House Bill hb0679

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    Florida House of Representatives - 2002                 HB 679

        By Representative Brown






  1                      A bill to be entitled

  2         An act relating to insurance; amending s.

  3         627.7295, F.S.; clarifying an exception;

  4         providing an additional exception to a

  5         requirement that a minimum of 2 months' premium

  6         be collected to issue a policy or binder for

  7         motor vehicle insurance; amending s. 627.901,

  8         F.S.; authorizing insurance agents and insurers

  9         that finance premiums for certain policies to

10         charge interest or a service charge at a

11         specified rate on unpaid premiums on those

12         policies; providing an effective date.

13

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

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16         Section 1.  Subsection (7) of section 627.7295, Florida

17  Statutes, is amended to read:

18         627.7295  Motor vehicle insurance contracts.--

19         (7)  A policy of private passenger motor vehicle

20  insurance or a binder for such a policy may be initially

21  issued in this state only if the insurer or agent has

22  collected from the insured an amount equal to 2 months'

23  premium.  An insurer, agent, or premium finance company may

24  not directly or indirectly take any action resulting in the

25  insured having paid from the insured's own funds an amount

26  less than the 2 months' premium required by this subsection.

27  This subsection applies without regard to whether the premium

28  is financed by a premium finance company or is paid pursuant

29  to a periodic payment plan of an insurer or an insurance

30  agent.  This subsection does not apply if an insured or member

31  of the insured's family is renewing or replacing a policy or a

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    Florida House of Representatives - 2002                 HB 679

    754-114A-02






  1  binder for such policy written by the same insurer or a member

  2  of the same insurer group.  This subsection does not apply to

  3  an insurer that issues private passenger motor vehicle

  4  coverage primarily to active duty or former military personnel

  5  or their dependents. This subsection does not apply if all

  6  policy payments are paid pursuant to a payroll deduction plan

  7  or an automatic electronic funds transfer payment plan from

  8  the policyholder, provided that the first policy payment may

  9  be is made by cash, cashier's check, check, or a money order.

10  This subsection and subsection (4) do not apply if all policy

11  payments to an insurer are paid pursuant to an automatic

12  electronic funds transfer payment plan from an agent or a

13  managing general agent, or if the policy is issued pursuant to

14  the transfer of a book of business by an agent from one

15  insurer to another, provided that and if the policy includes,

16  at a minimum, personal injury protection pursuant to ss.

17  627.730-627.7405; motor vehicle property damage liability

18  pursuant to s. 627.7275; and bodily injury liability in at

19  least the amount of $10,000 because of bodily injury to, or

20  death of, one person in any one accident and in the amount of

21  $20,000 because of bodily injury to, or death of, two or more

22  persons in any one accident. This subsection and subsection

23  (4) do not apply if an insured has had a policy in effect for

24  at least 6 months, the insured's agent is terminated by the

25  insurer that issued the policy, and the insured obtains

26  coverage on the policy's renewal date with a new company

27  through the terminated agent.

28         Section 2.  Subsection (1) of section 627.901, Florida

29  Statutes, is amended to read:

30         627.901  Premium financing by an insurance agent or

31  agency.--

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    Florida House of Representatives - 2002                 HB 679

    754-114A-02






  1         (1)  A general lines agent may make reasonable service

  2  charges for financing insurance premiums on policies issued or

  3  business produced by such an agent or agency, s. 626.9541

  4  notwithstanding.  The service charge shall not exceed $1 per

  5  installment, or a $6 total service charge per year, for any

  6  premium balance of $120 or less.  For any premium balance

  7  greater than $120 but not more than $220, the service charge

  8  shall not exceed $9 per year.  The maximum service charge for

  9  any premium balance greater than $220 shall not exceed $12 per

10  year.  In lieu of such service charges, an insurance agent or

11  agency may charge interest or service charges, which may be

12  level amounts and subject to endorsement changes, which in the

13  aggregate do not exceed a rate of interest not to exceed 18

14  percent simple interest per year on the average unpaid balance

15  as billed over the term of the policy.

16         Section 3.  This act shall take effect July 1, 2002.

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19                          HOUSE SUMMARY

20
      Adds an additional exception to the current requirement
21    that at least a 2-month minimum down payment be paid for
      an auto insurance policy. Specifies that an insurer or
22    agent who is financing premiums may charge service or
      interest charges, in level monthly installments, provided
23    that the total of the charges does not exceed the amounts
      charged under the current limit of an annual rate of 18
24    percent simple interest.

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