House Bill hb1841e1

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                                   CS/HB 1841, First Engrossed/ntc



  1                      A bill to be entitled

  2         An act relating to insurance company

  3         representatives; providing legislative findings

  4         and intent; creating s. 626.015, F.S.;

  5         providing definitions; creating s. 626.025,

  6         F.S.; requiring insurance agents to comply with

  7         certain consumer protection laws; amending s.

  8         626.171, F.S.; requiring the department to

  9         accept a uniform application for nonresident

10         agent licensing; creating s. 626.175, F.S.;

11         providing for Department of Insurance issuance

12         of temporary licenses under certain

13         circumstances; providing requirements and

14         procedures; providing for fees; creating s.

15         626.207, F.S.; requiring the department to

16         adopt rules establishing waiting periods for

17         applicants for licensure under certain

18         circumstances; authorizing the department to

19         adopt rules providing for penalties for

20         licensees under certain circumstances; amending

21         s. 626.221, F.S.; exempting customer

22         representatives and adjusters with certain

23         designations, agents transferring their

24         licenses from other states, and certain

25         applicants for nonresident agent licensure from

26         certain examination requirements under certain

27         circumstances; amending s. 626.2815, F.S.;

28         specifying additional continuing education

29         requirements; creating s. 626.292, F.S.;

30         providing requirements and procedures for

31         certain agents licensed in other states to


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                                   CS/HB 1841, First Engrossed/ntc



  1         transfer their licenses to this state under

  2         certain circumstances; amending s. 626.301,

  3         F.S.; revising the form and content of licenses

  4         issued by the department; creating s. 626.536,

  5         F.S.; requiring agents to report to the

  6         department certain final dispositions of

  7         administrative actions taken against the agent;

  8         authorizing the department to adopt rules to

  9         implement the requirement; amending s. 626.551,

10         F.S.; extending the time period allowed for

11         licensees to notify the department of a change

12         of address or name; providing for fines for

13         failure to timely report such information to

14         the department; creating ss. 626.7315,

15         626.7845, and 626.8305, F.S.; prohibiting

16         engaging in specified general lines insurance

17         activities, life insurance activities, or

18         health insurance activities without a license;

19         amending s. 626.732, F.S.; specifying

20         additional requirements relating to knowledge,

21         experience, or instruction for certain customer

22         representatives and service representatives;

23         specifying additional classroom and

24         correspondence course instruction requirements;

25         amending s. 626.738, F.S.; specifying

26         cancellation of solicitor licenses and

27         conversion to general lines insurance agent

28         licenses; amending ss. 626.741, 626.792, and

29         626.835, F.S.; authorizing the department to

30         issue a nonresident general lines agent, life

31         agent, or health agent license to certain


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                                   CS/HB 1841, First Engrossed/ntc



  1         individuals under certain circumstances;

  2         authorizing the department to enter into

  3         reciprocal agreements with other states to

  4         waive certain examinations under certain

  5         circumstances; authorizing the department to

  6         verify the nonresident applicant's licensing

  7         status through a database; creating s.

  8         626.7455, F.S.; prohibiting insurers from

  9         entering into agreements with unlicensed

10         persons to manage certain business of the

11         insurer; providing an exception; amending s.

12         626.785, F.S.; increasing a limitation on

13         authorized final disposition or burial

14         policies; amending ss. 626.7851 and 626.8311,

15         F.S.; specifying additional classroom and

16         correspondence course instruction requirements;

17         amending s. 626.852, F.S.; exempting from

18         insurance adjusters provisions persons

19         adjusting only multiple-peril crop insurance or

20         crop hail claims; amending s. 626.902, F.S.;

21         increasing a criminal penalty for representing

22         an unauthorized insurer; providing a penalty

23         for subsequent violations; amending ss. 624.11,

24         624.509, 626.094, 626.112, 626.321, 626.727,

25         626.729, 626.730, 626.7454, 626.779, 626.790,

26         626.8411, 626.927, 626.992, 629.401, and

27         648.27, F.S., to conform; amending s. 626.032,

28         F.S., relating to a definition of

29         administrative agent; amending ss. 624.311,

30         624.523, 624.507, 626.0428, 626.141, 626.112,

31         626.171, 626.221, 626.2815, 626.321, 626.451,


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  1         626.511, 626.521, 626.561, 626.601, 626.611,

  2         626.621, 626.641, 626.651, 626.730, 626.745,

  3         626.9541, 627.776, 631.155, 631.341, 634.318,

  4         641.37, and 642.041, F.S., to conform;

  5         repealing ss. 624.505(2), 626.727(2), 626.737,

  6         626.738, and 626.862(2), F.S., to conform;

  7         repealing ss. 626.031, 626.041, 626.051,

  8         626.062, 626.071, 626.072, 626.081, 626.091,

  9         626.094, 626.101, 626.102, 626.103, and

10         626.104, F.S., relating to definitions;

11         repealing ss. 626.736, 626.737, and 626.738,

12         F.S., relating to solicitors; repealing s.

13         626.739, F.S., relating to certain temporary

14         licenses; repealing s. 626.740, F.S., relating

15         to certain temporary limited licenses;

16         repealing ss. 626.790 and 626.791, F.S.,

17         relating to certain temporary licenses;

18         providing effective dates.

19

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

21

22         Section 1.  Legislative findings and intent.--The

23  Legislature finds that Subtitle C of the federal

24  Gramm-Leach-Bliley Act, 15 U.S.C.A., s. 6751, et seq.,

25  requires states to achieve uniformity or reciprocity in

26  producer licensing but not at the expense of state laws

27  designed to protect insurance consumers.  The Legislature

28  finds that the Gramm-Leach-Bliley Act expressly saves from

29  alteration state consumer protection laws unless inconsistent

30  with that act. Therefore, it is the intent of the Legislature

31  to achieve compliance with the uniformity and reciprocity


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                                   CS/HB 1841, First Engrossed/ntc



  1  requirements of Subtitle C of the Gramm-Leach-Bliley Act,

  2  while exercising its authority under that act to preserve

  3  insurance consumer protection laws not inconsistent with these

  4  requirements.

  5         Section 2.  Subsection (2) of section 624.11, Florida

  6  Statutes, is amended to read:

  7         624.11  Compliance required.--

  8         (2)  Any risk retention group organized and existing

  9  under the provisions of the Product Liability Risk Retention

10  Act of 1981 (Pub. L. No. 97-45), which has been licensed as an

11  insurance company and authorized to engage in the business of

12  insurance may transact insurance in this state and shall be

13  subject to the provisions of ss. 624.15, 624.316, 624.418,

14  624.421, 624.4211, 624.422, 624.509, 626.041, 626.112,

15  626.611, 626.621, 626.731, 626.741, 626.932, 626.938,

16  626.9541, 627.351, and 627.915; part I of chapter 631; and all

17  other applicable provisions of the laws of this state.  Any

18  such group formed in another jurisdiction shall furnish to the

19  department, upon request, a copy of any financial report

20  submitted by the group in the licensing jurisdiction.

21         Section 3.  Paragraph (b) of subsection (5) of section

22  624.509, Florida Statutes, is amended to read:

23         624.509  Premium tax; rate and computation.--

24         (5)  There shall be allowed a credit against the net

25  tax imposed by this section equal to 15 percent of the amount

26  paid by the insurer in salaries to employees located or based

27  within this state and who are covered by the provisions of

28  chapter 443. For purposes of this subsection:

29         (b)  The term "employees" does not include independent

30  contractors or any person whose duties require that the person

31  hold a valid license under the Florida Insurance Code, except


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                                   CS/HB 1841, First Engrossed/ntc



  1  persons defined in s. 626.015(1), (15), and (17) ss. 626.081,

  2  626.091, and 626.101.

  3         Section 4.  Section 626.015, Florida Statutes, is

  4  created to read:

  5         626.015  Definitions.--As used in this part:

  6         (1)  "Adjuster" means a public adjuster as defined in

  7  s. 626.854, independent adjuster as defined in s. 626.855, or

  8  company employee adjuster as defined in s. 626.856.

  9         (2)  "Administrative agent" means a life agent or

10  health agent who:

11         (a)  Is employed by a full-time licensed life agent or

12  health agent who shall supervise and be accountable for the

13  actions of the administrative agent.

14         (b)  Performs primarily administrative functions.

15         (c)  Receives no insurance commissions.

16         (d)  Does not solicit or transact business outside of

17  the confines of an insurance agency office.

18         (3)  "Agent" means a general lines agent, life agent,

19  health agent, or title agent, or all such agents, as indicated

20  by context. The term "agent" includes an insurance producer or

21  producer, but does not include a customer representative,

22  limited customer representative, or service representative.

23         (4)  "Appointment" means the authority given by an

24  insurer or employer to a licensee to transact insurance or

25  adjust claims on behalf of an insurer or employer.

26         (5)  "Customer representative" means an individual

27  appointed by a general lines agent or agency to assist that

28  agent or agency in transacting the business of insurance from

29  the office of that agent or agency.

30         (6)  "Department" means the Department of Insurance.

31


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  1         (7)  "General lines agent" means an agent transacting

  2  any one or more of the following kinds of insurance:

  3         (a)  Property insurance.

  4         (b)  Casualty insurance, including commercial liability

  5  insurance underwritten by a risk retention group, a commercial

  6  self-insurance fund as defined in s. 624.462, or a workers'

  7  compensation self-insurance fund established pursuant to s.

  8  624.4621.

  9         (c)  Surety insurance.

10         (d)  Health insurance, when transacted by an insurer

11  also represented by the same agent as to property or casualty

12  or surety insurance.

13         (e)  Marine insurance.

14         (8)  "Health agent" means an agent representing a

15  health maintenance organization or, as to health insurance

16  only, an insurer transacting health insurance.

17         (9)  "Home state" means the District of Columbia and

18  any state or territory of the United States in which an

19  insurance agent maintains his or her principal place of

20  residence and is licensed to act as an insurance agent.

21         (10)  "Insurance agency" means a business location at

22  which an individual, firm, partnership, corporation,

23  association, or other entity, other than an employee of the

24  individual, firm, partnership, corporation, association, or

25  other entity and other than an insurer as defined by s. 624.03

26  or an adjuster as defined by subsection (1), engages in any

27  activity or employs individuals to engage in any activity

28  which by law may be performed only by a licensed insurance

29  agent.

30         (11)  "License" means a document issued by the

31  department authorizing a person to be appointed to transact


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                                   CS/HB 1841, First Engrossed/ntc



  1  insurance or adjust claims for the kind, line, or class of

  2  insurance identified in the document.

  3         (12)  "Life agent" means an individual representing an

  4  insurer as to life insurance and annuity contracts, including

  5  agents appointed to transact life insurance, fixed-dollar

  6  annuity contracts, or variable contracts by the same insurer.

  7         (13)  "Limited customer representative" means a

  8  customer representative appointed by a general lines agent or

  9  agency to assist that agent or agency in transacting only the

10  business of private passenger motor vehicle insurance from the

11  office of that agent or agency. A limited customer

12  representative is subject to the Florida Insurance Code in the

13  same manner as a customer representative, unless otherwise

14  specified.

15         (14)  "Limited lines insurance" means those categories

16  of business specified in ss. 626.321 and 635.011.

17         (15)  "Line of authority" means a kind, line, or class

18  of insurance an agent is authorized to transact.

19         (16)(a)  "Managing general agent" means any person

20  managing all or part of the insurance business of an insurer,

21  including the management of a separate division, department,

22  or underwriting office, and acting as an agent for that

23  insurer, whether known as a managing general agent, manager,

24  or other similar term, who, with or without authority,

25  separately or together with affiliates, produces directly or

26  indirectly, or underwrites an amount of gross direct written

27  premium equal to or more than 5 percent of the policyholder

28  surplus as reported in the last annual statement of the

29  insurer in any single quarter or year and also does one or

30  more of the following:

31         1.  Adjusts or pays claims.


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  1         2.  Negotiates reinsurance on behalf of the insurer.

  2         (b)  The following persons shall not be considered

  3  managing general agents:

  4         1.  An employee of the insurer.

  5         2.  A United States manager of the United States branch

  6  of an alien insurer.

  7         3.  An underwriting manager managing all the insurance

  8  operations of the insurer pursuant to a contract, who is under

  9  the common control of the insurer subject to regulation under

10  ss. 628.801-628.803, and whose compensation is not based on

11  the volume of premiums written.

12         4.  Administrators as defined by s. 626.88.

13         5.  The attorney in fact authorized by and acting for

14  the subscribers of a reciprocal insurer under powers of

15  attorney.

16         (17)  "Resident" means an individual domiciled and

17  residing in this state.

18         (18)  "Service representative" means an individual

19  employed by an insurer or managing general agent for the

20  purpose of assisting a general lines agent in negotiating and

21  effecting insurance contracts when accompanied by a licensed

22  general lines agent.  A service representative shall not be

23  simultaneously licensed as a general lines agent in this

24  state. This subsection does not apply to life insurance.

25         (19)  "Uniform application" means the uniform

26  application of the National Association of Insurance

27  Commissioners for nonresident agent licensing, effective

28  January 15, 2001, or subsequent versions adopted by rule by

29  the department.

30         Section 5.  Section 626.025, Florida Statutes, is

31  created to read:


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                                   CS/HB 1841, First Engrossed/ntc



  1         626.025  Consumer protections.--To transact insurance,

  2  agents shall comply with consumer protection laws, including

  3  the following, as applicable:

  4         (1)  Continuing education requirements for resident and

  5  nonresident agents, as required in s. 626.2815.

  6         (2)  Fingerprinting requirements for resident and

  7  nonresident agents, as required under s. 626.171 or s.

  8  626.202.

  9         (3)  Fingerprinting following a department

10  investigation under s. 626.601.

11         (4)  The submission of credit and character reports, as

12  required by s. 626.171 or s. 626.521.

13         (5)  Qualifications for licensure as an agent in s.

14  626.731, s. 626.741, s. 626.785, s. 626.792, s. 626.831, or s.

15  626.835.

16         (6)  Examination requirements in s. 626.221, s.

17  626.741, s. 626.792, or s. 626.835.

18         (7)  Required licensure of certain insurance agencies

19  under s. 626.172.

20         (8)  Requirements for licensure of resident and

21  nonresident agents in s. 626.112, s. 626.321, s. 626.731, s.

22  626.741, s. 626.785, s. 626.831, s. 626.835, or s. 626.792.

23         (9)  The prohibition against nonresident agents having

24  a place of business in the state, a pecuniary interest in an

25  insurance business in the state, or a financial interest in an

26  insurance agency in the state, under s. 626.741, s. 626.835,

27  or s. 626.792.

28         (10)  The prohibition against employees of the United

29  States Department of Veterans Affairs being licensed as life

30  agents or health agents, under s. 626.788 or s. 626.833.

31


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                                   CS/HB 1841, First Engrossed/ntc



  1         (11)  The prohibition against licensed life agents or

  2  health agents who are members of the United States Armed

  3  Services selling insurance products to those of a lower

  4  military rank, under s. 626.789 or s. 626.834.

  5         (12)  Countersignature of insurance policies, as

  6  required under s. 624.425, s. 624.426, or s. 626.741.

  7         (13)  Designation of a primary agent by an insurance

  8  agency under s. 626.592.

  9         (14)  The code of ethics for life insurance agents, as

10  set forth in s. 626.797.

11         (15)  The prohibition against the designation of a life

12  insurance agent as the beneficiary of life insurance policy

13  sold to an individual other than a family member under s.

14  626.798.

15         (16)  Any other licensing requirement, restriction, or

16  prohibition designated a consumer protection by the Insurance

17  Commissioner, but not inconsistent with the requirements of

18  Subtitle C of the Gramm-Leach-Bliley Act, 15, U.S.C.A., s.

19  6751, et seq.

20         Section 6.  Section 626.032, Florida Statutes, is

21  amended to read:

22         626.032  Administrative agents "Administrative agent"

23  defined; continuing education and designation required.--

24         (1)  As used in this part, "administrative agent" means

25  a life agent or health agent who:

26         (a)  Is employed by a full-time licensed life agent or

27  health agent who shall supervise and be accountable for

28  actions of the administrative agent.

29         (b)  Performs primarily administrative functions.

30         (c)  Receives no insurance commissions.

31


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                                   CS/HB 1841, First Engrossed/ntc



  1         (d)  Does not solicit or transact business outside of

  2  the confines of an insurance agency office.

  3         (1)(2)  An administrative agent is subject to all

  4  requirements of this code applicable to life agents or health

  5  agents, except that the number of hours of continuing

  6  education required of an administrative agent under s.

  7  626.2815 is one-half the number of hours of continuing

  8  education required of a life agent or health agent.

  9         (2)(3)  An agent may request, and the department must

10  grant, a designation of "administrative agent" to be

11  prominently printed on the agent's license.  The request shall

12  be filed on a form furnished by the department with the

13  administrative agent's application filing fee of $10 and

14  license modification fee established by s. 624.501(16).

15         (3)(4)  An administrative agent who desires removal of

16  the "administrative agent" designation may apply to the

17  department, on forms furnished by the department with an

18  application filing fee of $10 and license modification fee

19  established pursuant to s. 624.501(16).  If, during the 24

20  months preceding the application, the administrative agent

21  completed the full continuing education requirements specified

22  in s. 626.2815, the department shall remove the designation

23  from the agent's license.

24         Section 7.  Section 626.094, Florida Statutes, is

25  amended to read:

26         626.094  "Insurance agency" defined.--An "insurance

27  agency" is a business location at which an individual, firm,

28  partnership, corporation, association, or other entity, except

29  for an employee of the individual, firm, partnership,

30  corporation, association, or other entity, and other than an

31  insurer as defined by  s. 624.03 or an adjuster as defined by


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  1  s. 626.015 626.101, engages in any activity or employs

  2  individuals to engage in any activity which by law may be

  3  performed only by a licensed insurance agent or solicitor.

  4         Section 8.  Paragraphs (a) and (b) of subsection (1)

  5  and subsection (2) of section 626.112, Florida Statutes, are

  6  amended to read:

  7         626.112  License and appointment required; agents,

  8  customer representatives, solicitors, adjusters, insurance

  9  agencies, service representatives, managing general agents.--

10         (1)(a)  No person may be, act as, or advertise or hold

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

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

13  currently licensed and appointed.

14         (b)  Except as provided in subsection (6) or in

15  applicable department rules, and in addition to other conduct

16  described in this chapter with respect to particular types of

17  agents, a license as an insurance agent, service

18  representative, solicitor, customer representative, or limited

19  customer representative is required in order to engage in the

20  solicitation of insurance. For purposes of this requirement,

21  as applicable to any of the license types described in this

22  section, the solicitation of insurance is the attempt to

23  persuade any person to purchase an insurance product by:

24         1.  Describing the benefits or terms of insurance

25  coverage, including premiums or rates of return;

26         2.  Distributing an invitation to contract to

27  prospective purchasers;

28         3.  Making general or specific recommendations as to

29  insurance products;

30         4.  Completing orders or applications for insurance

31  products; or


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  1         5.  Comparing insurance products, advising as to

  2  insurance matters, or interpreting policies or coverages.

  3

  4  However, an employee leasing company licensed pursuant to

  5  chapter 468 which is seeking to enter into a contract with an

  6  employer that identifies products and services offered to

  7  employees may deliver proposals for the purchase of employee

  8  leasing services to prospective clients of the employee

  9  leasing company setting forth the terms and conditions of

10  doing business; classify employees as permitted by s. 468.529;

11  collect information from prospective clients and other sources

12  as necessary to perform due diligence on the prospective

13  client and to prepare a proposal for services; provide and

14  receive enrollment forms, plans, and other documents; and

15  discuss or explain in general terms the conditions,

16  limitations, options, or exclusions of insurance benefit plans

17  available to the client or employees of the employee leasing

18  company were the client to contract with the employee leasing

19  company. Any advertising materials or other documents

20  describing specific insurance coverages must identify and be

21  from a licensed insurer or its licensed agent or a licensed

22  and appointed agent employed by the employee leasing company.

23  The employee leasing company may not advise or inform the

24  prospective business client or individual employees of

25  specific coverage provisions, exclusions, or limitations of

26  particular plans. As to clients for which the employee leasing

27  company is providing services pursuant to s. 468.525(4), the

28  employee leasing company may engage in activities permitted by

29  ss. 626.7315, 626.7845, and 626.8305 626.041, 626.051, and

30  626.062, subject to the restrictions specified in those

31  sections. If a prospective client requests more specific


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  1  information concerning the insurance provided by the employee

  2  leasing company, the employee leasing company must refer the

  3  prospective business client to the insurer or its licensed

  4  agent or to a licensed and appointed agent employed by the

  5  employee leasing company.

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

  7  shall solicit or otherwise transact as agent or, customer

  8  representative, or solicitor, or represent or hold himself or

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

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

11  or she is not then licensed and appointed.

12         Section 9.  Subsections (1) and (5) of section 626.171,

13  Florida Statutes, are amended to read:

14         626.171  Application for license.--

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

16  customer representative, adjuster, insurance agency, service

17  representative, managing general agent, or reinsurance

18  intermediary to any person except upon written application

19  therefor filed with it, qualification therefor, and payment in

20  advance of all applicable fees.  Any such application shall be

21  made under the oath of the applicant and be signed by the

22  applicant. Beginning November 1, 2002, the department shall

23  accept the uniform application for nonresident agent

24  licensing.  The department may adopt revised versions of the

25  uniform application by rule.

26         (5)  An application for a license as an agent, customer

27  representative, solicitor, adjuster, insurance agency, service

28  representative, managing general agent, or reinsurance

29  intermediary must be accompanied by a set of the individual

30  applicant's fingerprints, or, if the applicant is not an

31  individual, by a set of the fingerprints of the sole


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  1  proprietor, majority owner, partners, officers, and directors,

  2  on a form adopted by rule of the department and accompanied by

  3  the fingerprint processing fee set forth in s. 624.501.  The

  4  fingerprints shall be certified by a law enforcement officer.

  5         Section 10.  Section 626.175, Florida Statutes, is

  6  created to read:

  7         626.175  Temporary licensing.--

  8         (1)  The department may issue a nonrenewable temporary

  9  license for a period not to exceed 6 months authorizing

10  appointment of a general lines insurance agent or a life

11  agent, or an industrial fire or burglary agent, subject to the

12  conditions described in this section.  The fees paid for a

13  temporary license and appointment shall be as specified in s.

14  624.501. Fees paid shall not be refunded after a temporary

15  license has been issued.

16         (a)1.  In the case of a general lines agent, the

17  department may issue a temporary license to an employee, a

18  family member, a business associate, or a personal

19  representative of a licensed general lines agent for the

20  purpose of continuing or winding up the business affairs of

21  the agent or agency in the event the licensed agent has died

22  or become unable to perform his or her duties because of

23  military service or illness or other physical or mental

24  disability, subject to the following conditions:

25         a.  No other individual connected with the agent's

26  business may be licensed as a general lines agent.

27         b.  The proposed temporary licensee shall be qualified

28  for a regular general lines agent license under this code

29  except as to residence, examination, education, or experience.

30         c.  Application for the temporary license shall have

31  been made by the applicant upon statements and affidavit filed


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                                   CS/HB 1841, First Engrossed/ntc



  1  with the department on forms prescribed and furnished by the

  2  department.

  3         d.  Under a temporary license and appointment, the

  4  licensee shall not represent any insurer not last represented

  5  by the agent being replaced and shall not be licensed or

  6  appointed as to any additional kind, line, or class of

  7  insurance other than those covered by the last existing agency

  8  appointments of the replaced agent.  If an insurer withdraws

  9  from the agency during the temporary license period, the

10  temporary licensee may be appointed by another similar insurer

11  but only for the period remaining under the temporary license.

12         2.  A regular general lines agent license may be issued

13  to a temporary licensee upon meeting the qualifications for a

14  general lines agent license under s. 626.731.

15         (b)  In the case of a life agent, the department may

16  issue a temporary license:

17         1.  To the executor or administrator of the estate of a

18  deceased individual licensed and appointed as a life agent at

19  the time of death;

20         2.  To a surviving next of kin of the deceased

21  individual, if no administrator or executor has been appointed

22  and qualified; however, any license and appointment under this

23  subparagraph shall be canceled upon issuance of a license to

24  an executor or administrator under subparagraph 1.; or

25         3.  To an individual otherwise qualified to be licensed

26  as an agent who has completed the educational or training

27  requirements prescribed in s. 626.7851 and has successfully

28  sat for the required examination prior to termination of such

29  6-month period.  The department may issue this temporary

30  license only in the case of a life agent to represent an

31  insurer of the industrial or ordinary-combination class.


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                                   CS/HB 1841, First Engrossed/ntc



  1         (c)  In the case of a limited license authorizing

  2  appointment as an industrial fire or burglary agent, the

  3  department may issue a temporary license to an individual

  4  otherwise qualified to be licensed as an agent who has

  5  completed the educational or training requirements prescribed

  6  in s. 626.732 and has successfully sat for the required

  7  examination prior to termination of the 6-month period.

  8         (2)  If an absent or disabled agent being replaced

  9  under a temporary license returns or becomes able to resume

10  the active conduct of the agency, or if the disposition of the

11  affairs of the agency of a deceased or mentally incompetent

12  agent is completed, or the temporary licensee has qualified

13  for a regular license, before expiration otherwise of the

14  temporary license, the temporary license shall terminate.

15         (3)  If, during the 6-month temporary license and

16  appointment period, the applicant passes the licensing

17  examination, the temporary license shall terminate and a

18  license shall be issued by the department after payment of a

19  modification fee as prescribed in s. 624.501.

20         (4)  An application for a temporary license shall be

21  made by the applicant upon statements and affidavit filed with

22  the department on forms prescribed and furnished by the

23  department.

24         (5)  Except as provided in this section, the holder of

25  a temporary license shall be subject to the Florida Insurance

26  Code to the same extent as regularly licensed and appointed

27  agents.

28         (6)  The department may limit the authority of any

29  temporary licensee in any way deemed necessary to protect

30  insureds and the public.

31


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                                   CS/HB 1841, First Engrossed/ntc



  1         (7)  The department may issue to an applicant only one

  2  temporary license for each kind, line, or class of insurance

  3  or a single temporary license covering multiple lines.

  4         Section 11.  Section 626.207, Florida Statutes, is

  5  created to read:

  6         626.207  Department rulemaking authority; waiting

  7  periods for applicants; penalties against licensees.--

  8         (1)  The department shall adopt rules establishing

  9  specific waiting periods for applicants to become eligible for

10  licensure following denial, suspension, or revocation pursuant

11  to s. 626.611, s. 626.621, s. 626.8437, s. 626.844, s.

12  626.935, s. 626.9917, s. 634.181, s. 634.191, s. 634.320, s.

13  634.321, s. 634.422, s. 634.423, s. 642.041, or s. 642.043.

14  The purpose of the waiting periods is to provide sufficient

15  time to demonstrate reformation of character and

16  rehabilitation.  The waiting periods shall vary based on the

17  type of conduct and the length of time since the conduct

18  occurred and shall also be based on the probability that the

19  propensity to commit illegal conduct has been overcome.  The

20  waiting periods may be adjusted based on aggravating and

21  mitigating factors established by rule and consistent with

22  this purpose.

23         (2)  The department shall adopt rules establishing

24  specific penalties against licensees for violations of s.

25  626.611, s. 626.621, s. 626.8437, s. 626.844, s. 626.935, s.

26  626.9917, s. 634.181, s. 634.191, s. 634.320, s. 634.321, s.

27  634.422, s. 634.423, s. 642.041, or s. 642.043.  The purpose

28  of the revocation or suspension is to provide a sufficient

29  penalty to deter future violations of the Florida Insurance

30  Code.  The imposition of a revocation or the length of

31  suspension shall be based on the type of conduct and the


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                                   CS/HB 1841, First Engrossed/ntc



  1  probability that the propensity to commit further illegal

  2  conduct has been overcome at the time of eligibility for

  3  relicensure.  The revocation or the length of suspension may

  4  be adjusted based on aggravating or mitigating factors,

  5  established by rule and consistent with this purpose.

  6         Section 12.  Section 626.221, Florida Statutes, is

  7  amended to read:

  8         626.221  Examination requirement; exemptions.--

  9         (1)  The department shall not issue any license as

10  agent, solicitor, customer representative, or adjuster to any

11  individual who has not qualified for, taken, and passed to the

12  satisfaction of the department a written examination of the

13  scope prescribed in s. 626.241.

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

15  any of the following cases:

16         (a)  An applicant for renewal of appointment as an

17  agent, solicitor, customer representative, or adjuster, unless

18  the department determines that an examination is necessary to

19  establish the competence or trustworthiness of such applicant.

20         (b)  An applicant for limited license as agent for

21  personal accident insurance, baggage and motor vehicle excess

22  liability insurance, credit life or disability insurance,

23  credit insurance, credit property insurance, or in-transit and

24  storage personal property insurance.

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

26  for reinstatement of license or appointment as an agent,

27  customer representative, or adjuster whose license has been

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

29  written request for reinstatement.

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

31  application for license and appointment as an agent, customer


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                                   CS/HB 1841, First Engrossed/ntc



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

  2  of the department and had continuously been such an employee

  3  with responsible insurance duties for not less than 2 years

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

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

  6  applied for.

  7         (e)  An individual who qualified as a solicitor,

  8  managing general agent, service representative, customer

  9  representative, or all-lines adjuster by passing a general

10  lines agent's examination and subsequently was licensed and

11  appointed and has been actively engaged in all lines of

12  property and casualty insurance may, upon filing an

13  application for appointment, be licensed and appointed as a

14  general lines agent for the same kinds of business without

15  taking another examination if he or she holds any such

16  currently effective license referred to in this paragraph or

17  held the license within 24 months prior to the date of filing

18  the application with the department.

19         (f)  A person who has been licensed and appointed by

20  the department as a public adjuster or independent adjuster,

21  or licensed and appointed either as an agent or company

22  adjuster as to all property, casualty, and surety insurances,

23  may be licensed and appointed as a company adjuster as to any

24  of such insurances, or as an independent adjuster or public

25  adjuster, without additional written examination if an

26  application for appointment is filed with the department

27  within 24 months following the date of cancellation or

28  expiration of the prior appointment.

29         (g)  A person who has been licensed by the department

30  as an adjuster for motor vehicle, property and casualty,

31  workers' compensation, and health insurance may be licensed as


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                                   CS/HB 1841, First Engrossed/ntc



  1  such an adjuster without additional written examination if his

  2  or her application for appointment is filed with the

  3  department within 24 months after cancellation or expiration

  4  of the prior license.

  5         (h)  An applicant for temporary license, except as

  6  provided in this code.

  7         (i)  An applicant for license as a nonresident agent,

  8  if so provided in this code.

  9         (i)(j)  An applicant for a life or health license who

10  has received the designation of chartered life underwriter

11  (CLU) from the American College of Life Underwriters and who

12  has been engaged in the insurance business within the past 4

13  years, except that such an individual a person may be examined

14  on pertinent provisions of this code.

15         (j)(k)  An applicant for license as a general lines

16  agent, solicitor, customer representative, or adjuster who has

17  received the designation of chartered property and casualty

18  underwriter (CPCU) from the American Institute for Property

19  and Liability Underwriters and who has been engaged in the

20  insurance business within the past 4 years, except that such

21  an individual a person may be examined on pertinent provisions

22  of this code.

23         (k)(l)  An applicant for license as a customer

24  representative who has the designation of Accredited Advisor

25  in Insurance (AAI) from the Insurance Institute of America,

26  the designation of Certified Insurance Counselor (CIC) from

27  the Society of Certified Insurance Service Counselors, the

28  designation of Accredited Customer Service Representative

29  (ACSR) from the Independent Insurance Agents of America, the

30  designation of Certified Professional Service Representative

31  (CPSR) from the National Association of Professional Insurance


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                                   CS/HB 1841, First Engrossed/ntc



  1  Agents, the designation of Certified Insurance Service

  2  Representative (CISR) from the Society of Certified Insurance

  3  Service Representatives. Also, an applicant for license as a

  4  customer representative who has the designation of Certified

  5  Customer Service Representative (CCSR) from the Florida

  6  Association of Insurance Agents, or the designation of

  7  Registered Customer Service Representative (RCSR) from a

  8  regionally accredited postsecondary institution in this state,

  9  or the designation of Professional Customer Service

10  Representative (PCSR) from the Professional Career Institute,

11  whose curriculum has been approved by the department and whose

12  curriculum includes comprehensive analysis of basic property

13  and casualty lines of insurance and testing at least equal to

14  that of standard department testing for the customer

15  representative license. The department shall adopt rules

16  establishing standards for the approval of curriculum.

17         (l)(m)  An applicant for license as an adjuster who has

18  the designation of Accredited Claims Adjuster (ACA) from a

19  regionally accredited postsecondary institution in this state,

20  or the designation of Professional Claims Adjuster (PCA) from

21  the Professional Career Institute, whose curriculum has been

22  approved by the department and whose curriculum includes

23  comprehensive analysis of basic property and casualty lines of

24  insurance and testing at least equal to that of standard

25  department testing for the all-lines adjuster license. The

26  department shall adopt rules establishing standards for the

27  approval of curriculum.

28         (m)  An applicant qualifying for a license transfer

29  under s. 626.292, if the applicant:

30         1.  Has successfully completed the prelicensing

31  examination requirements in the applicant's previous state


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                                   CS/HB 1841, First Engrossed/ntc



  1  which are substantially equivalent to the examination

  2  requirements in this state, as determined by the Insurance

  3  Commissioner of this state;

  4         2.  Has received the designation of chartered property

  5  and casualty underwriter (CPCU) from the American Institute

  6  for Property and Liability Underwriters and has been engaged

  7  in the insurance business within the past 4 years if applying

  8  to transfer a general lines agent license; or

  9         3.  Has received the designation of chartered life

10  underwriter (CLU) from the American College of Life

11  Underwriters and has been engaged in the insurance business

12  within the past 4 years, if applying to transfer a life or

13  health agent license.

14         (n)  An applicant for a nonresident agent license, if

15  the applicant:

16         1.  Has successfully completed prelicensing examination

17  requirements in the applicant's home state which are

18  substantially equivalent to the examination requirements in

19  this state, as determined by the Insurance Commissioner of

20  this state, as a requirement for obtaining a resident license

21  in his or her home state;

22         2.  Held a general lines agent license, life agent

23  license, or health agent license prior to the time a written

24  examination was required;

25         3.  Has received the designation of chartered property

26  and casualty underwriter (CPCU) from the American Institute

27  for Property and Liability Underwriters and has been engaged

28  in the insurance business within the past 4 years, if an

29  applicant for a nonresident license as a general lines agent;

30  or

31


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                                   CS/HB 1841, First Engrossed/ntc



  1         4.  Has received the designation of chartered life

  2  underwriter (CLU) from the American College of Life

  3  Underwriters and has been in the insurance business within the

  4  past 4 years, if an applicant for a nonresident license as a

  5  life agent or health agent.

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

  7  solicitor or customer representative shall not be licensed as

  8  a general lines agent without application and examination for

  9  such license.

10         Section 13.  Paragraph (a) of subsection (3) of section

11  626.2815, Florida Statutes, is amended to read:

12         626.2815  Continuing education required; application;

13  exceptions; requirements; penalties.--

14         (3)(a)  Each person subject to the provisions of this

15  section must, except as set forth in paragraphs (b) and (c),

16  complete a minimum of 28 hours of continuing education courses

17  every 2 years in basic or higher-level courses prescribed by

18  this section or in other courses approved by the department.

19  Each person subject to the provisions of this section must

20  complete, as part of their required number of continuing

21  education hours, a minimum of 2 hours of continuing education,

22  approved by the department, every 2 years on the subject

23  matter of unauthorized entities engaging in the business of

24  insurance. The scope of the topic of unauthorized entities

25  shall include the Florida Nonprofit Multiple Employer Welfare

26  Arrangement Act and the Employee Retirement Income Security

27  Act, 29 U.S.C. s. 1001, et seq., as it relates to the

28  provision of health insurance by employers to their employees

29  and the regulation thereof.

30         Section 14.  Section 626.292, Florida Statutes, is

31  created to read:


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                                   CS/HB 1841, First Engrossed/ntc



  1         626.292  Transfer of license from another state.--

  2         (1)  Any individual licensed in good standing in

  3  another state may apply to the department to have the license

  4  transferred to this state to obtain a Florida resident agent

  5  license for the same lines of authority covered by the license

  6  in the other state.

  7         (2)  To qualify for a license transfer, an individual

  8  applicant must meet the following requirements:

  9         (a)  The individual shall become a resident of this

10  state.

11         (b)  The individual shall have been licensed in another

12  state for a minimum of 1 year immediately preceding the date

13  the individual became a resident of this state.

14         (c)  The individual shall submit a completed

15  application for this state which is received by the department

16  within 90 days after the date the individual became a resident

17  of this state, along with payment of the applicable fees set

18  forth in s. 624.501 and submission of the following documents:

19         1.  A certification issued by the appropriate official

20  of the applicant's home state identifying the type of license

21  and lines of authority under the license and stating that, at

22  the time the license from the home state was cancelled, the

23  applicant was in good standing in that state or that the

24  state's Producer Database records, maintained by the National

25  Association of Insurance Commissioners, its affiliates, or

26  subsidiaries, indicate that the agent is or was licensed in

27  good standing for the line of authority requested.

28         2.  A set of the individual applicant's fingerprints in

29  accordance with s. 626.171(5).

30         (d)  The individual shall satisfy prelicensing

31  education requirements in this state, unless the completion of


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                                   CS/HB 1841, First Engrossed/ntc



  1  prelicensing education requirements was a prerequisite for

  2  licensure in the other state and the prelicensing education

  3  requirements in the other state are substantially equivalent

  4  to the prelicensing requirements of this state as determined

  5  by the Insurance Commissioner of this state.

  6         (e)  The individual shall satisfy the examination

  7  requirement under s. 626.221, unless exempt thereunder.

  8         (3)  An applicant satisfying the requirements for a

  9  license transfer under subsection (2) shall be approved for

10  licensure in this state unless the department finds that

11  grounds exist under s. 626.611 or s. 626.621 for refusal,

12  suspension, or revocation of a license.

13         Section 15.  Section 626.301, Florida Statutes, is

14  amended to read:

15         626.301  Form and contents of licenses, in

16  general.--Each license issued by the department shall be in

17  such form as the department may designate and contain show the

18  licensee's name, lines of authority classes of insurance the

19  licensee is authorized to transact, the licensee's personal

20  identification number, the date of issuance, and any other

21  information the department deems necessary to fully identify

22  the licensee and the authority being granted the name of the

23  licensee.  The department may by rule require photographs of

24  applicants as a part of the licensing process.

25         Section 16.  Paragraphs (b) and (f) of subsection (1)

26  of section 626.321, Florida Statutes, are amended to read:

27         626.321  Limited licenses.--

28         (1)  The department shall issue to a qualified

29  individual, or a qualified individual or entity under

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

31


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                                   CS/HB 1841, First Engrossed/ntc



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

  2  categories:

  3         (b)  Industrial fire insurance or burglary

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

  5  burglary insurance.  The applicant for such a license shall

  6  pass a written examination covering such insurance.  No

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

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

  9  insurance coverage except as to life and health insurances.

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

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

12  and no individual or entity so licensed shall, during the same

13  period, hold a license as an agent or solicitor as to any

14  other or additional kind of life or health insurance with the

15  exception of credit life or disability insurance as defined in

16  paragraph (e). The same licensing provisions as outlined in

17  paragraph (e) apply to entities licensed as credit insurance

18  agents under this paragraph.

19         Section 17.  Section 626.536, Florida Statutes, is

20  created to read:

21         626.536  Reporting of actions.--An agent shall submit

22  to the department, within 30 days after the final disposition

23  of any administrative action taken against the agent by a

24  governmental agency in this or any other state or jurisdiction

25  relating to the business of insurance, the sale of securities,

26  or activity involving fraud, dishonesty, trustworthiness, or

27  breach of a fiduciary duty, a copy of the order, consent to

28  order, or other relevant legal documents. The department may

29  adopt rules implementing the provisions of this section.

30         Section 18.  Section 626.551, Florida Statutes, is

31  amended to read:


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                                   CS/HB 1841, First Engrossed/ntc



  1         626.551  Notice of change of address, name.--Every

  2  licensee shall notify the department in writing within 60 30

  3  days after a change of name, residence address, principal

  4  business street address, or mailing address.  Any licensed

  5  agent who has moved his or her residence from this state shall

  6  have his or her license and all appointments immediately

  7  terminated by the department. Failure to notify the department

  8  within the required time period shall result in a fine not to

  9  exceed $250 for the first offense and, for subsequent

10  offenses, a fine of not less than $500 or suspension or

11  revocation of the license pursuant to s. 626.611 or s.

12  626.621.

13         Section 19.  Section 626.727, Florida Statutes, is

14  amended to read:

15         626.727  Scope of this part.--This part applies only

16  to:

17         (1)  general lines agents, as defined in s. 626.041;

18         (2)  solicitors, as defined in s. 626.071;

19         (3)  customer representatives, as defined in s.

20  626.072; and

21         (4)  service representatives, and as defined in s.

22  626.081, or managing general agents, all as defined in s.

23  626.015 s. 626.091.

24         Section 20.  Section 626.729, Florida Statutes, is

25  amended to read:

26         626.729  "Industrial fire insurance" defined.--For the

27  purposes of this code, "industrial fire insurance" is

28  insurance against loss by fire of either buildings and other

29  structures or contents, which may include extended coverage;

30  windstorm insurance; basic limits owner's, landlord's, or

31  tenant's liability insurance with single limits of $25,000;


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                                   CS/HB 1841, First Engrossed/ntc



  1  comprehensive personal liability insurance with a single limit

  2  of $25,000; or burglary insurance, under which the premiums

  3  are collected quarterly or more often and the face amount of

  4  the insurance provided by the policy on one risk is not more

  5  than $50,000, including the contents of such buildings and

  6  other structures, and the insurer issuing such policy is

  7  operating under a system of collecting a debit by its agents.

  8  A temporary license for an industrial fire or burglary agent

  9  issued pursuant to s. 626.175 626.740 shall be solely for the

10  purpose of collecting premiums and servicing in-force

11  policies, and such licensee shall not directly or indirectly

12  solicit, negotiate, or effect contracts of insurance.

13         Section 21.  Subsections (1) and (2) of section

14  626.730, Florida Statutes, are amended to read:

15         626.730  Purpose of license.--

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

17  a general lines agent, customer representative, or solicitor

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

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

20  customer representative, or solicitor with respect to the

21  public and to facilitate the public supervision of such

22  activities in the public interest, and not for the purpose of

23  enabling the licensee to receive a rebate of premium in the

24  form of commission or other compensation as an agent or,

25  customer representative, or solicitor or enabling the licensee

26  to receive commissions or other compensation based upon

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

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

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

30  of insurance agent or, customer representative, or solicitor.

31


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                                   CS/HB 1841, First Engrossed/ntc



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

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

  3  or, customer representative, or solicitor as to any applicant

  4  therefor or licensee or appointee thereunder if it finds that

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

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

  7  the purpose of securing rebates or commissions on "controlled

  8  business," that is, on insurance written on his or her own

  9  interests or those of his or her family or of any firm,

10  corporation, or association with which he or she is

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

12  an interest other than as to the insurance thereof.

13         Section 22.  Section 626.7315, Florida Statutes, is

14  created to read:

15         626.7315  Prohibition against the unlicensed

16  transaction of general lines insurance.--With respect to any

17  line of authority as defined in s. 626.015, no individual

18  shall, unless licensed as a general lines agent:

19         (1)  Solicit insurance or procure applications

20  therefor;

21         (2)  In this state, receive or issue a receipt for any

22  money on account of or for any insurer, or receive or issue a

23  receipt for money from other persons to be transmitted to any

24  insurer for a policy, contract, or certificate of insurance or

25  any renewal thereof, even though the policy, certificate, or

26  contract is not signed by him or her as agent or

27  representative of the insurer;

28         (3)  Directly or indirectly represent himself or

29  herself to be an agent of any insurer or as an agent, to

30  collect or forward any insurance premium, or to solicit,

31  negotiate, effect, procure, receive, deliver, or forward,


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                                   CS/HB 1841, First Engrossed/ntc



  1  directly or indirectly, any insurance contract or renewal

  2  thereof or any endorsement relating to an insurance contract,

  3  or attempt to effect the same, of property or insurable

  4  business activities or interests, located in this state;

  5         (4)  In this state, engage or hold himself or herself

  6  out as engaging in the business of analyzing or abstracting

  7  insurance policies or of counseling or advising or giving

  8  opinions, other than as a licensed attorney at law, relative

  9  to insurance or insurance contracts, for fee, commission, or

10  other compensation, other than as a salaried bona fide

11  full-time employee so counseling and advising his or her

12  employer relative to the insurance interests of the employer

13  and of the subsidiaries or business affiliates of the

14  employer;

15         (5)  In any way, directly or indirectly, make or cause

16  to be made, or attempt to make or cause to be made, any

17  contract of insurance for or on account of any insurer;

18         (6)  Solicit, negotiate, or in any way, directly or

19  indirectly, effect insurance contracts, if a member of a

20  partnership or association, or a stockholder, officer, or

21  agent of a corporation which holds an agency appointment from

22  any insurer; or

23         (7)  Receive or transmit applications for suretyship,

24  or receive for delivery bonds founded on applications

25  forwarded from this state, or otherwise procure suretyship to

26  be effected by a surety insurer upon the bonds of persons in

27  this state or upon bonds given to persons in this state.

28         Section 23.  Subsection (1) of section 626.732, Florida

29  Statutes, is amended, and subsection (4) is added to said

30  section, to read:

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                                   CS/HB 1841, First Engrossed/ntc



  1         626.732  Requirement as to knowledge, experience, or

  2  instruction.--

  3         (1)  Except as provided in subsection (3), no applicant

  4  for a license as a general lines agent, except for a chartered

  5  property and casualty underwriter (CPCU), other than as to a

  6  limited license as to baggage and motor vehicle excess

  7  liability insurance, credit property insurance, credit

  8  insurance, or in-transit and storage personal property

  9  insurance, shall be qualified or licensed unless within the 4

10  years immediately preceding the date the application for

11  license is filed with the department the applicant has:

12         (a)  Taught or successfully completed classroom courses

13  in insurance satisfactory to the department at a school,

14  college, or extension division thereof, approved by the

15  department;

16         (b)  Completed a correspondence course in insurance

17  satisfactory to the department and regularly offered by

18  accredited institutions of higher learning in this state and,

19  except if he or she is applying for a limited license under s.

20  626.321, has had at least 6 months of responsible insurance

21  duties as a substantially full-time bona fide employee in all

22  lines of property and casualty insurance set forth in the

23  definition of general lines agent under s. 626.015 s.

24  626.041(1); or

25         (c)  Completed at least 1 year in responsible insurance

26  duties as a substantially full-time bona fide employee in all

27  lines of property and casualty insurance, exclusive of

28  aviation and wet marine and transportation insurances but not

29  exclusive of boats of less than 36 feet in length or aircraft

30  not held out for hire, as set forth in the definition of a

31  general lines agent under s. 626.015 s. 626.041(1), without


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                                   CS/HB 1841, First Engrossed/ntc



  1  the education requirement mentioned in paragraph (a) or

  2  paragraph (b); or

  3         (d)1.  Completed at least 1 year of responsible

  4  insurance duties as a licensed and appointed customer

  5  representative in either commercial or personal lines of

  6  property and casualty insurance and 40 hours of classroom

  7  courses approved by the department covering the areas of

  8  property, casualty, surety, health, and marine insurance; or

  9         2.  Completed at least 1 year of responsible insurance

10  duties as a licensed and appointed service representative in

11  either commercial or personal lines of property and casualty

12  insurance and 80 hours of classroom courses approved by the

13  department covering the areas of property, casualty, surety,

14  health, and marine insurance.

15         (4)  Classroom and correspondence courses under

16  subsection (1) must include instruction on the subject matter

17  of unauthorized entities engaging in the business of

18  insurance.  The scope of the topic of unauthorized entities

19  shall include the Florida Nonprofit Multiple-Employer Welfare

20  Arrangement Act and the Employee Retirement Income Security

21  Act, 29 U.S.C. s. 1001, et seq., as it relates to the

22  provision of health insurance by employers and the regulation

23  thereof.

24         Section 24.  Effective July 1, 2002, subsections (4)

25  and (5) are added to section 626.738, Florida Statutes, to

26  read:

27         626.738  Solicitor's powers; agent's or agency's

28  responsibility.--

29         (4)  The department shall not issue or renew solicitor

30  licenses and appointments on or after October 1, 2002.

31  Effective 12:01 a.m., October 1, 2002, all solicitor licenses


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                                   CS/HB 1841, First Engrossed/ntc



  1  and appointments shall be canceled by operation of law.  Each

  2  solicitor licensee may have his or her license converted to a

  3  general lines agent license.  No later than August 1, 2002,

  4  the department shall notify existing solicitor licensees of

  5  the procedure for converting their license to a general lines

  6  agent license, including the requirement of a written request

  7  to have the license converted and payment of any required

  8  fees.  Upon receipt of the written request and fee, the

  9  department shall issue a general lines insurance agent license

10  to the solicitor licensee.  Conversion of existing solicitor

11  licenses to general lines agent licenses shall be completed

12  prior to October 1, 2002.

13         (5)  After the department converts the solicitor

14  license to a general lines agent license, the licensee shall

15  comply with all provisions of the Florida Insurance Code

16  pertaining to general lines agents.

17         Section 25.  Section 626.741, Florida Statutes, is

18  amended to read:

19         626.741  Nonresident agents; licensing and

20  restrictions.--

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

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

23  license as:

24         (a)  A nonresident general lines agent to an individual

25  licensed in his or her home state as a resident agent for the

26  same line of authority as a Florida resident general lines

27  agent and who is otherwise qualified therefor under the laws

28  of this state, but who is not a resident of this state, if by

29  the laws of the individual's home state of the individual's

30  residence, residents of this state may be licensed in a

31


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                                   CS/HB 1841, First Engrossed/ntc



  1  similar like manner as a nonresident agent of his or her home

  2  state.

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

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

  5  state, but who is a resident of a state sharing that shares a

  6  common boundary with this state.

  7         (2)  The department may enter into reciprocal

  8  agreements with the appropriate official of any other state

  9  waiving the written examination of any applicant resident in

10  that other state if:

11         (a)  In the applicant's home state, a resident of this

12  state is privileged to procure a general lines agent's license

13  upon compliance with the conditions specified in subsection

14  (1) and without discrimination as to fees or otherwise in

15  favor of the residents of the individual's home state.

16         (b)  The appropriate official of the individual's home

17  state certifies that the applicant holds a currently valid

18  license as a resident agent in his or her home state for the

19  same line of authority as a general lines agent in this state.

20         (c)  The applicant satisfies the examination

21  requirement under s. 626.221, or qualifies for an exemption

22  thereunder.

23         (3)(2)  The department shall not, however, issue any

24  license and appointment to any nonresident who has an office

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

26  indirect pecuniary interest in any insurance agent, insurance

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

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

29  issuance and throughout the existence of the Florida license,

30  hold a license as agent or broker issued by his or her home

31  the state of his or her residence; nor to any individual who


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                                   CS/HB 1841, First Engrossed/ntc



  1  is employed by any insurer as a service representative or who

  2  is a managing general agent in any state, whether or not also

  3  licensed in another state as an agent or broker.  The

  4  foregoing requirement to hold a similar license in the

  5  applicant's home state of residence does not apply to customer

  6  representatives unless the home state licenses residents of

  7  that state in a similar like manner.  The prohibition against

  8  having an office or place of business in this state does not

  9  apply to customer representatives who are required to conduct

10  business solely within the confines of the office of a

11  licensed and appointed Florida resident general lines agent in

12  this state. The authority of such nonresident license is

13  limited to the specific lines of authority granted in the

14  license issued by the agent's home state of residence and

15  further limited to the specific lines authorized under the

16  nonresident license issued by this state. The department shall

17  have discretion to refuse to issue any license or appointment

18  to a nonresident when it has reason to believe that the

19  applicant by ruse or subterfuge is attempting to avoid the

20  intent and prohibitions contained in this subsection or to

21  believe that any of the grounds exist as for suspension or

22  revocation of license as set forth in ss. 626.611 and 626.621.

23         (4)(3)  Such a nonresident shall not directly or

24  indirectly solicit, negotiate, or effect insurance contracts

25  in this state unless accompanied by a countersigning agent,

26  resident in this state, on such risk.

27         (5)(4)(a)  All insurance policies as defined in s.

28  627.402, written under the nonresident agent's license,

29  including those written or issued pursuant to the Surplus

30  Lines Law, part VIII, on risks or property located in this

31  state must be countersigned by a local agent resident of this


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                                   CS/HB 1841, First Engrossed/ntc



  1  state; and it shall be the duty and responsibility of the

  2  nonresident agent, and, if called upon to do so by the

  3  countersigning agent, of the insurer likewise, to assure that

  4  such resident local agent receives the same commission as

  5  allowed by the home state of residence of the nonresident

  6  agent, but in no event shall the resident local agent receive,

  7  accept, or retain less than 50 percent of the usual Florida

  8  local agent's commission or 50 percent of the nonresident

  9  agent's commission, whichever is less, on policies of

10  insurance covering property as defined in s. 624.604 and

11  insurance covering in whole or in part real property and

12  tangible personal property, including property floater

13  policies.  On all other policies of insurance, including

14  insurance covering motor vehicles, plate glass, burglary,

15  robbery, theft, larceny, boiler and machinery, workers'

16  compensation, fidelity and surety, bodily injury liability,

17  and property damage liability, in no event shall he or she

18  receive, accept, or retain less than 25 percent of the usual

19  Florida local agent's commission or 25 percent of the

20  nonresident agent's commission, whichever is less.

21         (b)  The provisions of this subsection, with respect to

22  resident agent countersignature commission, shall not be

23  applicable to any contracts of insurance purchased by a person

24  whose premiums for insurance in the preceding year of such

25  purchase exceeded $250,000 in the aggregate.  Nothing herein

26  is intended to preclude the negotiation and payment of a

27  commission to the countersigning agent to compensate him or

28  her for services performed or to be performed.

29         (6)(5)  Any individual who holds a Florida nonresident

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

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


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                                   CS/HB 1841, First Engrossed/ntc



  1  insurance in this state under the nonresident license and

  2  appointment.  Such individual must make application for

  3  resident licensure and must become licensed as a resident

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

  5         (7)(6)  Upon becoming a resident of this state, an

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

  7  no longer eligible for licensure as a nonresident agent if

  8  such individual fails to make application for a resident

  9  license and become licensed as a resident agent within 90

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

11  canceled immediately.  He or she may apply for a resident

12  license pursuant to s. 626.731.

13         (8)(7)  Except as provided in this section and ss.

14  626.742 and 626.743, nonresident agents shall be subject to

15  the same requirements as apply to agents resident in this

16  state.

17         (9)  If available, the department shall verify the

18  nonresident applicant's licensing status through the Producer

19  Database maintained by the National Association of Insurance

20  Commissioners, its affiliates, or subsidiaries.

21         Section 26.  Subsection (6) of section 626.7454,

22  Florida Statutes, is amended to read:

23         626.7454  Managing general agents; duties of

24  insurers.--

25         (6)  An insurer shall review its books and records on a

26  quarterly basis to determine if any producer has become a

27  managing general agent as defined in s. 626.015 626.091.  If

28  the insurer determines that a producer has become a managing

29  general agent, the insurer shall promptly notify the producer

30  and the department of such determination and the insurer and

31  producer must fully comply with the provisions of this section


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                                   CS/HB 1841, First Engrossed/ntc



  1  and ss. 626.7451, 626.7452, and 626.7453 within 30 days after

  2  such determination.

  3

  4  Subsections (1), (3), and (4) do not apply to a managing

  5  general agent that is a controlled or controlling person.

  6         Section 27.  Section 626.7455, Florida Statutes, is

  7  created to read:

  8         626.7455  Managing general agent; responsibility of

  9  insurer.--

10         (1)  No insurer shall enter into an agreement with any

11  person to manage the business written in this state by the

12  general lines agents appointed by the insurer or appointed by

13  the managing general agent on behalf of the insurer unless the

14  person is properly licensed and appointed as a managing

15  general agent in this state. An insurer shall be responsible

16  for the acts of its managing general agent when the agent acts

17  within the scope of his or her authority.

18         (2)  This section does not apply to surplus lines

19  insurance when written pursuant to the Surplus Lines Law, ss.

20  626.913-626.937.

21         Section 28.  Section 626.779, Florida Statutes, is

22  amended to read:

23         626.779  "Life agent" defined.--For the purposes of

24  this part, a "life agent" is as defined in s. 626.015 626.051.

25         Section 29.  Section 626.7845, Florida Statutes, is

26  created to read:

27         626.7845  Prohibition against unlicensed transaction of

28  life insurance.--

29         (1)  An individual may not solicit or sell variable

30  life insurance, variable annuity contracts, or any other

31  indeterminate value or variable contract as defined in s.


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                                   CS/HB 1841, First Engrossed/ntc



  1  627.8015, unless the individual has successfully completed a

  2  licensure examination relating to variable annuity contracts

  3  authorized and approved by the department.

  4         (2)  Except as provided in s. 626.112(6), with respect

  5  to any line of authority specified in s. 626.015(11), no

  6  individual shall, unless licensed as a life agent:

  7         (a)  Solicit insurance or annuities or procure

  8  applications; or

  9         (b)  In this state, engage or hold himself or herself

10  out as engaging in the business of analyzing or abstracting

11  insurance policies or of counseling or advising or giving

12  opinions to persons relative to insurance or insurance

13  contracts other than:

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

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

16  associations, trustees, employers, or other business entities,

17  the subsidiaries and affiliates of each, relative to their

18  interests and those of their members or employees under

19  insurance benefit plans.

20         Section 30.  Paragraph (d) of subsection (1) of section

21  626.785, Florida Statutes, is amended to read:

22         626.785  Qualifications for license.--

23         (1)  The department shall not grant or issue a license

24  as life agent to any individual found by it to be

25  untrustworthy or incompetent, or who does not meet the

26  following qualifications:

27         (d)  Must not be a funeral director or direct disposer,

28  or an employee or representative thereof, or have an office

29  in, or in connection with, a funeral establishment, except

30  that a funeral establishment may contract with a life

31  insurance agent to sell a preneed contract as defined in


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                                   CS/HB 1841, First Engrossed/ntc



  1  chapter 497. Notwithstanding other provisions of this chapter,

  2  such insurance agent may sell limited policies of insurance

  3  covering the expense of final disposition or burial of an

  4  insured in an amount not to exceed $10,000 $7,500.

  5         Section 31.  Subsections (1) and (2) of section

  6  626.7851, Florida Statutes, are amended to read:

  7         626.7851  Requirement as to knowledge, experience, or

  8  instruction.--No applicant for a license as a life agent,

  9  except for a chartered life underwriter (CLU), shall be

10  qualified or licensed unless within the 4 years immediately

11  preceding the date the application for a license is filed with

12  the department he or she has:

13         (1)  Successfully completed 40 hours of classroom

14  courses in insurance satisfactory to the department at a

15  school or college, or extension division thereof, or other

16  authorized course of study, approved by the department.

17  Courses must include instruction on the subject matter of

18  unauthorized entities engaging in the business of insurance,

19  to include the Florida Nonprofit Multiple-Employer Welfare

20  Arrangement Act and the Employee Retirement Income Security

21  Act, 29 U.S.C. s. 1001, et seq., as it relates to the

22  provision of life insurance by employers to their employees

23  and the regulation thereof;

24         (2)  Successfully completed a correspondence course in

25  insurance satisfactory to the department and regularly offered

26  by accredited institutions of higher learning in this state,

27  approved by the department.  Courses must include instruction

28  on the subject matter of unauthorized entities engaging in the

29  business of insurance, to include the Florida Nonprofit

30  Multiple-Employer Welfare Arrangement Act and the Employee

31  Retirement Income Security Act, 29 U.S.C. s. 1001, et seq., as


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                                   CS/HB 1841, First Engrossed/ntc



  1  it relates to the provision of life insurance by employers to

  2  their employees and the regulation thereof;

  3         Section 32.  Subsection (1) of section 626.790, Florida

  4  Statutes, is amended to read:

  5         626.790  Temporary license; pending examination.--

  6         (1)  Each applicant for a life agent's license to

  7  represent an insurer of the industrial or ordinary-combination

  8  class may, upon payment of the required license and

  9  appointment fees, have issued to him or her a temporary

10  license for a period not exceeding 6 months.  The department

11  shall not issue a temporary license as to an ordinary class

12  agent, except as provided in s. 626.175 626.791.

13         Section 33.  Subsections (1) and (2) of section

14  626.792, Florida Statutes, are amended, and subsection (9) is

15  added to said section, to read:

16         626.792  Nonresident agents; licensing and

17  restrictions.--

18         (1)  The department, upon written application and

19  payment of the fees specified in s. 624.501, may issue a

20  license as a nonresident life agent to an individual a person

21  not resident of this state, upon compliance with the

22  applicable provisions of this code, if that individual's home

23  the state or province of Canada of such person's residence

24  will accord the same privilege to a resident of this state.

25         (2)  The department may enter into reciprocal

26  agreements with the appropriate official of any other state or

27  province of Canada waiving the written examination of any

28  applicant resident in such other state or province if, in that

29  other state or province, a resident of this state is

30  privileged to procure a life insurance agent's license upon

31  the foregoing conditions and without discrimination as to fees


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                                   CS/HB 1841, First Engrossed/ntc



  1  or otherwise in favor of the residents of such other state or

  2  province and:

  3         (a)  A written examination, substantially equivalent to

  4  the examination required by this state, is required of an

  5  applicant for a life insurance agent's license in such other

  6  state or province.;

  7         (b)  The appropriate official of the other state or

  8  province certifies that the applicant holds a currently valid

  9  license as a life insurance agent in such other state or

10  province and satisfies the examination requirement under s.

11  626.221 or is exempt under such section either passed such a

12  written examination or was the holder of a life insurance

13  agent's license prior to the time a written examination was

14  required; and

15         (c)  In such other state or province, a resident of

16  this state is privileged to procure a life insurance agent's

17  license upon the foregoing conditions and without

18  discrimination as to fees or otherwise in favor of the

19  residents of such other state or province.

20         (9)  If available, the department shall verify the

21  nonresident applicant's licensing status through the Producer

22  Database maintained by the National Association of Insurance

23  Commissioners, its affiliates or subsidiaries.

24         Section 34.  Section 626.8305, Florida Statutes, is

25  created to read:

26         626.8305  Prohibition against the unlicensed

27  transaction of health insurance.--Except as provided in s.

28  626.112(6), with respect to any line of authority specified in

29  s. 626.015(7), no individual shall, unless licensed as a

30  health agent:

31         (1)  Solicit insurance or procure applications; or


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                                   CS/HB 1841, First Engrossed/ntc



  1         (2)  In this state, engage or hold himself or herself

  2  out as engaging in the business of analyzing or abstracting

  3  insurance policies or of counseling or advising or giving

  4  opinions to persons relative to insurance contracts other

  5  than:

  6         (a)  As a consulting actuary advising insurers; or

  7         (b)  As to the counseling and advising of labor unions,

  8  associations, trustees, employers, or other business entities,

  9  the subsidiaries and affiliates of each, relative to their

10  interests and those of their members or employees under

11  insurance benefit plans.

12         Section 35.  Subsections (1) and (2) of section

13  626.8311, Florida Statutes, are amended to read:

14         626.8311  Requirement as to knowledge, experience, or

15  instruction.--No applicant for a license as a health agent,

16  except for a chartered life underwriter (CLU), shall be

17  qualified or licensed unless within the 4 years immediately

18  preceding the date the application for license is filed with

19  the department he or she has:

20         (1)  Successfully completed 40 hours of classroom

21  courses in insurance satisfactory to the department at a

22  school or college, or extension division thereof, or other

23  authorized course of study, approved by the department.

24  Courses must include instruction on the subject matter of

25  unauthorized entities engaging in the business of insurance,

26  to include the Florida Nonprofit Multiple-Employer Welfare

27  Arrangement Act and the Employee Retirement Income Security

28  Act, 29 U.S.C. s. 1001, et seq., as it relates to the

29  provision of health insurance by employers to their employees

30  and the regulation thereof;

31


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                                   CS/HB 1841, First Engrossed/ntc



  1         (2)  Successfully completed a correspondence course in

  2  insurance satisfactory to the department and regularly offered

  3  by accredited institutions of higher learning in this state,

  4  approved by the department.  Courses must include instruction

  5  on the subject matter of unauthorized entities engaging in the

  6  business of insurance, to include the Florida Nonprofit

  7  Multiple-Employer Welfare Arrangement Act and the Employee

  8  Retirement Income Security Act, 29 U.S.C. s. 1001, et seq., as

  9  it relates to the provision of health insurance by employers

10  to their employees and the regulation thereof;

11         Section 36.  Subsections (1) and (2) of section

12  626.835, Florida Statutes, are amended, and subsection (9) is

13  added to said section, to read:

14         626.835  Nonresident agents; licensing and

15  restrictions.--

16         (1)  The department, upon written application and

17  payment of the fees specified in s. 624.501, may issue a

18  license as a nonresident health agent to an individual a

19  person not a resident of this state, if the state or province

20  of Canada of such individual's person's residence will accord

21  the same privilege to a resident of this state.

22         (2)  The department may enter into reciprocal

23  agreements with the appropriate official of any other state or

24  province of Canada waiving the written examination of any

25  applicant resident in such other state or province if, in such

26  other state or province, a resident of this state is

27  privileged to procure a health insurance agent's license upon

28  the foregoing conditions and without discrimination as to fees

29  or otherwise in favor of the residents of such other state or

30  province and:

31


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                                   CS/HB 1841, First Engrossed/ntc



  1         (a)  A written examination, substantially equivalent to

  2  the examination required by this state, is required of an

  3  applicant for a health insurance agent's license in such other

  4  state or province.;

  5         (b)  The appropriate official of the other state or

  6  province certifies that the applicant holds a currently valid

  7  license as a health insurance agent in such other state or

  8  province and satisfied the examination requirements under s.

  9  626.221 or is exempt under such section either has passed such

10  a written examination or was the holder of a health insurance

11  agent's license prior to the time a written examination was

12  required; and

13         (c)  In such other state or province, a resident of

14  this state is privileged to procure a health insurance agent's

15  license upon the foregoing conditions and without

16  discrimination as to fees or otherwise in favor of the

17  residents of such other state or province.

18         (9)  If available, the department shall verify the

19  producer's licensing status through the Producer Database

20  maintained by the National Association of Insurance

21  Commissioners, its affiliates or subsidiaries.

22         Section 37.  Paragraph (b) of subsection (1) of section

23  626.8411, Florida Statutes, is amended to read:

24         626.8411  Application of Florida Insurance Code

25  provisions to title insurance agents or agencies.--

26         (1)  The following provisions of part II, as applicable

27  to general lines agents or agencies, also apply to title

28  insurance agents or agencies:

29         (b)  Section 626.175 626.739, relating to temporary

30  licenses.

31


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                                   CS/HB 1841, First Engrossed/ntc



  1         Section 38.  Subsection (6) is added to section

  2  626.852, Florida Statutes, to read:

  3         626.852  Scope of this part.--

  4         (6)  This part does not apply to any person who adjusts

  5  only multiple peril crop insurance or crop hail claims.

  6         Section 39.  Subsection (1) of section 626.902, Florida

  7  Statutes, is amended to read:

  8         626.902  Penalty for representing unauthorized

  9  insurer.--

10         (1)  In addition to any other penalties provided in the

11  insurance code:

12         (a)  Any insurance agent licensed in this state who in

13  this state knowingly represents or aids an unauthorized

14  insurer in violation of s. 626.901 commits a felony

15  misdemeanor of the third second degree, punishable as provided

16  in s. 775.082, or s. 775.083, or s. 775.084.

17         (b)  Any person other than an insurance agent licensed

18  in this state who in this state represents or aids an

19  unauthorized insurer in violation of s. 626.901 commits a

20  felony of the third degree, punishable as provided in s.

21  775.082, s. 775.083, or s. 775.084.

22         (c)  Any person who commits a subsequent violation of

23  this section commits a felony of the second degree, punishable

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

25         Section 40.  Subsection (2) of section 626.927, Florida

26  Statutes, is amended to read:

27         626.927  Licensing of surplus lines agent.--

28         (2)  Any individual while licensed and appointed as a

29  managing general agent as defined in s. 626.015 626.091, or

30  service representative as defined in s. 626.015 626.081, and

31  who otherwise possesses all of the other qualifications of a


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  1  general lines agent under this code, and who has a minimum of

  2  1 year's experience working for a licensed surplus lines agent

  3  or who has successfully completed 60 class hours in surplus

  4  and excess lines in a course approved by the department, may,

  5  upon taking and successfully passing a written examination as

  6  to surplus lines, as given by the department, be licensed as a

  7  surplus lines agent solely for the purpose of placing with

  8  surplus lines insurers property, marine, casualty, or surety

  9  coverages originated by general lines agents; except that no

10  examination as for a general lines agent's license shall be

11  required of any managing general agent or service

12  representative who held a Florida surplus lines agent's

13  license as of January 1, 1959.

14         Section 41.  Subsection (4) of section 626.992, Florida

15  Statutes, is amended to read:

16         626.992  Use of viatical settlement licensed brokers,

17  providers, and sales agents required.--

18         (4)  A person may not perform the functions of a

19  viatical settlement sales agent unless licensed as a life

20  agent as defined in s. 626.015 626.051 and as provided in this

21  chapter.

22         Section 42.  Paragraph (b) of subsection (6) of section

23  629.401, Florida Statutes, is amended to read:

24         629.401  Insurance exchange.--

25         (6)

26         (b)  In addition to the insurance laws specified in

27  paragraph (a), the department shall regulate the exchange

28  pursuant to the following powers, rights, and duties:

29         1.  General examination powers.--The department shall

30  examine the affairs, transactions, accounts, records, and

31  assets of any security fund, exchange, members, and associate


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  1  brokers as often as it deems advisable.  The examination may

  2  be conducted by the accredited examiners of the department at

  3  the offices of the entity or person being examined.  The

  4  department shall examine in like manner each prospective

  5  member or associate broker applying for membership in an

  6  exchange.

  7         2.  Departmental approval and applications of

  8  underwriting members.--No underwriting member shall commence

  9  operation without the approval of the department.  Before

10  commencing operation, an underwriting member shall provide a

11  written application containing:

12         a.  Name, type, and purpose of the underwriting member.

13         b.  Name, residence address, business background, and

14  qualifications of each person associated or to be associated

15  in the formation or financing of the underwriting member.

16         c.  Full disclosure of the terms of all understandings

17  and agreements existing or proposed among persons so

18  associated relative to the underwriting member, or the

19  formation or financing thereof, accompanied by a copy of each

20  such agreement or understanding.

21         d.  Full disclosure of the terms of all understandings

22  and agreements existing or proposed for management or

23  exclusive agency contracts.

24         3.  Investigation of underwriting member

25  applications.--In connection with any proposal to establish an

26  underwriting member, the department shall make an

27  investigation of:

28         a.  The character, reputation, financial standing, and

29  motives of the organizers, incorporators, or subscribers

30  organizing the proposed underwriting member.

31


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  1         b.  The character, financial responsibility, insurance

  2  experience, and business qualifications of its proposed

  3  officers.

  4         c.  The character, financial responsibility, business

  5  experience, and standing of the proposed stockholders and

  6  directors, or owners.

  7         4.  Notice of management changes.--An underwriting

  8  member shall promptly give the department written notice of

  9  any change among the directors or principal officers of the

10  underwriting member within 30 days after such change.  The

11  department shall investigate the new directors or principal

12  officers of the underwriting member.  The department's

13  investigation shall include an investigation of the character,

14  financial responsibility, insurance experience, and business

15  qualifications of any new directors or principal officers.  As

16  a result of the investigation, the department may require the

17  underwriting member to replace any new directors or principal

18  officers.

19         5.  Alternate financial statement.--In lieu of any

20  financial examination, the department may accept an audited

21  financial statement.

22         6.  Correction and reconstruction of records.--If the

23  department finds any accounts or records to be inadequate, or

24  inadequately kept or posted, it may employ experts to

25  reconstruct, rewrite, post, or balance them at the expense of

26  the person or entity being examined if such person or entity

27  has failed to maintain, complete, or correct such records or

28  accounts after the department has given him or her or it

29  notice and reasonable opportunity to do so.

30         7.  Obstruction of examinations.--Any person or entity

31  who or which willfully obstructs the department or its


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  1  examiner in an examination is guilty of a misdemeanor of the

  2  second degree, punishable as provided in s. 775.082 or s.

  3  775.083.

  4         8.  Filing of annual statement.--Each underwriting

  5  member shall file with the department a full and true

  6  statement of its financial condition, transactions, and

  7  affairs.  The statement shall be filed on or before March 1 of

  8  each year, or within such extension of time as the department

  9  for good cause grants, and shall be for the preceding calendar

10  year.  The statement shall contain information generally

11  included in insurer financial statements prepared in

12  accordance with generally accepted insurance accounting

13  principles and practices and in a form generally utilized by

14  insurers for financial statements, sworn to by at least two

15  executive officers of the underwriting member. The form of the

16  financial statements shall be the approved form of the

17  National Association of Insurance Commissioners or its

18  successor organization. The department may by rule require

19  each insurer to submit any part of the information contained

20  in the financial statement in a computer-readable form

21  compatible with the department's electronic data processing

22  system.  In addition to information furnished in connection

23  with its annual statement, an underwriting member must furnish

24  to the department as soon as reasonably possible such

25  information about its transactions or affairs as the

26  department requests in writing.  All information furnished

27  pursuant to the department's request must be verified by the

28  oath of two executive officers of the underwriting member.

29         9.  Record maintenance.--Each underwriting member shall

30  have and maintain its principal place of business in this

31  state and shall keep therein complete records of its assets,


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  1  transactions, and affairs in accordance with such methods and

  2  systems as are customary for or suitable to the kind or kinds

  3  of insurance transacted.

  4         10.  Examination of agents.--If the department has

  5  reason to believe that any agent, as defined in s. 626.015

  6  626.041, s. 626.051, s. 626.062, or s. 626.914, has violated

  7  or is violating any provision of the insurance law, or upon

  8  receipt of a written complaint signed by any interested person

  9  indicating that any such violation may exist, the department

10  shall conduct such examination as it deems necessary of the

11  accounts, records, documents, and transactions pertaining to

12  or affecting the insurance affairs of such agent.

13         11.  Written reports of department.--The department or

14  its examiner shall make a full and true written report of any

15  examination.  The report shall contain only information

16  obtained from examination of the records, accounts, files, and

17  documents of or relative to the person or entity examined or

18  from testimony of individuals under oath, together with

19  relevant conclusions and recommendations of the examiner based

20  thereon.  The department shall furnish a copy of the report to

21  the person or entity examined not less than 30 days prior to

22  filing the report in its office. If such person or entity so

23  requests in writing within such 30-day period, the department

24  shall grant a hearing with respect to the report and shall not

25  file the report until after the hearing and after such

26  modifications have been made therein as the department deems

27  proper.

28         12.  Admissibility of reports.--The report of an

29  examination when filed shall be admissible in evidence in any

30  action or proceeding brought by the department against the

31  person or entity examined, or against his or her or its


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  1  officers, employees, or agents.  The department or its

  2  examiners may at any time testify and offer other proper

  3  evidence as to information secured or matters discovered

  4  during the course of an examination, whether or not a written

  5  report of the examination has been either made, furnished, or

  6  filed in the department.

  7         13.  Publication of reports.--After an examination

  8  report has been filed, the department may publish the results

  9  of any such examination in one or more newspapers published in

10  this state whenever it deems it to be in the public interest.

11         14.  Consideration of examination reports by entity

12  examined.--After the examination report of an underwriting

13  member has been filed, an affidavit shall be filed with the

14  department, not more than 30 days after the report has been

15  filed, on a form furnished by the department and signed by the

16  person or a representative of any entity examined, stating

17  that the report has been read and that the recommendations

18  made in the report will be considered within a reasonable

19  time.

20         15.  Examination costs.--Each person or entity examined

21  by the department shall pay to the department the expenses

22  incurred in such examination.

23         16.  Exchange costs.--An exchange shall reimburse the

24  department for any expenses incurred by it relating to the

25  regulation of the exchange and its members, except as

26  specified in subparagraph 15.

27         17.  Powers of examiners.--Any examiner appointed by

28  the department, as to the subject of any examination,

29  investigation, or hearing being conducted by him or her, may

30  administer oaths, examine and cross-examine witnesses, and

31  receive oral and documentary evidence, and shall have the


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  1  power to subpoena witnesses, compel their attendance and

  2  testimony, and require by subpoena the production of books,

  3  papers, records, files, correspondence, documents, or other

  4  evidence which the examiner deems relevant to the inquiry. If

  5  any person refuses to comply with any such subpoena or to

  6  testify as to any matter concerning which he or she may be

  7  lawfully interrogated, the Circuit Court of Leon County or the

  8  circuit court of the county wherein such examination,

  9  investigation, or hearing is being conducted, or of the county

10  wherein such person resides, on the department's application

11  may issue an order requiring such person to comply with the

12  subpoena and to testify; and any failure to obey such an order

13  of the court may be punished by the court as a contempt

14  thereof.  Subpoenas shall be served, and proof of such service

15  made, in the same manner as if issued by a circuit court.

16  Witness fees and mileage, if claimed, shall be allowed the

17  same as for testimony in a circuit court.

18         18.  False testimony.--Any person willfully testifying

19  falsely under oath as to any matter material to any

20  examination, investigation, or hearing shall upon conviction

21  thereof be guilty of perjury and shall be punished

22  accordingly.

23         19.  Self-incrimination.--

24         a.  If any person asks to be excused from attending or

25  testifying or from producing any books, papers, records,

26  contracts, documents, or other evidence in connection with any

27  examination, hearing, or investigation being conducted by the

28  department or its examiner, on the ground that the testimony

29  or evidence required of the person may tend to incriminate him

30  or her or subject him or her to a penalty or forfeiture, and

31  the person notwithstanding is directed to give such testimony


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  1  or produce such evidence, he or she shall, if so directed by

  2  the department and the Department of Legal Affairs,

  3  nonetheless comply with such direction; but the person shall

  4  not thereafter be prosecuted or subjected to any penalty or

  5  forfeiture for or on account of any transaction, matter, or

  6  thing concerning which he or she may have so testified or

  7  produced evidence, and no testimony so given or evidence so

  8  produced shall be received against him or her upon any

  9  criminal action, investigation, or proceeding; except that no

10  such person so testifying shall be exempt from prosecution or

11  punishment for any perjury committed by him or her in such

12  testimony, and the testimony or evidence so given or produced

13  shall be admissible against him or her upon any criminal

14  action, investigation, or proceeding concerning such perjury,

15  nor shall he or she be exempt from the refusal, suspension, or

16  revocation of any license, permission, or authority conferred,

17  or to be conferred, pursuant to the insurance law.

18         b.  Any such individual may execute, acknowledge, and

19  file in the office of the department a statement expressly

20  waiving such immunity or privilege in respect to any

21  transaction, matter, or thing specified in such statement, and

22  thereupon the testimony of such individual or such evidence in

23  relation to such transaction, matter, or thing may be received

24  or produced before any judge or justice, court, tribunal,

25  grand jury, or otherwise; and if such testimony or evidence is

26  so received or produced, such individual shall not be entitled

27  to any immunity or privileges on account of any testimony so

28  given or evidence so produced.

29         20.  Penalty for failure to testify.--Any person who

30  refuses or fails, without lawful cause, to testify relative to

31  the affairs of any member, associate broker, or other person


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  1  when subpoenaed and requested by the department to so testify,

  2  as provided in subparagraph 17., shall, in addition to the

  3  penalty provided in subparagraph 17., be guilty of a

  4  misdemeanor of the second degree, punishable as provided in s.

  5  775.082 or s. 775.083.

  6         21.  Name selection.--No underwriting member shall be

  7  formed or authorized to transact insurance in this state under

  8  a name which is the same as that of any authorized insurer or

  9  is so nearly similar thereto as to cause or tend to cause

10  confusion or under a name which would tend to mislead as to

11  the type of organization of the insurer.  Before incorporating

12  under or using any name, the underwriting syndicate or

13  proposed underwriting syndicate shall submit its name or

14  proposed name to the department for the approval of the

15  department.

16         22.  Capitalization.--An underwriting member approved

17  on or after July 2, 1987, shall provide an initial paid-in

18  capital and surplus of $3 million and thereafter shall

19  maintain a minimum policyholder surplus of $2 million in order

20  to be permitted to write insurance.  Underwriting members

21  approved prior to July 2, 1987, shall maintain a minimum

22  policyholder surplus of $1 million. After June 29, 1988,

23  underwriting members approved prior to July 2, 1987, must

24  maintain a minimum policyholder surplus of $1.5 million to

25  write insurance.  After June 29, 1989, underwriting members

26  approved prior to July 2, 1987, must maintain a minimum

27  policyholder surplus of $1.75 million to write insurance.

28  After December 30, 1989, all underwriting members, regardless

29  of the date they were approved, must maintain a minimum

30  policyholder surplus of $2 million to write insurance.  Except

31  for that portion of the paid-in capital and surplus which


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                                   CS/HB 1841, First Engrossed/ntc



  1  shall be maintained in a security fund of an exchange, the

  2  paid-in capital and surplus shall be invested by an

  3  underwriting member in a manner consistent with ss.

  4  625.301-625.340.  The portion of the paid-in capital and

  5  surplus in any security fund of an exchange shall be invested

  6  in a manner limited to investments for life insurance

  7  companies under the Florida insurance laws.

  8         23.  Limitations on coverage written.--

  9         a.  Limit of risk.--No underwriting member shall expose

10  itself to any loss on any one risk in an amount exceeding 10

11  percent of its surplus to policyholders.  Any risk or portion

12  of any risk which shall have been reinsured in an assuming

13  reinsurer authorized or approved to do such business in this

14  state shall be deducted in determining the limitation of risk

15  prescribed in this section.

16         b.  Restrictions on premiums written.--If the

17  department has reason to believe that the underwriting

18  member's ratio of actual or projected annual gross written

19  premiums to policyholder surplus exceeds 8 to 1 or the

20  underwriting member's ratio of actual or projected annual net

21  premiums to policyholder surplus exceeds 4 to 1, the

22  department may establish maximum gross or net annual premiums

23  to be written by the underwriting member consistent with

24  maintaining the ratios specified in this sub-subparagraph.

25         (I)  Projected annual net or gross premiums shall be

26  based on the actual writings to date for the underwriting

27  member's current calendar year, its writings for the previous

28  calendar year, or both.  Ratios shall be computed on an

29  annualized basis.

30

31


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                                   CS/HB 1841, First Engrossed/ntc



  1         (II)  For purposes of this sub-subparagraph, the term

  2  "gross written premiums" means direct premiums written and

  3  reinsurance assumed.

  4         c.  Surplus as to policyholders.--For the purpose of

  5  determining the limitation on coverage written, surplus as to

  6  policyholders shall be deemed to include any voluntary

  7  reserves, or any part thereof, which are not required by or

  8  pursuant to law and shall be determined from the last sworn

  9  statement of such underwriting member with the department, or

10  by the last report or examination filed by the department,

11  whichever is more recent at the time of assumption of such

12  risk.

13         24.  Unearned premium reserves.--All unearned premium

14  reserves for business written on the exchange shall be

15  calculated on a monthly or more frequent basis or on such

16  other basis as determined by the department; except that all

17  premiums on any marine or transportation insurance trip risk

18  shall be deemed unearned until the trip is terminated.

19         25.  Loss reserves.--All underwriting members of an

20  exchange shall maintain loss reserves, including a reserve for

21  incurred but not reported claims.  The reserves shall be

22  subject to review by the department, and, if loss experience

23  shows that an underwriting member's loss reserves are

24  inadequate, the department shall require the underwriting

25  member to maintain loss reserves in such additional amount as

26  is needed to make them adequate.

27         26.  Distribution of profits.--An underwriting member

28  shall not distribute any profits in the form of cash or other

29  assets to owners except out of that part of its available and

30  accumulated surplus funds which is derived from realized net

31  operating profits on its business and realized capital gains.


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  1  In any one year such payments to owners shall not exceed 30

  2  percent of such surplus as of December 31 of the immediately

  3  preceding year, unless otherwise approved by the department.

  4  No distribution of profits shall be made that would render an

  5  underwriting member either impaired or insolvent.

  6         27.  Stock dividends.--A stock dividend may be paid by

  7  an underwriting member out of any available surplus funds in

  8  excess of the aggregate amount of surplus advanced to the

  9  underwriting member under subparagraph 29.

10         28.  Dividends from earned surplus.--A dividend

11  otherwise lawful may be payable out of an underwriting

12  member's earned surplus even though the total surplus of the

13  underwriting member is then less than the aggregate of its

14  past contributed surplus resulting from issuance of its

15  capital stock at a price in excess of the par value thereof.

16         29.  Borrowing of money by underwriting members.--

17         a.  An underwriting member may borrow money to defray

18  the expenses of its organization, provide it with surplus

19  funds, or for any purpose of its business, upon a written

20  agreement that such money is required to be repaid only out of

21  the underwriting member's surplus in excess of that stipulated

22  in such agreement. The agreement may provide for interest not

23  exceeding 15 percent simple interest per annum.  The interest

24  shall or shall not constitute a liability of the underwriting

25  member as to its funds other than such excess of surplus, as

26  stipulated in the agreement. No commission or promotion

27  expense shall be paid in connection with any such loan.  The

28  use of any surplus note and any repayments thereof shall be

29  subject to the approval of the department.

30         b.  Money so borrowed, together with any interest

31  thereon if so stipulated in the agreement, shall not form a


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                                   CS/HB 1841, First Engrossed/ntc



  1  part of the underwriting member's legal liabilities except as

  2  to its surplus in excess of the amount thereof stipulated in

  3  the agreement, nor be the basis of any setoff; but until

  4  repayment, financial statements filed or published by an

  5  underwriting member shall show as a footnote thereto the

  6  amount thereof then unpaid, together with any interest thereon

  7  accrued but unpaid.

  8         30.  Liquidation, rehabilitation, and

  9  restrictions.--The department, upon a showing that a member or

10  associate broker of an exchange has met one or more of the

11  grounds contained in part I of chapter 631, may restrict sales

12  by type of risk, policy or contract limits, premium levels, or

13  policy or contract provisions; increase surplus or capital

14  requirements of underwriting members; issue cease and desist

15  orders; suspend or restrict a member's or associate broker's

16  right to transact business; place an underwriting member under

17  conservatorship or rehabilitation; or seek an order of

18  liquidation as authorized by part I of chapter 631.

19         31.  Prohibited conduct.--The following acts by a

20  member, associate broker, or affiliated person shall

21  constitute prohibited conduct:

22         a.  Fraud.

23         b.  Fraudulent or dishonest acts committed by a member

24  or associate broker prior to admission to an exchange, if the

25  facts and circumstances were not disclosed to the department

26  upon application to become a member or associate broker.

27         c.  Conduct detrimental to the welfare of an exchange.

28         d.  Unethical or improper practices or conduct,

29  inconsistent with just and equitable principles of trade as

30  set forth in, but not limited to, ss. 626.951-626.9641 and

31  626.973.


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                                   CS/HB 1841, First Engrossed/ntc



  1         e.  Failure to use due diligence to ascertain the

  2  insurance needs of a client or a principal.

  3         f.  Misstatements made under oath or upon an

  4  application for membership on an exchange.

  5         g.  Failure to testify or produce documents when

  6  requested by the department.

  7         h.  Willful violation of any law of this state.

  8         i.  Failure of an officer or principal to testify under

  9  oath concerning a member, associate broker, or other person's

10  affairs as they relate to the operation of an exchange.

11         j.  Violation of the constitution and bylaws of the

12  exchange.

13         32.  Penalties for participating in prohibited

14  conduct.--

15         a.  The department may order the suspension of further

16  transaction of business on the exchange of any member or

17  associate broker found to have engaged in prohibited conduct.

18  In addition, any member or associate broker found to have

19  engaged in prohibited conduct may be subject to reprimand,

20  censure, and/or a fine not exceeding $25,000 imposed by the

21  department.

22         b.  Any member which has an affiliated person who is

23  found to have engaged in prohibited conduct shall be subject

24  to involuntary withdrawal or in addition thereto may be

25  subject to suspension, reprimand, censure, and/or a fine not

26  exceeding $25,000.

27         33.  Reduction of penalties.--Any suspension,

28  reprimand, censure, or fine may be remitted or reduced by the

29  department on such terms and conditions as are deemed fair and

30  equitable.

31


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  1         34.  Other offenses.--Any member or associate broker

  2  that is suspended shall be deprived, during the period of

  3  suspension, of all rights and privileges of a member or of an

  4  associate broker and may be proceeded against by the

  5  department for any offense committed either before or after

  6  the date of suspension.

  7         35.  Reinstatement.--Any member or associate broker

  8  that is suspended may be reinstated at any time on such terms

  9  and conditions as the department may specify.

10         36.  Remittance of fines.--Fines imposed under this

11  section shall be remitted to the department and shall be paid

12  into the Insurance Commissioner's Regulatory Trust Fund.

13         37.  Failure to pay fines.--When a member or associate

14  broker has failed to pay a fine for 15 days after it becomes

15  payable, such member or associate broker shall be suspended,

16  unless the department has granted an extension of time to pay

17  such fine.

18         38.  Changes in ownership or assets.--In the event of a

19  major change in the ownership or a major change in the assets

20  of an underwriting member, the underwriting member shall

21  report such change in writing to the department within 30 days

22  of the effective date thereof.  The report shall set forth the

23  details of the change.  Any change in ownership or assets of

24  more than 5 percent shall be considered a major change.

25         39.  Retaliation.--

26         a.  When by or pursuant to the laws of any other state

27  or foreign country any taxes, licenses, or other fees, in the

28  aggregate, and any fines, penalties, deposit requirements, or

29  other material obligations, prohibitions, or restrictions are

30  or would be imposed upon an exchange or upon the agents or

31  representatives of such exchange which are in excess of such


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                                   CS/HB 1841, First Engrossed/ntc



  1  taxes, licenses, and other fees, in the aggregate, or which

  2  are in excess of such fines, penalties, deposit requirements,

  3  or other obligations, prohibitions, or restrictions directly

  4  imposed upon similar exchanges or upon the agents or

  5  representatives of such exchanges of such other state or

  6  country under the statutes of this state, so long as such laws

  7  of such other state or country continue in force or are so

  8  applied, the same taxes, licenses, and other fees, in the

  9  aggregate, or fines, penalties, deposit requirements, or other

10  material obligations, prohibitions, or restrictions of

11  whatever kind shall be imposed by the department upon the

12  exchanges, or upon the agents or representatives of such

13  exchanges, of such other state or country doing business or

14  seeking to do business in this state.

15         b.  Any tax, license, or other obligation imposed by

16  any city, county, or other political subdivision or agency of

17  a state, jurisdiction, or foreign country on an exchange, or

18  on the agents or representatives on an exchange, shall be

19  deemed to be imposed by such state, jurisdiction, or foreign

20  country within the meaning of sub-subparagraph a.

21         40.  Agents.--

22         a.  Agents as defined in ss. 626.015 626.041, 626.051,

23  626.062, and 626.914 who are broker members or associate

24  broker members of an exchange shall be allowed only to place

25  on an exchange the same kind or kinds of business that the

26  agent is licensed to place pursuant to Florida law.  Direct

27  Florida business as defined in s. 626.916 or s. 626.917 shall

28  be written through a broker member who is a surplus lines

29  agent as defined in s. 626.914.  The activities of each broker

30  member or associate broker with regard to an exchange shall be

31  subject to all applicable provisions of the insurance laws of


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                                   CS/HB 1841, First Engrossed/ntc



  1  this state, and all such activities shall constitute

  2  transactions under his or her license as an insurance agent

  3  for purposes of the Florida insurance law.

  4         b.  Premium payments and other requirements.--If an

  5  underwriting member has assumed the risk as to a surplus lines

  6  coverage and if the premium therefor has been received by the

  7  surplus lines agent who placed such insurance, then in all

  8  questions thereafter arising under the coverage as between the

  9  underwriting member and the insured, the underwriting member

10  shall be deemed to have received the premium due to it for

11  such coverage; and the underwriting member shall be liable to

12  the insured as to losses covered by such insurance, and for

13  unearned premiums which may become payable to the insured upon

14  cancellation of such insurance, whether or not in fact the

15  surplus lines agent is indebted to the underwriting member

16  with respect to such insurance or for any other cause.

17         41.  Improperly issued contracts, riders, and

18  endorsements.--

19         a.  Any insurance policy, rider, or endorsement issued

20  by an underwriting member and otherwise valid which contains

21  any condition or provision not in compliance with the

22  requirements of this section shall not be thereby rendered

23  invalid, except as provided in s. 627.415, but shall be

24  construed and applied in accordance with such conditions and

25  provisions as would have applied had such policy, rider, or

26  endorsement been in full compliance with this section.  In the

27  event an underwriting member issues or delivers any policy for

28  an amount which exceeds any limitations otherwise provided in

29  this section, the underwriting member shall be liable to the

30  insured or his or her beneficiary for the full amount stated

31


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                                   CS/HB 1841, First Engrossed/ntc



  1  in the policy in addition to any other penalties that may be

  2  imposed.

  3         b.  Any insurance contract delivered or issued for

  4  delivery in this state governing a subject or subjects of

  5  insurance resident, located, or to be performed in this state

  6  which, pursuant to the provisions of this section, the

  7  underwriting member may not lawfully insure under such a

  8  contract shall be cancelable at any time by the underwriting

  9  member, any provision of the contract to the contrary

10  notwithstanding; and the underwriting member shall promptly

11  cancel the contract in accordance with the request of the

12  department therefor.  No such illegality or cancellation shall

13  be deemed to relieve the underwriting syndicate of any

14  liability incurred by it under the contract while in force or

15  to prohibit the underwriting syndicate from retaining the pro

16  rata earned premium thereon.  This provision does not relieve

17  the underwriting syndicate from any penalty otherwise incurred

18  by the underwriting syndicate.

19         42.  Satisfaction of judgments.--

20         a.  Every judgment or decree for the recovery of money

21  heretofore or hereafter entered in any court of competent

22  jurisdiction against any underwriting member shall be fully

23  satisfied within 60 days from and after the entry thereof or,

24  in the case of an appeal from such judgment or decree, within

25  60 days from and after the affirmance of the judgment or

26  decree by the appellate court.

27         b.  If the judgment or decree is not satisfied as

28  required under sub-subparagraph a., and proof of such failure

29  to satisfy is made by filing with the department a certified

30  transcript of the docket of the judgment or the decree

31  together with a certificate by the clerk of the court wherein


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  1  the judgment or decree remains unsatisfied, in whole or in

  2  part, after the time provided in sub-subparagraph a., the

  3  department shall forthwith prohibit the underwriting member

  4  from transacting business.  The department shall not permit

  5  such underwriting member to write any new business until the

  6  judgment or decree is wholly paid and satisfied and proof

  7  thereof is filed with the department under the official

  8  certificate of the clerk of the court wherein the judgment was

  9  recovered, showing that the judgment or decree is satisfied of

10  record, and until the expenses and fees incurred in the case

11  are also paid by the underwriting syndicate.

12         43.  Tender and exchange offers.--No person shall

13  conclude a tender offer or an exchange offer or otherwise

14  acquire 5 percent or more of the outstanding voting securities

15  of an underwriting member or controlling company or purchase 5

16  percent or more of the ownership of an underwriting member or

17  controlling company unless such person has filed with, and

18  obtained the approval of, the department and sent to such

19  underwriting member a statement setting forth:

20         a.  The identity of, and background information on,

21  each person by whom, or on whose behalf, the acquisition is to

22  be made; and, if the acquisition is to be made by or on behalf

23  of a corporation, association, or trust, the identity of and

24  background information on each director, officer, trustee, or

25  other natural person performing duties similar to those of a

26  director, officer, or trustee for the corporation,

27  association, or trust.

28         b.  The source and amount of the funds or other

29  consideration used, or to be used, in making the acquisition.

30

31


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  1         c.  Any plans or proposals which such person may have

  2  to liquidate such member, to sell its assets, or to merge or

  3  consolidate it.

  4         d.  The percentage of ownership which such person

  5  proposes to acquire and the terms of the offer or exchange, as

  6  the case may be.

  7         e.  Information as to any contracts, arrangements, or

  8  understandings with any party with respect to any securities

  9  of such member or controlling company, including, but not

10  limited to, information relating to the transfer of any

11  securities, option arrangements, or puts or calls or the

12  giving or withholding of proxies, naming the party with whom

13  such contract, arrangements, or understandings have been

14  entered and giving the details thereof.

15         f.  The department may disapprove any acquisition

16  subject to the provisions of this subparagraph by any person

17  or any affiliated person of such person who:

18         (I)  Willfully violates this subparagraph;

19         (II)  In violation of an order of the department issued

20  pursuant to sub-subparagraph j., fails to divest himself or

21  herself of any stock obtained in violation of this

22  subparagraph, or fails to divest himself or herself of any

23  direct or indirect control of such stock, within 25 days after

24  such order; or

25         (III)  In violation of an order issued by the

26  department pursuant to sub-subparagraph j., acquires

27  additional stock of the underwriting member or controlling

28  company, or direct or indirect control of such stock, without

29  complying with this subparagraph.

30         g.  The person or persons filing the statement required

31  by this subparagraph have the burden of proof.  The department


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  1  shall approve any such acquisition if it finds, on the basis

  2  of the record made during any proceeding or on the basis of

  3  the filed statement if no proceeding is conducted, that:

  4         (I)  Upon completion of the acquisition, the

  5  underwriting member will be able to satisfy the requirements

  6  for the approval to write the line or lines of insurance for

  7  which it is presently approved;

  8         (II)  The financial condition of the acquiring person

  9  or persons will not jeopardize the financial stability of the

10  underwriting member or prejudice the interests of its

11  policyholders or the public;

12         (III)  Any plan or proposal which the acquiring person

13  has, or acquiring persons have, made:

14         (A)  To liquidate the insurer, sell its assets, or

15  merge or consolidate it with any person, or to make any other

16  major change in its business or corporate structure or

17  management; or

18         (B)  To liquidate any controlling company, sell its

19  assets, or merge or consolidate it with any person, or to make

20  any major change in its business or corporate structure or

21  management which would have an effect upon the underwriting

22  member

23

24  is fair and free of prejudice to the policyholders of the

25  underwriting member or to the public;

26         (IV)  The competence, experience, and integrity of

27  those persons who will control directly or indirectly the

28  operation of the underwriting member indicate that the

29  acquisition is in the best interest of the policyholders of

30  the underwriting member and in the public interest;

31


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                                   CS/HB 1841, First Engrossed/ntc



  1         (V)  The natural persons for whom background

  2  information is required to be furnished pursuant to this

  3  subparagraph have such backgrounds as to indicate that it is

  4  in the best interests of the policyholders of the underwriting

  5  member, and in the public interest, to permit such persons to

  6  exercise control over such underwriting member;

  7         (VI)  The officers and directors to be employed after

  8  the acquisition have sufficient insurance experience and

  9  ability to assure reasonable promise of successful operation;

10         (VII)  The management of the underwriting member after

11  the acquisition will be competent and trustworthy and will

12  possess sufficient managerial experience so as to make the

13  proposed operation of the underwriting member not hazardous to

14  the insurance-buying public;

15         (VIII)  The management of the underwriting member after

16  the acquisition will not include any person who has directly

17  or indirectly through ownership, control, reinsurance

18  transactions, or other insurance or business relations

19  unlawfully manipulated the assets, accounts, finances, or

20  books of any insurer or underwriting member or otherwise acted

21  in bad faith with respect thereto;

22         (IX)  The acquisition is not likely to be hazardous or

23  prejudicial to the underwriting member's policyholders or the

24  public; and

25         (X)  The effect of the acquisition of control would not

26  substantially lessen competition in insurance in this state or

27  would not tend to create a monopoly therein.

28         h.  No vote by the stockholder of record, or by any

29  other person, of any security acquired in contravention of the

30  provisions of this subparagraph is valid.  Any acquisition of

31  any security contrary to the provisions of this subparagraph


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  1  is void. Upon the petition of the underwriting member or

  2  controlling company, the circuit court for the county in which

  3  the principal office of such underwriting member is located

  4  may, without limiting the generality of its authority, order

  5  the issuance or entry of an injunction or other order to

  6  enforce the provisions of this subparagraph.  There shall be a

  7  private right of action in favor of the underwriting member or

  8  controlling company to enforce the provisions of this

  9  subparagraph.  No demand upon the department that it perform

10  its functions shall be required as a prerequisite to any suit

11  by the underwriting member or controlling company against any

12  other person, and in no case shall the department be deemed a

13  necessary party to any action by such underwriting member or

14  controlling company to enforce the provisions of this

15  subparagraph.  Any person who makes or proposes an acquisition

16  requiring the filing of a statement pursuant to this

17  subparagraph, or who files such a statement, shall be deemed

18  to have thereby designated the Insurance Commissioner, or his

19  or her assistant or deputy or another person in charge of his

20  or her office, as such person's agent for service of process

21  under this subparagraph and shall thereby be deemed to have

22  submitted himself or herself to the administrative

23  jurisdiction of the department and to the jurisdiction of the

24  circuit court.

25         i.  Any approval by the department under this

26  subparagraph does not constitute a recommendation by the

27  department for an acquisition, tender offer, or exchange

28  offer.  It is unlawful for a person to represent that the

29  department's approval constitutes a recommendation.  A person

30  who violates the provisions of this sub-subparagraph is guilty

31  of a felony of the third degree, punishable as provided in s.


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                                   CS/HB 1841, First Engrossed/ntc



  1  775.082, s. 775.083, or s. 775.084.  The

  2  statute-of-limitations period for the prosecution of an

  3  offense committed under this sub-subparagraph is 5 years.

  4         j.  Upon notification to the department by the

  5  underwriting member or a controlling company that any person

  6  or any affiliated person of such person has acquired 5 percent

  7  or more of the outstanding voting securities of the

  8  underwriting member or controlling company without complying

  9  with the provisions of this subparagraph, the department shall

10  order that the person and any affiliated person of such person

11  cease acquisition of any further securities of the

12  underwriting member or controlling company; however, the

13  person or any affiliated person of such person may request a

14  proceeding, which proceeding shall be convened within 7 days

15  after the rendering of the order for the sole purpose of

16  determining whether the person, individually or in connection

17  with any affiliated person of such person, has acquired 5

18  percent or more of the outstanding voting securities of an

19  underwriting member or controlling company.  Upon the failure

20  of the person or affiliated person to request a hearing within

21  7 days, or upon a determination at a hearing convened pursuant

22  to this sub-subparagraph that the person or affiliated person

23  has acquired voting securities of an underwriting member or

24  controlling company in violation of this subparagraph, the

25  department may order the person and affiliated person to

26  divest themselves of any voting securities so acquired.

27         k.(I)  The department shall, if necessary to protect

28  the public interest, suspend or revoke the certificate of

29  authority of any underwriting member or controlling company:

30         (A)  The control of which is acquired in violation of

31  this subparagraph;


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                                   CS/HB 1841, First Engrossed/ntc



  1         (B)  That is controlled, directly or indirectly, by any

  2  person or any affiliated person of such person who, in

  3  violation of this subparagraph, has obtained control of an

  4  underwriting member or controlling company; or

  5         (C)  That is controlled, directly or indirectly, by any

  6  person who, directly or indirectly, controls any other person

  7  who, in violation of this subparagraph, acquires control of an

  8  underwriting member or controlling company.

  9         (II)  If any underwriting member is subject to

10  suspension or revocation pursuant to sub-sub-subparagraph (I),

11  the underwriting member shall be deemed to be in such

12  condition, or to be using or to have been subject to such

13  methods or practices in the conduct of its business, as to

14  render its further transaction of insurance presently or

15  prospectively hazardous to its policyholders, creditors, or

16  stockholders or to the public.

17         l.(I)  For the purpose of this sub-sub-subparagraph,

18  the term "affiliated person" of another person means:

19         (A)  The spouse of such other person;

20         (B)  The parents of such other person and their lineal

21  descendants and the parents of such other person's spouse and

22  their lineal descendants;

23         (C)  Any person who directly or indirectly owns or

24  controls, or holds with power to vote, 5 percent or more of

25  the outstanding voting securities of such other person;

26         (D)  Any person 5 percent or more of the outstanding

27  voting securities of which are directly or indirectly owned or

28  controlled, or held with power to vote, by such other person;

29         (E)  Any person or group of persons who directly or

30  indirectly control, are controlled by, or are under common

31


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                                   CS/HB 1841, First Engrossed/ntc



  1  control with such other person; or any officer, director,

  2  partner, copartner, or employee of such other person;

  3         (F)  If such other person is an investment company, any

  4  investment adviser of such company or any member of an

  5  advisory board of such company;

  6         (G)  If such other person is an unincorporated

  7  investment company not having a board of directors, the

  8  depositor of such company; or

  9         (H)  Any person who has entered into an agreement,

10  written or unwritten, to act in concert with such other person

11  in acquiring or limiting the disposition of securities of an

12  underwriting member or controlling company.

13         (II)  For the purposes of this section, the term

14  "controlling company" means any corporation, trust, or

15  association owning, directly or indirectly, 25 percent or more

16  of the voting securities of one or more underwriting members.

17         m.  The department is authorized to adopt, amend, or

18  repeal rules that are necessary to implement the provisions of

19  this subparagraph, pursuant to chapter 120.

20         44.  Background information.--The information as to the

21  background and identity of each person about whom information

22  is required to be furnished pursuant to sub-subparagraph 43.a.

23  shall include, but shall not be limited to:

24         a.  Such person's occupations, positions of employment,

25  and offices held during the past 10 years.

26         b.  The principal business and address of any business,

27  corporation, or other organization in which each such office

28  was held or in which such occupation or position of employment

29  was carried on.

30

31


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                                   CS/HB 1841, First Engrossed/ntc



  1         c.  Whether, at any time during such 10-year period,

  2  such person was convicted of any crime other than a traffic

  3  violation.

  4         d.  Whether, during such 10-year period, such person

  5  has been the subject of any proceeding for the revocation of

  6  any license and, if so, the nature of such proceeding and the

  7  disposition thereof.

  8         e.  Whether, during such 10-year period, such person

  9  has been the subject of any proceeding under the federal

10  Bankruptcy Act or whether, during such 10-year period, any

11  corporation, partnership, firm, trust, or association in which

12  such person was a director, officer, trustee, partner, or

13  other official has been subject to any such proceeding, either

14  during the time in which such person was a director, officer,

15  trustee, partner, or other official, or within 12 months

16  thereafter.

17         f.  Whether, during such 10-year period, such person

18  has been enjoined, either temporarily or permanently, by a

19  court of competent jurisdiction from violating any federal or

20  state law regulating the business of insurance, securities, or

21  banking, or from carrying out any particular practice or

22  practices in the course of the business of insurance,

23  securities, or banking, together with details of any such

24  event.

25         45.  Security fund.--All underwriting members shall be

26  members of the security fund of any exchange.

27         46.  Underwriting member defined.--Whenever the term

28  "underwriting member" is used in this subsection, it shall be

29  construed to mean "underwriting syndicate."

30

31


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                                   CS/HB 1841, First Engrossed/ntc



  1         47.  Offsets.--Any action, requirement, or constraint

  2  imposed by the department shall reduce or offset similar

  3  actions, requirements, or constraints of any exchange.

  4         48.  Restriction on member ownership.--

  5         a.  Investments existing prior to July 2, 1987.--The

  6  investment in any member by brokers, agents, and

  7  intermediaries transacting business on the exchange, and the

  8  investment in any such broker, agent, or intermediary by any

  9  member, directly or indirectly, shall in each case be limited

10  in the aggregate to less than 20 percent of the total

11  investment in such member, broker, agent, or intermediary, as

12  the case may be. After December 31, 1987, the aggregate

13  percent of the total investment in such member by any broker,

14  agent, or intermediary and the aggregate percent of the total

15  investment in any such broker, agent, or intermediary by any

16  member, directly or indirectly, shall not exceed 15 percent.

17  After June 30, 1988, such aggregate percent shall not exceed

18  10 percent and after December 31, 1988, such aggregate percent

19  shall not exceed 5 percent.

20         b.  Investments arising on or after July 2, 1987.--The

21  investment in any underwriting member by brokers, agents, or

22  intermediaries transacting business on the exchange, and the

23  investment in any such broker, agent, or intermediary by any

24  underwriting member, directly or indirectly, shall in each

25  case be limited in the aggregate to less than 5 percent of the

26  total investment in such underwriting member, broker, agent,

27  or intermediary.

28         49.  "Underwriting manager" defined.--"Underwriting

29  manager" as used in this subparagraph includes any person,

30  partnership, corporation, or organization providing any of the

31  following services to underwriting members of the exchange:


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                                   CS/HB 1841, First Engrossed/ntc



  1         a.  Office management and allied services, including

  2  correspondence and secretarial services.

  3         b.  Accounting services, including bookkeeping and

  4  financial report preparation.

  5         c.  Investment and banking consultations and services.

  6         d.  Underwriting functions and services including the

  7  acceptance, rejection, placement, and marketing of risk.

  8         50.  Prohibition of underwriting manager

  9  investment.--Any direct or indirect investment in any

10  underwriting manager by a broker member or any affiliated

11  person of a broker member or any direct or indirect investment

12  in a broker member by an underwriting manager or any

13  affiliated person of an underwriting manager is prohibited.

14  "Affiliated person" for purposes of this subparagraph is

15  defined in subparagraph 43.

16         51.  An underwriting member may not accept reinsurance

17  on an assumed basis from an affiliate or a controlling

18  company, nor may a broker member or management company place

19  reinsurance from an affiliate or controlling company of theirs

20  with an underwriting member.  "Affiliate and controlling

21  company" for purposes of this subparagraph is defined in

22  subparagraph 43.

23         52.  Premium defined.--"Premium" is the consideration

24  for insurance, by whatever name called.  Any "assessment" or

25  any "membership," "policy," "survey," "inspection," "service"

26  fee or charge or similar fee or charge in consideration for an

27  insurance contract is deemed part of the premium.

28         53.  Rules.--The department shall promulgate rules

29  necessary for or as an aid to the effectuation of any

30  provision of this section.

31


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                                   CS/HB 1841, First Engrossed/ntc



  1         Section 43.  Subsection (7) of section 648.27, Florida

  2  Statutes, is amended to read:

  3         648.27  Licenses and appointments; general.--

  4         (7)  Any person who represents a surety company, whose

  5  duties are restricted to bail bonds, and who comes under the

  6  definition of "service representative" as provided in s.

  7  626.015 626.081 shall be licensed and appointed as a bail bond

  8  agent.

  9         Section 44.  Paragraphs (b) and (c) of subsection (4)

10  of section 624.311, Florida Statutes, are amended to read:

11         624.311  Records; reproductions; destruction.--

12         (4)  To facilitate the efficient use of floor space and

13  filing equipment in its offices, the department may destroy

14  the following records and documents pursuant to chapter 257:

15         (b)  Agent, solicitor, adjuster, and similar license

16  files, including license files of the Division of State Fire

17  Marshal, over 2 years old; except that the department shall

18  preserve by reproduction or otherwise a copy of the original

19  records upon the basis of which each such licensee qualified

20  for her or his initial license, except a competency

21  examination, and of any disciplinary proceeding affecting the

22  licensee;

23         (c)  All agent, solicitor, adjuster, and similar

24  license files and records, including original license

25  qualification records and records of disciplinary proceedings

26  5 years after a licensee has ceased to be qualified for a

27  license;

28         Section 45.  Paragraphs (e) and (o) of subsection (1)

29  of section 624.523, Florida Statutes, are amended to read:

30         624.523  Insurance Commissioner's Regulatory Trust

31  Fund.--


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                                   CS/HB 1841, First Engrossed/ntc



  1         (1)  There is created in the State Treasury a trust

  2  fund designated "Insurance Commissioner's Regulatory Trust

  3  Fund" to which shall be credited all payments received on

  4  account of the following items:

  5         (e)  All payments received on account of items provided

  6  for under respective provisions of s. 624.501, as follows:

  7         1.  Subsection (1) (certificate of authority of

  8  insurer).

  9         2.  Subsection (2) (charter documents of insurer).

10         3.  Subsection (3) (annual license tax of insurer).

11         4.  Subsection (4) (annual statement of insurer).

12         5.  Subsection (5) (application fee for insurance

13  representatives).

14         6.  The "appointment fee" portion of any appointment

15  provided for under paragraphs (6)(a) and (b) (insurance

16  representatives, property, marine, casualty and surety

17  insurance, and agents, and solicitors).

18         7.  Paragraph (6)(c) (nonresident agents).

19         8.  Paragraph (6)(d) (service representatives).

20         9.  The "appointment fee" portion of any appointment

21  provided for under paragraph (7)(a) (life insurance agents,

22  original appointment, and renewal or continuation of

23  appointment).

24         10.  Paragraph (7)(b) (nonresident agent license).

25         11.  The "appointment fee" portion of any appointment

26  provided for under paragraph (8)(a) (health insurance agents,

27  agent's appointment, and renewal or continuation fee).

28         12.  Paragraph (8)(b) (nonresident agent appointment).

29         13.  The "appointment fee" portion of any appointment

30  provided for under subsections (9) and (10) (limited licenses

31  and fraternal benefit society agents).


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                                   CS/HB 1841, First Engrossed/ntc



  1         14.  Subsection (11) (vending machines).

  2         15.  Subsection (12) (surplus lines agent).

  3         16.  Subsection (13) (adjusters' appointment).

  4         17.  Subsection (14) (examination fee).

  5         18.  Subsection (15) (temporary license and appointment

  6  as agent or adjuster).

  7         19.  Subsection (16) (reissuance, reinstatement, etc.).

  8         20.  Subsection (17) (additional license continuation

  9  fees).

10         21.  Subsection (18) (filing application for permit to

11  form insurer).

12         22.  Subsection (19) (license fee of rating

13  organization).

14         23.  Subsection (20) (miscellaneous services).

15         24.  Subsection (21) (insurance agencies).

16         (o)  All state tax portions of agents' and solicitors'

17  licenses collected under s. 624.501.

18         Section 46.  Section 624.507, Florida Statutes, is

19  amended to read:

20         624.507  Municipal tax.--Municipal corporations may

21  require a tax of insurance agents and solicitors not to exceed

22  50 percent of the state tax specified as to such agents and

23  solicitors under this part, and unless otherwise authorized by

24  law.  Such a tax may be required only by a municipal

25  corporation within the boundaries of which is located the

26  agent's business office, or if no such office is required

27  under this code, by the municipal corporation of the agent's

28  place of residence.

29         Section 47.  Subsections (1) and (3) of section

30  626.0428, Florida Statutes, are amended to read:

31


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                                   CS/HB 1841, First Engrossed/ntc



  1         626.0428  Agency personnel powers, duties, and

  2  limitations.--

  3         (1)  An individual employed by an agent or agency on

  4  salary who devotes full time to clerical work, with incidental

  5  taking of insurance applications or quoting or receiving

  6  premiums on incoming inquiries in the office of the agent or

  7  agency, is not deemed to be an agent or, customer

  8  representative, or solicitor if his or her compensation does

  9  not include in whole or in part any commissions on such

10  business and is not related to the production of applications,

11  insurance, or premiums.

12         (3)  No employee of an agent or agency may initiate

13  contact with any person for the purpose of soliciting

14  insurance unless licensed and appointed as a general lines

15  agent or, customer representative, or solicitor.

16         Section 48.  Subsections (1) and (2) of section

17  626.112, Florida Statutes, are amended to read:

18         626.112  License and appointment required; agents,

19  customer representatives, solicitors, adjusters, insurance

20  agencies, service representatives, managing general agents.--

21         (1)(a)  No person may be, act as, or advertise or hold

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

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

24  currently licensed and appointed.

25         (b)  Except as provided in subsection (6) or in

26  applicable department rules, and in addition to other conduct

27  described in this chapter with respect to particular types of

28  agents, a license as an insurance agent, service

29  representative, solicitor, customer representative, or limited

30  customer representative is required in order to engage in the

31  solicitation of insurance. For purposes of this requirement,


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                                   CS/HB 1841, First Engrossed/ntc



  1  as applicable to any of the license types described in this

  2  section, the solicitation of insurance is the attempt to

  3  persuade any person to purchase an insurance product by:

  4         1.  Describing the benefits or terms of insurance

  5  coverage, including premiums or rates of return;

  6         2.  Distributing an invitation to contract to

  7  prospective purchasers;

  8         3.  Making general or specific recommendations as to

  9  insurance products;

10         4.  Completing orders or applications for insurance

11  products; or

12         5.  Comparing insurance products, advising as to

13  insurance matters, or interpreting policies or coverages.

14

15  However, an employee leasing company licensed pursuant to

16  chapter 468 which is seeking to enter into a contract with an

17  employer that identifies products and services offered to

18  employees may deliver proposals for the purchase of employee

19  leasing services to prospective clients of the employee

20  leasing company setting forth the terms and conditions of

21  doing business; classify employees as permitted by s. 468.529;

22  collect information from prospective clients and other sources

23  as necessary to perform due diligence on the prospective

24  client and to prepare a proposal for services; provide and

25  receive enrollment forms, plans, and other documents; and

26  discuss or explain in general terms the conditions,

27  limitations, options, or exclusions of insurance benefit plans

28  available to the client or employees of the employee leasing

29  company were the client to contract with the employee leasing

30  company. Any advertising materials or other documents

31  describing specific insurance coverages must identify and be


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                                   CS/HB 1841, First Engrossed/ntc



  1  from a licensed insurer or its licensed agent or a licensed

  2  and appointed agent employed by the employee leasing company.

  3  The employee leasing company may not advise or inform the

  4  prospective business client or individual employees of

  5  specific coverage provisions, exclusions, or limitations of

  6  particular plans. As to clients for which the employee leasing

  7  company is providing services pursuant to s. 468.525(4), the

  8  employee leasing company may engage in activities permitted by

  9  ss. 626.041, 626.051, and 626.062, subject to the restrictions

10  specified in those sections. If a prospective client requests

11  more specific information concerning the insurance provided by

12  the employee leasing company, the employee leasing company

13  must refer the prospective business client to the insurer or

14  its licensed agent or to a licensed and appointed agent

15  employed by the employee leasing company.

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

17  shall solicit or otherwise transact as agent or, customer

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

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

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

21  or she is not then licensed and appointed.

22         Section 49.  Section 626.141, Florida Statutes, is

23  amended to read:

24         626.141  Violation not to affect validity of

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

26  binding as between the parties thereto shall not be rendered

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

28  procured by or through an unlicensed agent or, customer

29  representative, or solicitor or an agent or, customer

30  representative, or solicitor who has not been appointed.

31


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                                   CS/HB 1841, First Engrossed/ntc



  1         Section 50.  Subsection (5) of section 626.171, Florida

  2  Statutes, is amended to read:

  3         626.171  Application for license.--

  4         (5)  An application for a license as an agent, customer

  5  representative, solicitor, adjuster, insurance agency, service

  6  representative, managing general agent, or reinsurance

  7  intermediary must be accompanied by a set of the individual

  8  applicant's fingerprints, or, if the applicant is not an

  9  individual, by a set of the fingerprints of the sole

10  proprietor, majority owner, partners, officers, and directors,

11  on a form adopted by rule of the department and accompanied by

12  the fingerprint processing fee set forth in s. 624.501.  The

13  fingerprints shall be certified by a law enforcement officer.

14         Section 51.  Subsections (1) and (3) of section

15  626.221, Florida Statutes, are amended to read:

16         626.221  Examination requirement; exemptions.--

17         (1)  The department shall not issue any license as

18  agent, solicitor, customer representative, or adjuster to any

19  individual who has not qualified for, taken, and passed to the

20  satisfaction of the department a written examination of the

21  scope prescribed in s. 626.241.

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

23  solicitor or customer representative shall not be licensed as

24  a general lines agent without application and examination for

25  such license.

26         Section 52.  Paragraph (d) of subsection (3) of section

27  626.2815, Florida Statutes, is amended to read:

28         626.2815  Continuing education required; application;

29  exceptions; requirements; penalties.--

30         (3)

31


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                                   CS/HB 1841, First Engrossed/ntc



  1         (d)  Any person who holds a license as a customer

  2  representative, limited customer representative,

  3  administrative agent, title agent, solicitor, motor vehicle

  4  physical damage and mechanical breakdown insurance agent, crop

  5  or hail and multiple-peril crop insurance agent, or as an

  6  industrial fire insurance or burglary insurance agent and who

  7  is not a licensed life or health insurance agent, shall be

  8  required to complete 14 hours of continuing education courses

  9  every 2 years, except, for compliance periods beginning on

10  January 1, 1998, each licensee subject to this paragraph shall

11  be required to complete 10 hours of continuing education

12  courses every 2 years.

13         Section 53.  Paragraphs (b) and (f) of subsection (1)

14  of section 626.321, Florida Statutes, are amended to read:

15         626.321  Limited licenses.--

16         (1)  The department shall issue to a qualified

17  individual, or a qualified individual or entity under

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

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

20  categories:

21         (b)  Industrial fire insurance or burglary

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

23  burglary insurance.  The applicant for such a license shall

24  pass a written examination covering such insurance.  No

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

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

27  insurance coverage except as to life and health insurances.

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

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

30  and no individual or entity so licensed shall, during the same

31  period, hold a license as an agent or solicitor as to any


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                                   CS/HB 1841, First Engrossed/ntc



  1  other or additional kind of life or health insurance with the

  2  exception of credit life or disability insurance as defined in

  3  paragraph (e). The same licensing provisions as outlined in

  4  paragraph (e) apply to entities licensed as credit insurance

  5  agents under this paragraph.

  6         Section 54.  Subsections (5) and (6) of section

  7  626.451, Florida Statutes, are amended to read:

  8         626.451  Appointment of agent or other

  9  representative.--

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

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

12  representative, solicitor, customer representative, or

13  managing general agent has pleaded guilty or nolo contendere

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

15  department of such fact.

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

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

18  customer representative, or managing general agent, the state

19  attorney shall immediately furnish the department a certified

20  copy of the information or indictment.

21         Section 55.  Subsection (1) of section 626.511, Florida

22  Statutes, is amended to read:

23         626.511  Reasons for termination; confidential

24  information.--

25         (1)  Any insurer terminating the appointment of an

26  agent; any general lines agent terminating the appointment of

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

28  multiple-peril crop insurance agent; and any employer

29  terminating the appointment of an adjuster, service

30  representative, or managing general agent, whether such

31  termination is by direct action of the appointing insurer,


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                                   CS/HB 1841, First Engrossed/ntc



  1  agent, or employer or by failure to renew or continue the

  2  appointment as provided, shall file with the department a

  3  statement of the reasons, if any, for and the facts relative

  4  to such termination.  In the case of termination of the

  5  appointment of an agent, such information may be filed by the

  6  insurer or by the general agent of the insurer.

  7         Section 56.  Subsection (1) of section 626.521, Florida

  8  Statutes, is amended to read:

  9         626.521  Character, credit reports.--

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

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

12  solicitor, adjuster, service representative, customer

13  representative, or managing general agent, the appointing

14  insurer or its manager or general agent in this state, in the

15  case of agents, or the appointing general lines agent, in the

16  case of solicitors or customer representatives, or the

17  employer, in the case of service representatives and of

18  adjusters who are not to be self-employed, shall

19  coincidentally with such appointment or employment secure and

20  thereafter keep on file a full detailed credit and character

21  report made by an established and reputable independent

22  reporting service, relative to the individual so appointed or

23  employed.

24         Section 57.  Subsections (1) and (3) of section

25  626.561, Florida Statutes, are amended to read:

26         626.561  Reporting and accounting for funds.--

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

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

29  representative, solicitor, or adjuster in transactions under

30  his or her license are trust funds received by the licensee in

31  a fiduciary capacity. An agent shall keep the funds belonging


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                                   CS/HB 1841, First Engrossed/ntc



  1  to each insurer for which he or she is not appointed, other

  2  than a surplus lines insurer, in a separate account so as to

  3  allow the department to properly audit such funds. The

  4  licensee in the applicable regular course of business shall

  5  account for and pay the same to the insurer, insured, or other

  6  person entitled thereto.

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

  8  adjuster who, not being lawfully entitled thereto, either

  9  temporarily or permanently diverts or misappropriates such

10  funds or any portion thereof or deprives the other person of a

11  benefit therefrom commits the offense specified below:

12         (a)  If the funds diverted or misappropriated are $300

13  or less, a misdemeanor of the first degree, punishable as

14  provided in s. 775.082 or s. 775.083.

15         (b)  If the funds diverted or misappropriated are more

16  than $300, but less than $20,000, a felony of the third

17  degree, punishable as provided in s. 775.082, s. 775.083, or

18  s. 775.084.

19         (c)  If the funds diverted or misappropriated are

20  $20,000 or more, but less than $100,000, a felony of the

21  second degree, punishable as provided in s. 775.082, s.

22  775.083, or s. 775.084.

23         (d)  If the funds diverted or misappropriated are

24  $100,000 or more, a felony of the first degree, punishable as

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

26         Section 58.  Subsection (1) of section 626.601, Florida

27  Statutes, is amended to read:

28         626.601  Improper conduct; inquiry; fingerprinting.--

29         (1)  The department may, upon its own motion or upon a

30  written complaint signed by any interested person and filed

31  with the department, inquire into any alleged improper conduct


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                                   CS/HB 1841, First Engrossed/ntc



  1  of any licensed agent, solicitor, adjuster, service

  2  representative, managing general agent, customer

  3  representative, title insurance agent, title insurance agency,

  4  continuing education course provider, instructor, school

  5  official, or monitor group under this code. The department may

  6  thereafter initiate an investigation of any such licensee if

  7  it has reasonable cause to believe that the licensee has

  8  violated any provision of the insurance code. During the

  9  course of its investigation, the department shall contact the

10  licensee being investigated unless it determines that

11  contacting such person could jeopardize the successful

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

13         Section 59.  Section 626.611, Florida Statutes, is

14  amended to read:

15         626.611  Grounds for compulsory refusal, suspension, or

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

17  adjuster's, customer representative's, service

18  representative's, or managing general agent's license or

19  appointment.--The department shall deny an application for,

20  suspend, revoke, or refuse to renew or continue the license or

21  appointment of any applicant, agent, title agency, solicitor,

22  adjuster, customer representative, service representative, or

23  managing general agent, and it shall suspend or revoke the

24  eligibility to hold a license or appointment of any such

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

26  appointee any one or more of the following applicable grounds

27  exist:

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

29  license or appointment as specified in this code.

30

31


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                                   CS/HB 1841, First Engrossed/ntc



  1         (2)  Material misstatement, misrepresentation, or fraud

  2  in obtaining the license or appointment or in attempting to

  3  obtain the license or appointment.

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

  5  department any examination required under this code.

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

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

  8  prohibitions of this code.

  9         (5)  Willful misrepresentation of any insurance policy

10  or annuity contract or willful deception with regard to any

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

12  of dissemination of information or advertising.

13         (6)  If, as an adjuster, or agent licensed and

14  appointed to adjust claims under this code, he or she has

15  materially misrepresented to an insured or other interested

16  party the terms and coverage of an insurance contract with

17  intent and for the purpose of effecting settlement of claim

18  for loss or damage or benefit under such contract on less

19  favorable terms than those provided in and contemplated by the

20  contract.

21         (7)  Demonstrated lack of fitness or trustworthiness to

22  engage in the business of insurance.

23         (8)  Demonstrated lack of reasonably adequate knowledge

24  and technical competence to engage in the transactions

25  authorized by the license or appointment.

26         (9)  Fraudulent or dishonest practices in the conduct

27  of business under the license or appointment.

28         (10)  Misappropriation, conversion, or unlawful

29  withholding of moneys belonging to insurers or insureds or

30  beneficiaries or to others and received in conduct of business

31  under the license or appointment.


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                                   CS/HB 1841, First Engrossed/ntc



  1         (11)  Unlawfully rebating, attempting to unlawfully

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

  3  her commission with another.

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

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

  6  representative, or solicitor for the purpose of soliciting or

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

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

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

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

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

12  willful violation of any provision of this code.

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

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

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

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

17  any other country which involves moral turpitude, without

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

19  the court having jurisdiction of such cases.

20         (15)  Fraudulent or dishonest practice in submitting or

21  aiding or abetting any person in the submission of an

22  application for workers' compensation coverage under chapter

23  440 containing false or misleading information as to employee

24  payroll or classification for the purpose of avoiding or

25  reducing the amount of premium due for such coverage.

26         (16)  Sale of an unregistered security that was

27  required to be registered, pursuant to chapter 517.

28         Section 60.  Section 626.621, Florida Statutes, is

29  amended to read:

30         626.621  Grounds for discretionary refusal, suspension,

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


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                                   CS/HB 1841, First Engrossed/ntc



  1  representative's, service representative's, or managing

  2  general agent's license or appointment.--The department may,

  3  in its discretion, deny an application for, suspend, revoke,

  4  or refuse to renew or continue the license or appointment of

  5  any applicant, agent, solicitor, adjuster, customer

  6  representative, service representative, or managing general

  7  agent, and it may suspend or revoke the eligibility to hold a

  8  license or appointment of any such person, if it finds that as

  9  to the applicant, licensee, or appointee any one or more of

10  the following applicable grounds exist under circumstances for

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

12  mandatory under s. 626.611:

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

14  appointment could have been refused had it then existed and

15  been known to the department.

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

17  other law applicable to the business of insurance in the

18  course of dealing under the license or appointment.

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

20  department.

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

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

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

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

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

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

27  appointment, engaging in unfair methods of competition or in

28  unfair or deceptive acts or practices, as prohibited under

29  part IX of this chapter, or having otherwise shown himself or

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

31  detrimental to the public interest.


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                                   CS/HB 1841, First Engrossed/ntc



  1         (7)  Willful overinsurance of any property or health

  2  insurance risk.

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

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

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

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

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

  8  conviction has been entered by the court having jurisdiction

  9  of such cases.

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

11         (10)  Cheating on an examination required for licensure

12  or violating test center or examination procedures published

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

14  authorized representatives of the examination program

15  administrator.  Communication of test center and examination

16  procedures must be clearly established and documented.

17         (11)  Failure to inform the department in writing

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

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

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

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

22  any other country without regard to whether a judgment of

23  conviction has been entered by the court having jurisdiction

24  of the case.

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

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

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

28  department.

29         Section 61.  Subsections (2) and (3) of section

30  626.641, Florida Statutes, are amended to read:

31         626.641  Duration of suspension or revocation.--


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                                   CS/HB 1841, First Engrossed/ntc



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

  2  appointment revoked by the department, nor any person whose

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

  4  shall have the right to apply for another license or

  5  appointment under this code within 2 years from the effective

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

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

  8  court order or decree affirming the revocation. The department

  9  shall not, however, grant a new license or appointment or

10  reinstate eligibility to hold such license or appointment if

11  it finds that the circumstance or circumstances for which the

12  eligibility was revoked or for which the previous license or

13  appointment was revoked still exist or are likely to recur; if

14  an individual's license as agent or, customer representative,

15  or solicitor or eligibility to hold same has been revoked upon

16  the ground specified in s. 626.611(12), the department shall

17  refuse to grant or issue any new license or appointment so

18  applied for.

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

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

21  individual have been revoked at two separate times, the

22  department shall not thereafter grant or issue any license

23  under this code as to such individual.

24         Section 62.  Subsections (1) and (2) of section

25  626.651, Florida Statutes, are amended to read:

26         626.651  Effect of suspension, revocation upon

27  associated licenses and appointments and licensees and

28  appointees.--

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

30  or continue any one license of an agent or, customer

31  representative, or solicitor, or upon suspension or revocation


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                                   CS/HB 1841, First Engrossed/ntc



  1  of eligibility to hold a license or appointment, the

  2  department shall at the same time likewise suspend or revoke

  3  all other licenses, appointments, or status of eligibility

  4  held by the licensee or appointee under this code.

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

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

  7  suspension or revocation of eligibility, the license and

  8  appointments of any other agents who are members of such

  9  agency, whether incorporated or unincorporated, and any

10  solicitors or customer representatives employed by such

11  agency, who knowingly are parties to the act which formed the

12  ground for the suspension or revocation may likewise be

13  suspended or revoked.

14         Section 63.  Subsections (1) and (2) of section

15  626.730, Florida Statutes, are amended to read:

16         626.730  Purpose of license.--

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

18  a general lines agent or, customer representative, or

19  solicitor is to authorize and enable the licensee actively and

20  in good faith to engage in the insurance business as such an

21  agent or, customer representative, or solicitor with respect

22  to the public and to facilitate the public supervision of such

23  activities in the public interest, and not for the purpose of

24  enabling the licensee to receive a rebate of premium in the

25  form of commission or other compensation as an agent or,

26  customer representative, or solicitor or enabling the licensee

27  to receive commissions or other compensation based upon

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

29  his or her own interests or those of other persons with whom

30  he or she is closely associated in capacities other than that

31  of insurance agent or, customer representative, or solicitor.


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

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

  3  or, customer representative, or solicitor as to any applicant

  4  therefor or licensee or appointee thereunder if it finds that

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

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

  7  the purpose of securing rebates or commissions on "controlled

  8  business," that is, on insurance written on his or her own

  9  interests or those of his or her family or of any firm,

10  corporation, or association with which he or she is

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

12  an interest other than as to the insurance thereof.

13         Section 64.  Section 626.745, Florida Statutes, is

14  amended to read:

15         626.745  Service representatives, managing general

16  agents; managers; activities.--Individuals employed by

17  insurers or their managers, general agents, or representatives

18  as service representatives, and as managing general agents

19  employed for the purpose of or engaged in assisting agents and

20  solicitors in negotiating and effecting contracts of

21  insurance, shall engage in such activities when, and only

22  when, accompanied by an agent or solicitor duly licensed and

23  appointed as a resident licensee and appointee under this

24  code.

25         Section 65.  Paragraphs (h) and (u) of subsection (1)

26  of section 626.9541, Florida Statutes, are amended to read:

27         626.9541  Unfair methods of competition and unfair or

28  deceptive acts or practices defined.--

29         (1)  UNFAIR METHODS OF COMPETITION AND UNFAIR OR

30  DECEPTIVE ACTS.--The following are defined as unfair methods

31  of competition and unfair or deceptive acts or practices:


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  1         (h)  Unlawful rebates.--

  2         1.  Except as otherwise expressly provided by law, or

  3  in an applicable filing with the department, knowingly:

  4         a.  Permitting, or offering to make, or making, any

  5  contract or agreement as to such contract other than as

  6  plainly expressed in the insurance contract issued thereon;

  7         b.  Paying, allowing, or giving, or offering to pay,

  8  allow, or give, directly or indirectly, as inducement to such

  9  insurance contract, any unlawful rebate of premiums payable on

10  the contract, any special favor or advantage in the dividends

11  or other benefits thereon, or any valuable consideration or

12  inducement whatever not specified in the contract;

13         c.  Giving, selling, or purchasing, or offering to

14  give, sell, or purchase, as inducement to such insurance

15  contract or in connection therewith, any stocks, bonds, or

16  other securities of any insurance company or other

17  corporation, association, or partnership, or any dividends or

18  profits accrued thereon, or anything of value whatsoever not

19  specified in the insurance contract.

20         2.  Nothing in paragraph (g) or subparagraph 1. of this

21  paragraph shall be construed as including within the

22  definition of discrimination or unlawful rebates:

23         a.  In the case of any contract of life insurance or

24  life annuity, paying bonuses to all policyholders or otherwise

25  abating their premiums in whole or in part out of surplus

26  accumulated from nonparticipating insurance; provided that any

27  such bonuses or abatement of premiums is fair and equitable to

28  all policyholders and for the best interests of the company

29  and its policyholders.

30         b.  In the case of life insurance policies issued on

31  the industrial debit plan, making allowance to policyholders


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                                   CS/HB 1841, First Engrossed/ntc



  1  who have continuously for a specified period made premium

  2  payments directly to an office of the insurer in an amount

  3  which fairly represents the saving in collection expenses.

  4         c.  Readjustment of the rate of premium for a group

  5  insurance policy based on the loss or expense thereunder, at

  6  the end of the first or any subsequent policy year of

  7  insurance thereunder, which may be made retroactive only for

  8  such policy year.

  9         d.  Issuance of life insurance policies or annuity

10  contracts at rates less than the usual rates of premiums for

11  such policies or contracts, as group insurance or employee

12  insurance as defined in this code.

13         e.  Issuing life or disability insurance policies on a

14  salary savings, bank draft, preauthorized check, payroll

15  deduction, or other similar plan at a reduced rate reasonably

16  related to the savings made by the use of such plan.

17         3.a.  No title insurer, or any member, employee,

18  attorney, agent, agency, or solicitor thereof, shall pay,

19  allow, or give, or offer to pay, allow, or give, directly or

20  indirectly, as inducement to title insurance, or after such

21  insurance has been effected, any rebate or abatement of the

22  agent's, agency's, or title insurer's share of the premium or

23  any charge for related title services below the cost for

24  providing such services, or provide any special favor or

25  advantage, or any monetary consideration or inducement

26  whatever.  Nothing herein contained shall preclude an

27  abatement in an attorney's fee charged for legal services.

28         b.  Nothing in this subparagraph shall be construed as

29  prohibiting the payment of fees to attorneys at law duly

30  licensed to practice law in the courts of this state, for

31  professional services, or as prohibiting the payment of earned


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                                   CS/HB 1841, First Engrossed/ntc



  1  portions of the premium to duly appointed agents or agencies

  2  who actually perform services for the title insurer.

  3         c.  No insured named in a policy, or any other person

  4  directly or indirectly connected with the transaction

  5  involving the issuance of such policy, including, but not

  6  limited to, any mortgage broker, real estate broker, builder,

  7  or attorney, any employee, agent, agency, or representative,

  8  or solicitor thereof, or any other person whatsoever, shall

  9  knowingly receive or accept, directly or indirectly, any

10  rebate or abatement of said charge, or any monetary

11  consideration or inducement, other than as set forth in

12  sub-subparagraph b.

13         (u)  False claims; obtaining or retaining money

14  dishonestly.--

15         1.  Any agent, physician, claimant, or other person who

16  causes to be presented to any insurer a false claim for

17  payment, knowing the same to be false; or

18         2.  Any agent, solicitor, collector, or other person

19  who represents any insurer or collects or does business

20  without the authority of the insurer, secures cash advances by

21  false statements, or fails to turn over when required, or

22  satisfactorily account for, all collections of such insurer,

23

24  shall, in addition to the other penalties provided in this

25  act, be guilty of a misdemeanor of the second degree and, upon

26  conviction thereof, shall be subject to the penalties provided

27  by s. 775.082 or s. 775.083.

28         Section 66.  Paragraph (b) of subsection (2) of section

29  627.776, Florida Statutes, is amended to read:

30         627.776  Applicability or inapplicability of Florida

31  Insurance Code provisions to title insurers.--


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                                   CS/HB 1841, First Engrossed/ntc



  1         (2)  The following provisions of this code do not apply

  2  to title insurance:

  3         (b)  Part II of chapter 626 (general lines agents and

  4  solicitors; qualifications and requirements).

  5         Section 67.  Section 631.155, Florida Statutes, is

  6  amended to read:

  7         631.155  Agents' balances; premiums and unearned

  8  commissions.--Premiums and unearned commissions which have

  9  been collected on behalf of an insurer by an agent, solicitor,

10  agency, or other entity or person constitute an asset of the

11  insurer for which the agent, solicitor, agency, or other

12  entity or person has a duty to account to the receiver and to

13  pay over amounts as may be due.  The duty to account to the

14  receiver shall encompass all persons or entities involved in

15  the handling and transmittal of premium funds.  An accounting

16  shall be provided to the receiver within 20 days after receipt

17  of a written demand for an accounting. If there is a dispute

18  regarding the accounting, the court shall hear and decide the

19  matter upon petition of the receiver. Compliance with this

20  section and payment of sums determined to be owed by the court

21  within 30 days of judgment, or within other payment terms

22  approved by the court, shall constitute requirements for

23  continued licensure of a person holding a license under the

24  Florida Insurance Code, and failure to comply with this

25  section shall be sufficient grounds for the license

26  revocation.

27         Section 68.  Subsection (1) of section 631.341, Florida

28  Statutes, is amended to read:

29         631.341  Notice of insolvency to policyholders by

30  insurer, general agent, or agent.--

31


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                                   CS/HB 1841, First Engrossed/ntc



  1         (1)  The receiver shall, immediately after appointment

  2  in any delinquency proceeding against an insurer in which the

  3  policies have been canceled, give written notice of such

  4  proceeding to each general agent and licensed agent of the

  5  insurer in this state.  Each general agent and licensed agent

  6  of the insurer in this state shall forthwith give written

  7  notice of such proceeding to all subagents, producing agents,

  8  brokers, solicitors, and service representatives writing

  9  business through such general agent or licensed agent, whether

10  or not such subagents, producing agents, brokers, solicitors,

11  and servicing representatives are licensed or permitted by the

12  insurer and whether or not they are operating under a written

13  agency contract.

14         Section 69.  Section 634.318, Florida Statutes, is

15  amended to read:

16         634.318  License and appointment of sales

17  representatives.--Sales representatives for home warranty

18  associations and insurers shall be licensed, appointed,

19  renewed, continued, reinstated, or terminated in the same

20  manner as prescribed in chapter 626 for insurance

21  representatives in general, except they shall be exempt from

22  the fingerprinting, photo identification card, education, and

23  examination provisions. License, appointment, and other fees

24  shall be those as prescribed in s. 624.501. No employee or

25  sales representative of a home warranty association or insurer

26  may directly or indirectly solicit or negotiate insurance

27  contracts, or hold herself or himself out in any manner to be

28  an insurance agent or solicitor, unless so qualified,

29  licensed, and appointed therefor under the insurance code. A

30  home warranty association is not required to be licensed as a

31  sales representative to solicit, sell, issue, or otherwise


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                                   CS/HB 1841, First Engrossed/ntc



  1  transact the home warranty agreements issued by the home

  2  warranty association.

  3         Section 70.  Subsections (3) and (4) of section 641.37,

  4  Florida Statutes, are amended to read:

  5         641.37  Prohibited activities; penalties.--

  6         (3)  Any agent or representative, solicitor, examining

  7  physician, applicant, or other person who knowingly makes any

  8  false and fraudulent statements or representation in, or with

  9  reference to, any application or negotiation for health

10  maintenance organization coverage is, in addition to any other

11  penalty provided by law, guilty of a misdemeanor of the first

12  degree, punishable as provided in s. 775.082 or s. 775.083.

13         (4)  Any agent, representative, solicitor, collector,

14  or other person who, while acting on behalf of a health

15  maintenance organization, receives or collects its funds or

16  premium payments and fails to satisfactorily account for or

17  turn over, when required, all such funds or payments is, in

18  addition to the other penalties provided for by law, guilty of

19  a misdemeanor of the second degree, punishable as provided in

20  s. 775.082 or s. 775.083.

21         Section 71.  Section 642.041, Florida Statutes, is

22  amended to read:

23         642.041  Grounds for compulsory refusal, suspension, or

24  revocation of license or appointment of contracting sales

25  representatives.--The department shall, pursuant to the

26  insurance code, deny, suspend, revoke, or refuse to renew or

27  continue the license or appointment of any sales

28  representative or the license or appointment of any general

29  lines agent or solicitor if it finds that, as to the sales

30  representative or, general lines agent, or solicitor, any one

31  or more of the following applicable grounds exist:


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                                   CS/HB 1841, First Engrossed/ntc



  1         (1)  Material misstatement, misrepresentation, or fraud

  2  in obtaining or attempting to obtain a license or appointment.

  3         (2)  The license or appointment is willfully used, or

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

  5  prohibitions of ss. 642.011-642.049.

  6         (3)  Willful misrepresentation of any legal expense

  7  contract or willful deception with regard to any such

  8  contract, performed either in person or by any form of

  9  dissemination of information or advertising.

10         (4)  In the adjustment of claims, material

11  misrepresentation to a contract holder or other interested

12  party of the terms and coverage of a contract, with the intent

13  and for the purpose of settling such claim on less favorable

14  terms than those provided in and contemplated by the contract.

15         (5)  Demonstrated lack of fitness or trustworthiness to

16  engage in the business of legal expense insurance.

17         (6)  Demonstrated lack of adequate knowledge and

18  technical competence to engage in the transactions authorized

19  by the license or appointment.

20         (7)  Fraudulent or dishonest practices in the conduct

21  of business under the license or appointment.

22         (8)  Misappropriation, conversion, or unlawful

23  withholding of moneys belonging to an insurer or other person

24  and received in the conduct of business under the license or

25  appointment.

26         (9)  Unlawfully rebating, or attempting to unlawfully

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

28  her commission with another.

29         (10)  Willful failure to comply with, or willful

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

31  willful violation of any provision of ss. 642.011-642.049.


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                                   CS/HB 1841, First Engrossed/ntc



  1         (11)  Being found guilty of, or pleading guilty or nolo

  2  contendere to, a felony or a crime punishable by imprisonment

  3  of 1 year or more under the law of the United States of

  4  America or any state thereof or under the law of any other

  5  country which involves moral turpitude, without regard to

  6  whether a judgment of conviction has been entered.

  7         Section 72.  Subsection (2) of section 624.505,

  8  subsection (2) of section 626.727, sections 626.737 and

  9  626.738, and  subsection (2) of section 626.862, Florida

10  Statutes, and sections 626.031, 626.041, 626.051, 626.062,

11  626.071, 626.072, 626.081, 626.091, 626.094, 626.101, 626.102,

12  626.103, 626.104, 626.736, 626.737, 626.738, 626.739, 626.740,

13  626.790, and 626.791, Florida Statutes, are repealed.

14         Section 73.  Except as otherwise provided herein, this

15  act shall take effect October 1, 2002.

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