Senate Bill 2516c1
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Florida Senate - 1999 CS for SB 2516
By the Committee on Banking and Insurance; and Senator Rossin
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1 A bill to be entitled
2 An act relating to insurance fraud; amending s.
3 626.321, F.S.; providing requirements for
4 limited licenses for credit life or disability
5 insurance and credit insurance; amending s.
6 626.989, F.S.; defining the terms "insurer" and
7 "insurance policy" for purposes of determining
8 insurance fraud; creating s. 626.9892, F.S.;
9 establishing the Anti-Fraud Reward Program in
10 the department; providing for rewards under
11 certain circumstances; requiring the department
12 to adopt rules to implement the program;
13 exempting review of department decisions
14 relating to rewards; creating s. 641.3915,
15 F.S.; requiring health maintenance
16 organizations to comply with insurer anti-fraud
17 requirements; amending s. 775.15, F.S.;
18 extending the statute of limitations for
19 certain insurance fraud violations; amending s.
20 817.234, F.S.; specifying a schedule of
21 criminal penalties for committing insurance
22 fraud; providing definitions; providing
23 application to health maintenance organizations
24 and contracts; amending s. 817.505, F.S.;
25 revising a penalty for patient brokering;
26 reenacting s. 455.657(3), F.S., relating to
27 kickbacks, to incorporate changes; providing an
28 appropriation; providing an effective date.
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30 Be It Enacted by the Legislature of the State of Florida:
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1 Section 1. Paragraphs (e) and (f) of subsection (1) of
2 section 626.321, Florida Statutes, 1998 Supplement are amended
3 to read:
4 626.321 Limited licenses.--
5 (1) The department shall issue to a qualified
6 individual, or a qualified individual or entity under
7 paragraphs (c), (d), and (e), a license as agent authorized to
8 transact a limited class of business in any of the following
9 categories:
10 (e) Credit life or disability insurance.--License
11 covering only credit life or disability insurance. The
12 license may be issued only to an individual employed by a life
13 or health insurer as an officer or other salaried or
14 commissioned representative, or to an individual employed by
15 or associated with a lending or financing institution or
16 creditor, and may authorize the sale of such insurance only
17 with respect to borrowers or debtors of such lending or
18 financing institution or creditor. However, only the
19 individual or entity whose tax identification number is used
20 in receiving or is credited with receiving the commission from
21 the sale of such insurance shall be the licensed agent of the
22 insurer. No individual while so licensed shall hold a license
23 as an agent or solicitor as to any other or additional kind or
24 class of life or health insurance coverage. An entity other
25 than a lending or financial institution defined in s. 626.988
26 holding a limited license under this paragraph shall also be
27 authorized to sell credit property insurance. An entity
28 applying for a license under this section:
29 1. Is required to submit only one application for a
30 license under s. 626.171.
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1 2. Is required to obtain a license for each office,
2 branch office, or place of business making use of the entity's
3 business name by applying to the department for the license on
4 a simplified form developed by rule of the department for this
5 purpose.
6 3. Is not required to pay any additional application
7 fees for a license issued to the offices or places of business
8 referenced in subsection (2), but is required to pay the
9 license fee as prescribed in s. 624.501, be appointed under s.
10 626.112, and pay the prescribed appointment fee under s.
11 624.501. The license obtained under this paragraph shall be
12 posted at the business location for which it was issued so as
13 to be readily visible to prospective purchasers of such
14 coverage.
15 (f) Credit insurance.--License covering only credit
16 insurance, as such insurance is defined in s. 624.605(1)(i),
17 and no individual or entity so licensed shall, during the same
18 period, hold a license as an agent or solicitor as to any
19 other or additional kind of life or health insurance with the
20 exception of credit life or disability insurance as defined in
21 paragraph (e). The same licensing provisions as outlined in
22 paragraph (e) apply to entities licensed as credit insurance
23 agents under this paragraph.
24 Section 2. Subsection (1) of section 626.989, Florida
25 Statutes, 1998 Supplement, is amended to read:
26 626.989 Division of Insurance Fraud; definition;
27 investigative, subpoena powers; protection from civil
28 liability; reports to division; division investigator's power
29 to execute warrants and make arrests.--
30 (1) For the purposes of this section, a person commits
31 a "fraudulent insurance act" if the person knowingly and with
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1 intent to defraud presents, causes to be presented, or
2 prepares with knowledge or belief that it will be presented,
3 to or by an insurer, self-insurer, self-insurance fund,
4 servicing corporation, purported insurer, broker, or any agent
5 thereof, any written statement as part of, or in support of,
6 an application for the issuance of, or the rating of, any
7 insurance policy, or a claim for payment or other benefit
8 pursuant to any insurance policy, which the person knows to
9 contain materially false information concerning any fact
10 material thereto or if the person conceals, for the purpose of
11 misleading another, information concerning any fact material
12 thereto. For the purposes of this section, the term "insurer"
13 also includes any health maintenance organization and the term
14 "insurance policy" also includes a health maintenance
15 organization subscriber contract.
16 Section 3. Section 626.9892, Florida Statutes, is
17 created to read:
18 626.9892 Anti-Fraud Reward Program; reporting of
19 insurance fraud.--
20 (1) The Anti-Fraud Reward Program is established
21 within the department, to be funded from the Insurance
22 Commissioner's Regulatory Trust Fund.
23 (2) The department may pay rewards of up to $25,000 to
24 persons providing information leading to the arrest and
25 conviction of persons committing complex or organized crimes
26 investigated by the Division of Insurance Fraud arising from
27 violations of s. 440.105, s. 624.15, s. 626.9541, s. 626.989,
28 or s. 817.234.
29 (3) Only a single reward amount may be paid by the
30 department for claims arising out of the same transaction or
31 occurrence, regardless of the number of persons arrested and
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1 convicted and the number of persons submitting claims for the
2 reward. The reward may be disbursed among more than one
3 person in amounts determined by the department.
4 (4) The department shall adopt rules that set forth
5 the application and approval process, including the criteria
6 against which claims are to be evaluated, the basis for
7 determining specific reward amounts, and the manner in which
8 rewards are disbursed. Applications for rewards authorized by
9 this section must be made under rules established by the
10 department.
11 (5) Determinations by the department to grant or deny
12 a reward under this section is not considered agency action
13 subject to review under s. 120.569 or s. 120.57.
14 Section 4. Section 641.3915, Florida Statutes, is
15 created to read:
16 641.3915 Health maintenance organization anti-fraud
17 plans and investigative units.--Each authorized health
18 maintenance organization and applicant for a certificate of
19 authority shall comply with the provisions of ss. 626.989 and
20 626.9891 as though such organization or applicant were an
21 authorized insurer. For purposes of this section, the
22 reference to the year 1996 in s. 626.9891 means the year 2000
23 and the reference to the year 1995 means the year 1999.
24 Section 5. Paragraph (h) of subsection (2) of section
25 775.15, Florida Statutes, 1998 Supplement, is amended to read:
26 775.15 Time limitations.--
27 (2) Except as otherwise provided in this section,
28 prosecutions for other offenses are subject to the following
29 periods of limitation:
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1 (h) A prosecution for a felony violation of s. 440.105
2 or s. 817.234 must be commenced within 5 years after the
3 violation is committed.
4 Section 6. Subsections (1), (2), (3), (4), and (10) of
5 section 817.234, Florida Statutes, 1998 Supplement, are
6 amended and subsections (11) and (12) are added to that
7 section to read:
8 817.234 False and fraudulent insurance claims.--
9 (1)(a) A person commits insurance fraud punishable as
10 provided in subsection (11) if that person Any person who,
11 with the intent to injure, defraud, or deceive any insurer:
12 1. Presents or causes to be presented any written or
13 oral statement as part of, or in support of, a claim for
14 payment or other benefit pursuant to an insurance policy or
15 health maintenance organization subscriber or provider
16 contract, knowing that such statement contains any false,
17 incomplete, or misleading information concerning any fact or
18 thing material to such claim;
19 2. Prepares or makes any written or oral statement
20 that is intended to be presented to any insurer in connection
21 with, or in support of, any claim for payment or other benefit
22 pursuant to an insurance policy or health maintenance
23 organization subscriber or provider contract, knowing that
24 such statement contains any false, incomplete, or misleading
25 information concerning any fact or thing material to such
26 claim; or
27 3.a. Knowingly presents, causes to be presented, or
28 prepares or makes with knowledge or belief that it will be
29 presented to any insurer, purported insurer, servicing
30 corporation, insurance broker, or insurance agent, or any
31 employee or agent thereof, any false, incomplete, or
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1 misleading information or written or oral statement as part
2 of, or in support of, an application for the issuance of, or
3 the rating of, any insurance policy, or health maintenance
4 organization subscriber or provider contract; or
5 b. Knowingly who conceals information concerning any
6 fact material to such application,
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8 commits a felony of the third degree, punishable as provided
9 in s. 775.082, s. 775.083, or s. 775.084.
10 (b) All claims and application forms shall contain a
11 statement that is approved by the Department of Insurance that
12 clearly states in substance the following: "Any person who
13 knowingly and with intent to injure, defraud, or deceive any
14 insurer files a statement of claim or an application
15 containing any false, incomplete, or misleading information is
16 guilty of a felony of the third degree." This paragraph does
17 not apply to reinsurance contracts, reinsurance agreements, or
18 reinsurance claims transactions. The changes in this paragraph
19 relating to applications shall take effect on March 1, 1996.
20 (2) Any physician licensed under chapter 458,
21 osteopathic physician licensed under chapter 459, chiropractic
22 physician licensed under chapter 460, or other practitioner
23 licensed under the laws of this state who knowingly and
24 willfully assists, conspires with, or urges any insured party
25 to fraudulently violate any of the provisions of this section
26 or part XI of chapter 627, or any person who, due to such
27 assistance, conspiracy, or urging by said physician,
28 osteopathic physician, chiropractic physician, or
29 practitioner, knowingly and willfully benefits from the
30 proceeds derived from the use of such fraud, commits insurance
31 fraud is guilty of a felony of the third degree, punishable as
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1 provided in subsection (11) s. 775.082, s. 775.083, or s.
2 775.084. In the event that a physician, osteopathic physician,
3 chiropractic physician, or practitioner is adjudicated guilty
4 of a violation of this section, the Board of Medicine as set
5 forth in chapter 458, the Board of Osteopathic Medicine as set
6 forth in chapter 459, the Board of Chiropractic Medicine as
7 set forth in chapter 460, or other appropriate licensing
8 authority shall hold an administrative hearing to consider the
9 imposition of administrative sanctions as provided by law
10 against said physician, osteopathic physician, chiropractic
11 physician, or practitioner.
12 (3) Any attorney who knowingly and willfully assists,
13 conspires with, or urges any claimant to fraudulently violate
14 any of the provisions of this section or part XI of chapter
15 627, or any person who, due to such assistance, conspiracy, or
16 urging on such attorney's part, knowingly and willfully
17 benefits from the proceeds derived from the use of such fraud,
18 commits insurance fraud a felony of the third degree,
19 punishable as provided in subsection (11) s. 775.082, s.
20 775.083, or s. 775.084.
21 (4) Any No person or governmental unit licensed under
22 chapter 395 to maintain or operate a hospital, and any no
23 administrator or employee of any such hospital, who shall
24 knowingly and willfully allows allow the use of the facilities
25 of said hospital by an insured party in a scheme or conspiracy
26 to fraudulently violate any of the provisions of this section
27 or part XI of chapter 627. Any hospital administrator or
28 employee who violates this subsection commits insurance fraud
29 a felony of the third degree, punishable as provided in
30 subsection (11) s. 775.082, s. 775.083, or s. 775.084. Any
31 adjudication of guilt for a violation of this subsection, or
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1 the use of business practices demonstrating a pattern
2 indicating that the spirit of the law set forth in this
3 section or part XI of chapter 627 is not being followed, shall
4 be grounds for suspension or revocation of the license to
5 operate the hospital or the imposition of an administrative
6 penalty of up to $5,000 by the licensing agency, as set forth
7 in chapter 395.
8 (10) As used in this section, the term "insurer" means
9 any insurer, health maintenance organization, self-insurer,
10 self-insurance fund, or other similar entity or person
11 regulated under chapter 440 or chapter 641 or by the
12 Department of Insurance under the Florida Insurance Code.
13 (11) If the value of any property involved in a
14 violation of this section:
15 (a) Is less than $20,000, the offender commits a
16 felony of the third degree, punishable as provided in s.
17 775.082, s. 775.083, or s. 775.084.
18 (b) Is $20,000 or more, but less than $100,000, the
19 offender commits a felony of the second degree, punishable as
20 provided in s. 775.082, s. 775.083, or s. 775.084.
21 (c) Is $100,000 or more, the offender commits a felony
22 of the first degree, punishable as provided in s. 775.082, s.
23 775.083, or s. 775.084.
24 (12) As used in this section, the term:
25 (a) "Property" means property as defined in s.
26 812.012.
27 (b) "Value" means value as defined in s. 812.012.
28 Section 7. Subsection (4) of section 817.505, Florida
29 Statutes, 1998 Supplement, is amended to read:
30 817.505 Patient brokering prohibited; exceptions;
31 penalties.--
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1 (4) Any person, including an officer, partner, agent,
2 attorney, or other representative of a firm, joint venture,
3 partnership, business trust, syndicate, corporation, or other
4 business entity, who violates any provision of this section
5 commits:
6 (a) A misdemeanor of the first degree for a first
7 violation, punishable as provided in s. 775.082 or by a fine
8 not to exceed $5,000, or both.
9 (b) a felony of the third degree for a second or
10 subsequent violation, punishable as provided in s. 775.082, s.
11 775.083, or s. 775.084 or by a fine not to exceed $10,000, or
12 both.
13 Section 8. For the purpose of incorporating the
14 amendment to subsection (4) of section 817.505, Florida
15 Statutes, 1998 Supplement, in a reference thereto, subsection
16 (3) of section 455.657, Florida Statutes, is reenacted to
17 read:
18 455.657 Kickbacks prohibited.--
19 (3) Violations of this section shall be considered
20 patient brokering and shall be punishable as provided in s.
21 817.505.
22 Section 9. The sum of $250,000 is appropriated from
23 the Insurance Commissioner's Regulatory Trust Fund in a
24 nonoperating category for fiscal year 1999-2000 for the
25 purpose of implementing the reward program under section
26 626.9892, Florida Statutes, as created by this act.
27 Section 10. This act shall take effect July 1, 1999.
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1 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
2 Senate Bill 2516
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4 1. Allows entities licensed to market credit life, credit
disability, and credit property insurance as well as
5 credit insurance, to submit only one application to the
Department of Insurance, to obtain a license for each
6 branch office, and apply for licensure using an
abbreviated fee for a license issued to a branch office,
7 but are required to pay certain appointment fees.
8 2. Health maintenance organizations (HMOs) and HMO
contracts would be included under the law prohibiting
9 false and fraudulent insurance claims and applications.
Health maintenance organizations would be required to
10 file anti-fraud plans with the Department of Insurance
or establish special investigative units.
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3. The Department of Insurance would be authorized to
12 create an "Anti-Fraud Reward Program" in order to pay
rewards to individuals who provide information leading
13 to the arrest and conviction of persons committing
insurance fraud. Appropriates $250,000 from the
14 Insurance Commissioner's Regulatory Trust Fund to
implement the reward program.
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4. Criminal penalties for insurance fraud would be
16 increased using a sliding scale based on the value of
the property involved in the fraudulent activity. The
17 statute of limitations for prosecuting insurance fraud
would be extended from 3 years to 5 years.
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5. The criminal penalties for patient brokering would be
19 increased. Reenacts the provision which prohibits
kickbacks under s. 455.657, F.S.
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