SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
CHAMBER ACTION
Senate House
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11 Senators Holzendorf, Geller, Klein, and Latvala moved the
12 following amendment:
13
14 Senate Amendment (with title amendment)
15 On page 2, between lines 24 and 25,
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17 insert:
18 Section 2. Paragraph (e) is added to subsection (1) of
19 section 28.101, Florida Statutes; to read:
20 28.101 Petitions and records of dissolution of
21 marriage; additional charges.--
22 (1) When a party petitions for a dissolution of
23 marriage, in addition to the filing charges in s. 28.241, the
24 clerk shall collect and receive:
25 (e) A charge of $50. Monthly, the clerk shall transfer
26 the moneys collected under this paragraph to the authorized
27 insurer or eligible surplus lines insurer, selected under
28 chapter 287, for the issuance of a policy of insurance to
29 provide child-support payments when the payor's employment has
30 been involuntarily terminated. The $50 charge may be reduced
31 to the actual premium amount for such policy as determined
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Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 through the competitive-bidding process in chapter 287.
2 1. The policy required by this paragraph must provide
3 for the payment of child-support amounts due to the child or
4 to the child's parent or legal guardian. Payments must be
5 made, after a reasonable waiting period of no longer than 7
6 days, on behalf of the obligated person when the obligated
7 person has become unemployed by reason of involuntary
8 unemployment. As used in this paragraph, the term "involuntary
9 unemployment" means unemployment due to a strike, lockout,
10 individual or mass layoff, or loss of income due to business
11 failure or bankruptcy. Payments must be equal to the monthly
12 or weekly support payments and must be paid in accordance with
13 the terms of the divorce decree or other order of the court
14 for the term of involuntary unemployment, but payments may not
15 be made for a period of more than 13 weeks. The 13 weeks need
16 not be consecutive; however, this is the maximum number of
17 weeks payable on behalf of the obligated person for the total
18 of all periods of involuntary unemployment.
19 2. In addition to the costs collected for the payment
20 of the insurance premium, the clerk may collect an additional
21 fee of $4 to cover the administrative cost of collecting and
22 transmitting the insurance premium.
23 3. The Department of Management Services shall select
24 an insurer or eligible surplus lines insurer to provide the
25 insurance required under this paragraph, and such selection
26 must comply with the provisions of chapter 287. The department
27 shall notify each county clerk of the insurer or surplus lines
28 insurer selected to provide the insurance and the necessary
29 information for transmittal of the moneys collected to pay the
30 premiums for such insurance.
31 4. The clerk shall furnish to such insurer or surplus
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Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 insurer the name and address of each person ordered to pay
2 child support and each person entitled to receive such
3 payments. The insurer or surplus lines insurer selected shall
4 furnish a certificate of insurance, an explanation of the
5 coverage, and claim-filing instructions to the person entitled
6 to receive the child-support payments.
7 5. The insurer or surplus lines insurer providing the
8 insurance required under this paragraph is responsible for
9 notifying the obligor, the obligee, the Department of Revenue
10 in the Title IV-D cases, and the local depository in the
11 county that entered the order that child support payments are
12 being made by an insurer.
13 Section 3. Subsection (6) is added to section
14 624.3161, Florida Statutes, to read:
15 624.3161 Market conduct examinations.--
16 (6) The department shall adopt rules as necessary to
17 effectuate the market conduct examination process, to assure
18 compliance by the person examined with the applicable
19 provisions of the Insurance Code. Such rules shall not exceed
20 the authority of the statutes involved in the market conduct
21 examination.
22 Section 4. Subsection (8) is added to section 626.171,
23 Florida Statutes, to read:
24 626.171 Application for license.--
25 (8) The department shall adopt rules to effectuate the
26 license application process, including photo identification,
27 background checks and credit reports, prelicensing courses,
28 the impact of criminal and law enforcement history, and other
29 relevant information in an effort to determine an applicant's
30 fitness and trustworthiness to engage in the business of
31 insurance.
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SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 Section 5. Paragraphs (o) and (w) of subsection (1) of
2 section 626.9541, Florida Statutes, are amended to read:
3 626.9541 Unfair methods of competition and unfair or
4 deceptive acts or practices defined.--
5 (1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR
6 DECEPTIVE ACTS.--The following are defined as unfair methods
7 of competition and unfair or deceptive acts or practices:
8 (o) Illegal dealings in premiums; excess or reduced
9 charges for insurance.--
10 1. Knowingly collecting any sum as a premium or charge
11 for insurance, which is not then provided, or is not in due
12 course to be provided, subject to acceptance of the risk by
13 the insurer, by an insurance policy issued by an insurer as
14 permitted by this code.
15 2. Knowingly collecting as a premium or charge for
16 insurance any sum in excess of or less than the premium or
17 charge applicable to such insurance, in accordance with the
18 applicable classifications and rates as filed with and
19 approved by the department, and as specified in the policy;
20 or, in cases when classifications, premiums, or rates are not
21 required by this code to be so filed and approved, premiums
22 and charges in excess of or less than those specified in the
23 policy and as fixed by the insurer. This provision shall not
24 be deemed to prohibit the charging and collection, by surplus
25 lines agents licensed under part VIII of this chapter, of the
26 amount of applicable state and federal taxes, or fees as
27 authorized by s. 626.916(4), in addition to the premium
28 required by the insurer or the charging and collection, by
29 licensed agents, of the exact amount of any discount or other
30 such fee charged by a credit card facility in connection with
31 the use of a credit card, as authorized by subparagraph (q)3.,
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Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 in addition to the premium required by the insurer. This
2 subparagraph shall not be construed to prohibit collection of
3 a premium for a universal life or a variable or indeterminate
4 value insurance policy made in accordance with the terms of
5 the contract.
6 3.a. Imposing or requesting an additional premium for
7 a policy of motor vehicle liability, personal injury
8 protection, medical payment, or collision insurance or any
9 combination thereof or refusing to renew the policy solely
10 because the insured was involved in a motor vehicle accident
11 unless the insurer's file contains information from which the
12 insurer in good faith determines that the insured was
13 substantially at fault in the accident.
14 b. An insurer which imposes and collects such a
15 surcharge or which refuses to renew such policy shall, in
16 conjunction with the notice of premium due or notice of
17 nonrenewal, notify the named insured that he or she is
18 entitled to reimbursement of such amount or renewal of the
19 policy under the conditions listed below and will subsequently
20 reimburse him or her or renew the policy, if the named insured
21 demonstrates that the operator involved in the accident was:
22 (I) Lawfully parked;
23 (II) Reimbursed by, or on behalf of, a person
24 responsible for the accident or has a judgment against such
25 person;
26 (III) Struck in the rear by another vehicle headed in
27 the same direction and was not convicted of a moving traffic
28 violation in connection with the accident;
29 (IV) Hit by a "hit-and-run" driver, if the accident
30 was reported to the proper authorities within 24 hours after
31 discovering the accident;
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Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 (V) Not convicted of a moving traffic violation in
2 connection with the accident, but the operator of the other
3 automobile involved in such accident was convicted of a moving
4 traffic violation;
5 (VI) Finally adjudicated not to be liable by a court
6 of competent jurisdiction;
7 (VII) In receipt of a traffic citation which was
8 dismissed or nolle prossed; or
9 (VIII) Not at fault as evidenced by a written
10 statement from the insured establishing facts demonstrating
11 lack of fault which are not rebutted by information in the
12 insurer's file from which the insurer in good faith determines
13 that the insured was substantially at fault.
14 c. In addition to the other provisions of this
15 subparagraph, an insurer may not fail to renew a policy if the
16 insured has had only one accident in which he or she was at
17 fault within the current 3-year period. However, an insurer
18 may nonrenew a policy for reasons other than accidents in
19 accordance with s. 627.728. This subparagraph does not
20 prohibit nonrenewal of a policy under which the insured has
21 had three or more accidents, regardless of fault, during the
22 most recent 3-year period.
23 4. Imposing or requesting an additional premium for,
24 or refusing to renew, a policy for motor vehicle insurance
25 solely because the insured committed a noncriminal traffic
26 infraction as described in s. 318.14 unless the infraction is:
27 a. A second infraction committed within an 18-month
28 period, or a third or subsequent infraction committed within a
29 36-month period.
30 b. A violation of s. 316.183, when such violation is a
31 result of exceeding the lawful speed limit by more than 15
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Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 miles per hour.
2 5. Upon the request of the insured, the insurer and
3 licensed agent shall supply to the insured the complete proof
4 of fault or other criteria which justifies the additional
5 charge or cancellation.
6 6. No insurer shall impose or request an additional
7 premium for motor vehicle insurance, cancel or refuse to issue
8 a policy, or refuse to renew a policy because the insured or
9 the applicant is a handicapped or physically disabled person,
10 so long as such handicap or physical disability does not
11 substantially impair such person's mechanically assisted
12 driving ability.
13 7. No insurer may cancel or otherwise terminate any
14 insurance contract or coverage, or require execution of a
15 consent to rate endorsement, during the stated policy term for
16 the purpose of offering to issue, or issuing, a similar or
17 identical contract or coverage to the same insured with the
18 same exposure at a higher premium rate or continuing an
19 existing contract or coverage with the same exposure at an
20 increased premium.
21 8. No insurer may issue a nonrenewal notice on any
22 insurance contract or coverage, or require execution of a
23 consent to rate endorsement, for the purpose of offering to
24 issue, or issuing, a similar or identical contract or coverage
25 to the same insured at a higher premium rate or continuing an
26 existing contract or coverage at an increased premium without
27 meeting any applicable notice requirements.
28 9. No insurer shall, with respect to premiums charged
29 for motor vehicle insurance, unfairly discriminate solely on
30 the basis of age, sex, marital status, location of the risk,
31 accidents more than 3 years old, or scholastic achievement.
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Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 10. Imposing or requesting an additional premium for
2 motor vehicle comprehensive or uninsured motorist coverage
3 solely because the insured was involved in a motor vehicle
4 accident or was convicted of a moving traffic violation.
5 11. No insurer shall cancel or issue a nonrenewal
6 notice on any insurance policy or contract without complying
7 with any applicable cancellation or nonrenewal provision
8 required under the Florida Insurance Code.
9 12. No insurer shall impose or request an additional
10 premium, cancel a policy, or issue a nonrenewal notice on any
11 insurance policy or contract because of any traffic infraction
12 when adjudication has been withheld and no points have been
13 assessed pursuant to s. 318.14(9) and (10). However, this
14 subparagraph does not apply to traffic infractions involving
15 accidents in which the insurer has incurred a loss due to the
16 fault of the insured.
17 (w) Soliciting or accepting new or renewal insurance
18 risks by insolvent or impaired insurer prohibited; penalty.--
19 1. Whether or not delinquency proceedings as to the
20 insurer have been or are to be initiated, but while such
21 insolvency or impairment exists, no director or officer of an
22 insurer, except with the written permission of the Department
23 of Insurance, shall authorize or permit the insurer to solicit
24 or accept new or renewal insurance risks in this state after
25 such director or officer knew, or reasonably should have
26 known, that the insurer was insolvent or impaired. "Impaired"
27 includes impairment for capital or surplus, as defined in s.
28 631.011(12)(9) and (13)(10).
29 2. Any such director or officer, upon conviction of a
30 violation of this paragraph, is guilty of a felony of the
31 third degree, punishable as provided in s. 775.082, s.
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Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 775.083, or s. 775.084.
2 Section 6. Section 626.9552, Florida Statutes, is
3 created to read:
4 626.9552 Single interest insurance.--
5 (1) When single interest insurance is written at the
6 expense of the purchaser or borrower in connection with a
7 finance or loan transaction, a clear and concise statement
8 must be furnished the purchaser or borrower advising the
9 purchaser or borrower that the insurance effected is solely
10 for the interest of the financing entity, and that no
11 protection thereunder exists for the benefit of the purchaser
12 or borrower. When single interest insurance is written, no
13 effort may be made by the insurer to recover the amount of any
14 payment from the borrower. Single interest insurance policies
15 must be clearly stamped or printed on the declarations page,
16 "Single Interest Only----No Subrogation." Single interest
17 insurance is to be placed only after it has been determined
18 that no other kind of insurance can be placed on the risk,
19 except with the consent of the purchaser or borrower. Single
20 interest may be written in cases of inland marine installment
21 sales floater policies. If insurance cannot be obtained for
22 the dual protection of the purchaser or borrower, and the
23 seller or lender or financing entity for all the coverages
24 contemplated, or if obtained, is canceled by the insurer
25 before expiration, the seller or lender or financing entity
26 may obtain insurance to protect his or her interest in the
27 motor vehicle or other personal property, and the purchaser or
28 borrower may be required to pay the cost thereof. In such
29 event the seller or lender or financing entity shall promptly
30 notify the purchaser or borrower that such insurance cannot be
31 obtained, or has been canceled, and credit to the purchaser or
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Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 borrower the difference between the amount charged for dual
2 protection insurance and the actual cost of such single
3 interest insurance, less, in the event of cancellation, the
4 earned premium on the dual interest insurance for the period
5 it was in force. If the purchaser or borrower procures
6 acceptable dual interest insurance within 30 days after the
7 date of such notice and provides the seller or lender, or
8 finance entity with evidence that the premium therefore has
9 been paid, there is no charge to him or her for the single
10 interest coverage. As used in this section, the term
11 "financing entity" means a finance company, bank, or other
12 lending institution. However, those lenders licensed under the
13 Consumer Finance Act, chapter 516, must provide coverage
14 issued in the name of the borrower containing the customary
15 mortgagee or loss payee clause.
16 (2) If a certificate is issued under a master policy,
17 the same coverage as provided in an individual policy will
18 apply.
19 (3) The provisions of this section do not apply to
20 title insurance as defined in s. 624.608.
21 Section 7. Paragraph (a) of subsection (2) of section
22 627.062, Florida Statutes, is amended to read:
23 627.062 Rate standards.--
24 (2) As to all such classes of insurance:
25 (a) Insurers or rating organizations shall establish
26 and use rates, rating schedules, or rating manuals to allow
27 the insurer a reasonable rate of return on such classes of
28 insurance written in this state. Copies A copy of rates,
29 rating schedules, rating manuals, premium credits or discount
30 schedules, and surcharge schedules, and changes thereto, shall
31 be filed with the department under one of the following
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Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 procedures:
2 1. If the filing is made at least 90 days before the
3 proposed effective date and the filing is not implemented
4 during the department's review of the filing and any
5 proceeding and judicial review, then such filing shall be
6 considered a "file and use" filing. In such case, the
7 department shall finalize its review by issuance of a notice
8 of intent to approve or a notice of intent to disapprove
9 within 90 days after receipt of the filing. The notice of
10 intent to approve and the notice of intent to disapprove
11 constitute agency action for purposes of the Administrative
12 Procedure Act. Requests for supporting information, requests
13 for mathematical or mechanical corrections, or notification to
14 the insurer by the department of its preliminary findings
15 shall not toll the 90-day period during any such proceedings
16 and subsequent judicial review. The rate shall be deemed
17 approved if the department does not issue a notice of intent
18 to approve or a notice of intent to disapprove within 90 days
19 after receipt of the filing.
20 2. If the filing is not made in accordance with the
21 provisions of subparagraph 1., such filing shall be made as
22 soon as practicable, but no later than 30 days after the
23 effective date, and shall be considered a "use and file"
24 filing. An insurer making a "use and file" filing is
25 potentially subject to an order by the department to return to
26 policyholders portions of rates found to be excessive, as
27 provided in paragraph (h).
28 Section 8. Subsection (4) is added to section
29 627.0625, Florida Statutes, to read:
30 627.0625 Commercial property and casualty risk
31 management plans.--
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Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 (4) Commercial motor vehicle policies that are issued
2 to satisfy mandatory financial responsibility requirements of
3 a state or local government must provide first dollar coverage
4 to third-party claimants without a deductible. With respect to
5 such practices, the department may adopt rules necessary to
6 assure that claims are administered fairly as required by law.
7 Section 9. Subsection (8) of section 627.0651, Florida
8 Statutes, is amended to read:
9 627.0651 Making and use of rates for motor vehicle
10 insurance.--
11 (8) Rates are not unfairly discriminatory if averaged
12 broadly among members of a group; nor are rates unfairly
13 discriminatory even though they are lower than rates for
14 nonmembers of the group. However, such rates are unfairly
15 discriminatory if they are not actuarially measurable and
16 credible and sufficiently related to actual or expected loss
17 and expense experience of the group so as to assure that
18 nonmembers of the group are not unfairly discriminated
19 against. Use of a single United States Postal Service zip code
20 as a rating territory shall be deemed unfairly discriminatory.
21 An insurer may not impose a surcharge or discount for
22 liability coverages based on the type of vehicle without
23 providing acceptable actuarial justification.
24 Section 10. Section 627.385, Florida Statutes, is
25 created to read:
26 627.385 Conduct of residual market board members.--
27 (1)(a) For various insurance coverages, a residual
28 market has been created by legislation to provide a market of
29 last resort for individuals unable to secure coverage in the
30 voluntary market.
31 (b) Each residual market's enabling legislation calls
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Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 for the establishment of a board of governors or directors
2 that operates subject to a plan of operation. The board, in
3 carrying out its obligations, must engage in business
4 transactions in order to provide and administer the required
5 coverage and maintain adequate funds to support the plan. In
6 order for the board to fully execute its responsibilities
7 required by law, conflict of interest or inappropriate
8 activity by board members, or the appearance thereof, with
9 regard to member insurers or policyholders of the residual
10 market mechanism must be avoided. The Legislature has
11 determined that the provisions set forth in subsection (2) are
12 necessary to protect the public interest by ensuring fair,
13 reasonable, and beneficial board practice and activity.
14 (c) This section applies to the Florida Medical
15 Malpractice Joint Underwriting Association, the Florida
16 Automobile Joint Underwriting Association, the Florida
17 Workers' Compensation Joint Underwriting Association, the
18 Florida Comprehensive Health Association, the Florida
19 Windstorm Underwriting Association, the Florida Property and
20 Casualty Joint Underwriting Association, the Florida
21 Residential Property and Casualty Joint Underwriting
22 Association, and the board members thereof.
23 (2) To ensure that the board is free from potential
24 conflict or inappropriate behavior the following are adopted
25 in the plan of operation of the subject residual market in
26 this state.
27 (a) A board member may not act as a servicing carrier
28 or administering entity for the subject plan, other than a
29 claim adjustment contract open to all members of the plan.
30 (b) A board member or board member representative may
31 not use his or her position to foster or facilitate any
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1 special pecuniary gain for himself or herself, his or her
2 member company, or any other entity in which the board member
3 or board member representative or the member company has a
4 substantial financial interest, except as otherwise provided
5 in paragraph (a).
6 (c) A board member or board member representative may
7 not use his or her position on the board to secure or promote
8 any business relationship from which he or she may derive a
9 financial gain.
10 (d) A board member or designee may not receive any
11 gift or gratuity, except as provided in s. 112.3248, other
12 than meals, while acting in his or her capacity as a board
13 member.
14 (3) Board members and board member representatives
15 shall maintain reasonable board expenses based on state travel
16 policy as set forth in s. 112.061. The board shall develop a
17 detailed policy regarding board member travel, which policy
18 must be based on s. 112.061 and is subject to the approval of
19 the department.
20 Section 11. Section 627.4065, Florida Statutes, is
21 created to read:
22 627.4065 Insured's right to return policy; notice.--A
23 health insurance policy issued or issued for delivery in this
24 state must have printed or stamped thereon or attached thereto
25 a notice in a prominent place stating in substance that the
26 policyholder may return the policy to the insurer within 10
27 days after its delivery and may have the premium paid refunded
28 if, after examination of the policy or contract, the
29 policyholder is not satisfied with it for any reason. The
30 notice must provide that if the policyholder, pursuant to such
31 notice, returns the policy or contract to the insurer at its
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1 home office or branch office or to the agent through whom it
2 was purchased, it is considered void from the beginning and
3 the parties are in the same position as if no policy or
4 contract had been issued. This section does not apply to group
5 policies, single premium nonrenewable policies or travel
6 accident policies.
7 Section 12. Section 627.41345, Florida Statutes, is
8 created to read:
9 627.41345 Certificate of insurance.--An insurer or
10 agent may not issue or sign a certificate of insurance that
11 contains terms or conditions that differ from those in the
12 policy under which the certificate of insurance is issued. In
13 the event of a conflict, the terms of the policy under which
14 the certificate of insurance is issued shall control.
15 Section 13. Subsection (9) is added to section
16 627.7015, Florida Statutes, to read:
17 627.7015 Alternative procedure for resolution of
18 disputed property insurance claims.--
19 (9) For purposes of this section, the term "claim"
20 refers to any dispute between an insurer and an insured
21 relating to a material issue of fact other than a dispute:
22 (a) With respect to which the insurer has a reasonable
23 basis to suspect fraud;
24 (b) Where, based on agreed-upon facts as to the cause
25 of loss, there is no coverage under the policy;
26 (c) With respect to which the insurer has a reasonable
27 basis to believe that the claimant has intentionally made a
28 material misrepresentation of fact which is relevant to the
29 claim, and the entire request for payment of a loss has been
30 denied on the basis of the material misrepresentation; or
31 (d) Where the amount in controversy is less than $500,
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1 unless the parties agree to mediate a dispute involving a
2 lesser amount.
3 Section 14. Section 627.7276, Florida Statutes, is
4 amended to read:
5 627.7276 Notice of limited coverage.--
6 (1) The following notice of limited coverage shall An
7 automobile policy that does not contain coverage for bodily
8 injury and property damage must be clearly stamped or printed
9 on any automobile insurance policy that provides coverage only
10 for first-party damage to the insured vehicle, but does not
11 provide coverage for bodily injury liability, property damage
12 liability, or personal injury protection to the effect that
13 such coverage is not included in the policy in the following
14 manner:
15
16 "THIS POLICY DOES NOT PROVIDE BODILY INJURY
17 LIABILITY, AND PROPERTY DAMAGE LIABILITY, OR
18 PERSONAL INJURY PROTECTION INSURANCE OR ANY
19 OTHER COVERAGE FOR WHICH A SPECIFIC PREMIUM
20 CHARGE IS NOT MADE, AND DOES NOT COMPLY WITH
21 ANY FINANCIAL RESPONSIBILITY LAW OR WITH THE
22 FLORIDA MOTOR VEHICLE NO-FAULT LAW."
23
24 (2) This legend must appear on the policy declaration
25 page and on the filing back of the policy and be printed in a
26 contrasting color from that used on the policy and in type
27 larger than the largest type used in the text thereof, as an
28 overprint or by a rubber stamp impression.
29 Section 15. Section 627.795, Florida Statutes, is
30 created to read:
31 627.795 Policy exceptions.--
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Amendment No. ___ Barcode 363452
1 (1) A title insurance commitment must be issued on all
2 real estate closing transactions when a title insurance policy
3 is to be issued, except for multiple conveyances on the same
4 property such as timesharing.
5 (2) A gap exception may not be deleted on a commitment
6 until the time of closing.
7 Section 16. Subsection (1) of section 627.918, Florida
8 Statutes, is amended to read:
9 627.918 Reporting formats.--
10 (1) The department shall require that the reporting
11 provided for in this part be made on forms adopted established
12 by the department or in a format compatible with the
13 department's its electronic data processing equipment. The
14 department shall adopt by rule standards for such approval.
15 Section 17. Subsection (3) of section 641.3108,
16 Florida Statutes, is amended to read:
17 641.3108 Notice of cancellation of contract.--
18 (3) In the case of a health maintenance contract
19 issued to an employer or person holding the contract on behalf
20 of the subscriber group, the health maintenance organization
21 may make the notification through the employer or group
22 contract holder, and, if the health maintenance organization
23 elects to take this action through the employer or group
24 contract holder, the organization shall be deemed to have
25 complied with the provisions of this section upon notifying
26 the employer or group contract holder of the requirements of
27 this section and requesting the employer or group contract
28 holder to forward to all subscribers the notice required
29 herein. If a subscriber group contract is not renewed due to
30 claim experience, the subscriber group is entitled to receive
31 information concerning its loss ratio. If requested by a
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1 subscriber group, a detailed claim experience record may be
2 provided at a reasonable expense. The record shall maintain
3 subscriber confidentiality.
4 Section 18. Subsection (7) of section 627.7295,
5 Florida Statutes, is amended to read:
6 627.7295 Motor vehicle insurance contracts.--
7 (7) A policy of private passenger motor vehicle
8 insurance or a binder for such a policy may be initially
9 issued in this state only if the insurer or agent has
10 collected from the insured an amount equal to 2 months'
11 premium. An insurer, agent, or premium finance company may
12 not directly or indirectly take any action resulting in the
13 insured having paid from the insured's own funds an amount
14 less than the 2 months' premium required by this subsection.
15 This subsection applies without regard to whether the premium
16 is financed by a premium finance company or is paid pursuant
17 to a periodic payment plan of an insurer or an insurance
18 agent. This subsection does not apply if an insured or member
19 of the insured's family is renewing or replacing a policy or a
20 binder for such policy written by the same insurer or a member
21 of the same insurer group. This subsection does not apply to
22 an insurer that issues private passenger motor vehicle
23 coverage primarily to active duty or former military personnel
24 or their dependents. This subsection does not apply if all
25 policy payments are paid pursuant to a payroll deduction plan
26 or an automatic electronic funds transfer payment plan from
27 the policyholder, provided that the first policy payment may
28 be is made by cash, cashier's check, check, or a money order.
29 This subsection and subsection (4) do not apply if all policy
30 payments to an insurer are paid pursuant to an automatic
31 electronic funds transfer payment plan from an agent or a
18
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SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 managing general agent, or if the policy is issued pursuant to
2 the transfer of a book of business by an agent from one
3 insurer to another, provided that and if the policy includes,
4 at a minimum, personal injury protection pursuant to ss.
5 627.730-627.7405; motor vehicle property damage liability
6 pursuant to s. 627.7275; and bodily injury liability in at
7 least the amount of $10,000 because of bodily injury to, or
8 death of, one person in any one accident and in the amount of
9 $20,000 because of bodily injury to, or death of, two or more
10 persons in any one accident. This subsection and subsection
11 (4) do not apply if an insured has had a policy in effect for
12 at least 6 months, the insured's agent is terminated by the
13 insurer that issued the policy, and the insured obtains
14 coverage on the policy's renewal date with a new company
15 through the terminated agent.
16 Section 19. Subsection (1) of section 627.901, Florida
17 Statutes, is amended to read:
18 627.901 Premium financing by an insurance agent or
19 agency.--
20 (1) A general lines agent may make reasonable service
21 charges for financing insurance premiums on policies issued or
22 business produced by such an agent or agency, s. 626.9541
23 notwithstanding. The service charge shall not exceed $1 per
24 installment, or a $6 total service charge per year, for any
25 premium balance of $120 or less. For any premium balance
26 greater than $120 but not more than $220, the service charge
27 shall not exceed $9 per year. The maximum service charge for
28 any premium balance greater than $220 shall not exceed $12 per
29 year. In lieu of such service charges, an insurance agent or
30 agency may charge interest or service charges, which may be
31 level amounts and subject to endorsement changes, that in the
19
8:46 AM 05/01/01 s1220c-02k0f
SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 aggregate do not exceed a rate of interest not to exceed 18
2 percent simple interest per year on the average unpaid balance
3 as billed over the term of the policy.
4 Section 20. Section 626.9651, Florida Statutes, is
5 created to read:
6 626.9651 Privacy.--The department shall adopt rules
7 consistent with other provisions of the Insurance Code to
8 govern the use of a consumer's nonpublic personal financial
9 and health information. These rules shall be based on,
10 consistent with, and not more restrictive than the National
11 Association of Insurance Commissioners' Privacy of Consumer
12 Financial and Health Information Regulation adopted September
13 26, 2000, by the National Association of Insurance
14 Commissioners, provided, however, the rules shall permit the
15 use and disclosure of nonpublic personal health information
16 for scientific, medical, or public policy research in
17 accordance with federal law. In addition, these rules shall
18 be consistent with, and not more restrictive than, the
19 standards contained in Title V of the Gramm-Leach-Bliley Act
20 of 1999 (Pub. L. No. 106-102). Any health insurer or health
21 maintenance organization determined by the department to be in
22 compliance with, or to be actively undertaking compliance
23 with, the consumer privacy protection rules promulgated by the
24 United States Department of Health and Human Services, in
25 conformance with the Health Insurance Portability and
26 Affordability Act, shall be deemed in compliance with this
27 section. This section shall take effect July 1, 2001.
28 Section 21. Section 631.001, Florida Statutes, is
29 amended to read:
30 (Substantial rewording of section.
31 See s. 631.001, F.S., for present text.)
20
8:46 AM 05/01/01 s1220c-02k0f
SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 631.001 Construction; purposes.--
2 (1) The underlying purposes and policies of the
3 provisions of this part, which are integral elements of the
4 regulation of the business of insurance and are of vital
5 public interest and concern, are to:
6 (a) Protect the interests of insureds, claimants,
7 creditors, and the public.
8 (b) Provide a comprehensive scheme for the
9 receivership of insurers.
10 (c) Establish this state as a reciprocal state in
11 those states which, in substance and effect, enact the
12 National Association of Insurance Commissioners Rehabilitation
13 and Liquidation Model Act or the Uniform Insurers Liquidation
14 Act.
15 (d) Make more efficient the administration of insurer
16 receiverships on an interstate and international basis.
17 (e) Provide prompt corrective measures for any
18 potentially dangerous condition in an insurer.
19 (f) Implement improved methods for rehabilitating
20 insurers, which methods involve the cooperation and management
21 expertise of the insurance industry.
22 (g) Enhance the efficiency and economy of liquidation
23 through clarification and specification of the law to minimize
24 legal uncertainty and litigation.
25 (h) Lessen the problems of interstate rehabilitation
26 and liquidation of an entity subject to the provisions of this
27 part by facilitating cooperation between states in the
28 liquidation process and by extension of the scope of personal
29 jurisdiction over debtors of the insurer outside this state.
30 (i) Establish a system which equitably apportions any
31 unavoidable loss.
21
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SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 (j) Maximize recovery of assets for the benefit of the
2 insurer and its policyholders, creditors, and estate.
3 (2) This part shall be liberally construed to effect
4 the purposes stated in subsection (1) and shall specifically
5 authorize the department in its capacity as administrator,
6 conservator, rehabilitator, receiver, liquidator, or similar
7 capacity to pursue any actions for damages or other recoveries
8 on behalf of the insurer and its policyholders, creditors, and
9 estate.
10 (3) This part may be cited as the "Insurers
11 Rehabilitation and Liquidation Act."
12 Section 22. Section 631.011, Florida Statutes, is
13 amended to read:
14 631.011 Definitions.--For the purpose of this part,
15 the term:
16 (1) "Affiliate" means any entity which exercises
17 control over or is controlled by the insurer, directly or
18 indirectly through:
19 (a) Equity ownership of voting securities;
20 (b) Common managerial control; or
21 (c) Collusive participation by the management of the
22 insurer and affiliate in the management of the insurer or the
23 affiliate.
24 (2) "Ancillary state" means, any state other than a
25 domiciliary state.
26 (3) "Assets," as used in this section subsections
27 (8)-(10), means only allowed assets as defined in chapter 625.
28 (4) "Bona fide holder for value" means a holder who,
29 while not possessing information that would lead a reasonable
30 person in the holder's position to believe that the insurer is
31 financially impaired, and while unaware of the imminence or
22
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SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 pendency of any receivership proceeding against the insurer,
2 has, in the exercise of reasonable business judgment,
3 exchanged his or her own funds, assets, or property for funds,
4 assets, or property of the insurer having an equivalent market
5 value.
6 (5)(4) "Court" refers to the circuit court in which
7 the receivership proceeding is pending.
8 (6)(5) "Delinquency proceeding" means any proceeding
9 commenced against an insurer pursuant to this chapter for the
10 purpose of liquidating, rehabilitating, reorganizing, or
11 conserving such insurer.
12 (7)(6) "Domiciliary state" means the state in which an
13 insurer is incorporated or organized or, in the case of an
14 insurer incorporated or organized in a foreign country, the
15 state in which such insurer, having become authorized to do
16 business in such state, has, at the commencement of a
17 delinquency proceeding, the largest amount of its assets held
18 in trust and assets held on deposit for the benefit of its
19 policyholders or policyholders and creditors in the United
20 States; and any such insurer is deemed to be domiciled in such
21 state.
22 (8) "Fair consideration" means that consideration
23 which is given for property or assets of an insurer when, in
24 exchange for the property or assets and in good faith,
25 property is conveyed, services are rendered, or an enforceable
26 obligation not invalidated by the receivership proceedings is
27 created, having a value to the insurer of not less than the
28 value of the property or assets given in exchange.
29 (9)(7) "Foreign country" means territory not in any
30 state.
31 (10)(8) "General assets" means all property, real,
23
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SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 personal, or otherwise, not specifically mortgaged, pledged,
2 deposited, or otherwise encumbered for the security or benefit
3 of specified persons or a limited class or classes of persons,
4 and as to such specifically encumbered property the term
5 includes all such property or its proceeds in excess of the
6 amount necessary to discharge the sum or sums secured thereby.
7 Assets held in trust and assets held on deposit for the
8 security or benefit of all policyholders or all policyholders
9 and creditors in the United States shall be deemed general
10 assets.
11 (11) "Good faith," as applied to a transferee or
12 transferor under this part, means honesty in fact and
13 intention and includes the exercise of reasonable business
14 judgment, together with the absence of information that would
15 lead a reasonable person in the same position to know that the
16 insurer is financially impaired or insolvent and together with
17 the absence of knowledge regarding the imminence or pendency
18 of any receivership proceeding against the insurer.
19 (12)(9) "Impairment of capital" means that the minimum
20 surplus required to be maintained in s. 624.408 has been
21 dissipated and the insurer is not possessed of assets at least
22 equal to all its liabilities together with its total issued
23 and outstanding capital stock, if a stock insurer, or the
24 minimum surplus or net trust fund required by s. 624.407, if a
25 mutual, reciprocal, or business trust insurer.
26 (13)(10) "Impairment of surplus" means that the
27 surplus of a stock insurer, the additional surplus of a mutual
28 or reciprocal insurer, or the additional net trust fund of a
29 business trust insurer does not comply with the requirements
30 of s. 624.408.
31 (14)(11) "Insolvency" means that all the assets of the
24
8:46 AM 05/01/01 s1220c-02k0f
SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 insurer, if made immediately available, would not be
2 sufficient to discharge all its liabilities or that the
3 insurer is unable to pay its debts as they become due in the
4 usual course of business. When the context of any provision of
5 this code so indicates, insolvency also includes and is
6 defined as "impairment of surplus," as defined in subsection
7 (13)(9), and "impairment of capital," as defined in subsection
8 (12)(8).
9 (15)(12) "Insurer," in addition to persons so defined
10 under s. 624.03, also includes persons purporting to be
11 insurers or organizing, or holding themselves out as
12 organizing, in this state for the purpose of becoming insurers
13 and all insurers who have insureds resident in this state.
14 (16)(13) "Liabilities," as used in subsections (12)
15 and (14) (8)-(10), means all liabilities, including those
16 specifically required in s. 625.041.
17 (17)(14) "Person" includes natural persons,
18 corporations, partnerships, trusts, estates, and sole
19 proprietorships.
20 (18) "Property," with respect to an insolvent entity,
21 includes all right, title, and interest of the insolvent
22 entity whether legal or equitable, tangible or intangible, or
23 choate or inchoate and includes choses in action, contract
24 rights, and any other interest recognized under the laws of
25 this state. When an order of conservation, rehabilitation, or
26 liquidation is entered, the term also includes entitlements
27 that existed prior to the entry of the order and those that
28 may arise by operation of the provisions of this chapter or
29 other provisions of law allowing the department to avoid prior
30 transfers or assert other rights in its capacity as receiver.
31 The term also includes all records and data that are otherwise
25
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SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 the property of the insolvent insurer, however stored,
2 including, but not limited to, claims and claim files,
3 application files, litigation files, premium records, rate
4 books, underwriting manuals, personnel records, or financial
5 records, or similar records within the possession, custody, or
6 control of a managing general agent, third-party
7 administrator, management company, accountant, attorney,
8 affiliate, or other person. The term does not include
9 privileged or confidential documents of an insolvent insurer
10 generated by a third party.
11 (19)(15) "Receiver" means a receiver, liquidator,
12 rehabilitator, or conservator, as the context may require.
13 (20)(16) "Reciprocal state" means any state other than
14 this state in which in substance and effect the provisions of
15 the Insurers Rehabilitation and Liquidation Act are in force,
16 including the provisions requiring that the commissioner of
17 insurance or equivalent insurance supervisory official be the
18 receiver of a delinquent insurer.
19 (21)(17) "Secured claim" means any claim secured by
20 mortgage, trust deed, pledge, deposit as security, escrow, or
21 otherwise but does not include a special deposit claim, a
22 claim against general assets, or a claim based on mere
23 possession. The term also includes a claim which more than 4
24 months before the commencement of a delinquency proceeding in
25 the state of the insurer's domicile has become a lien upon
26 specific assets by reason of judicial process.
27 (22)(18) "Special deposit claim" means any claim
28 secured by a deposit made pursuant to statute for the security
29 or benefit of a limited class or classes of persons, but not
30 including any general assets.
31 (23)(19) "State" is as defined in s. 624.08.
26
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SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 Section 23. Section 631.025, Florida Statutes, is
2 created to read:
3 631.025 Persons and entities subject to this
4 part.--Delinquency proceedings authorized by this part may be
5 initiated against any insurer as defined in s. 631.011(15) if
6 the statutory grounds are present as to that insurer, and the
7 receivership court may exercise jurisdiction over any person
8 required to cooperate with the department pursuant to s.
9 631.391 and over all persons made subject to the court's
10 jurisdiction by other provisions of law. Such persons include,
11 but are not limited to:
12 (1) A person who is transacting or has transacted
13 insurance business in or from this state and against whom
14 claims arising from that business exist or may exist in the
15 future.
16 (2) A person who purports to transact an insurance
17 business in this state, and any person or entity who acts as
18 an insurer, transacts insurance, or otherwise engages in
19 insurance activities in or from this state, with or without a
20 certificate of authority or proper authority from the
21 department.
22 (3) An insurer who has insureds residing in this
23 state.
24 (4) All other persons organized or in the process of
25 organizing with the intent to transact an insurance business
26 in this state.
27 Section 24. Paragraph (d) of subsection (1) of section
28 631.041, Florida Statutes, is amended, and subsection (6) is
29 added to that section, to read:
30 631.041 Automatic stay; relief from stay;
31 injunctions.--
27
8:46 AM 05/01/01 s1220c-02k0f
SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 (1) An application or petition under s. 631.031
2 operates as a matter of law as an automatic stay applicable to
3 all persons and entities, other than the receiver, which shall
4 be permanent and survive the entry of an order of
5 conservation, rehabilitation, or liquidation, and which shall
6 prohibit:
7 (d) Any act to create, perfect, or enforce a lien
8 against property of the insurer, except that a secured claim
9 as defined in s. 631.011(21)(17) may proceed under s. 631.191
10 after the order of liquidation is entered;
11 (6) No statute of limitations or defense of laches
12 shall run with respect to any action by or against an insurer
13 between the filing of a petition for conservation,
14 rehabilitation, or liquidation against an insurer and the
15 order granting or denying that petition. If the petition is
16 denied, any action against the insurer that might have been
17 commenced when the petition was filed may be commenced for at
18 least 60 days after the order denying such relief.
19 Section 25. Section 631.113, Florida Statutes, is
20 created to read:
21 631.113 Extension of time.--
22 (1) The running of any unexpired statute of
23 limitations as to any claims brought by the administrator,
24 conservator, rehabilitator, receiver, or liquidator, or an
25 official or agency exercising powers pursuant to this chapter
26 seeking damages or other recoveries on behalf of an insurer,
27 its policyholders, its creditors, or its estate, shall be
28 tolled for a period of 4 years from the entry of an order
29 placing the administrator, conservator, rehabilitator,
30 receiver, liquidator, or similar official or agency over the
31 insurer, provided, if the delinquency proceedings brought
28
8:46 AM 05/01/01 s1220c-02k0f
SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 pursuant to this chapter against the insurer terminate in less
2 than 4 years, such tolling shall cease at the time when the
3 proceedings are finally concluded, including all appeals
4 therefrom. Further, the right of action does not accrue and
5 the limitations period for any such action does not run during
6 the time when the insurer is controlled by parties acting
7 contrary to the company's interests or when the facts giving
8 rise to such claim are fraudulently concealed from regulatory
9 authorities or from any members of company management. The
10 provisions of chapter 95 shall be construed so as to be
11 consistent with the provisions of this section. The receiver
12 may institute any action or proceeding on behalf of the estate
13 of the insurer while any statute of limitation is tolled
14 pursuant to this section. The tolling shall be in addition to
15 any other applicable tolling provision.
16 (2) For actions not covered by subsection (1), if any
17 unexpired time period is fixed, by any agreement or in any
18 proceeding, for doing any act for the benefit of the estate,
19 the receiver shall have 180 days, or such longer period as the
20 receivership court may allow for good cause shown, from the
21 entry of the order of rehabilitation or liquidation to perform
22 the act.
23 Section 26. Present subsections (6) through (9) of
24 section 631.141, Florida Statutes, are renumbered as
25 subsections (7) through (10), respectively, and a new
26 subsection (6) is added to that section to read:
27 631.141 Conduct of delinquency proceeding; domestic
28 and alien insurers.--
29 (6) The department as receiver is vested with and may
30 assert all rights belonging to policyholders, creditors, and
31 the estate as well as all rights of the entity or entities in
29
8:46 AM 05/01/01 s1220c-02k0f
SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 receivership, except to the extent that an individual claim is
2 personal and unique to that claimant and recovery thereon
3 could not inure to the benefit of the estate or to other
4 claimants.
5 Section 27. Paragraph (d) of subsection (6) of section
6 631.154, Florida Statutes, is amended to read:
7 631.154 Funds or other property in the possession of
8 third person.--
9 (6) Should the receiver be successful in establishing
10 its claim or any part thereof, the receiver shall be entitled
11 to recover judgment for the following:
12 (d) All costs, investigative and other expenses, which
13 include the department's in-house staff and staff attorney's
14 expenses, costs, and salaries, expended in necessary to the
15 recovery of the property or funds, and reasonable attorney's
16 fees.
17 Section 28. Section 631.156, Florida Statutes, is
18 created to read:
19 631.156 Investigation by the department.--
20 (1) Preliminary or incidental to a petition for
21 receivership proceedings, the department may, and if appointed
22 receiver shall, undertake a full investigation to determine
23 the causes and reasons for the insolvency, the discovery and
24 location of assets to be recovered, the recovery of such
25 assets, whether the filing of false statements with the
26 department contributed to the insolvency, and, in conjunction
27 with the department's Division of Insurance Fraud or any other
28 appropriate agency of state or federal government, whether any
29 law of this state, any other state, or the Federal Government
30 relating to the solvency of the insurer has been violated. In
31 the furtherance of such investigation, the department may:
30
8:46 AM 05/01/01 s1220c-02k0f
SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 (a) Examine and review any and all documents that are
2 reasonably calculated to disclose or lead to the disclosure of
3 the causes and reasons for the insolvency, the discovery and
4 location of assets to be recovered, the recovery of such
5 assets, the truth or falsity of statements filed with the
6 department, and whether any law of this state, any other
7 state, or the Federal Government has been violated.
8 (b) Take statements or depositions under oath of any
9 person whose testimony is reasonably calculated to disclose or
10 lead to the disclosure of the causes and reasons for the
11 insolvency, the discovery of and location of assets to be
12 recovered, the recovery of such assets, the truth or falsity
13 of statements filed with the department, and whether any law
14 of this state, any other state, or the Federal Government has
15 been violated.
16 (c) Request the court having jurisdiction over the
17 receivership proceedings to issue any necessary subpoenas.
18 (d) Examine and review the books, records, and
19 documents of any affiliate, controlling person, officer,
20 director, manager, trustee, agent, adjuster, employee, or
21 independent contractor of any insurer or affiliate and any
22 other person who possesses any executive authority over, or
23 who exercises or has exercised any control over, any segment
24 of the affairs of the insurer or affiliate, to the extent such
25 examination is reasonably calculated to disclose or lead to
26 the disclosure of the causes and reasons for the insolvency,
27 the discovery and location of assets to be recovered, the
28 recovery of such assets, the truth or falsity of statements
29 filed with the department, and whether any law of this state,
30 any other state, or the Federal Government has been violated.
31 (2) In its capacity as receiver, the department may
31
8:46 AM 05/01/01 s1220c-02k0f
SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 provide documents, books and records, other investigative
2 products, work product, and analysis, including copies of any
3 or all of the foregoing items, to the Division of Insurance
4 Fraud or any other appropriate agency of state or federal
5 government. The sharing of information, investigative
6 products, or analysis shall not waive any work product or
7 other privilege that would otherwise apply under common law,
8 chapter 119, or any other law.
9 (3) The department, as the court's receiver, is
10 granted the discretion to determine what books, records,
11 documents, or testimony would be reasonably calculated to
12 disclose or lead to the disclosure of the causes and reasons
13 for the insolvency, the discovery and location of assets to be
14 recovered, the recovery of the assets, the truth or falsity of
15 statements filed with the department, and whether any law of
16 this state or of the United States has been violated, subject
17 to the court's power to review such determination or appoint a
18 general master to review such determination. A party
19 asserting that any documents requested by the department under
20 this section are not subject to review, or that any particular
21 testimony may not be obtained, shall present such contention
22 by written motion to the receivership court within 20 days
23 after receipt of the request and shall be fully responsible
24 for the loss of any evidence which occurs after the department
25 first informs said party of its request therefor. The court
26 shall, as expeditiously as possible, determine whether the
27 department has abused its discretion in seeking such evidence
28 or testimony, with the objecting party having the burden of
29 proof. A party who fails to produce the requested evidence or
30 testimony without filing a proper timely objection, or who
31 having unsuccessfully asserted such objection fails thereafter
32
8:46 AM 05/01/01 s1220c-02k0f
SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 to furnish the evidence or testimony, within the time provided
2 by the court or the department, shall be subject to the
3 contempt powers of the court, in addition to any other
4 applicable penalties which may be provided in the Florida
5 Insurance Code or other law.
6 Section 29. Section 631.157, Florida Statutes, is
7 created to read:
8 631.157 Civil action by the receiver.--
9 (1) Any person who is engaged in the business of
10 insurance or who acts as or is an officer, director, agent, or
11 employee of any person engaged in the business of insurance,
12 or is involved, other than as an insured or beneficiary under
13 a policy of insurance, in a transaction relating to the
14 conduct of affairs of such a business, and who willfully
15 obtains or uses, as defined in s. 812.012(2), any asset or
16 property, including, but not limited to, moneys, funds,
17 premiums, credits, or other property of an insurer, shall be
18 liable to the department as receiver for the use and benefit
19 of an insolvent insurer's estate, creditors, and
20 policyholders, as follows:
21 (a) If such obtaining or using did not jeopardize the
22 safety and soundness of an insurer and was not a significant
23 cause of such insurer's being placed in conservation,
24 rehabilitation, or liquidation, such person shall be liable
25 only for the full amount of any asset obtained or used, plus
26 prejudgment interest provided by law.
27 (b) If such obtaining or using jeopardized the safety
28 and soundness of an insurer or was a significant cause of such
29 insurer's being placed in conservation, rehabilitation, or
30 liquidation, such person shall be liable for triple the full
31 amount of any asset obtained or used, plus prejudgment
33
8:46 AM 05/01/01 s1220c-02k0f
SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 interest provided by law on the original amount.
2 (2) Any person who is engaged in the business of
3 insurance or who acts as or is an officer, director, agent, or
4 employee of any person engaged in the business of insurance,
5 or is involved, other than as an insured or beneficiary under
6 a policy of insurance, in a transaction relating to the
7 conduct of affairs of such a business, and who, while having
8 actual knowledge or such constructive knowledge as should have
9 been obtained through reasonable inquiry by a person in such
10 position, if such person knowingly misreports, or knowingly
11 makes any false entry of, a material fact in any book, report,
12 or statement of an insurer with the intent to deceive such
13 insurer, including any officer, employee, or agent of such
14 insurer, the department, or any agent or examiner appointed by
15 the department to examine the affairs of such person or of the
16 insurer, concerning the financial condition or solvency of
17 such business, shall be liable to the department as receiver
18 for the use and benefit of an insolvent insurer's estate,
19 creditors, and policyholders, as follows:
20 (a) If such misreporting did not jeopardize the safety
21 and soundness of an insurer and was not a significant cause of
22 such insurer's being placed in conservation, rehabilitation,
23 or liquidation, such person shall be liable only for the full
24 amount of any asset misreported.
25 (b) If such misreporting jeopardized the safety and
26 soundness of an insurer or was a significant cause of such
27 insurer's being placed in conservation, rehabilitation, or
28 liquidation, such person shall be liable for triple the full
29 amount of any asset misreported.
30 (3) If the asset or property that has been obtained or
31 used was reported to the department as being available to the
34
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SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 insurer as an admitted asset and such asset is unavailable to
2 the receiver for payment of the obligations of the insurer at
3 the time when a receivership proceeding is instituted, the
4 obtaining or using shall be presumed to have jeopardized the
5 safety and soundness of the insurer and to have been a
6 significant cause of such insurer's being placed in
7 conservation, rehabilitation, or liquidation, with the burden
8 of proof on the defendants to show otherwise.
9 (4) If the receiver is successful in establishing a
10 claim under this section, the receiver shall be entitled to
11 recover all of its costs, investigative and other expenses,
12 which shall include the department's in-house staff and staff
13 attorney's expenses, costs, and salaries, expended in the
14 prosecution of the action, and reasonable attorney's fees.
15 The receiver shall be exempt from the provisions of s. 57.111.
16 (5) An action under this section may be brought at any
17 time before the expiration of 4 years after the entry of the
18 initial order of rehabilitation or liquidation under this part
19 but shall be filed before the time the receivership proceeding
20 is closed or dismissed.
21 Section 30. Paragraph (b) of subsection (1) of section
22 631.57, Florida Statutes, is amended to read:
23 631.57 Powers and duties of the association.--
24 (1) The association shall:
25 (b) Be deemed the insurer to the extent of its
26 obligation on the covered claims, and, to such extent, shall
27 have all rights, duties, defenses, and obligations of the
28 insolvent insurer as if the insurer had not become insolvent.
29 In no event shall the association be liable for any penalties
30 or interest.
31 Section 31. Section 631.3995, Florida Statutes, is
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SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 created to read:
2 631.3995 Closing of estate; Closed Estate Fund Trust
3 Account.--
4 (1) When all assets justifying the expense of
5 collection and distribution have been marshaled and
6 distributed under this part, the department shall petition the
7 court to terminate the liquidation proceedings and to close
8 the estate. The court may grant such other relief as may be
9 appropriate, including, but not limited to, a full discharge
10 of all liability and responsibility of the liquidator, the
11 reservation of assets for administrative expenses incurred in
12 the closing of the estate, and any other actions the
13 department feels necessary or appropriate for closing the
14 estate.
15 (2) Any remaining reserved assets that are provided
16 for in subsection (1) and that may not be practicably or
17 economically distributed to claimants shall be deposited into
18 a segregated account to be known as the Closed Estate Fund
19 Trust Account, if created by law. The department may use
20 moneys held in the account for paying the administrative
21 expenses of companies subject to this part that lack
22 sufficient assets to allow the department to perform its
23 duties and obligations under this part. An annual audit of the
24 Closed Estate Fund Trust Account shall be performed regardless
25 of its balance.
26 (3) The department may petition the court to reopen
27 the proceedings for good cause shown, including the marshaling
28 of additional assets, and the court may enter such other
29 orders as may be deemed appropriate.
30 Section 32. Subsection (3) of section 631.54, Florida
31 Statutes, is amended to read:
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SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 631.54 Definitions.--As used in this part:
2 (3) "Covered claim" means an unpaid claim, including
3 one of unearned premiums, which arises out of, and is within
4 the coverage, and not in excess of, the applicable limits of
5 an insurance policy to which this part applies, issued by an
6 insurer, if such insurer becomes an insolvent insurer after
7 October 1, 1970, and the claimant or insured is a resident of
8 this state at the time of the insured event or the property
9 from which the claim arises is permanently located in this
10 state. "Covered claim" shall not include any amount due any
11 reinsurer, insurer, insurance pool, or underwriting
12 association, as subrogation, contribution, indemnification,
13 recoveries or otherwise. Member insurers shall have no right
14 of subrogation against the insured of any insolvent member.
15 Section 33. Section 817.2341, Florida Statutes, is
16 created to read:
17 817.2341 Crimes by or affecting persons engaged in the
18 administration of any insurer or entity organized pursuant to
19 chapter 624 or chapter 641.--
20 (1)(a) Any person who makes a false entry of a
21 material fact in any book, report, or statement relating to a
22 transaction of an insurer or entity organized pursuant to
23 chapter 624 or chapter 641, intending thereby to deceive any
24 person about the financial condition or solvency of such
25 insurer or entity, commits a felony of the third degree,
26 punishable as provided in s. 775.082, s. 775.083, or s.
27 775.084.
28 (b) If such false entry of a material fact is made
29 with the intent to deceive any person as to the impairment of
30 capital, as defined in s. 631.011(12), of such insurer or
31 entity or is the significant cause of such insurer or entity
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SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 being placed in conservation, rehabilitation, or liquidation
2 by a court, the offense is a felony of the first degree,
3 punishable as provided in s. 775.082, s. 775.083, or s.
4 775.084.
5 (2)(a) Any person who knowingly makes a material false
6 statement or report to the department or any agent of the
7 department, or who knowingly and materially overvalues any
8 property in any document or report prepared to be presented to
9 the department or any agent of the department, commits a
10 felony of the third degree, punishable as provided in s.
11 775.082, s. 775.083, or s. 775.084.
12 (b) If such material false statement or report or such
13 material overvaluation is made with the intent to deceive any
14 person as to the impairment of capital, as defined in s.
15 631.011(12), of an insurer or entity organized pursuant to
16 chapter 624 or chapter 641, or is the significant cause of
17 such insurer or entity being placed in conservation,
18 rehabilitation, or liquidation by a court, the offense is a
19 felony of the first degree, punishable as provided in s.
20 775.082, s. 775.083, or s. 775.084.
21
22 (Redesignate subsequent sections.)
23
24
25 ================ T I T L E A M E N D M E N T ===============
26 And the title is amended as follows:
27 On page 1, line 6, after the semicolon,
28
29 insert:
30 amending s. 28.101, F.S.; providing an
31 additional charge when a party petitions for a
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SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 dissolution of marriage; providing for the
2 disposition of the charge for the payment of a
3 policy of insurance to provide child-support
4 payments when the payor's employment has been
5 involuntarily terminated; providing for
6 selection of insurer by competitive bidding;
7 amending ss. 624.3161, 626.171, F.S.; directing
8 the department to adopt rules relating to
9 market conduct examinations and license
10 applications; amending s. 626.9541, F.S.;
11 revising provisions relating to unfair
12 competition and deceptive practices; creating
13 626.9552, F.S.; providing standards for single
14 interest insurance; amending s. 627.062, F.S.;
15 providing for filing forms for rate standards;
16 amending s. 627.0625, F.S.; authorizing the
17 department to adopt rules relating to
18 third-party claimants; amending s. 627.0651,
19 F.S.; prohibiting motor vehicle insurers from
20 imposing a surcharge or a discount due to
21 certain factors; creating s. 627.385, F.S.;
22 providing rules of conduct for residual market
23 board members; creating s. 627.4065, F.S.;
24 providing for notice of right to return health
25 insurance policies; creating s. 627.41345,
26 F.S.; prohibiting an insurer or agent from
27 issuing or signing certain certificates of
28 insurance; providing that the terms of the
29 policy control in case of conflict; amending s.
30 627.7015, F.S.; defining the term "claim" for
31 purposes of alternative procedures for
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SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 resolving disputed property insurance claims;
2 amending s. 627.7276, F.S.; providing for
3 notice of coverage of automobile policies;
4 creating s. 627.795, F.S.; providing guidelines
5 for title insurance policies; amending s.
6 627.918, F.S.; directing the department to
7 adopt rules relating to reporting formats;
8 amending s. 641.3108, F.S.; requiring health
9 maintenance organizations to provide certain
10 information to subscriber groups whose contract
11 is not renewed for certain reasons; amending s.
12 627.7295, F.S.; providing an additional
13 exception to a requirement that a minimum of 2
14 months' premium be collected to issue a policy
15 or binder for motor vehicle insurance; amending
16 s. 627.901, F.S.; authorizing insurance agents
17 and insurers that finance premiums for certain
18 policies to charge interest or a service charge
19 at a specified rate on unpaid premiums on those
20 policies; creating s. 626.9651, F.S.; directing
21 the department to adopt rules to govern the use
22 of a consumer's nonpublic personal financial
23 and health information by health insurers and
24 health maintenance organizations; providing
25 standards governing the rules; amending s.
26 631.001, F.S.; providing construction and
27 purposes; providing a short title; amending s.
28 631.011, F.S.; providing additional
29 definitions; creating s. 631.025, F.S.;
30 specifying application to certain persons and
31 entities; amending s. 631.041, F.S.; limiting
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SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 application of certain time restrictions;
2 correcting a cross-reference; creating s.
3 631.113, F.S.; providing for tolling certain
4 time limitations in certain actions; amending
5 s. 631.141, F.S.; vesting the Department of
6 Insurance with certain rights as receiver;
7 amending s. 631.154, F.S.; including certain
8 costs and expenses of the department in costs
9 and expenses entitled to be recovered by the
10 receiver under certain circumstances; creating
11 s. 631.156, F.S.; providing for investigations
12 by the department preliminary or incidental to
13 receivership proceedings; providing department
14 powers; authorizing the department to provide
15 certain information in such investigations;
16 granting the department certain discretionary
17 powers; creating s. 631.157, F.S.; imposing
18 liability on certain persons or entities for
19 certain actions; specifying amounts of damages;
20 providing construction; providing costs and
21 expenses entitled to be recovered by the
22 receiver under certain circumstances; providing
23 a time certain for bringing certain actions;
24 amending s. 631.57, F.S.; clarifying that the
25 association has the same legal defenses
26 available to the insolvent insurer; creating s.
27 631.3995, F.S.; providing procedures and
28 requirements for closing an estate; providing
29 for deposit of certain assets into the Closed
30 Estate Fund Trust Account; providing for uses
31 of such account; providing for reopening
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SENATE AMENDMENT
Bill No. SB 1220, 1st Eng.
Amendment No. ___ Barcode 363452
1 certain proceedings; amending s. 631.54, F.S.;
2 revising a definition; creating s. 817.2341,
3 F.S.; providing criminal penalties for certain
4 activities;
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