22  subdivision is liable on such bonds. The corporation does not

23  have the power to pledge the credit, the revenues, or the

24  taxing power of the state or of any political subdivision. The

25  credit, revenues, or taxing power of the state or of any

26  political subdivision shall not be deemed to be pledged to the

27  payment of any bonds of the corporation. However, bonds issued

28  under this subsection are declared to be for an essential

29  public and governmental purpose.

30         2.  The property, revenues, and other assets of the

31  corporation; the transactions and operations of the


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  1  corporation and the income from such transactions and

  2  operations; and all bonds issued under this paragraph and the

  3  interest on such bonds, which is exempt from income taxes of

  4  the United States, are exempt from taxation by the state and

  5  any political subdivision, including, but not limited to, the

  6  intangibles tax under chapter 199, the income tax under

  7  chapter 220, and the premium tax under the Florida Insurance

  8  Code. This exemption does not apply to any tax imposed by

  9  chapter 220 on interest income or profits on debt obligations

10  owned by corporations other than the Special Disability Trust

11  Fund Financing Corporation. The corporation is not subject to

12  the reporting requirements mandated by the Florida Insurance

13  Code.

14         (f)  All bonds of the corporation shall be and

15  constitute legal investments without limitation for all public

16  bodies of this state; for all banks, trust companies, savings

17  banks, savings associations, savings and loan associations,

18  and investment companies; for all administrators, executors,

19  trustees, and other fiduciaries; for all insurance companies

20  and associations and other persons carrying on an insurance

21  business; and for all other persons who are now or may

22  hereafter be authorized to invest in bonds or other

23  obligations of the state and shall be and constitute eligible

24  securities to be deposited as collateral for the security of

25  any state, county, municipal, or other public funds. This

26  paragraph shall be considered as additional and supplemental

27  authority and shall not be limited without specific reference

28  to this paragraph.

29         (g)  In the event the commission selects a qualified

30  entity to assume all or some of the liabilities of the Special

31  Disability Trust Fund, all or any portion of the monetary


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  1  assets and claims liabilities held in and accruing to the

  2  Special Disability Trust Fund may, with the agreement of the

  3  corporation or the administrator, be transferred to and fully

  4  assumed by the corporation or the qualified entity. As

  5  provided in an agreement with the corporation or the qualified

  6  entity, subsequent assessments under subsection (9) shall be

  7  collected by the division, deposited into the Special

  8  Disability Trust Fund, and used exclusively for the debt

  9  service of the bonds issued by the corporation, the payment of

10  outstanding liabilities of the Special Disability Trust Fund

11  not assumed by the corporation or the qualified entity, and

12  expenses of the corporation.

13         (h)  The administrator is prohibited from reviewing,

14  auditing, litigating, reimbursing, or settling any pending or

15  future claim or liability of its affiliates or subsidiaries.

16  The administrator is required to subcontract the

17  responsibility of reviewing, auditing, litigating,

18  reimbursing, or settling such a claim or liability.

19         (i)  The Auditor General is authorized to examine and

20  audit the records and accounts of the corporation.

21         Section 85.  There is hereby appropriated $200,000 from

22  the Special Disability Trust Fund to the Special Disability

23  Trust Fund Privatization Commission to implement this act.

24         Section 86.  Paragraph (e) of subsection (4) of section

25  215.555, Florida Statutes, is amended to read:

26         215.555  Florida Hurricane Catastrophe Fund.--

27         (4)  REIMBURSEMENT CONTRACTS.--

28         (e)1.  Except as provided in subparagraphs 2. and 3.,

29  the contract shall provide that if an insurer demonstrates to

30  the board that it is likely to qualify for reimbursement under

31  the contract, and demonstrates to the board that the immediate


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  1  receipt of moneys from the board is likely to prevent the

  2  insurer from becoming insolvent, the board shall advance the

  3  insurer, at market interest rates, the amounts necessary to

  4  maintain the solvency of the insurer, up to 50 percent of the

  5  board's estimate of the reimbursement due the insurer. The

  6  insurer's reimbursement shall be reduced by an amount equal to

  7  the amount of the loan and interest thereon.

  8         2.  With respect only to an entity created under s.

  9  627.351, the contract shall also provide that the board may,

10  upon application by such entity, advance to such entity, at

11  market interest rates, up to 90 percent of the lesser of:

12         a.  The board's estimate of the amount of reimbursement

13  due to such entity; or

14         b.  The entity's share of the actual reimbursement

15  premium paid for that contract year, multiplied by the

16  currently available liquid assets of the fund.  In order for

17  the entity to qualify for an advance under this subparagraph,

18  the entity must demonstrate to the board that the advance is

19  essential to allow the entity to pay claims for a covered

20  event and the board must determine that the fund's assets are

21  sufficient and are sufficiently liquid to allow the board to

22  make an advance to the entity and still fulfill the board's

23  reimbursement obligations to other insurers. The entity's

24  final reimbursement for any contract year in which an advance

25  has been made under this subparagraph must be reduced by an

26  amount equal to the amount of the advance and any interest on

27  such advance. In order to determine what amounts, if any, are

28  due the entity, the board may require the entity to report its

29  exposure and its losses at any time to determine retention

30  levels and reimbursements payable.

31


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  1         3.  The contract shall also provide specifically and

  2  solely with respect to any limited apportionment company under

  3  s. 627.351(2)(b)3. that the board may, upon application by

  4  such company, advance to such company the amount of the

  5  estimated reimbursement payable to such company as calculated

  6  pursuant to paragraph (d), up to the lesser of:

  7         a.  Ninety percent of the board's estimate of the

  8  reimbursement due to such company, or

  9         b.  Ninety percent of the company's share of the total

10  fund premiums applied to the board's currently available

11  liquid assets,

12

13  at market rates, if the company demonstrates to the board that

14  the immediate receipt of such moneys is essential to permit it

15  to pay claims for a covered event and if the board determines

16  that the fund's assets are sufficient and are sufficiently

17  liquid to permit the board to make an advance to such company

18  and at the same time fulfill its reimbursement obligations to

19  the insurers that are participants in the fund.  Such

20  company's final reimbursement for any contract year in which

21  an advance pursuant to this subparagraph has been made shall

22  be reduced by an amount equal to the amount of the advance and

23  interest thereon.  In order to determine what amounts, if any,

24  are due to such company, the board may require such company to

25  report its exposure and its losses at such times as may be

26  required to determine retention levels and loss reimbursements

27  payable.

28         Section 87.  Paragraph (f) of subsection (2) of section

29  624.316, Florida Statutes, is amended to read:

30         624.316  Examination of insurers.--

31         (2)


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  1         (f)1.a.  An examination under this section must be

  2  conducted at least once every year with respect to a domestic

  3  insurer that has continuously held a certificate of authority

  4  for less than 3 years. The examination must cover the

  5  preceding fiscal year or the period since the last examination

  6  of the insurer. The department may limit the scope of the

  7  examination if the insurer has demonstrated sufficient

  8  compliance as determined under subparagraph 3.

  9         b.  The department may not accept an independent

10  certified public accountant's audit report in lieu of an

11  examination required by this subparagraph.

12         c.  An insurer may not be required to pay more than

13  $25,000 to cover the costs of any one examination under this

14  subparagraph.

15         2.  An examination under this section must be conducted

16  not less frequently than once every 5 years with respect to an

17  insurer that has continuously held a certificate of authority,

18  without a change in ownership subject to s. 624.4245 or s.

19  628.461, for more than 15 years and has demonstrated

20  sufficient compliance as determined under subparagraph 3. The

21  examination must cover the preceding 5 fiscal years of the

22  insurer or the period since the last examination of the

23  insurer. This subparagraph does not limit the ability of the

24  department to conduct more frequent examinations.

25         3.  The department must, by rule, adopt procedures and

26  criteria for determining if an insurer has demonstrated

27  sufficient compliance with this code and cooperation with the

28  department. The rules must include consideration of such

29  factors as financial strength, timeliness, consumer service,

30  economic and community contributions and support,

31  responsiveness to department requests, and any other relevant


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  1  factors. The department must annually publish and disseminate

  2  a listing of those insurers found to demonstrate sufficient

  3  compliance under the rules, including special recognition for

  4  community contributions and support.

  5         Section 88.  Subsection (4) is added to section

  6  624.426, Florida Statutes, to read:

  7         624.426  Exceptions to resident agent and

  8  countersignature law.--Section 624.425 does not apply to:

  9         (4)  Policies of insurance issued by insurers whose

10  agents represent only one company or group of companies under

11  common ownership if a company within one group is transferring

12  policies to another company within the same group and the

13  agent of record remains the same.

14         Section 89.  Subsections (1)-(12) of section 624.610,

15  Florida Statutes, are renumbered as subsections (2)-(13) of

16  said section, respectively, new subsection (1) is added to

17  said section, and renumbered subsection (2) of said section is

18  amended, to read:

19         624.610  Reinsurance.--

20         (1)  The purpose of this section is to protect the

21  interests of insureds, claimants, ceding insurers, assuming

22  insurers, and the public.  It is the intent of the Legislature

23  to ensure adequate regulation of insurers and reinsurers and

24  adequate protection for those to whom they owe obligations.

25  In furtherance of that state interest, the Legislature

26  requires that upon the insolvency of a non-United States

27  insurer or reinsurer which provides security to fund its

28  United States obligations in accordance with this section,

29  such security shall be maintained in the United States and

30  claims shall be filed with and valued by the State Insurance

31  Commissioner with regulatory oversight, and the assets shall


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  1  be distributed in accordance with the insurance laws of the

  2  state in which the trust is domiciled that are applicable to

  3  the liquidation of domestic United States insurance companies.

  4  The Legislature declares that the matters contained in this

  5  section are fundamental to the business of insurance in

  6  accordance with 15 U.S.C. ss. 1011-1012.

  7         (3)(2)

  8         (b)  Credit in accounting and financial statements on

  9  account of reinsurance ceded to a nonapproved reinsurer may be

10  allowed only:

11         1.  When it is demonstrated by the ceding insurer to

12  the satisfaction of the department that such reinsurer

13  maintains the standards and meets the financial requirements

14  applicable to an authorized insurer;

15         2.  To the extent of deposits by, or funds withheld

16  from, such reinsurer pursuant to express provision therefor in

17  the reinsurance contract as security for the payment of the

18  obligations thereunder if such deposits or funds are held

19  subject to withdrawal by, and under the control of, the ceding

20  insurer or such deposits or funds are placed in trust for such

21  purposes in a bank which is a member of the Federal Reserve

22  System if withdrawals from the trust cannot be made without

23  the consent of the ceding insurer. The funds withheld may be

24  cash or securities which are qualified as admitted assets

25  under part II of chapter 625 and which have a market value

26  equal to or greater than the credit taken; or

27         3.  To the extent that the amount of a clean,

28  unconditional, evergreen, and irrevocable letter of credit,

29  issued for a term of not less than 1 year and in conformity

30  with the requirements set forth in this subparagraph, equals

31  or exceeds the liability of an unauthorized or unapproved


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  1  reinsurer for unearned premiums, outstanding losses, and an

  2  adequate reserve for incurred but not reported losses under a

  3  specific reinsurance agreement. The requirements are that such

  4  a clean and irrevocable letter of credit be issued under

  5  arrangements satisfactory to the department as constituting

  6  security to the ceding insurer substantially equal to that of

  7  a deposit under subparagraph 2. and that the letter be issued

  8  by a banking institution which is a member of the Federal

  9  Reserve System and which has financial standing satisfactory

10  to the commissioner. The department may adopt rules requiring

11  that the letter adhere in its wording to a format for letters

12  of credit as the format has been or may be adopted or approved

13  by the National Association of Insurance Commissioners.

14         4.  When the reinsurance is ceded to a reinsurer which

15  maintains a trust fund, in a bank or trust company that is

16  subject to supervision by any state of the United States or

17  that is a member of the Federal Reserve System, for the

18  payment of the valid claims for business written in the United

19  States. The trust shall consist of a trusteed account in an

20  amount not less than the reinsurer's liabilities attributable

21  to reinsurance by ceding insurers for business written in the

22  United States and, in addition, the reinsurer shall maintain a

23  trusteed surplus of not less than $20 million.  Such trust

24  shall be established in a form approved, and any amendments to

25  the trust approved, by the insurance commissioner where the

26  trust is domiciled, or the insurance commissioner of another

27  state who, pursuant to the terms of the trust agreement, has

28  accepted principal regulatory oversight of the trust.  The

29  trust shall remain in effect for as long as the reinsurer has

30  outstanding obligations due under the reinsurance agreements

31  subject to the trust.  The trust assets must be in cash or


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  1  securities which are qualified as admitted assets under part

  2  II of chapter 625 and which have a market value of the

  3  required liabilities and trusteed surplus. The reinsurer shall

  4  report quarterly to the insurance commissioner information

  5  substantially the same as that required to be reported on the

  6  National Association of Insurance Commissioners Annual

  7  Statement form by licensed insurers to enable the insurance

  8  commissioner to determine the sufficiency of the trust fund.

  9  The trust and the reinsurer shall be subject to examination as

10  determined by the commissioner.

11         5.  The credit permitted by subparagraph (a)4. and the

12  credit permitted by subparagraph (b)2. shall not be allowed

13  unless the assuming insurer in substance agrees in the trust

14  agreement to the following conditions:

15         a.  Notwithstanding any other provisions in the trust

16  instrument, if the trust fund is inadequate because it

17  contains an amount less than the amount required by the

18  department or, if the grantor of the trust has been declared

19  insolvent or placed into receivership, rehabilitation,

20  liquidation, or similar proceedings under the laws of its

21  state or country of domicile, the trustee shall comply with an

22  order of the commissioner superintendent with regulatory

23  oversight over the trust or with an order of a court of

24  competent jurisdiction directing the trustee to transfer to

25  the commissioner superintendent with regulatory oversight all

26  of the assets of United States trust beneficiaries.

27         b.  The assets shall be distributed by, and claims of

28  United States trust beneficiaries shall be filed with and

29  valued by, the commissioner superintendent with regulatory

30  oversight in accordance with the laws of the state in which

31


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  1  the trust is domiciled that are applicable to the liquidation

  2  of domestic insurance companies.

  3         c.  If the commissioner superintendent with regulatory

  4  oversight determines that the assets of the trust fund or any

  5  part thereof are not necessary to satisfy the claims for

  6  business written in the United States, the assets or any part

  7  thereof shall be returned by the commissioner superintendent

  8  with regulatory oversight to the trustee for distribution in

  9  accordance with the trust agreement.

10         d.  The grantor shall waive any right otherwise

11  available to it under United States law that is inconsistent

12  with this provision.

13         (c)  For the purposes of this subsection only, the term

14  "ceding insurer" shall include any health maintenance

15  organization operating under a certificate of authority issued

16  under part I of chapter 641.

17         Section 90.  Paragraph (a) of subsection (2) of section

18  627.7275, Florida Statutes, is amended to read:

19         627.7275  Motor vehicle property damage liability.--

20         (2)(a)  Insurers writing motor vehicle insurance in

21  this state shall make available, subject to the insurers'

22  usual underwriting restrictions, coverage under policies as

23  described in subsection (1) of this section to any applicant

24  for private passenger motor vehicle insurance coverage who is

25  seeking the coverage in order to reinstate the applicant's

26  driving privileges in this state when the driving privileges

27  were revoked or suspended pursuant to s. 316.646 or s. 627.733

28  due to the failure of the applicant to maintain required

29  security.  The policy shall be issued for a period of at least

30  6 months and as to the minimum coverages required under this

31  section shall not be cancelable by the insured for any reason


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  1  or by the insurer after a period not to exceed 30 days during

  2  which the insurer must complete underwriting of the policy.

  3  After the insurer has completed underwriting the policy within

  4  the 30-day period, the insurer shall notify the Department of

  5  Highway Safety and Motor Vehicles that the policy is in full

  6  force and effect and the policy shall not be cancelable for

  7  the remainder of the policy period.  A premium shall be

  8  collected and coverage shall be in effect for the 30-day

  9  period during which the insurer is completing the underwriting

10  of the policy whether or not the person's driver license,

11  motor vehicle tag, and motor vehicle registration are in

12  effect.  Once the noncancelable provisions of the policy

13  become effective, the coverage or risk shall not be changed

14  during the policy period and the premium shall be

15  nonrefundable fully earned.  If, during the pendency of the

16  2-year proof of insurance period required under s. 627.733(7),

17  the insured obtains additional coverage or coverage for an

18  additional risk or changes territories, the insured then she

19  or he must obtain a new 6-month noncancelable policy in

20  accordance with the provisions of this section. However, if

21  the insured must obtain a new 6-month policy and obtains the

22  policy from the same insurer, the policyholder shall receive

23  credit on the new policy for any premium paid on the

24  previously issued policy.

25         Section 91.  Subsections (1) and (2) of section

26  627.9126, Florida Statutes, are amended to read:

27         627.9126  Annual reports of information by liability

28  insurers required.--

29         (1)  Each insurer transacting commercial multiperil,

30  products liability, commercial automobile liability, private

31  passenger automobile liability, or other line of liability


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  1  insurance shall maintain information as specified in this

  2  section. Such information shall be maintained for each line of

  3  insurance and for direct Florida business only. The department

  4  may shall annually conduct a sampling of claims or actions for

  5  damages for personal injury or property damage claimed to have

  6  been caused by error, omission, or negligence of insureds if

  7  the claim resulted in:

  8         (a)  A final judgment in any amount.

  9         (b)  A settlement in any amount.

10         (c)  A final disposition not resulting in payment on

11  behalf of the insured.

12         (2)  Upon request of the department, an insurer shall,

13  within 60 days, submit to the department a report that which

14  contains:

15         (a)  A final judgment in any amount.

16         (b)  A settlement in any amount.

17         (c)  A final disposition not resulting in payment on

18  behalf of the insured.

19         Section 92.  Section 627.913, Florida Statutes, is

20  amended to read:

21         627.913  Reports of information by products liability

22  insurers required.--

23         (1)  The department may require any insurer authorized

24  to write a policy of products liability insurance in the state

25  to shall transmit the following information, based on its

26  statewide products liability insurance writings. Upon the

27  request of, to the department, an each year in the annual

28  report of such insurer shall, within 60 days, submit to the

29  department a report that contains:

30         (1)(a)  Premiums written;

31         (2)(b)  Premiums earned;


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  1         (3)(c)  Unearned premiums;

  2         (4)(d)  The dollar amount of claims paid;

  3         (5)(e)  Incurred claims, not including claims incurred

  4  but not reported;

  5         (6)(f)  Claims closed without payment, and the amount

  6  reserved for such claims;

  7         (7)(g)  Loss reserves for all claims except claims

  8  incurred but not reported;

  9         (8)(h)  Reserves for claims incurred but not reported;

10         (9)(i)  Losses paid as a percentage of the amount

11  reserved for such losses;

12         (10)(j)  Net investment gain or loss and other income

13  gain or loss allocated to products liability lines according

14  to the allocation formula used in the annual insurance expense

15  exhibit;

16         (11)(k)  Underwriting income or loss;

17         (12)(l)  Actual expenses in detail, including, but not

18  limited to, loss adjustment expense; commissions; general

19  expense; and advertising, home office, and defense costs;

20         (13)(m)  Claims settled after a suit was filed;

21         (14)(n)  Claims paid based on a judgment; and

22         (15)(o)  Judgments appealed by the insurer, together

23  with the total results of such appeals.

24         (2)  The department shall provide a summary of

25  information provided pursuant to subsection (1) in its annual

26  report.

27         (3)  In the first year that an insurer makes a report

28  pursuant to subsection (1), the insurer shall provide only the

29  information required by paragraphs (a) through (l) of

30  subsection (1) and shall provide such information for the

31  current year and the 3 previous years.


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  1         Section 93.  Section 624.22, Florida Statutes, is

  2  repealed.

  3         Section 94.  Sections 626.532 and 626.857, Florida

  4  Statutes, are repealed.

  5         Section 95.  Section 627.192, Florida Statutes, is

  6  created to read:

  7         627.192  Workers' compensation insurance; employee

  8  leasing arrangements.--

  9         (1)  The purpose of this section is to ensure that an

10  employer who leases some or all of its workers properly

11  obtains workers' compensation insurance coverage for all of

12  its employees, including those leased from or coemployed with

13  another entity, and that premium paid by an employee leasing

14  company is commensurate with exposure and anticipated claim

15  experience for all employees.

16         (2)  For purposes of the Florida Insurance Code:

17         (a)  "Employee leasing" shall have the same meaning as

18  set forth in s. 468.520(4).

19         (b)  "Experience rating modification" means a factor

20  applied to a premium to reflect a risk's variation from the

21  average risk. The experience modification is determined by

22  comparing actual losses to expected losses, using the risk's

23  own past experience.

24         (c)  "Leased employee" means a person performing

25  services for a lessee under an employee leasing arrangement.

26         (d)  "Lessee" means an entity which obtains all or part

27  of its workforce from another entity through an employee

28  leasing arrangement or which employs the services of an entity

29  through an employee leasing arrangement.

30         (e)  "Lessor" means an employee leasing company, as set

31  forth in part XI of chapter 468, engaged in the business of or


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  1  holding itself out as being in the business of employee

  2  leasing. A lessor may also be referred to as an employee

  3  leasing company.

  4         (f)  "Premium subject to dispute" means that the

  5  insured has provided a written notice of dispute to the

  6  insurer or service carrier, has initiated any applicable

  7  proceeding for resolving such disputes as prescribed by law or

  8  rating organization procedures approved by the department, or

  9  has initiated litigation regarding the premium dispute. The

10  insured must have detailed the specific areas of dispute and

11  provided an estimate of the premium the insured believes to be

12  correct. The insured must have paid any undisputed portion of

13  the bill.

14         (3)  A lessor that obtains coverage in the voluntary

15  workers' compensation market may elect, with the voluntary

16  market insurer's knowledge and consent, to secure the coverage

17  on leased employees through a workers' compensation policy

18  issued to the lessor. The insurer of the lessor may, in its

19  discretion, take all reasonable steps to ascertain exposure

20  under the policy and collect the appropriate premium by:

21         (a)  Requiring the lessor to provide a complete

22  description of lessor's operations.

23         (b)  Requiring periodic reporting by the lessor of

24  covered lessees' payroll, classifications, claims information,

25  loss data, and jurisdictions with exposure. This reporting may

26  be supplemented by a requirement for lessees to submit to the

27  carrier Internal Revenue Service Form 941 or its equivalent on

28  a quarterly basis.

29         (c)  Auditing the lessor's operations.

30         (d)  Using other reasonable measures to determine the

31  appropriate premium.


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  1         (4)  A lessor that applies for coverage or is covered

  2  through the voluntary market shall also maintain and furnish

  3  to the insurer on an annual basis, and as the insurer may

  4  otherwise reasonably require, sufficient information to permit

  5  the calculation of an experience modification factor for each

  6  lessee upon termination of the employee leasing relationship.

  7  Information accruing during the term of the leasing

  8  arrangement which is used to calculate an experience

  9  modification factor for a lessee upon termination of the

10  leasing relationship shall continue to be used in the future

11  experience ratings of the lessor. Such information shall

12  include:

13         (a)  The lessee's corporate name.

14         (b)  The lessee's taxpayer or employer identification

15  number.

16         (c)  Payroll summaries and class codes applicable to

17  each lessee, and, if requested by the insurer, a listing of

18  all leased employees associated with a given lessee.

19         (d)  Claims information grouped by lessee, and any

20  other information maintained by or readily available to the

21  lessor that is necessary for the calculation of an experience

22  modification factor for each lessee.

23         (5)  In addition to any other provision of law, any

24  material violation of this section by an employee leasing

25  company is grounds for cancellation or nonrenewal of the

26  lessor's insurance policy provided that the employee leasing

27  company has been provided a reasonable opportunity to cure the

28  violation. If an employee leasing company has received notice

29  that its workers' compensation insurance policy will be

30  canceled or nonrenewed, the leasing company shall notify by

31  certified mail, within 15 days after receipt of the notice,


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  1  all of the lessees for which there is an employee leasing

  2  arrangement covered under the policy to be canceled, except

  3  notice is not required if the employee leasing company has

  4  obtained another insurance policy with an effective date that

  5  is the same as the date of cancellation or nonrenewal.

  6         (6)  If the employee leasing arrangement with a lessee

  7  is terminated, the lessee shall be assigned an experience

  8  modification factor which reflects its experience during the

  9  experience period specified by the approved experience rating

10  plan, including, if applicable, experience incurred for leased

11  employees under the employee leasing arrangements. The

12  employee leasing company shall notify the insurer of its

13  intent to terminate any lessee relationship prior to

14  termination when feasible. When prior notice is not feasible,

15  the employee leasing company shall notify its insurer within 5

16  working days following actual termination.

17         (7)  This section shall not have any effect on the

18  statutory obligation, if any, of a lessee to secure workers'

19  compensation coverage for employees that the lessee does not

20  coemploy or lease pursuant to an employee leasing arrangement.

21         (8)  A lessee shall not enter into an employee leasing

22  relationship or be eligible for workers' compensation coverage

23  in the voluntary market if the lessee owes its current or a

24  prior insurer any premium for workers' compensation insurance,

25  or if the lessee owes its current or prior employee leasing

26  company amounts due under the service agreement, except for

27  premium or amounts due that are subject to dispute. For the

28  purposes of this section and compliance with other laws and

29  regulations, a lessor may rely on a sworn statement by the

30  lessee that the lessee has met any and all prior premium or

31


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  1  fee obligations, unless the lessor has actual knowledge to the

  2  contrary.

  3         (9)  Insurers shall conduct annual audits of payroll

  4  and classifications of employee leasing companies in order to

  5  ensure that the appropriate premium is charged for workers'

  6  compensation coverage. The audits shall be conducted to ensure

  7  that all sources of payment by lessors to employees,

  8  subcontractors, and independent contractors have been reviewed

  9  and the accuracy of classifications of employees have been

10  verified. Insurers may provide for more frequent audits of

11  lessors based on such factors as amount of premium, type of

12  business, loss ratios, or other relevant factors. Payroll and

13  classification verification audit rules of insurers must

14  include, but need not be limited to, use by the insurer of

15  state and federal reports of employee income, payroll and

16  other accounting records, certificates of insurance maintained

17  by subcontractors, and duties of employees.

18         (10)  If a lessor or a lessee fails to provide

19  reasonable access to payroll and classification records for a

20  payroll and classification audit, the insured shall pay a

21  premium to the insurer not to exceed three times the most

22  recent estimated annual premium. However, the lessor is not

23  subject to such penalty if the failure to obtain the needed

24  records is the direct result of the acts or omissions of the

25  lessee.

26         (11)  This section shall take effect July 1, 1998, and

27  shall apply to any workers' compensation insurance policy

28  issued to or renewed with an employee leasing company on or

29  after October 1, 1998.

30         Section 96.  Except as otherwise provided herein, this

31  act shall take effect October 1, 1998.


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