HB 1337 2003
1	A bill to be entitled
2	An act relating to governmental reorganization; revising
3	and conforming provisions of the Florida Statutes to the
4	amendment of Article IV, Section 4 of the State
5	Constitution, in which the functions of the former
6	positions of Comptroller and Treasurer were combined into
7	the office of Chief Financial Officer, and chapter 2002-
8	404, Laws of Florida, which reorganized certain executive-
9	branch duties and functions to implement such
10	constitutional amendment; revising and conforming
11	provisions of the Florida Statues to the creation of the
12	Department of Financial Services and the Financial
13	Services Commission and the abolition of the Department of
14	Insurance and the Department of Banking and Finance;
15	amending ss. 20.121, 103.091, 110.1127, 112.215, 215.555,
16	215.559, 391.221, 401.245, 408.05, 408.7056, 440.13,
17	440.20, 440.24, 440.38, 440.381, 440.385, 440.386, 440.44,
18	440.52, 440.525, 553.74,.624.05, 624.155, 624.303,
19	624.305, 624.316, 624.317, 624.404, 624.4072, 624.413,
20	624.424, 624.476, 624.477, 625.01115, 625.121, 625.151,
21	625.317, 625.325, and 626.015, F.S., to revise and
22	conform; creating s. 626.016, F.S.; prescribing powers and
23	duties of the Department of Financial Services, Financial
24	Services Commission, and Office of Insurance Regulation;
25	amending ss. 626.025, 626.112, 626.161, 626.171, 626.181,
26	626.191, 626.201, 626.202, 626.211, 626.221, 626.231,
27	626.241, 626.251, 626.261, 626.266, 626.271, 626.281,
28	626.2815, 626.2817, 626.291, 626.292, 626.301, 626.322,
29	626.361, 626.371, 626.381, 626.431, 626.451, 626.461,
30	626.471, 626.511, 626.521, 626.541, 626.551, 626.561,
31	626.591, 626.592, 626.601, 626.611, 626.621, 626.631,
32	626.641, 626.661, 626.681, 626.691, 626.692, 626.7315,
33	626.732, 626.742, 626.7451, 626.7454, 626.7491, 626.7492,
34	626.752, 626.7845, 626.7851, 626.8305, 626.8311, 626.8427,
35	626.8463, 626.8467, 626.847, 626.8473, 626.8582, 626.8584,
36	626.859, 626.861, 626.863, 626.865, 626.866, 626.867,
37	626.869, 626.8695, 626.8696, 626.8697, 626.8698, 626.870,
38	626.871, 626.872, 626.873, 626.8732, 626.8734, 626.8736,
39	626.8738, 626.874, 626.878, 626.88, 626.8805, 626.8809,
40	626.8814, 626.884, 626.89, 626.891, 626.892, 626.894,
41	626.895, 626.896, 626.897, 626.898, 626.899, 626.901,
42	626.906, 626.907, 626.909, 626.910, 626.912, 626.914,
43	626.916, 626.917, 626.918, 626.919, 626.921, 626.931,
44	626.932, 626.936, 626.9361, 626.937, 626.938, 626.9511,
45	626.9541, 626.9543, 626.9545, 626.9551, 626.9561,
46	626.9571, 626.9581, 626.9591, 626.9601, 626.9611,
47	626.9621, 626.9631, 626.9641, 626.9651, 626.989, 626.9892,
48	626.99, 626.9911, 626.9912, 626.9913, 626.9914, 626.9915,
49	626.9916, 626.9919, 626.9921, 626.9922, 626.99235,
50	626.99245, 626.9925, 626.9926, 626.9927, 626.99272,
51	626.99285, 626.99295, 627.0628, 627.0629, 627.311,
52	627.3111, 627.351, 627.3511, 627.3513, 627.3515, 627.357,
53	627.4236, 627.6488, 627.6699, 627.7015, 627.745, 628.4615,
54	628.917, 631.021, 631.025, 631.031, 631.041, 631.042,
55	631.051, 631.0515, 631.061, 631.071, 631.081, 631.091,
56	631.111, 631.152, 631.154, 631.221, 631.231, 631.361,
57	631.371, 631.391, 631.392, 631.398, 631.54, 631.55,
58	631.56, 631.57, 631.59, 631.60, 631.62, 631.66, 631.714,
59	631.72, 631.722, 631.723, 631.727, 631.813, 631.814,
60	631.821, 631.825, 631.904, 631.911, 631.912, 631. 917,
61	631.918, 631.931, 634.3284, 634.430, 634.433, 636.067,
62	641.183, 641.185, 641.19, 641.2017, 641.2018, 641.21,
63	641.215, 641.22, 641.225, 641.227, 641.228, 641.23,
64	641.234, 641.2342, 641.25, 641.255, 641.26, 641.27,
65	641.28, 641.281, 641.284, 641.285, 641.29, 641.3007,
66	641.305, 641.31, 641.3105, 641.31071, 641.31074, 641.315,
67	641.3154, 641.3155, 641.316, 641.35, 641.35, 641.36,
68	641.365, 641.385, 641.39001, 641.3903, 641.3905, 641.3907,
69	641.3909, 641.3911, 641.3913, 641.3917, 641.3922, 641.402,
70	641.403, 641.,405, 641.406, 641.4065, 641.407, 641.409,
71	641.41, 641.412, 641.418, 641.42, 641.421, 641.424,
72	641.437, 641.443, 641.444, 641.445, 641.446, 641.447,
73	641.448, 641.45, 641.452, 641.453, 641.454, 641.455,
74	641.457, 641.48, 641.49, 641.495, 641.511, 641.511,
75	641.512, 641.52, 641.54, 641.55, 641.58, 642.0475,
76	651.119, 252.62, 288.778, 288.99, 289.051, 289.081,
77	289.121, 420.101, 494.00125, 494.00421 517.021, 517.03,
78	517.051, 517.061, 517.07, 517.075, 517.081, 517.082,
79	517.101, 517.111, 517.12, 517.1201, 517.1203, 517.1204,
80	517.121, 517.131, 517.141, 517.151, 517.161, 517.181,
81	517.191, 517.201, 517.2015, 517.221, 517.241, 517.301,
82	517.302 517.313, 517.315, 517.32, 520.996, 520.9965,
83	537.008, 537.009, 537.011, 537.013, 537.016, 537.017,
84	559.725, 560.128, 560.129, 560.404, 609.05, and 655.012,
85	F.S., to revise and conform; protecting the validity of
86	certain administrative and judicial actions; providing for
87	substitution of parties; providing for continuation and
88	effect of certain certificates of authority, forms,
89	licenses, rates, filings, and actions; providing for
90	controlling effect; providing an effective date.
91
92	Be It Enacted by the Legislature of the State of Florida:
93
94	Section 1. Section 20.121, Florida Statutes, is amended to
95	read:
96	20.121 Department of Financial Services.--There is created
97	a Department of Financial Services.
98	(1) DEPARTMENT HEAD.--The head of the Department of
99	Financial Services is the Chief Financial Officer.
100	(2) DIVISIONS.--The Department of Financial Services shall
101	consist of the following divisions:
102	(a) The Division of Accounting and Auditing, which shall
103	include the following bureau and office:
104	1. The Bureau of Unclaimed Property.
105	2. The Office of Fiscal Integrity which shall function as
106	a criminal justice agency for purposes of ss. 943.045-943.08 and
107	shall have a separate budget. The office may conduct
108	investigations within or outside this state as the bureau deems
109	necessary to aid in the enforcement of this section. If during
110	an investigation the office has reason to believe that any
111	criminal law of this state has or may have been violated, the
112	office shall refer any records tending to show such violation to
113	state or federal law enforcement or prosecutorial agencies and
114	shall provide investigative assistance to those agencies as
115	required.
116	(b) The Division of State Fire Marshal.
117	(c) The Division of Risk Management.
118	(d) The Division of Treasury, which shall include a Bureau
119	of Deferred Compensation responsible for administering the
120	Government Employees Deferred Compensation Plan established
121	under s. 112.215 for state employees.
122	(e) The Division of Insurance Fraud.
123	(f) The Division of Rehabilitation and Liquidation.
124	(g) The Division of Insurance Agents and Agency Services.
125	(h) The Division of Consumer Services, which shall include
126	a Bureau of Funeral and Cemetery Services.
127	1. The Division of Consumer Services shall perform the
128	following functions concerning products or services regulated by
129	the Department of Financial Services or by either office of the
130	Financial Services Commission:
131	a. Receive inquiries and complaints from consumers;
132	b. Prepare and disseminate such information as the
133	department deems appropriate to inform or assist consumers;
134	c. Provide direct assistance and advocacy for consumers
135	who request such assistance or advocacy;
136	d. With respect to apparent or potential violations of law
137	or applicable rules by a person or entity licensed by the
138	department or by either office of the commission, report such
139	apparent or potential violation to the appropriate division of
140	the department or office of the commission, which may take such
141	further action as it deems appropriate.
142	2. Any person licensed or issued a certificate of
143	authority by the department or by either office of the
144	commission shall respond, in writing, to the Division of
145	Consumer Services within 15 days after receipt of a written
146	request from the division to do so concerning a consumer
147	complaint. Failure to timely respond is subject to an
148	administrative fine by the department or office that issued the
149	license or certificate of authority, as may be imposed for a
150	violation of law.
151	(i) The Division of Workers' Compensation.
152	(j) The Division of Administration.
153	(k) The Division of Legal Services.
154	(l) The Division of Information Systems.
155	(m) The Office of Insurance Consumer Advocate.
156	(3) FINANCIAL SERVICES COMMISSION.--Effective January 7,
157	2003, there is created within the Department of Financial
158	Services the Financial Services Commission, composed of the
159	Governor, the Attorney General, the Chief Financial Officer, and
160	the Commissioner of Agriculture, which shall for purposes of
161	this section be referred to as the commission. Commission
162	members shall serve as agency head of the Financial Services
163	Commission. The commission shall be a separate budget entity
164	and shall be exempt from the provisions of s. 20.052. Commission
165	action shall be by majority vote consisting of at least three
166	affirmative votes. The commission shall not be subject to
167	control, supervision, or direction by the Department of
168	Financial Services in any manner, including purchasing,
169	transactions involving real or personal property, personnel, or
170	budgetary matters.
171	(a) Structure.--The major structural unit of the
172	commission is the office. Each office shall be headed by a
173	director. The following offices are established:
174	1. The Office of Insurance Regulation, which shall be
175	responsible for all activities concerning insurers and other
176	risk bearing entities, including licensing, rates, policy forms,
177	market conduct, claims, adjusters, issuance of certificates of
178	authority, solvency, viatical settlements, premium financing,
179	and administrative supervision, as provided under the insurance
180	code or chapter 636. The head of the Office of Insurance
181	Regulation is the Director of the Office of Insurance
182	Regulation.
183	2. The Office of Financial Institutions and Securities
184	Regulation, which shall be responsible for all activities of the
185	Financial Services Commission relating to the regulation of
186	banks, credit unions, other financial institutions, finance
187	companies, and the securities industry. The head of the office
188	is the Director of the Office of Financial Institutions and
189	Securities Regulation. The Office of Financial Institutions and
190	Securities Regulation shall include a Bureau of Financial
191	Investigations, which shall function as a criminal justice
192	agency for purposes of ss. 943.045-943.08 and shall have a
193	separate budget. The bureau may conduct investigations within
194	or outside this state as the bureau deems necessary to aid in
195	the enforcement of this section. If, during an investigation,
196	the office has reason to believe that any criminal law of this
197	state has or may have been violated, the office shall refer any
198	records tending to show such violation to state or federal law
199	enforcement or prosecutorial agencies and shall provide
200	investigative assistance to those agencies as required.
201	(b) Organization.--The commission shall establish by rule
202	any additional organizational structure of the offices. It is
203	the intent of the Legislature to provide the commission with the
204	flexibility to organize the offices in any manner they determine
205	appropriate to promote both efficiency and accountability.
206	(c) Powers.--Commission members shall serve as the agency
207	head for purposes of rulemaking under ss. 120.536-120.565 by the
208	commission and all subunits of the commission. Each director is
209	agency head for purposes of final agency action under chapter
210	120 for all areas within the regulatory authority delegated to
211	the director's office.
212	(d) Appointment and qualifications of directors.--The
213	commission shall appoint or remove each director by a majority
214	vote consisting of at least three affirmative votes, with both
215	the Governor and the Chief Financial Officer on the prevailing
216	side. The minimum qualifications of the directors are as
217	follows:
218	1. Prior to appointment as director, the Director of the
219	Office of Insurance Regulation must have had, within the
220	previous 10 years, at least 5 years of responsible private
221	sector experience working full time in areas within the scope of
222	the subject matter jurisdiction of the Office of Insurance
223	Regulation or at least 5 years of experience as a senior
224	examiner or other senior employee of a state or federal agency
225	having regulatory responsibility over insurers or insurance
226	agencies.
227	2. Prior to appointment as director, the Director of the
228	Office of Financial Institutions and Securities Regulation must
229	have had, within the previous 10 years, at least 5 years of
230	responsible private sector experience working full time in areas
231	within the subject matter jurisdiction of the Office of
232	Financial Institutions and Securities Regulation or at least 5
233	years of experience as a senior examiner or other senior
234	employee of a state or federal agency having regulatory
235	responsibility over financial institutions, finance companies,
236	or securities companies.
237	(e) Administrative support.--The offices shall have a
238	sufficient number of attorneys, examiners, investigators, other
239	professional personnel to carry out their responsibilities and
240	administrative personnel as determined annually in the
241	appropriations process. The Department of Financial Services
242	shall provide administrative and information systems support to
243	the offices.
244	Section 2. Subsection (6) of section 103.091, Florida
245	Statutes, is amended to read:
246	103.091 Political parties.--
247	(6)(a)1.In addition to the members provided for in
248	subsection (1), each county executive committee shall include
249	all members of the Legislature who are residents of the county
250	and members of their respective political party and who shall be
251	known as at-large committeemen and committeewomen.
252	(b)2.Each state executive committee shall include, as at-
253	large committeemen and committeewomen, all members of the United
254	States Congress representing the State of Florida who are
255	members of the political party, all statewide elected officials
256	who are members of the party, and the President of the Senate or
257	the Minority Leader in the Senate, and the Speaker of the House
258	of Representatives or the Minority Leader in the House of
259	Representatives, whichever is a member of the political party,
260	and 20 members of the Legislature who are members of the
261	political party. Ten of the legislators shall be appointed with
262	the concurrence of the state chair of the respective party, as
263	follows: five to be appointed by the President of the Senate;
264	five by the Minority Leader in the Senate; five by the Speaker
265	of the House of Representatives; and five by the Minority Leader
266	in the House.
267	(c)3.When a political party allows any member of the
268	state executive committee to have more than one vote per person,
269	other than by proxy, in a matter coming before the state
270	executive committee, the 20 members of the Legislature appointed
271	under subparagraph 2. shall not be appointed to the state
272	executive committee and the following elected officials who are
273	members of that political party shall be appointed and shall
274	have the following votes:
275	1.a.Governor: a number equal to 15 percent of votes cast
276	by state executive committeemen and committeewomen;
277	2.b.Lieutenant Governor: a number equal to 5 percent of
278	the votes cast by state executive committeemen and
279	committeewomen;
280	3.c.Each member of the United States Senate representing
281	the state: a number equal to 10 percent of the votes cast by
282	state executive committeemen and committeewomen;
283	d. Secretary of State: a number equal to 5 percent of the
284	votes cast by state executive committeemen and committeewomen;
285	4.e.Attorney General: a number equal to 5 percent of the
286	votes cast by state executive committeemen and committeewomen;
287	5.f.Chief Financial OfficerComptroller: a number equal
288	to 5 percent of the votes cast by state executive committeemen
289	and committeewomen;
290	g. Treasurer: a number equal to 5 percent of the votes
291	cast by state executive committeemen and committeewomen;
292	6.h.Commissioner of Agriculture: a number equal to 5
293	percent of the votes cast by state executive committeemen and
294	committeewomen;
295	i. Commissioner of Education: a number equal to 5 percent
296	of the votes cast by state executive committeemen and
297	committeewomen;
298	7.j.President of the Senate: a number equal to 10 percent
299	of the votes cast by state executive committeemen and
300	committeewomen;
301	8.k.Minority leader of the Senate: a number equal to 10
302	percent of the votes cast by state executive committeemen and
303	committeewomen;
304	9.l.Speaker of the House of Representatives: a number
305	equal to 10 percent of the votes cast by state executive
306	committeemen and committeewomen;
307	10.m.Minority leader of the House of Representatives: a
308	number equal to 10 percent of the votes cast by state executive
309	committeemen and committeewomen; and
310	11.n.Each member of the United States House of
311	Representatives representing the state: a number equal to 1
312	percent of the votes cast by state executive committeemen and
313	committeewomen.
314	(d)1.4.a.The governing body of each state executive
315	committee as defined by party rule shall include as at-large
316	committeemen and committeewomen all statewide elected officials
317	who are members of such political party; up to four members of
318	the United States Congress representing the state who are
319	members of such political party and who shall be appointed by
320	the state chair on the basis of geographic representation; the
321	permanent presiding officer selected by the members of each
322	house of the Legislature who are members of such political
323	party; and the minority leader selected by the members of each
324	house of the Legislature who are members of such political
325	party.
326	2.b.All members of the governing body shall have one vote
327	per person.
328	Section 3. Paragraph (a) of subsection (2) of section
329	110.1127, Florida Statutes, is amended to read:
330	110.1127 Employee security checks.--
331	(2)(a) All positions within the Division of Treasury of
332	the Department of Financial ServicesInsuranceare deemed to be
333	positions of special trust or responsibility, and a person may
334	be disqualified for employment in any such position by reason
335	of:
336	1. The conviction or prior conviction of a crime which is
337	reasonably related to the nature of the position sought or held
338	by the individual; or
339	2. The entering of a plea of nolo contendere or, when a
340	jury verdict of guilty is rendered but adjudication of guilt is
341	withheld, with respect to a crime which is reasonably related to
342	the nature of the position sought or held by the individual.
343	Section 4. Subsection (4), paragraph (a) of subsection
344	(6), paragraphs (a), (d), (f), and(h) of subsection (8),
345	paragraph (b) of subsection (10), and subsections (11) and (12)
346	of section 112.215, Florida Statutes, are amended to read:
347	112.215 Government employees; deferred compensation
348	program.--
349	(4)(a) The Chief Financial OfficerTreasurer, with the
350	approval of the State Board of Administration, shall establish
351	such plan or plans of deferred compensation for state employees,
352	including all such investment vehicles or products incident
353	thereto, as may be available through, or offered by, qualified
354	companies or persons, and may approve one or more such plans for
355	implementation by and on behalf of the state and its agencies
356	and employees.
357	(b) If the Chief Financial OfficerTreasurerdeems it
358	advisable, he or she shall have the power, with the approval of
359	the State Board of Administration, to create a trust or other
360	special funds for the segregation of funds or assets resulting
361	from compensation deferred at the request of employees of the
362	state or its agencies and for the administration of such
363	program.
364	(c) The Chief Financial OfficerTreasurer, with the
365	approval of the State Board of Administration, may delegate
366	responsibility for administration of the plan to a person the
367	Chief Financial OfficerTreasurerdetermines to be qualified,
368	compensate such person, and, directly or through such person or
369	pursuant to a collective bargaining agreement, contract with a
370	private corporation or institution to provide such services as
371	may be part of any such plan or as may be deemed necessary or
372	proper by the Chief Financial OfficerTreasureror such person,
373	including, but not limited to, providing consolidated billing,
374	individual and collective recordkeeping and accountings, asset
375	purchase, control, and safekeeping, and direct disbursement of
376	funds to employees or other beneficiaries. The Chief Financial
377	OfficerTreasurermay authorize a person, private corporation,
378	or institution to make direct disbursement of funds under the
379	plan to an employee or other beneficiary only upon the order of
380	the Comptroller to the Treasurer.
381	(d) In accordance with such approved plan, and upon
382	contract or agreement with an eligible employee, deferrals of
383	compensation may be accomplished by payroll deductions made by
384	the appropriate officer or officers of the state, with such
385	funds being thereafter held and administered in accordance with
386	the plan.
387	(6)(a) No deferred compensation plan of the state shall
388	become effective until approved by the State Board of
389	Administration and the Chief Financial OfficerTreasureris
390	satisfied by opinion from such federal agency or agencies as may
391	be deemed necessary that the compensation deferred thereunder
392	and/or the investment products purchased pursuant to the plan
393	will not be included in the employee's taxable income under
394	federal or state law until it is actually received by such
395	employee under the terms of the plan, and that such compensation
396	will nonetheless be deemed compensation at the time of deferral
397	for the purposes of social security coverage, for the purposes
398	of the state retirement system, and for any other retirement,
399	pension, or benefit program established by law.
400	(8)(a) There is herebycreated a Deferred Compensation
401	Advisory Council composed of seven members.
402	1. One member shall be appointed by the Speaker of the
403	House of Representatives and the President of the Senate jointly
404	and shall be an employee of the legislative branch.
405	2. One member shall be appointed by the Chief Justice of
406	the Supreme Court and shall be an employee of the judicial
407	branch.
408	3. One member shall be appointed by the chair of the
409	Public Employees Relations Commission and shall be a nonexempt
410	public employee.
411	4. The remaining four members shall be employed by the
412	executive branch and shall be appointed as follows:
413	a. One member shall be appointed by the Chancellor of the
414	State University System and shall be an employee of the
415	university system.
416	b. One member shall be appointed by the Chief Financial
417	OfficerTreasurer and shall be an employee of the Chief
418	Financial OfficerTreasurer.
419	c. One member shall be appointed by the Governor and shall
420	be an employee of the executive branch.
421	d. One member shall be appointed by the Comptroller and
422	shall be an employee of the Comptroller.
423	(d) The council shall meet at the call of its chair, at
424	the request of a majority of its membership, or at the request
425	of the Chief Financial OfficerTreasurer, but not less than
426	twice a year. The business of the council shall be presented to
427	the council in the form of an agenda. The agenda shall be set
428	by the Chief Financial OfficerTreasurerand shall include items
429	of business requested by the council members.
430	(f) The council shall make a report of each meeting to the
431	Chief Financial OfficerTreasurer, which shall show the names of
432	the members present and shall include a record of its
433	discussions, recommendations, and actions taken. The Chief
434	Financial OfficerTreasurershall keep the records of the
435	proceedings of each meeting on file and shall make the records
436	available to any interested person or group.
437	(h) The advisory council shall provide assistance and
438	recommendations to the Chief Financial OfficerTreasurer
439	relating to the provisions of the plan, the insurance or
440	investment options to be offered under the plan, and any other
441	contracts or appointments deemed necessary by the council and
442	the Chief Financial OfficerTreasurerto carry out the
443	provisions of this act. The Chief Financial OfficerTreasurer
444	shall inform the council of the manner in which each council
445	recommendation is being addressed. The Chief Financial Officer
446	Treasurershall provide the council, at least annually, a report
447	on the status of the deferred compensation program, including,
448	but not limited to, information on participant enrollment,
449	amount of compensation deferred, total plan assets, product
450	provider performance, and participant satisfaction with the
451	program.
452	(10)
453	(b)1. There is created in the State Treasury the Deferred
454	Compensation Trust Fund, through which the Chief Financial
455	OfficerTreasureras trustee shall hold moneys, pensions,
456	annuities, or other benefits accrued or accruing under and
457	pursuant to 26 U.S.C. s. 457 and the deferred compensation plan
458	provided for therein and adopted by this state; and
459	a. All amounts of compensation deferred thereunder;
460	b. All property and rights purchased with such amounts;
461	and
462	c. All income attributable to such amounts, property, or
463	rights.
464	2. Notwithstanding the mandates of 26 U.S.C. s. 457(b)(6),
465	all of the assets specified in subparagraph 1. shall be held in
466	trust for the exclusive benefit of participants and their
467	beneficiaries as mandated by 26 U.S.C. s. 457(g)(1).
468	(11) With respect to any funds held pursuant to a deferred
469	compensation plan, any plan provider which is a bank or savings
470	association and which provides time deposit accounts and
471	certificates of deposit as an investment product to the plan
472	participants may, with the approval of the State Board of
473	Administration for providers in the state plan, or with the
474	approval of the appropriate official or body designated under
475	subsection (5) for a plan of a county, municipality, other
476	political subdivision, or constitutional county officer, be
477	exempt from the provisions of chapter 280 requiring it to be a
478	qualified public depository, provided:
479	(a) The bank or savings association shall, to the extent
480	that the time deposit accounts or certificates of deposit are
481	not insured by the Federal Deposit Insurance Corporation or the
482	Federal Savings and Loan Insurance Corporation, pledge
483	collateral with the Chief Financial OfficerTreasurerfor all
484	state funds held by it under a deferred compensation plan, or
485	with such other appropriate official for all public funds held
486	by it under a deferred compensation plan of a county,
487	municipality, other political subdivision, or constitutional
488	county officer, in an amount which equals at least 150 percent
489	of all uninsured deferred compensation funds then held.
490	(b) Said collateral shall be of the kind permitted by s.
491	280.13 and shall be pledged in the manner provided for by the
492	applicable provisions of chapter 280.
493
494	The Chief Financial OfficerTreasurershall have all the
495	applicable powers provided in ss. 280.04, 280.05, and 280.08
496	relating to the sale or other disposition of the pledged
497	collateral.
498	(12) The Chief Financial OfficerTreasurermay adopt any
499	rule necessary to administer and implement this act with respect
500	to deferred compensation plans for state employees.
501	Section 5. Paragraph (c) of subsection (2), paragraph (d)
502	of subsection (4), and paragraphs (a), (b), and (c) of
503	subsection (6) of section 215.555, Florida Statutes, are amended
504	to read:
505	215.555 Florida Hurricane Catastrophe Fund.--
506	(2) DEFINITIONS.--As used in this section:
507	(c) "Covered policy" means any insurance policy covering
508	residential property in this state, including, but not limited
509	to, any homeowner's, mobile home owner's, farm owner's,
510	condominium association, condominium unit owner's, tenant's, or
511	apartment building policy, or any other policy covering a
512	residential structure or its contents issued by any authorized
513	insurer, including any joint underwriting association or similar
514	entity created pursuant to law. The term "covered policy"
515	includes any collateral protection insurance policy covering
516	personal residences which protects both the borrower's and the
517	lender's financial interests, in an amount at least equal to the
518	coverage for the dwelling in place under the lapsed homeowner's
519	policy, if such policy can be accurately reported as required in
520	subsection(5). Additionally, covered policies include policies
521	covering the peril of wind removed from the Florida Residential
522	Property and Casualty Joint Underwriting Association or from the
523	Citizens Property Insurance Corporation, created pursuant to s.
524	627.351(6), or from the Florida Windstorm Underwriting
525	Association, created pursuant to s. 627.351(2), by an authorized
526	insurer under the terms and conditions of an executed assumption
527	agreement between the authorized insurer and eithersuch
528	association. Each assumption agreement between theeither
529	association and such authorized insurer must be approved by the
530	Florida Department of Insurance or the Office of Insurance
531	Regulationprior to the effective date of the assumption, and
532	the Department of Insurance or the Office of Insurance
533	Regulationmust provide written notification to the board within
534	15 working days after such approval. "Covered policy" does not
535	include any policy that excludes wind coverage or hurricane
536	coverage or any reinsurance agreement and does not include any
537	policy otherwise meeting this definition which is issued by a
538	surplus lines insurer or a reinsurer.
539	(4) REIMBURSEMENT CONTRACTS.--
540	(d)1. For purposes of determining potential liability and
541	to aid in the sound administration of the fund, the contract
542	shall require each insurer to report such insurer's losses from
543	each covered event on an interim basis, as directed by the
544	board. The contract shall require the insurer to report to the
545	board no later than December 31 of each year, and quarterly
546	thereafter, its reimbursable losses from covered events for the
547	year. The contract shall require the board to determine and pay,
548	as soon as practicable after receiving these reports of
549	reimbursable losses, the initial amount of reimbursement due and
550	adjustments to this amount based on later loss information. The
551	adjustments to reimbursement amounts shall require the board to
552	pay, or the insurer to return, amounts reflecting the most
553	recent calculation of losses.
554	2. In determining reimbursements pursuant to this
555	subsection, the contract shall provide that the board shall:
556	a. First reimburse insurers writing covered policies,
557	which insurers are in full compliance with this section and have
558	petitioned the Office of Insurance RegulationDepartment of
559	Insuranceand qualified as limited apportionment companies under
560	s. 627.351(2)(b)3. The amount of such reimbursement shall be
561	the lesser of $10 million or an amount equal to 10 times the
562	insurer's reimbursement premium for the current year. The
563	amount of reimbursement paid under this sub-subparagraph may not
564	exceed the full amount of reimbursement promised in the
565	reimbursement contract. This sub-subparagraph does not apply
566	with respect to any contract year in which the year-end
567	projected cash balance of the fund, exclusive of any bonding
568	capacity of the fund, exceeds $2 billion. Only one member of any
569	insurer group may receive reimbursement under this sub-
570	subparagraph.
571	b. Next pay to each insurer such insurer's projected
572	payout, which is the amount of reimbursement it is owed, up to
573	an amount equal to the insurer's share of the actual premium
574	paid for that contract year, multiplied by the actual claims-
575	paying capacity available for that contract year; provided,
576	entities created pursuant to s. 627.351 shall be further
577	reimbursed in accordance with sub-subparagraph c.
578	c. Thereafter, establish, based on reimbursable losses,
579	the prorated reimbursement level at the highest level for which
580	any remaining fund balance or bond proceeds are sufficient to
581	reimburse entities created pursuant to s. 627.351 for losses
582	exceeding the amounts payable pursuant to sub-subparagraph b.
583	for the current contract year.
584	(6) REVENUE BONDS.--
585	(a) General provisions.--
586	1. Upon the occurrence of a hurricane and a determination
587	that the moneys in the fund are or will be insufficient to pay
588	reimbursement at the levels promised in the reimbursement
589	contracts, the board may take the necessary steps under
590	paragraph (b) or paragraph (c) for the issuance of revenue bonds
591	for the benefit of the fund. The proceeds of such revenue bonds
592	may be used to make reimbursement payments under reimbursement
593	contracts; to refinance or replace previously existing
594	borrowings or financial arrangements; to pay interest on bonds;
595	to fund reserves for the bonds; to pay expenses incident to the
596	issuance or sale of any bond issued under this section,
597	including costs of validating, printing, and delivering the
598	bonds, costs of printing the official statement, costs of
599	publishing notices of sale of the bonds, and related
600	administrative expenses; or for such other purposes related to
601	the financial obligations of the fund as the board may
602	determine. The term of the bonds may not exceed 30 years. The
603	board may pledge or authorize the corporation to pledge all or a
604	portion of all revenues under subsection (5) and under
605	subparagraph 3. to secure such revenue bonds and the board may
606	execute such agreements between the board and the issuer of any
607	revenue bonds and providers of other financing arrangements
608	under paragraph (7)(b) as the board deems necessary to evidence,
609	secure, preserve, and protect such pledge. If reimbursement
610	premiums received under subsection (5) or earnings on such
611	premiums are used to pay debt service on revenue bonds, such
612	premiums and earnings shall be used only after the use of the
613	moneys derived from assessments under subparagraph 3. The
614	funds, credit, property, or taxing power of the state or
615	political subdivisions of the state shall not be pledged for the
616	payment of such bonds. The board may also enter into agreements
617	under paragraph (b) or paragraph (c) for the purpose of issuing
618	revenue bonds in the absence of a hurricane upon a determination
619	that such action would maximize the ability of the fund to meet
620	future obligations.
621	2. The Legislature finds and declares that the issuance of
622	bonds under this subsection is for the public purpose of paying
623	the proceeds of the bonds to insurers, thereby enabling insurers
624	to pay the claims of policyholders to assure that policyholders
625	are able to pay the cost of construction, reconstruction,
626	repair, restoration, and other costs associated with damage to
627	property of policyholders of covered policies after the
628	occurrence of a hurricane. Revenue bonds may not be issued under
629	this subsection until validated under chapter 75. The validation
630	of at least the first obligations incurred pursuant to this
631	subsection shall be appealed to the Supreme Court, to be handled
632	on an expedited basis.
633	3. If the board determines that the amount of revenue
634	produced under subsection (5) is insufficient to fund the
635	obligations, costs, and expenses of the fund and the
636	corporation, including repayment of revenue bonds, the board
637	shall direct the Office of Insurance RegulationDepartment of
638	Insuranceto levy an emergency assessment on each insurer
639	writing property and casualty business in this state. Pursuant
640	to the emergency assessment, each such insurer shall pay to the
641	corporation by July 1 of each year an amount set by the board
642	not exceeding 2 percent of its gross direct written premium for
643	the prior year from all property and casualty business in this
644	state except for workers' compensation, except that, if the
645	Governor has declared a state of emergency under s. 252.36 due
646	to the occurrence of a covered event, the amount of the
647	assessment for the contract year may be increased to an amount
648	not exceeding 4 percent of such premium. Any assessment
649	authority not used for the contract year may be used for a
650	subsequent contract year. If, for a subsequent contract year,
651	the board determines that the amount of revenue produced under
652	subsection (5) is insufficient to fund the obligations, costs,
653	and expenses of the fund and the corporation, including
654	repayment of revenue bonds for that contract year, the board
655	shall direct the Office of Insurance RegulationDepartment of
656	Insuranceto levy an emergency assessment up to an amount not
657	exceeding the amount of unused assessment authority from a
658	previous contract year or years, plus an additional 2 percent if
659	the Governor has declared a state of emergency under s. 252.36
660	due to the occurrence of a covered event. Any assessment
661	authority not used for the contract year may be used for a
662	subsequent contract year. As used in this subsection, the term
663	"property and casualty business" includes all lines of business
664	identified on Form 2, Exhibit of Premiums and Losses, in the
665	annual statement required by s. 624.424 and any rules adopted
666	under such section, except for those lines identified as
667	accident and health insurance. The annual assessments under this
668	subparagraph shall continue as long as the revenue bonds issued
669	with respect to which the assessment was imposed are
670	outstanding, unless adequate provision has been made for the
671	payment of such bonds pursuant to the documents authorizing
672	issuance of the bonds. An insurer shall not at any time be
673	subject to aggregate annual assessments under this subparagraph
674	of more than 2 percent of premium, except that in the case of a
675	declared emergency, an insurer shall not at any time be subject
676	to aggregate annual assessments under this subparagraph of more
677	than 6 percent of premium; provided, no more than 4 percent may
678	be assessed for any one contract year. Any rate filing or
679	portion of a rate filing reflecting a rate change attributable
680	entirely to the assessment levied under this subparagraph shall
681	be deemed approved when made, subject to the authority of the
682	Office of Insurance RegulationDepartment of Insuranceto
683	require actuarial justification as to the adequacy of any rate
684	at any time. If the rate filing reflects only a rate change
685	attributable to the assessment under this paragraph, the filing
686	may consist of a certification so stating. The assessments
687	otherwise payable to the corporation pursuant to this
688	subparagraph shall be paid instead to the fund unless and until
689	the Office of Insurance RegulationDepartment of Insurancehas
690	received from the corporation and the fund a notice, which shall
691	be conclusive and upon which the Office of Insurance Regulation
692	Department of Insurancemay rely without further inquiry, that
693	the corporation has issued bonds and the fund has no agreements
694	in effect with local governments pursuant to paragraph (b). On
695	or after the date of such notice and until such date as the
696	corporation has no bonds outstanding, the fund shall have no
697	right, title, or interest in or to the assessments, except as
698	provided in the fund's agreements with the corporation.
699	(b) Revenue bond issuance through counties or
700	municipalities.--
701	1. If the board elects to enter into agreements with local
702	governments for the issuance of revenue bonds for the benefit of
703	the fund, the board shall enter into such contracts with one or
704	more local governments, including agreements providing for the
705	pledge of revenues, as are necessary to effect such issuance.
706	The governing body of a county or municipality is authorized to
707	issue bonds as defined in s. 125.013 or s. 166.101 from time to
708	time to fund an assistance program, in conjunction with the
709	Florida Hurricane Catastrophe Fund, for the purposes set forth
710	in this section or for the purpose of paying the costs of
711	construction, reconstruction, repair, restoration, and other
712	costs associated with damage to properties of policyholders of
713	covered policies due to the occurrence of a hurricane by
714	assuring that policyholders located in this state are able to
715	recover claims under property insurance policies after a covered
716	event.
717	2. In order to avoid needless and indiscriminate
718	proliferation, duplication, and fragmentation of such assistance
719	programs, any local government may provide for the payment of
720	fund reimbursements, regardless of whether or not the losses for
721	which reimbursement is made occurred within or outside of the
722	territorial jurisdiction of the local government.
723	3. The state hereby covenants with holders of bonds issued
724	under this paragraph that the state will not repeal or abrogate
725	the power of the board to direct the Office of Insurance
726	RegulationDepartment of Insuranceto levy the assessments and
727	to collect the proceeds of the revenues pledged to the payment
728	of such bonds as long as any such bonds remain outstanding
729	unless adequate provision has been made for the payment of such
730	bonds pursuant to the documents authorizing the issuance of such
731	bonds.
732	4. There shall be no liability on the part of, and no
733	cause of action shall arise against any members or employees of
734	the governing body of a local government for any actions taken
735	by them in the performance of their duties under this paragraph.
736	(c) Florida Hurricane Catastrophe Fund Finance
737	Corporation.--
738	1. In addition to the findings and declarations in
739	subsection (1), the Legislature also finds and declares that:
740	a. The public benefits corporation created under this
741	paragraph will provide a mechanism necessary for the cost-
742	effective and efficient issuance of bonds. This mechanism will
743	eliminate unnecessary costs in the bond issuance process,
744	thereby increasing the amounts available to pay reimbursement
745	for losses to property sustained as a result of hurricane
746	damage.
747	b. The purpose of such bonds is to fund reimbursements
748	through the Florida Hurricane Catastrophe Fund to pay for the
749	costs of construction, reconstruction, repair, restoration, and
750	other costs associated with damage to properties of
751	policyholders of covered policies due to the occurrence of a
752	hurricane.
753	c. The efficacy of the financing mechanism will be
754	enhanced by the corporation's ownership of the assessments, by
755	the insulation of the assessments from possible bankruptcy
756	proceedings, and by covenants of the state with the
757	corporation's bondholders.
758	2.a. There is created a public benefits corporation, which
759	is an instrumentality of the state, to be known as the Florida
760	Hurricane Catastrophe Fund Finance Corporation.
761	b. The corporation shall operate under a five-member board
762	of directors consisting of the Governor or a designee, the Chief
763	Financial OfficerComptroller or a designee, the Attorney
764	GeneralTreasureror a designee, the director of the Division of
765	Bond Finance of the State Board of Administration, and the
766	senior employee of the State Board of Administration responsible
767	for operationschief operating officerof the Florida Hurricane
768	Catastrophe Fund.
769	c. The corporation has all of the powers of corporations
770	under chapter 607 and under chapter 617, subject only to the
771	provisions of this subsection.
772	d. The corporation may issue bonds and engage in such
773	other financial transactions as are necessary to provide
774	sufficient funds to achieve the purposes of this section.
775	e. The corporation may invest in any of the investments
776	authorized under s. 215.47.
777	f. There shall be no liability on the part of, and no
778	cause of action shall arise against, any board members or
779	employees of the corporation for any actions taken by them in
780	the performance of their duties under this paragraph.
781	3.a. In actions under chapter 75 to validate any bonds
782	issued by the corporation, the notice required by s. 75.06 shall
783	be published only in Leon County and in two newspapers of
784	general circulation in the state, and the complaint and order of
785	the court shall be served only on the State Attorney of the
786	Second Judicial Circuit.
787	b. The state hereby covenants with holders of bonds of the
788	corporation that the state will not repeal or abrogate the power
789	of the board to direct the Office of Insurance Regulation
790	Department of Insuranceto levy the assessments and to collect
791	the proceeds of the revenues pledged to the payment of such
792	bonds as long as any such bonds remain outstanding unless
793	adequate provision has been made for the payment of such bonds
794	pursuant to the documents authorizing the issuance of such
795	bonds.
796	4. The bonds of the corporation are not a debt of the
797	state or of any political subdivision, and neither the state nor
798	any political subdivision is liable on such bonds. The
799	corporation does not have the power to pledge the credit, the
800	revenues, or the taxing power of the state or of any political
801	subdivision. The credit, revenues, or taxing power of the state
802	or of any political subdivision shall not be deemed to be
803	pledged to the payment of any bonds of the corporation.
804	5.a. The property, revenues, and other assets of the
805	corporation; the transactions and operations of the corporation
806	and the income from such transactions and operations; and all
807	bonds issued under this paragraph and interest on such bonds are
808	exempt from taxation by the state and any political subdivision,
809	including the intangibles tax under chapter 199 and the income
810	tax under chapter 220. This exemption does not apply to any tax
811	imposed by chapter 220 on interest, income, or profits on debt
812	obligations owned by corporations other than the Florida
813	Hurricane Catastrophe Fund Finance Corporation.
814	b. All bonds of the corporation shall be and constitute
815	legal investments without limitation for all public bodies of
816	this state; for all banks, trust companies, savings banks,
817	savings associations, savings and loan associations, and
818	investment companies; for all administrators, executors,
819	trustees, and other fiduciaries; for all insurance companies and
820	associations and other persons carrying on an insurance
821	business; and for all other persons who are now or may hereafter
822	be authorized to invest in bonds or other obligations of the
823	state and shall be and constitute eligible securities to be
824	deposited as collateral for the security of any state, county,
825	municipal, or other public funds. This sub-subparagraph shall be
826	considered as additional and supplemental authority and shall
827	not be limited without specific reference to this sub-
828	subparagraph.
829	6. The corporation and its corporate existence shall
830	continue until terminated by law; however, no such law shall
831	take effect as long as the corporation has bonds outstanding
832	unless adequate provision has been made for the payment of such
833	bonds pursuant to the documents authorizing the issuance of such
834	bonds. Upon termination of the existence of the corporation, all
835	of its rights and properties in excess of its obligations shall
836	pass to and be vested in the state.
837	Section 6. Subsection (5) of section 215.559, Florida
838	Statutes, is amended to read:
839	215.559 Hurricane Loss Mitigation Program.--
840	(5) Except for the program set forth in subsection (3),
841	the Department of Community Affairs shall develop the programs
842	set forth in this section in consultation with an advisory
843	council consisting of a representative designated by the Chief
844	Financial OfficerDepartment of Insurance, a representative
845	designated by the Florida Home Builders Association, a
846	representative designated by the Florida Insurance Council, a
847	representative designated by the Federation of Manufactured Home
848	Owners, a representative designated by the Florida Association
849	of Counties, and a representative designated by the Florida
850	Manufactured Housing Association.
851	Section 7. Subsection (2) of section 391.221, Florida
852	Statutes, is amended to read:
853	391.221 Statewide Children's Medical Services Network
854	Advisory Council.--
855	(2) The council shall be composed of 12 members
856	representing the private health care provider sector, families
857	with children who have special health care needs, the Agency for
858	Health Care Administration, the Office of Insurance Regulation
859	of the Financial Services CommissionDepartment of Insurance,
860	the Florida Chapter of the American Academy of Pediatrics, an
861	academic health center pediatric program, and the health
862	insurance industry. Members shall be appointed for 4-year,
863	staggered terms. In no case shall an employee of the Department
864	of Health serve as a member or as an ex officio member of the
865	advisory council. A vacancy shall be filled for the remainder
866	of the unexpired term in the same manner as the original
867	appointment. A member may not be appointed to more than two
868	consecutive terms. However, a member may be reappointed after
869	being off the council for at least 2 years.
870	Section 8. Paragraph (b) of subsection (2) of section
871	401.245, Florida Statutes, is amended to read:
872	401.245 Emergency Medical Services Advisory Council.--
873	(2)
874	(b) Representation on the Emergency Medical Services
875	Advisory Council shall include: two licensed physicians who are
876	"medical directors" as defined in s. 401.23(15) or whose medical
877	practice is closely related to emergency medical services; two
878	emergency medical service administrators, one of whom is
879	employed by a fire service; two certified paramedics, one of
880	whom is employed by a fire service; two certified emergency
881	medical technicians, one of whom is employed by a fire service;
882	one emergency medical services educator; one emergency nurse;
883	one hospital administrator; one representative of air ambulance
884	services; one representative of a commercial ambulance operator;
885	and two laypersons who are in no way connected with emergency
886	medical services, one of whom is a representative of the
887	elderly. Ex officio members of the advisory council from state
888	agencies shall include, but shall not be limited to,
889	representatives from the Department of Education, the Department
890	of Management Services, the Office of Insurance Regulation of
891	the Financial Services CommissionDepartment of Insurance, the
892	Department of Highway Safety and Motor Vehicles, the Department
893	of Transportation, and the Department of Community Affairs.
894	Section 9. Paragraph (a) of subsection (8) of section
895	408.05, Florida Statutes, is amended to read:
896	408.05 State Center for Health Statistics.--
897	(8) STATE COMPREHENSIVE HEALTH INFORMATION SYSTEM ADVISORY
898	COUNCIL.--
899	(a) There is established in the agency the State
900	Comprehensive Health Information System Advisory Council to
901	assist the center in reviewing the comprehensive health
902	information system and to recommend improvements for such
903	system. The council shall consist of the following members:
904	1. An employee of the Executive Office of the Governor, to
905	be appointed by the Governor.
906	2. An employee of the Department of Financial Services
907	Department of Insurance, to be appointed by the Chief Financial
908	OfficerInsurance Commissioner.
909	3. An employee of the Department of Education, to be
910	appointed by the Commissioner of Education.
911	4. Ten persons, to be appointed by the Secretary of Health
912	Care Administration, representing other state and local
913	agencies, state universities, the Florida Association of
914	Business/Health Coalitions, local health councils, professional
915	health-care-related associations, consumers, and purchasers.
916	Section 10. Section 408.7056, Florida Statutes, is amended
917	to read:
918	408.7056 Statewide Provider and Subscriber Assistance
919	Program.--
920	(1) As used in this section, the term:
921	(a) "Agency" means the Agency for Health Care
922	Administration.
923	(b) "Department" means the Department of Insurance.
924	(b)(c)"Grievance procedure" means an established set of
925	rules that specify a process for appeal of an organizational
926	decision.
927	(c)(d)"Health care provider" or "provider" means a state-
928	licensed or state-authorized facility, a facility principally
929	supported by a local government or by funds from a charitable
930	organization that holds a current exemption from federal income
931	tax under s. 501(c)(3) of the Internal Revenue Code, a licensed
932	practitioner, a county health department established under part
933	I of chapter 154, a prescribed pediatric extended care center
934	defined in s. 400.902, a federally supported primary care
935	program such as a migrant health center or a community health
936	center authorized under s. 329 or s. 330 of the United States
937	Public Health Services Act that delivers health care services to
938	individuals, or a community facility that receives funds from
939	the state under the Community Alcohol, Drug Abuse, and Mental
940	Health Services Act and provides mental health services to
941	individuals.
942	(d)(e)"Managed care entity" means a health maintenance
943	organization or a prepaid health clinic certified under chapter
944	641, a prepaid health plan authorized under s. 409.912, or an
945	exclusive provider organization certified under s. 627.6472.
946	(e) "Office" means the Office of Insurance Regulation of
947	the Financial Services Commission.
948	(f) "Panel" means a statewide provider and subscriber
949	assistance panel selected as provided in subsection (11).
950	(2) The agency shall adopt and implement a program to
951	provide assistance to subscribers and providers, including those
952	whose grievances are not resolved by the managed care entity to
953	the satisfaction of the subscriber or provider. The program
954	shall consist of one or more panels that meet as often as
955	necessary to timely review, consider, and hear grievances and
956	recommend to the agency or the officedepartmentany actions
957	that should be taken concerning individual cases heard by the
958	panel. The panel shall hear every grievance filed by subscribers
959	and providers on behalf of subscribers, unless the grievance:
960	(a) Relates to a managed care entity's refusal to accept a
961	provider into its network of providers;
962	(b) Is part of an internal grievance in a Medicare managed
963	care entity or a reconsideration appeal through the Medicare
964	appeals process which does not involve a quality of care issue;
965	(c) Is related to a health plan not regulated by the state
966	such as an administrative services organization, third-party
967	administrator, or federal employee health benefit program;
968	(d) Is related to appeals by in-plan suppliers and
969	providers, unless related to quality of care provided by the
970	plan;
971	(e) Is part of a Medicaid fair hearing pursued under 42
972	C.F.R. ss. 431.220 et seq.;
973	(f) Is the basis for an action pending in state or federal
974	court;
975	(g) Is related to an appeal by nonparticipating providers,
976	unless related to the quality of care provided to a subscriber
977	by the managed care entity and the provider is involved in the
978	care provided to the subscriber;
979	(h) Was filed before the subscriber or provider completed
980	the entire internal grievance procedure of the managed care
981	entity, the managed care entity has complied with its timeframes
982	for completing the internal grievance procedure, and the
983	circumstances described in subsection (6) do not apply;
984	(i) Has been resolved to the satisfaction of the
985	subscriber or provider who filed the grievance, unless the
986	managed care entity's initial action is egregious or may be
987	indicative of a pattern of inappropriate behavior;
988	(j) Is limited to seeking damages for pain and suffering,
989	lost wages, or other incidental expenses, including accrued
990	interest on unpaid balances, court costs, and transportation
991	costs associated with a grievance procedure;
992	(k) Is limited to issues involving conduct of a health
993	care provider or facility, staff member, or employee of a
994	managed care entity which constitute grounds for disciplinary
995	action by the appropriate professional licensing board and is
996	not indicative of a pattern of inappropriate behavior, and the
997	agency or officedepartmenthas reported these grievances to the
998	appropriate professional licensing board or to the health
999	facility regulation section of the agency for possible
1000	investigation; or
1001	(l) Is withdrawn by the subscriber or provider. Failure
1002	of the subscriber or the provider to attend the hearing shall be
1003	considered a withdrawal of the grievance.
1004	(3) The agency shall review all grievances within 60 days
1005	after receipt and make a determination whether the grievance
1006	shall be heard. Once the agency notifies the panel, the
1007	subscriber or provider, and the managed care entity that a
1008	grievance will be heard by the panel, the panel shall hear the
1009	grievance either in the network area or by teleconference no
1010	later than 120 days after the date the grievance was filed. The
1011	agency shall notify the parties, in writing, by facsimile
1012	transmission, or by phone, of the time and place of the hearing.
1013	The panel may take testimony under oath, request certified
1014	copies of documents, and take similar actions to collect
1015	information and documentation that will assist the panel in
1016	making findings of fact and a recommendation. The panel shall
1017	issue a written recommendation, supported by findings of fact,
1018	to the provider or subscriber, to the managed care entity, and
1019	to the agency or the officedepartmentno later than 15 working
1020	days after hearing the grievance. If at the hearing the panel
1021	requests additional documentation or additional records, the
1022	time for issuing a recommendation is tolled until the
1023	information or documentation requested has been provided to the
1024	panel. The proceedings of the panel are not subject to chapter
1025	120.
1026	(4) If, upon receiving a proper patient authorization
1027	along with a properly filed grievance, the agency requests
1028	medical records from a health care provider or managed care
1029	entity, the health care provider or managed care entity that has
1030	custody of the records has 10 days to provide the records to the
1031	agency. Failure to provide requested medical records may result
1032	in the imposition of a fine of up to $500. Each day that
1033	records are not produced is considered a separate violation.
1034	(5) Grievances that the agency determines pose an
1035	immediate and serious threat to a subscriber's health must be
1036	given priority over other grievances. The panel may meet at the
1037	call of the chair to hear the grievances as quickly as possible
1038	but no later than 45 days after the date the grievance is filed,
1039	unless the panel receives a waiver of the time requirement from
1040	the subscriber. The panel shall issue a written recommendation,
1041	supported by findings of fact, to the officedepartmentor the
1042	agency within 10 days after hearing the expedited grievance.
1043	(6) When the agency determines that the life of a
1044	subscriber is in imminent and emergent jeopardy, the chair of
1045	the panel may convene an emergency hearing, within 24 hours
1046	after notification to the managed care entity and to the
1047	subscriber, to hear the grievance. The grievance must be heard
1048	notwithstanding that the subscriber has not completed the
1049	internal grievance procedure of the managed care entity. The
1050	panel shall, upon hearing the grievance, issue a written
1051	emergency recommendation, supported by findings of fact, to the
1052	managed care entity, to the subscriber, and to the agency or the
1053	officedepartmentfor the purpose of deferring the imminent and
1054	emergent jeopardy to the subscriber's life. Within 24 hours
1055	after receipt of the panel's emergency recommendation, the
1056	agency or officedepartmentmay issue an emergency order to the
1057	managed care entity. An emergency order remains in force until:
1058	(a) The grievance has been resolved by the managed care
1059	entity;
1060	(b) Medical intervention is no longer necessary; or
1061	(c) The panel has conducted a full hearing under
1062	subsection (3) and issued a recommendation to the agency or the
1063	officedepartment, and the agency or officedepartmenthas
1064	issued a final order.
1065	(7) After hearing a grievance, the panel shall make a
1066	recommendation to the agency or the officedepartmentwhich may
1067	include specific actions the managed care entity must take to
1068	comply with state laws or rules regulating managed care
1069	entities.
1070	(8) A managed care entity, subscriber, or provider that is
1071	affected by a panel recommendation may within 10 days after
1072	receipt of the panel's recommendation, or 72 hours after receipt
1073	of a recommendation in an expedited grievance, furnish to the
1074	agency or officedepartmentwritten evidence in opposition to
1075	the recommendation or findings of fact of the panel.
1076	(9) No later than 30 days after the issuance of the
1077	panel's recommendation and, for an expedited grievance, no later
1078	than 10 days after the issuance of the panel's recommendation,
1079	the agency or the officedepartmentmay adopt the panel's
1080	recommendation or findings of fact in a proposed order or an
1081	emergency order, as provided in chapter 120, which it shall
1082	issue to the managed care entity. The agency or office
1083	departmentmay issue a proposed order or an emergency order, as
1084	provided in chapter 120, imposing fines or sanctions, including
1085	those contained in ss. 641.25 and 641.52. The agency or the
1086	officedepartmentmay reject all or part of the panel's
1087	recommendation. All fines collected under this subsection must
1088	be deposited into the Health Care Trust Fund.
1089	(10) In determining any fine or sanction to be imposed,
1090	the agency and the officedepartmentmay consider the following
1091	factors:
1092	(a) The severity of the noncompliance, including the
1093	probability that death or serious harm to the health or safety
1094	of the subscriber will result or has resulted, the severity of
1095	the actual or potential harm, and the extent to which provisions
1096	of chapter 641 were violated.
1097	(b) Actions taken by the managed care entity to resolve or
1098	remedy any quality-of-care grievance.
1099	(c) Any previous incidents of noncompliance by the managed
1100	care entity.
1101	(d) Any other relevant factors the agency or office
1102	departmentconsiders appropriate in a particular grievance.
1103	(11) The panel shall consist of members employed by the
1104	agency,and members employed by the officedepartment, and
1105	members employed by the Department of Financial Services,chosen
1106	by their respective agencies; a consumer appointed by the
1107	Governor; a physician appointed by the Governor, as a standing
1108	member; and physicians who have expertise relevant to the case
1109	to be heard, on a rotating basis. The agency may contract with a
1110	medical director and a primary care physician who shall provide
1111	additional technical expertise to the panel. The medical
1112	director shall be selected from a health maintenance
1113	organization with a current certificate of authority to operate
1114	in Florida.
1115	(12) Every managed care entity shall submit a quarterly
1116	report to the agency and the officedepartmentlisting the
1117	number and the nature of all subscribers' and providers'
1118	grievances which have not been resolved to the satisfaction of
1119	the subscriber or provider after the subscriber or provider
1120	follows the entire internal grievance procedure of the managed
1121	care entity. The agency shall notify all subscribers and
1122	providers included in the quarterly reports of their right to
1123	file an unresolved grievance with the panel.
1124	(13) Any information which would identify a subscriber or
1125	the spouse, relative, or guardian of a subscriber and which is
1126	contained in a report obtained by the officeDepartment of
1127	Insurancepursuant to this section is confidential and exempt
1128	from the provisions of s. 119.07(1) and s. 24(a), Art. I of the
1129	State Constitution.
1130	(14) A proposed order issued by the agency or office
1131	departmentwhich only requires the managed care entity to take a
1132	specific action under subsection (7) is subject to a summary
1133	hearing in accordance with s. 120.574, unless all of the parties
1134	agree otherwise. If the managed care entity does not prevail at
1135	the hearing, the managed care entity must pay reasonable costs
1136	and attorney's fees of the agency or the officedepartment
1137	incurred in that proceeding.
1138	(15)(a) Any information which would identify a subscriber
1139	or the spouse, relative, or guardian of a subscriber which is
1140	contained in a document, report, or record prepared or reviewed
1141	by the panel or obtained by the agency pursuant to this section
1142	is confidential and exempt from the provisions of s. 119.07(1)
1143	and s. 24(a), Art. I of the State Constitution.
1144	(b) Meetings of the panel shall be open to the public
1145	unless the provider or subscriber whose grievance will be heard
1146	requests a closed meeting or the agency or the officeDepartment
1147	of Insurancedetermines that information of a sensitive personal
1148	nature which discloses the subscriber's medical treatment or
1149	history; or information which constitutes a trade secret as
1150	defined by s. 812.081; or information relating to internal risk
1151	management programs as defined in s. 641.55(5)(c), (6), and (8)
1152	may be revealed at the panel meeting, in which case that portion
1153	of the meeting during which such sensitive personal information,
1154	trade secret information, or internal risk management program
1155	information is discussed shall be exempt from the provisions of
1156	s. 286.011 and s. 24(b), Art. I of the State Constitution. All
1157	closed meetings shall be recorded by a certified court reporter.
1158
1159	This subsection is subject to the Open Government Sunset Review
1160	Act of 1995 in accordance with s. 119.15, and shall stand
1161	repealed on October 2, 2003, unless reviewed and saved from
1162	repeal through reenactment by the Legislature.
1163	Section 11. Subsections (11) and (12) of section 440.13,
1164	Florida Statutes, are amended to read:
1165	440.13 Medical services and supplies; penalty for
1166	violations; limitations.--
1167	(11) AUDITS BY AGENCY FOR HEALTH CARE ADMINISTRATION AND
1168	THE DEPARTMENT OF INSURANCE; JURISDICTION.--
1169	(a) The Agency for Health Care Administration may
1170	investigate health care providers to determine whether providers
1171	are complying with this chapter and with rules adopted by the
1172	agency, whether the providers are engaging in overutilization,
1173	and whether providers are engaging in improper billing
1174	practices. If the agency finds that a health care provider has
1175	improperly billed, overutilized, or failed to comply with agency
1176	rules or the requirements of this chapter it must notify the
1177	provider of its findings and may determine that the health care
1178	provider may not receive payment from the carrier or may impose
1179	penalties as set forth in subsection (8) or other sections of
1180	this chapter. If the health care provider has received payment
1181	from a carrier for services that were improperly billed or for
1182	overutilization, it must return those payments to the carrier.
1183	The agency may assess a penalty not to exceed $500 for each
1184	overpayment that is not refunded within 30 days after
1185	notification of overpayment by the agency or carrier.
1186	(b) The department shall monitor carriers as provided in
1187	this chapter and the Office of Insurance Regulation shalland
1188	audit insurers and group self-insurance fundscarriersas
1189	provided in s. 624.3161, to determine if medical bills are paid
1190	in accordance with this section and department rules of the
1191	department and Financial Services Commission, respectively. Any
1192	employer, if self-insured, or carrier found by the department or
1193	Office of Insurance Regulationdivisionnot to be within 90
1194	percent compliance as to the payment of medical bills after July
1195	1, 1994, must be assessed a fine not to exceed 1 percent of the
1196	prior year's assessment levied against such entity under s.
1197	440.51 for every quarter in which the entity fails to attain 90-
1198	percent compliance. The department shall fine or otherwise
1199	discipline an employer or carrier, pursuant to this chapter, the
1200	insurance code, or rules adopted by the department, and the
1201	Office of Insurance Regulation shall fine or otherwise
1202	discipline an insurer or group self-insurance fund pursuant to
1203	the insurance code or rules adopted by the Financial Services
1204	Commission,for each late payment of compensation that is below
1205	the minimum 90-percent performance standard. Any carrier that is
1206	found to be not in compliance in subsequent consecutive quarters
1207	must implement a medical-bill review program approved by the
1208	department or officedivision, and an insurer or group self-
1209	insurance fundthe carrieris subject to disciplinary action by
1210	the Office of Insurance RegulationDepartment of Insurance.
1211	(c) The agency has exclusive jurisdiction to decide any
1212	matters concerning reimbursement, to resolve any overutilization
1213	dispute under subsection (7), and to decide any question
1214	concerning overutilization under subsection (8), which question
1215	or dispute arises after January 1, 1994.
1216	(d) The following agency actions do not constitute agency
1217	action subject to review under ss. 120.569 and 120.57 and do not
1218	constitute actions subject to s. 120.56: referral by the entity
1219	responsible for utilization review; a decision by the agency to
1220	refer a matter to a peer review committee; establishment by a
1221	health care provider or entity of procedures by which a peer
1222	review committee reviews the rendering of health care services;
1223	and the review proceedings, report, and recommendation of the
1224	peer review committee.
1225	(12) CREATION OF THREE-MEMBER PANEL; GUIDES OF MAXIMUM
1226	REIMBURSEMENT ALLOWANCES.--
1227	(a) A three-member panel is created, consisting of the
1228	Chief Financial OfficerInsurance Commissioner, or the Chief
1229	Financial Officer'sInsurance Commissioner'sdesignee, and two
1230	members to be appointed by the Governor, subject to confirmation
1231	by the Senate, one member who, on account of present or previous
1232	vocation, employment, or affiliation, shall be classified as a
1233	representative of employers, the other member who, on account of
1234	previous vocation, employment, or affiliation, shall be
1235	classified as a representative of employees. The panel shall
1236	determine statewide schedules of maximum reimbursement
1237	allowances for medically necessary treatment, care, and
1238	attendance provided by physicians, hospitals, ambulatory
1239	surgical centers, work-hardening programs, pain programs, and
1240	durable medical equipment. The maximum reimbursement allowances
1241	for inpatient hospital care shall be based on a schedule of per
1242	diem rates, to be approved by the three-member panel no later
1243	than March 1, 1994, to be used in conjunction with a
1244	precertification manual as determined by the agency. All
1245	compensable charges for hospital outpatient care shall be
1246	reimbursed at 75 percent of usual and customary charges. Until
1247	the three-member panel approves a schedule of per diem rates for
1248	inpatient hospital care and it becomes effective, all
1249	compensable charges for hospital inpatient care must be
1250	reimbursed at 75 percent of their usual and customary charges.
1251	Annually, the three-member panel shall adopt schedules of
1252	maximum reimbursement allowances for physicians, hospital
1253	inpatient care, hospital outpatient care, ambulatory surgical
1254	centers, work-hardening programs, and pain programs. However,
1255	the maximum percentage of increase in the individual
1256	reimbursement allowance may not exceed the percentage of
1257	increase in the Consumer Price Index for the previous year. An
1258	individual physician, hospital, ambulatory surgical center, pain
1259	program, or work-hardening program shall be reimbursed either
1260	the usual and customary charge for treatment, care, and
1261	attendance, the agreed-upon contract price, or the maximum
1262	reimbursement allowance in the appropriate schedule, whichever
1263	is less.
1264	(b) As to reimbursement for a prescription medication, the
1265	reimbursement amount for a prescription shall be the average
1266	wholesale price times 1.2 plus $4.18 for the dispensing fee,
1267	except where the carrier has contracted for a lower amount. Fees
1268	for pharmaceuticals and pharmaceutical services shall be
1269	reimbursable at the applicable fee schedule amount. Where the
1270	employer or carrier has contracted for such services and the
1271	employee elects to obtain them through a provider not a party to
1272	the contract, the carrier shall reimburse at the schedule,
1273	negotiated, or contract price, whichever is lower.
1274	(c) Reimbursement for all fees and other charges for such
1275	treatment, care, and attendance, including treatment, care, and
1276	attendance provided by any hospital or other health care
1277	provider, ambulatory surgical center, work-hardening program, or
1278	pain program, must not exceed the amounts provided by the
1279	uniform schedule of maximum reimbursement allowances as
1280	determined by the panel or as otherwise provided in this
1281	section. This subsection also applies to independent medical
1282	examinations performed by health care providers under this
1283	chapter. Until the three-member panel approves a uniform
1284	schedule of maximum reimbursement allowances and it becomes
1285	effective, all compensable charges for treatment, care, and
1286	attendance provided by physicians, ambulatory surgical centers,
1287	work-hardening programs, or pain programs shall be reimbursed at
1288	the lowest maximum reimbursement allowance across all 1992
1289	schedules of maximum reimbursement allowances for the services
1290	provided regardless of the place of service. In determining the
1291	uniform schedule, the panel shall first approve the data which
1292	it finds representative of prevailing charges in the state for
1293	similar treatment, care, and attendance of injured persons. Each
1294	health care provider, health care facility, ambulatory surgical
1295	center, work-hardening program, or pain program receiving
1296	workers' compensation payments shall maintain records verifying
1297	their usual charges. In establishing the uniform schedule of
1298	maximum reimbursement allowances, the panel must consider:
1299	1. The levels of reimbursement for similar treatment,
1300	care, and attendance made by other health care programs or
1301	third-party providers;
1302	2. The impact upon cost to employers for providing a level
1303	of reimbursement for treatment, care, and attendance which will
1304	ensure the availability of treatment, care, and attendance
1305	required by injured workers;
1306	3. The financial impact of the reimbursement allowances
1307	upon health care providers and health care facilities, including
1308	trauma centers as defined in s. 395.4001, and its effect upon
1309	their ability to make available to injured workers such
1310	medically necessary remedial treatment, care, and attendance.
1311	The uniform schedule of maximum reimbursement allowances must be
1312	reasonable, must promote health care cost containment and
1313	efficiency with respect to the workers' compensation health care
1314	delivery system, and must be sufficient to ensure availability
1315	of such medically necessary remedial treatment, care, and
1316	attendance to injured workers; and
1317	4. The most recent average maximum allowable rate of
1318	increase for hospitals determined by the Health Care Board under
1319	chapter 408.
1320	(d) In addition to establishing the uniform schedule of
1321	maximum reimbursement allowances, the panel shall:
1322	1. Take testimony, receive records, and collect data to
1323	evaluate the adequacy of the workers' compensation fee schedule,
1324	nationally recognized fee schedules and alternative methods of
1325	reimbursement to certified health care providers and health care
1326	facilities for inpatient and outpatient treatment and care.
1327	2. Survey certified health care providers and health care
1328	facilities to determine the availability and accessibility of
1329	workers' compensation health care delivery systems for injured
1330	workers.
1331	3. Survey carriers to determine the estimated impact on
1332	carrier costs and workers' compensation premium rates by
1333	implementing changes to the carrier reimbursement schedule or
1334	implementing alternative reimbursement methods.
1335	4. Submit recommendations on or before January 1, 2003,
1336	and biennially thereafter, to the President of the Senate and
1337	the Speaker of the House of Representatives on methods to
1338	improve the workers' compensation health care delivery system.
1339
1340	The agency and the department, as requested,divisionshall
1341	provide data to the panel, including but not limited to,
1342	utilization trends in the workers' compensation health care
1343	delivery system. The agencydivisionshall provide the panel
1344	with an annual report regarding the resolution of medical
1345	reimbursement disputes and any actions pursuant to s. 440.13(8).
1346	The departmentdivisionshall provide administrative support and
1347	service to the panel to the extent requested by the panel.
1348	Section 12. Paragraph (c) of subsection (8) and
1349	subsections (10), (15), (16), and (17) of section 440.20,
1350	Florida Statutes, are amended to read:
1351	440.20 Time for payment of compensation; penalties for
1352	late payment.--
1353	(8) In addition to any other penalties provided by this
1354	chapter for late payment, if any installment of compensation is
1355	not paid when it becomes due, the employer, carrier, or
1356	servicing agent shall pay interest thereon at the rate of 12
1357	percent per year from the date the installment becomes due until
1358	it is paid, whether such installment is payable without an order
1359	or under the terms of an order. The interest payment shall be
1360	the greater of the amount of interest due or $5.
1361	(c) In order to ensure carrier compliance under this
1362	chapter and provisions of the Florida Insurance Code, the office
1363	departmentshall monitor the performance of carriers by
1364	conducting market conduct examinations, as provided in s.
1365	624.3161, and conducting investigations, as provided in s.
1366	624.317. The department shall establish by rule minimum
1367	performance standards for carriers to ensure that a minimum of
1368	90 percent of all compensation benefits are timely paid. The
1369	department shall fine a carrier as provided in s. 440.13(11)(b)
1370	up to $50 for each late payment of compensation that is below
1371	the minimum 90 percent performance standard. This paragraph does
1372	not affect the imposition of any penalties or interest due to
1373	the claimant. If a carrier contracts with a servicing agent to
1374	fulfill its administrative responsibilities under this chapter,
1375	the payment practices of the servicing agent are deemed the
1376	payment practices of the carrier for the purpose of assessing
1377	penalties against the carrier.
1378	(10) Whenever the department deems it advisable, it may
1379	require any employer to make a deposit with the Chief Financial
1380	OfficerTreasurerto secure the prompt and convenient payments
1381	of such compensation; and payments therefrom upon any awards
1382	shall be made upon order of the department or judge of
1383	compensation claims.
1384	(15)(a) The officedepartmentshall examine on an ongoing
1385	basis claims files in accordance with s. 624.3161 and may impose
1386	fines pursuant to s. 624.310(5) and this chapter in order to
1387	identify questionable claims-handling techniques, questionable
1388	patterns or practices of claims, or a pattern of repeated
1389	unreasonably controverted claims by carriers, as defined in s.
1390	440.02, providing services to employees pursuant to this
1391	chapter. If the officedepartmentfinds such questionable
1392	techniques, patterns, or repeated unreasonably controverted
1393	claims as constitute a general business practice of a carrier,
1394	as defined in s. 440.02, the officedepartmentshall take
1395	appropriate action so as to bring such general business
1396	practices to a halt pursuant to s. 440.38(3) or may impose
1397	penalties pursuant to s. 624.4211. The department and officemay
1398	initiate investigations of questionable techniques, patterns,
1399	practices, or repeated unreasonably controverted claims. The
1400	Financial Services Commissiondepartmentmay by rule establish
1401	forms and procedures for corrective action plans and for
1402	auditing carriers.
1403	(b) As to any examination, investigation, or hearing being
1404	conducted under this chapter, the department and office
1405	Insurance Commissioner or his or her designee:
1406	1. May administer oaths, examine and cross-examine
1407	witnesses, receive oral and documentary evidence; and
1408	2. Shall have the power to subpoena witnesses, compel
1409	their attendance and testimony, and require by subpoena the
1410	production of books, papers, records, files, correspondence,
1411	documents, or other evidence which is relevant to the inquiry.
1412	(c) If any person refuses to comply with any such subpoena
1413	or to testify as to any matter concerning which she or he may be
1414	lawfully interrogated, the Circuit Court of Leon County or of
1415	the county wherein such examination, investigation, or hearing
1416	is being conducted, or of the county wherein such person
1417	resides, may, on the application of the department or the
1418	office, issue an order requiring such person to comply with the
1419	subpoena and to testify.
1420	(d) Subpoenas shall be served, and proof of such service
1421	made, in the same manner as if issued by a circuit court.
1422	Witness fees, costs, and reasonable travel expenses, if claimed,
1423	shall be allowed the same as for testimony in a circuit court.
1424	(e) The department shall publish annually a report which
1425	indicates the promptness of first payment of compensation
1426	records of each carrier or self-insurer so as to focus attention
1427	on those carriers or self-insurers with poor payment records for
1428	the preceding year. The department and the officeshall take
1429	appropriate steps so as to cause such poor carrier payment
1430	practices to halt pursuant to s. 440.38(3). In addition, the
1431	department shall take appropriate action so as to halt such poor
1432	payment practices of self-insurers. "Poor payment practice"
1433	means a practice of late payment sufficient to constitute a
1434	general business practice.
1435	(f) The Financial Services Commission, in consultation
1436	with the department, shall adoptpromulgaterules providing
1437	guidelines to carriers, as defined in s. 440.02, self-insurers,
1438	and employers to indicate behavior that may be construed as
1439	questionable claims-handling techniques, questionable patterns
1440	of claims, repeated unreasonably controverted claims, or poor
1441	payment practices.
1442	(16) No penalty assessed under this section may be
1443	recouped by any carrier or self-insurer in the rate base, the
1444	premium, or any rate filing. The officeDepartment of Insurance
1445	shall enforce this subsection.
1446	(17) The Financial Services Commissiondepartmentmay by
1447	rule establish audit procedures and set standards for the
1448	Automated Carrier Performance System.
1449	Section 13. Subsections (2) and (3) of section 440.24,
1450	Florida Statutes, is amended to read:
1451	440.24 Enforcement of compensation orders; penalties.--
1452	(2) In any case where the employer is insured and the
1453	carrier fails to comply with any compensation order of a judge
1454	of compensation claims or court within 10 days after such order
1455	becomes final, the department shall notify the office of such
1456	failure and the office shallthereuponsuspend the license of
1457	such carrier to do an insurance business in this state, until
1458	such carrier has complied with such order.
1459	(3) In any case where the employer is a self-insurer and
1460	fails to comply with any compensation order of a judge of
1461	compensation claims or court within 10 days after such order
1462	becomes final, the department of Insurancemay suspend or revoke
1463	any authorization previously given to the employer to be a self-
1464	insurer, and the Florida Self-Insurers Guaranty Association,
1465	Incorporated, may call or sue upon the surety bond or exercise
1466	its rights under the letter of credit deposited by the self-
1467	insurer with the association as a qualifying security deposit as
1468	may be necessary to satisfy the order.
1469	Section 14. Subsections (1), (2), (3), and (4) of section
1470	440.38, Florida Statutes, are amended to read:
1471	440.38 Security for compensation; insurance carriers and
1472	self-insurers.--
1473	(1) Every employer shall secure the payment of
1474	compensation under this chapter:
1475	(a) By insuring and keeping insured the payment of such
1476	compensation with any stock company or mutual company or
1477	association or exchange, authorized to do business in the state;
1478	(b) By furnishing satisfactory proof to the Florida Self-
1479	Insurers Guaranty Association, Incorporated, created in s.
1480	440.385, that it has the financial strength necessary to ensure
1481	timely payment of all current and future claims individually and
1482	on behalf of its subsidiary and affiliated companies with
1483	employees in this state and receiving an authorization from the
1484	department of Insuranceto pay such compensation directly. The
1485	association shall review the financial strength of applicants
1486	for membership, current members, and former members and make
1487	recommendations to the department of Insuranceregarding their
1488	qualifications to self-insure in accordance with this section
1489	and ss. 440.385 and 440.386. The department shall act in
1490	accordance with the recommendations unless it finds by clear and
1491	convincing evidence that the recommendations are erroneous.
1492	1. As a condition of authorization under paragraph (a),
1493	the association may recommend that the department of Insurance
1494	require an employer to deposit with the association a qualifying
1495	security deposit. The association shall recommend the type and
1496	amount of the qualifying security deposit and shall prescribe
1497	conditions for the qualifying security deposit, which shall
1498	include authorization for the association to call the qualifying
1499	security deposit in the case of default to pay compensation
1500	awards and related expenses of the association. As a condition
1501	to authorization to self-insure, the employer shall provide
1502	proof that the employer has provided for competent personnel
1503	with whom to deliver benefits and to provide a safe working
1504	environment. The employer shall also provide evidence that it
1505	carries reinsurance at levels that will ensure the financial
1506	strength and actuarial soundness of such employer in accordance
1507	with rules adopted by the department of Insurance. The
1508	department of Insurancemay by rule require that, in the event
1509	of an individual self-insurer's insolvency, such qualifying
1510	security deposits and reinsurance policies are payable to the
1511	association. Any employer securing compensation in accordance
1512	with the provisions of this paragraph shall be known as a self-
1513	insurer and shall be classed as a carrier of her or his own
1514	insurance. The employer shall, if requested, provide the
1515	association an actuarial report signed by a member of the
1516	American Academy of Actuaries providing an opinion of the
1517	appropriate present value of the reserves, using a 4-percent
1518	discount rate, for current and future compensation claims. If
1519	any member or former member of the association refuses to timely
1520	provide such a report, the association may obtain an order from
1521	a circuit court requiring the member to produce such a report
1522	and ordering any other relief that the court determines is
1523	appropriate. The association may recover all reasonable costs
1524	and attorney's fees in such proceedings.
1525	2. If the employer fails to maintain the foregoing
1526	requirements, the association shall recommend to the department
1527	of Insurancethat the department revoke the employer's authority
1528	to self-insure, unless the employer provides to the association
1529	the certified opinion of an independent actuary who is a member
1530	of the American Academy of Actuaries as to the actuarial present
1531	value of the employer's determined and estimated future
1532	compensation payments based on cash reserves, using a 4-percent
1533	discount rate, and a qualifying security deposit equal to 1.5
1534	times the value so certified. The employer shall thereafter
1535	annually provide such a certified opinion until such time as the
1536	employer meets the requirements of subparagraph 1. The
1537	qualifying security deposit shall be adjusted at the time of
1538	each such annual report. Upon the failure of the employer to
1539	timely provide such opinion or to timely provide a security
1540	deposit in an amount equal to 1.5 times the value certified in
1541	the latest opinion, the association shall provide that
1542	information to the department of Insurancealong with a
1543	recommendation, and the department of Insuranceshall then
1544	revoke such employer's authorization to self-insure. Failure to
1545	comply with this subparagraph constitutes an immediate serious
1546	danger to the public health, safety, or welfare sufficient to
1547	justify the summary suspension of the employer's authorization
1548	to self-insure pursuant to s. 120.68.
1549	3. Upon the suspension or revocation of the employer's
1550	authorization to self-insure, the employer shall provide to the
1551	association the certified opinion of an independent actuary who
1552	is a member of the American Academy of Actuaries of the
1553	actuarial present value of the determined and estimated future
1554	compensation payments of the employer for claims incurred while
1555	the member exercised the privilege of self-insurance, using a
1556	discount rate of 4 percent. The employer shall provide such an
1557	opinion at 6-month intervals thereafter until such time as the
1558	latest opinion shows no remaining value of claims. With each
1559	such opinion, the employer shall deposit with the association a
1560	qualifying security deposit in an amount equal to the value
1561	certified by the actuary. The association has a cause of action
1562	against an employer, and against any successor of the employer,
1563	who fails to timely provide such opinion or who fails to timely
1564	maintain the required security deposit with the association. The
1565	association shall recover a judgment in the amount of the
1566	actuarial present value of the determined and estimated future
1567	compensation payments of the employer for claims incurred while
1568	the employer exercised the privilege of self-insurance, together
1569	with attorney's fees. For purposes of this section, the
1570	successor of an employer means any person, business entity, or
1571	group of persons or business entities, which holds or acquires
1572	legal or beneficial title to the majority of the assets or the
1573	majority of the shares of the employer.
1574	4. A qualifying security deposit shall consist, at the
1575	option of the employer, of:
1576	a. Surety bonds, in a form and containing such terms as
1577	prescribed by the association, issued by a corporation surety
1578	authorized to transact surety business by the department of
1579	Insurance, and whose policyholders' and financial ratings, as
1580	reported in A.M. Best's Insurance Reports, Property-Liability,
1581	are not less than "A" and "V", respectively.
1582	b. Irrevocable letters of credit in favor of the
1583	association issued by financial institutions located within this
1584	state, the deposits of which are insured through the Federal
1585	Deposit Insurance Corporation.
1586	5. The qualifying security deposit shall be held by the
1587	association exclusively for the benefit of workers' compensation
1588	claimants. The security shall not be subject to assignment,
1589	execution, attachment, or any legal process whatsoever, except
1590	as necessary to guarantee the payment of compensation under this
1591	chapter. No surety bond may be terminated, and no letter of
1592	credit may be allowed to expire, without 90 days' prior written
1593	notice to the association and deposit by the self-insuring
1594	employer of some other qualifying security deposit of equal
1595	value within 10 business days after such notice. Failure to
1596	provide such written notice or failure to timely provide
1597	qualifying replacement security after such notice shall
1598	constitute grounds for the association to call or sue upon the
1599	surety bond or to exercise its rights under a letter of credit.
1600	Current self-insured employers must comply with this section on
1601	or before December 31, 2001, or upon the maturity of existing
1602	security deposits, whichever occurs later. The department of
1603	Insurancemay specify by rule the amount of the qualifying
1604	security deposit required prior to authorizing an employer to
1605	self-insure and the amount of net worth required for an employer
1606	to qualify for authorization to self-insure;
1607	(c) By entering into a contract with a public utility
1608	under an approved utility-provided self-insurance program as set
1609	forth in s. 624.46225 in effect as of July 1, 1983. The
1610	departmentdivisionshall adopt rules to implement this
1611	paragraph;
1612	(d) By entering into an interlocal agreement with other
1613	local governmental entities to create a local government pool
1614	pursuant to s. 624.4622;
1615	(e) In accordance with s. 440.135, an employer, other than
1616	a local government unit, may elect coverage under the Workers'
1617	Compensation Law and retain the benefit of the exclusiveness of
1618	liability provided in s. 440.11 by obtaining a 24-hour health
1619	insurance policy from an authorized property and casualty
1620	insurance carrier or an authorized life and health insurance
1621	carrier, or by participating in a fully or partially self-
1622	insured 24-hour health plan that is established or maintained by
1623	or for two or more employers, so long as the law of this state
1624	is not preempted by the Employee Retirement Income Security Act
1625	of 1974, Pub. L. No. 93-406, or any amendment to that law, which
1626	policy or plan must provide, for at least occupational injuries
1627	and illnesses, medical benefits that are comparable to those
1628	required by this chapter. A local government unit, as a single
1629	employer, in accordance with s. 440.135, may participate in the
1630	24-hour health insurance coverage plan referenced in this
1631	paragraph. Disputes and remedies arising under policies issued
1632	under this section are governed by the terms and conditions of
1633	the policies and under the applicable provisions of the Florida
1634	Insurance Code and rules adopted under the insurance code and
1635	other applicable laws of this state. The 24-hour health
1636	insurance policy may provide for health care by a health
1637	maintenance organization or a preferred provider organization.
1638	The premium for such 24-hour health insurance policy shall be
1639	paid entirely by the employer. The 24-hour health insurance
1640	policy may use deductibles and coinsurance provisions that
1641	require the employee to pay a portion of the actual medical care
1642	received by the employee. If an employer obtains a 24-hour
1643	health insurance policy or self-insured plan to secure payment
1644	of compensation as to medical benefits, the employer must also
1645	obtain an insurance policy or policies that provide indemnity
1646	benefits as follows:
1647	1. If indemnity benefits are provided only for
1648	occupational-related disability, such benefits must be
1649	comparable to those required by this chapter.
1650	2. If indemnity benefits are provided for both
1651	occupational-related and nonoccupational-related disability,
1652	such benefits must be comparable to those required by this
1653	chapter, except that they must be based on 60 percent of the
1654	average weekly wages.
1655	3. The employer shall provide for each of its employees
1656	life insurance with a death benefit of $100,000.
1657	4. Policies providing coverage under this subsection must
1658	use prescribed and acceptable underwriting standards, forms, and
1659	policies approved by the Department of Insurance. If any
1660	insurance policy that provides coverage under this section is
1661	canceled, terminated, or nonrenewed for any reason, the
1662	cancellation, termination, or nonrenewal is ineffective until
1663	the self-insured employer or insurance carrier or carriers
1664	notify the division and the Department of Insurance of the
1665	cancellation, termination, or nonrenewal, and until the division
1666	has actually received the notification. The division must be
1667	notified of replacement coverage under a workers' compensation
1668	and employer's liability insurance policy or plan by the
1669	employer prior to the effective date of the cancellation,
1670	termination, or nonrenewal; or
1671	(e)(f)By entering into a contract with an individual
1672	self-insurer under an approved individual self-insurer-provided
1673	self-insurance program as set forth in s. 624.46225. The
1674	departmentdivisionmay adopt rules to administer this
1675	subsection.
1676	(2)(a) The department of Insuranceshall adopt rules by
1677	which businesses may become qualified to provide underwriting
1678	claims-adjusting, loss control, and safety engineering services
1679	to self-insurers.
1680	(b) The department of Insuranceshall adopt rules
1681	requiring self-insurers to file any reports necessary to fulfill
1682	the requirements of this chapter. Any self-insurer who fails to
1683	file any report as prescribed by the rules adopted by the
1684	department of Insuranceshall be subject to a civil penalty.
1685	(3)(a) The license of any stock company or mutual company
1686	or association or exchange authorized to do insurance business
1687	in the state shall for good cause, upon recommendation of the
1688	departmentdivision, be suspended or revoked by the office
1689	Department of Insurance. No suspension or revocation shall
1690	affect the liability of any carrier already incurred.
1691	(b) The department of Insuranceshall suspend or revoke
1692	any authorization to a self-insurer for failure to comply with
1693	this section or for good cause, as defined by rule of the
1694	department of Insurance. No suspension or revocation shall
1695	affect the liability of any self-insurer already incurred.
1696	(c) Violation of s. 440.381 by a self-insurance fund shall
1697	result in the imposition of a fine not to exceed $1,000 per
1698	audit if the self-insurance fund fails to act on said audits by
1699	correcting errors in employee classification or accepted
1700	applications for coverage where it knew employee classifications
1701	were incorrect. Such fines shall be levied by the department
1702	divisionand deposited into the Workers' Compensation
1703	Administration Trust Fund.
1704	(4)(a) A carrier of insurance, including the parties to
1705	any mutual, reciprocal, or other association, may not write any
1706	compensation insurance under this chapter without a certificate
1707	of authoritypermit from the officeDepartment of Insurance.
1708	Such certificate of authoritypermitshall be given, upon
1709	application therefor, to any insurance or mutual or reciprocal
1710	insurance association upon the office'sdepartment'sbeing
1711	satisfied of the solvency of such corporation or association and
1712	its ability to perform all its undertakings. The office
1713	Department of Insurance may revoke any certificate of authority
1714	permitso issued for violation of any provision of this chapter.
1715	(b) A carrier of insurance, including the parties to any
1716	mutual, reciprocal, or other association, may not write any
1717	compensation insurance under this chapter unless such carrier
1718	has a claims adjuster, either in-house or under contract,
1719	situated within this state. Self-insurers whose compensation
1720	payments are administered through a third party and carriers of
1721	insurance shall maintain a claims adjuster within this state
1722	during any period for which there are any open claims against
1723	such self-insurer or carrier arising under the compensation
1724	insurance written by the self-insurer or carrier. Individual
1725	self-insurers whose compensation payments are administered by
1726	employees of the self-insurer shall not be required to have
1727	their claims adjuster situated within this state. Individual
1728	self-insurers shall not be required to have their claims
1729	adjusters situated within this state.
1730	Section 15. Subsections (1) and (3) of section 440.381,
1731	Florida Statutes, are amended to read:
1732	440.381 Application for coverage; reporting payroll;
1733	payroll audit procedures; penalties.--
1734	(1) Applications by an employer to a carrier for coverage
1735	required by s. 440.38 must be made on a form prescribed by the
1736	Financial Services CommissionDepartment of Insurance. The
1737	Financial Services CommissionDepartment of Insuranceshall
1738	adopt rules for applications for coverage required by s. 440.38.
1739	The rules must provide that an application include information
1740	on the employer, the type of business, past and prospective
1741	payroll, estimated revenue, previous workers' compensation
1742	experience, employee classification, employee names, and any
1743	other information necessary to enable a carrier to accurately
1744	underwrite the applicant. The rules must include a provision
1745	that a carrier or self-insurance fund may require that an
1746	employer update an application monthly to reflect any change in
1747	the required application information.
1748	(3) The Financial Services Commission, in consultation
1749	with the department,shall establish by rule minimum
1750	requirements for audits of payroll and classifications in order
1751	to ensure that the appropriate premium is charged for workers'
1752	compensation coverage. The rules shall ensure that audits
1753	performed by both carriers and employers are adequate to provide
1754	that all sources of payments to employees, subcontractors, and
1755	independent contractors have been reviewed and that the accuracy
1756	of classification of employees has been verified. The rules
1757	shall provide that employers in all classes other than the
1758	construction class be audited not less frequently than
1759	biennially and may provide for more frequent audits of employers
1760	in specified classifications based on factors such as amount of
1761	premium, type of business, loss ratios, or other relevant
1762	factors. In no event shall employers in the construction class,
1763	generating more than the amount of premium required to be
1764	experience rated, be audited less than annually. The annual
1765	audits required for construction classes shall consist of
1766	physical onsite audits. Payroll verification audit rules must
1767	include, but need not be limited to, the use of state and
1768	federal reports of employee income, payroll and other accounting
1769	records, certificates of insurance maintained by subcontractors,
1770	and duties of employees. At the completion of an audit, the
1771	employer or officer of the corporation and the auditor must
1772	print and sign their names on the audit document and attach
1773	proof of identification to the audit document.
1774	Section 16. Section 440.385, Florida Statutes, is amended
1775	to read:
1776	440.385 Florida Self-Insurers Guaranty Association,
1777	Incorporated.--
1778	(1) CREATION OF ASSOCIATION.--
1779	(a) There is created a nonprofit corporation to be known
1780	as the "Florida Self-Insurers Guaranty Association,
1781	Incorporated," hereinafter referred to as "the association."
1782	Upon incorporation of the association, all individual self-
1783	insurers as defined in ss. 440.02(23)(a) and 440.38(1)(b), other
1784	than individual self-insurers which are public utilities or
1785	governmental entities, shall be members of the association as a
1786	condition of their authority to individually self-insure in this
1787	state. The association shall perform its functions under a plan
1788	of operation as established and approved under subsection (5)
1789	and shall exercise its powers and duties through a board of
1790	directors as established under subsection (2). The association
1791	shall have those powers granted or permitted corporations not
1792	for profit, as provided in chapter 617. The activities of the
1793	association shall be subject to review by the department of
1794	Insurance. The department of Insuranceshall have oversight
1795	responsibility as set forth in this section. The association is
1796	specifically authorized to enter into agreements with this state
1797	to perform specified services.
1798	(b) A member may voluntarily withdraw from the association
1799	when the member voluntarily terminates the self-insurance
1800	privilege and pays all assessments due to the date of such
1801	termination. However, the withdrawing member shall continue to
1802	be bound by the provisions of this section relating to the
1803	period of his or her membership and any claims charged pursuant
1804	thereto. The withdrawing member who is a member on or after
1805	January 1, 1991, shall also be required to provide to the
1806	association upon withdrawal, and at 12-month intervals
1807	thereafter, satisfactory proof, including, if requested by the
1808	association, a report of known and potential claims certified by
1809	a member of the American Academy of Actuaries, that it continues
1810	to meet the standards of s. 440.38(1)(b)1. in relation to claims
1811	incurred while the withdrawing member exercised the privilege of
1812	self-insurance. Such reporting shall continue until the
1813	withdrawing member demonstrates to the association that there is
1814	no remaining value to claims incurred while the withdrawing
1815	member was self-insured. If a withdrawing member fails or
1816	refuses to timely provide an actuarial report to the
1817	association, the association may obtain an order from a circuit
1818	court requiring the member to produce such a report and ordering
1819	any other relief that the court determines appropriate. The
1820	association is entitled to recover all reasonable costs and
1821	attorney's fees expended in such proceedings. If during this
1822	reporting period the withdrawing member fails to meet the
1823	standards of s. 440.38(1)(b)1., the withdrawing member who is a
1824	member on or after January 1, 1991, shall thereupon, and at 6-
1825	month intervals thereafter, provide to the association the
1826	certified opinion of an independent actuary who is a member of
1827	the American Academy of Actuaries of the actuarial present value
1828	of the determined and estimated future compensation payments of
1829	the member for claims incurred while the member was a self-
1830	insurer, using a discount rate of 4 percent. With each such
1831	opinion, the withdrawing member shall deposit with the
1832	association security in an amount equal to the value certified
1833	by the actuary and of a type that is acceptable for qualifying
1834	security deposits under s. 440.38(1)(b). The withdrawing member
1835	shall continue to provide such opinions and to provide such
1836	security until such time as the latest opinion shows no
1837	remaining value of claims. The association has a cause of
1838	action against a withdrawing member, and against any successor
1839	of a withdrawing member, who fails to timely provide the
1840	required opinion or who fails to maintain the required deposit
1841	with the association. The association shall be entitled to
1842	recover a judgment in the amount of the actuarial present value
1843	of the determined and estimated future compensation payments of
1844	the withdrawing member for claims incurred during the time that
1845	the withdrawing member exercised the privilege of self-
1846	insurance, together with reasonable attorney's fees. The
1847	association is also entitled to recover reasonable attorney's
1848	fees in any action to compel production of any actuarial report
1849	required by this section. For purposes of this section, the
1850	successor of a withdrawing member means any person, business
1851	entity, or group of persons or business entities, which holds or
1852	acquires legal or beneficial title to the majority of the assets
1853	or the majority of the shares of the withdrawing member.
1854	(2) BOARD OF DIRECTORS.--The board of directors of the
1855	association shall consist of nine persons and shall be organized
1856	as established in the plan of operation. All board members shall
1857	be experienced in self-insurance in this state. Each director
1858	shall serve for a 4-year term and may be reappointed.
1859	Appointments after January 1, 2002, shall be made by the
1860	department of Insuranceupon recommendation of members of the
1861	association. Any vacancy on the board shall be filled for the
1862	remaining period of the term in the same manner as appointments
1863	other than initial appointments are made. Each director shall be
1864	reimbursed for expenses incurred in carrying out the duties of
1865	the board on behalf of the association.
1866	(3) POWERS AND DUTIES.--
1867	(a) Upon creation of the Insolvency Fund pursuant to the
1868	provisions of subsection (4), the association is obligated for
1869	payment of compensation under this chapter to insolvent members'
1870	employees resulting from incidents and injuries existing prior
1871	to the member becoming an insolvent member and from incidents
1872	and injuries occurring within 30 days after the member has
1873	become an insolvent member, provided the incidents giving rise
1874	to claims for compensation under this chapter occur during the
1875	year in which such insolvent member is a member of the guaranty
1876	fund and was assessable pursuant to the plan of operation, and
1877	provided the employee makes timely claim for such payments
1878	according to procedures set forth by a court of competent
1879	jurisdiction over the delinquency or bankruptcy proceedings of
1880	the insolvent member. Such obligation includes only that amount
1881	due the injured worker or workers of the insolvent member under
1882	this chapter. In no event is the association obligated to a
1883	claimant in an amount in excess of the obligation of the
1884	insolvent member. The association shall be deemed the insolvent
1885	employer for purposes of this chapter to the extent of its
1886	obligation on the covered claims and, to such extent, shall have
1887	all rights, duties, and obligations of the insolvent employer as
1888	if the employer had not become insolvent. However, in no event
1889	shall the association be liable for any penalties or interest.
1890	(b) The association may:
1891	1. Employ or retain such persons as are necessary to
1892	handle claims and perform other duties of the association.
1893	2. Borrow funds necessary to effect the purposes of this
1894	section in accord with the plan of operation.
1895	3. Sue or be sued.
1896	4. Negotiate and become a party to such contracts as are
1897	necessary to carry out the purposes of this section.
1898	5. Purchase such reinsurance as is determined necessary
1899	pursuant to the plan of operation.
1900	6. Review all applicants for membership in the association
1901	to determine whether the applicant is qualified for membership
1902	under the law. The association shall recommend to the department
1903	of Insurancethat the application be accepted or rejected based
1904	on the criteria set forth in s. 440.38(1)(b). The department of
1905	Insuranceshall approve or disapprove the application as
1906	provided in paragraph (6)(a).
1907	7. Collect and review financial information from employers
1908	and make recommendations to the department of Insurance
1909	regarding the appropriate security deposit and reinsurance
1910	amounts necessary for an employer to demonstrate that it has the
1911	financial strength necessary to ensure the timely payment of all
1912	current and future claims. The association may audit and examine
1913	an employer to verify the financial strength of its current and
1914	former members. If the association determines that a current or
1915	former self-insured employer does not have the financial
1916	strength necessary to ensure the timely payment of all current
1917	and estimated future claims, the association may recommend to
1918	the department of Insurancethat the department:
1919	a. Revoke the employer's self-insurance privilege.
1920	b. Require the employer to provide a certified opinion of
1921	an independent actuary who is a member of the American Academy
1922	of Actuaries as to the actuarial present value of the employer's
1923	estimated current and future compensation payments, using a 4-
1924	percent discount rate.
1925	c. Require an increase in the employer's security deposit
1926	in an amount determined by the association to be necessary to
1927	ensure payment of compensation claims. The department of
1928	Insuranceshall act on such recommendations as provided in
1929	paragraph (6)(a). The association has a cause of action against
1930	an employer, and against any successor of an employer, who fails
1931	to provide an additional security deposit required by the
1932	department of Insurance. The association shall file an action
1933	in circuit court to recover a judgment in the amount of the
1934	requested additional security deposit together with reasonable
1935	attorney's fees. For the purposes of this section, the
1936	successor of an employer is any person, business entity, or
1937	group of persons or business entities which holds or acquires
1938	legal or beneficial title to the majority of the assets or the
1939	majority of the shares of the employer.
1940	8. Charge fees to any member of the association to cover
1941	the actual costs of examining the financial and safety
1942	conditions of that member.
1943	9. Charge an applicant for membership in the association a
1944	fee sufficient to cover the actual costs of examining the
1945	financial condition of the applicant.
1946	10. Implement any procedures necessary to ensure
1947	compliance with regulatory actions taken by the department of
1948	Insurance.
1949	(c)1. To the extent necessary to secure funds for the
1950	payment of covered claims and also to pay the reasonable costs
1951	to administer them, the association, subject to approval by the
1952	department of Insurance, shall levy assessments based on the
1953	annual written premium each employer would have paid had the
1954	employer not been self-insured. Every assessment shall be made
1955	as a uniform percentage of the figure applicable to all
1956	individual self-insurers, provided that the assessment levied
1957	against any self-insurer in any one year shall not exceed 1
1958	percent of the annual written premium during the calendar year
1959	preceding the date of the assessment. Assessments shall be
1960	remitted to and administered by the board of directors in the
1961	manner specified by the approved plan. Each employer so
1962	assessed shall have at least 30 days' written notice as to the
1963	date the assessment is due and payable. The association shall
1964	levy assessments against any newly admitted member of the
1965	association so that the basis of contribution of any newly
1966	admitted member is the same as previously admitted members,
1967	provision for which shall be contained in the plan of operation.
1968	2. If, in any one year, funds available from such
1969	assessments, together with funds previously raised, are not
1970	sufficient to make all the payments or reimbursements then
1971	owing, the funds available shall be prorated, and the unpaid
1972	portion shall be paid as soon thereafter as sufficient
1973	additional funds become available.
1974	3. Funds may be allocated or paid from the Workers'
1975	Compensation Administration Trust Fund to contract with the
1976	association to perform services required by law. However, no
1977	state funds of any kind shall be allocated or paid to the
1978	association or any of its accounts for payment of covered claims
1979	or related expenses except those state funds accruing to the
1980	association by and through the assignment of rights of an
1981	insolvent employer. The department of Insurancemay not levy any
1982	assessment on the association.
1983	(4) INSOLVENCY FUND.--Upon the adoption of a plan of
1984	operation, there shall be created an Insolvency Fund to be
1985	managed by the association.
1986	(a) The Insolvency Fund is created for purposes of meeting
1987	the obligations of insolvent members incurred while members of
1988	the association and after the exhaustion of any security
1989	deposit, as required under this chapter. However, if such
1990	security deposit or reinsurance policy is payable to the
1991	association, the association shall commence to provide benefits
1992	out of the Insolvency Fund and be reimbursed from the security
1993	deposit or reinsurance policy. The method of operation of the
1994	Insolvency Fund shall be defined in the plan of operation as
1995	provided in subsection (5).
1996	(b) The department of Insuranceshall have the authority
1997	to audit the financial soundness of the Insolvency Fund
1998	annually.
1999	(c) The department of Insurancemay offer certain
2000	amendments to the plan of operation to the board of directors of
2001	the association for purposes of assuring the ongoing financial
2002	soundness of the Insolvency Fund and its ability to meet the
2003	obligations of this section.
2004	(5) PLAN OF OPERATION.--The association shall operate
2005	pursuant to a plan of operation approved by the board of
2006	directors. The plan of operation in effect on January 1, 2002,
2007	and approved by the Department of Labor and Employment Security
2008	shall remain in effect. However, any amendments to the plan
2009	shall not become effective until approved by the Department of
2010	Financial ServicesInsurance.
2011	(a) The purpose of the plan of operation shall be to
2012	provide the association and the board of directors with the
2013	authority and responsibility to establish the necessary programs
2014	and to take the necessary actions to protect against the
2015	insolvency of a member of the association. In addition, the
2016	plan shall provide that the members of the association shall be
2017	responsible for maintaining an adequate Insolvency Fund to meet
2018	the obligations of insolvent members provided for under this act
2019	and shall authorize the board of directors to contract and
2020	employ those persons with the necessary expertise to carry out
2021	this stated purpose. By January 1, 2003, the board of directors
2022	shall submit to the department of Insurancea proposed plan of
2023	operation for the administration of the association. The
2024	department of Insuranceshall approve the plan by order,
2025	consistent with this section. The department of Insuranceshall
2026	approve any amendments to the plan, consistent with this
2027	section, which are determined appropriate to carry out the
2028	duties and responsibilities of the association.
2029	(b) All member employers shall comply with the plan of
2030	operation.
2031	(c) The plan of operation shall:
2032	1. Establish the procedures whereby all the powers and
2033	duties of the association under subsection (3) will be
2034	performed.
2035	2. Establish procedures for handling assets of the
2036	association.
2037	3. Establish the amount and method of reimbursing members
2038	of the board of directors under subsection (2).
2039	4. Establish procedures by which claims may be filed with
2040	the association and establish acceptable forms of proof of
2041	covered claims. Notice of claims to the receiver or liquidator
2042	of the insolvent employer shall be deemed notice to the
2043	association or its agent, and a list of such claims shall be
2044	submitted periodically to the association or similar
2045	organization in another state by the receiver or liquidator.
2046	5. Establish regular places and times for meetings of the
2047	board of directors.
2048	6. Establish procedures for records to be kept of all
2049	financial transactions of the association and its agents and the
2050	board of directors.
2051	7. Provide that any member employer aggrieved by any final
2052	action or decision of the association may appeal to the
2053	department of Insurancewithin 30 days after the action or
2054	decision.
2055	8. Establish the procedures whereby recommendations of
2056	candidates for the board of directors shall be submitted to the
2057	department of Insurance.
2058	9. Contain additional provisions necessary or proper for
2059	the execution of the powers and duties of the association.
2060	(d) The plan of operation may provide that any or all of
2061	the powers and duties of the association, except those specified
2062	under subparagraphs (c)1. and 2., be delegated to a corporation,
2063	association, or other organization which performs or will
2064	perform functions similar to those of this association or its
2065	equivalent in two or more states. Such a corporation,
2066	association, or organization shall be reimbursed as a servicing
2067	facility would be reimbursed and shall be paid for its
2068	performance of any other functions of the association. A
2069	delegation of powers or duties under this subsection shall take
2070	effect only with the approval of both the board of directors and
2071	the department of Insuranceand may be made only to a
2072	corporation, association, or organization which extends
2073	protection which is not substantially less favorable and
2074	effective than the protection provided by this section.
2075	(6) POWERS AND DUTIES OF DEPARTMENT OF INSURANCE.--The
2076	department of Insuranceshall:
2077	(a) Review recommendations of the association concerning
2078	whether current or former self-insured employers or members of
2079	the association have the financial strength necessary to ensure
2080	the timely payment of all current and estimated future claims.
2081	If the association determines an employer does not have the
2082	financial strength necessary to ensure the timely payment of all
2083	current and future claims and recommends action pursuant to
2084	paragraph (3)(b), the department shall take such action as
2085	necessary to order the employer to comply with the
2086	recommendation, unless the department finds by clear and
2087	convincing evidence that the recommendation is erroneous.
2088	(b) Contract with the association for services, which may
2089	include, but are not limited to:
2090	1. Processing applications for self-insurance.
2091	2. Collecting and reviewing financial statements and loss
2092	reserve information from individual self-insurers.
2093	3. Collecting and maintaining files for original security
2094	deposit documents and reinsurance policies from individual self-
2095	insurers and, if necessary, perfecting security interests in
2096	security deposits.
2097	4. Processing compliance documentation for individual
2098	self-insurers and providing copies of such documentation to the
2099	department.
2100	5. Collecting all data necessary to calculate annual
2101	premium for all individual self-insurers, including individual
2102	self-insurers that are public utilities or governmental
2103	entities, and providing such calculated annual premium to the
2104	departmentdivisionfor assessment purposes.
2105	6. Inspecting and auditing annually, if necessary, the
2106	payroll and other records of each individual self-insurer,
2107	including individual self-insurers that are public utilities or
2108	governmental entities, in order to determine the wages paid by
2109	each individual self-insurer, the premium such individual self-
2110	insurer would have to pay if insured, and all payments of
2111	compensation made by such individual self-insurer during each
2112	prior period with the results of such audit provided to the
2113	departmentdivision. For purposes of this section, the payroll
2114	records of each individual self-insurer shall be open to
2115	inspection and audit by the association and the department, or
2116	their authorized representatives, during regular business hours.
2117	7. Processing applications and making recommendations with
2118	respect to the qualification of a business to be approved to
2119	provide or continue to provide services to individual self-
2120	insurers in the areas of underwriting, claims adjusting, loss
2121	control, and safety engineering.
2122	8. Providing legal representation to implement the
2123	administration and audit of individual self-insurers and making
2124	recommendations regarding prosecution of any administrative or
2125	legal proceedings necessitated by the regulation of the
2126	individual self-insurers by the department.
2127	(c) Contract with an attorney or attorneys recommended by
2128	the association for representation of the department in any
2129	administrative or legal proceedings necessitated by the
2130	recommended regulation of the individual self-insurers.
2131	(d) Direct the association to require from each individual
2132	self-insurer, at such time and in accordance with such
2133	regulations as the department prescribes, reports relating to
2134	wages paid, the amount of premiums such individual self-insurer
2135	would have to pay if insured, and all payments of compensation
2136	made by such individual self-insurer during each prior period
2137	and to determine the amounts paid by each individual self-
2138	insurer and the amounts paid by all individual self-insurers
2139	during such period. For purposes of this section, the payroll
2140	records of each individual self-insurer shall be open to annual
2141	inspection and audit by the association and the department, or
2142	their authorized representative, during regular business hours,
2143	and if any audit of such records of an individual self-insurer
2144	discloses a deficiency in the amount reported to the association
2145	or in the amounts paid to the departmentdivisionby an
2146	individual self-insurer for its assessment for the Workers'
2147	Compensation Administration Trust Fund, the department or the
2148	association may assess the cost of such audit against the
2149	individual self-insurer.
2150	(e) Require that the association notify the member
2151	employers and any other interested parties of the determination
2152	of insolvency and of their rights under this section. Such
2153	notification shall be by mail at the last known address thereof
2154	when available; but, if sufficient information for notification
2155	by mail is not available, notice by publication in a newspaper
2156	of general circulation shall be sufficient.
2157	(f) Suspend or revoke the authority of any member employer
2158	failing to pay an assessment when due or failing to comply with
2159	the plan of operation to self-insure in this state. As an
2160	alternative, the department may levy a fine on any member
2161	employer failing to pay an assessment when due. Such fine shall
2162	not exceed 5 percent of the unpaid assessment per month, except
2163	that no fine shall be less than $100 per month.
2164	(g) Revoke the designation of any servicing facility if
2165	the department finds that claims are being handled
2166	unsatisfactorily.
2167	(7) EFFECT OF PAID CLAIMS.--
2168	(a) Any person who recovers from the association under
2169	this section shall be deemed to have assigned his or her rights
2170	to the association to the extent of such recovery. Every
2171	claimant seeking the protection of this section shall cooperate
2172	with the association to the same extent as such person would
2173	have been required to cooperate with the insolvent member. The
2174	association shall have no cause of action against the employee
2175	of the insolvent member for any sums the association has paid
2176	out, except such causes of action as the insolvent member would
2177	have had if such sums had been paid by the insolvent member. In
2178	the case of an insolvent member operating on a plan with
2179	assessment liability, payments of claims by the association
2180	shall not operate to reduce the liability of the insolvent
2181	member to the receiver, liquidator, or statutory successor for
2182	unpaid assessments.
2183	(b) The receiver, liquidator, or statutory successor of an
2184	insolvent member shall be bound by settlements of covered claims
2185	by the association or a similar organization in another state.
2186	The court having jurisdiction shall grant such claims priority
2187	against the assets of the insolvent member equal to that to
2188	which the claimant would have been entitled in the absence of
2189	this section. The expense of the association or similar
2190	organization in handling claims shall be accorded the same
2191	priority as the expenses of the liquidator.
2192	(c) The association shall file periodically with the
2193	receiver or liquidator of the insolvent member statements of the
2194	covered claims paid by the association and estimates of
2195	anticipated claims on the association, which shall preserve the
2196	rights of the association against the assets of the insolvent
2197	member.
2198	(8) NOTIFICATION OF INSOLVENCIES.--To aid in the detection
2199	and prevention of employer insolvencies: Upon determination by
2200	majority vote that any member employer may be insolvent or in a
2201	financial condition hazardous to the employees thereof or to the
2202	public, it shall be the duty of the board of directors to notify
2203	the department of Insuranceof any information indicating such
2204	condition.
2205	(9) EXAMINATION OF THE ASSOCIATION.--The association shall
2206	be subject to examination and regulation by the department of
2207	Insurance. No later than March 30 of each year, the board of
2208	directors shall submit an audited financial statement for the
2209	preceding calendar year in a form approved by the department.
2210	(10) IMMUNITY.--There shall be no liability on the part
2211	of, and no cause of action of any nature shall arise against,
2212	any member employer, the association or its agents or employees,
2213	the board of directors, or the department of Insuranceor its
2214	representatives for any action taken by them in the performance
2215	of their powers and duties under this section.
2216	(11) STAY OF PROCEEDINGS; REOPENING OF DEFAULT
2217	JUDGMENTS.--All proceedings in which an insolvent employer is a
2218	party, or is obligated to defend a party, in any court or before
2219	any quasi-judicial body or administrative board in this state
2220	shall be stayed for up to 6 months, or for such additional
2221	period from the date the employer becomes an insolvent member,
2222	as is deemed necessary by a court of competent jurisdiction to
2223	permit proper defense by the association of all pending causes
2224	of action as to any covered claims arising from a judgment under
2225	any decision, verdict, or finding based on the default of the
2226	insolvent member. The association, either on its own behalf or
2227	on behalf of the insolvent member, may apply to have such
2228	judgment, order, decision, verdict, or finding set aside by the
2229	same court or administrator that made such judgment, order,
2230	decision, verdict, or finding and shall be permitted to defend
2231	against such claim on the merits. If requested by the
2232	association, the stay of proceedings may be shortened or waived.
2233	(12) LIMITATION ON CERTAIN ACTIONS.--Notwithstanding any
2234	other provision of this chapter, a covered claim, as defined
2235	herein, with respect to which settlement is not effected and
2236	pursuant to which suit is not instituted against the insured of
2237	an insolvent member or the association within 1 year after the
2238	deadline for filing claims with the receiver of the insolvent
2239	member, or any extension of the deadline, shall thenceforth be
2240	barred as a claim against the association.
2241	(13) CORPORATE INCOME TAX CREDIT.--Any sums acquired by a
2242	member by refund, dividend, or otherwise from the association
2243	shall be payable within 30 days of receipt to the Department of
2244	Revenue for deposit with the Chief Financial OfficerTreasurer
2245	to the credit of the General Revenue Fund. All provisions of
2246	chapter 220 relating to penalties and interest on delinquent
2247	corporate income tax payments apply to payments due under this
2248	subsection.
2249	Section 17. Subsections (2), (3), and (4) of section
2250	440.386, Florida Statutes, are amended to read:
2251	440.386 Individual self-insurers' insolvency;
2252	conservation; liquidation.--
2253	(2) COMMENCEMENT OF DELINQUENCY PROCEEDING.--The
2254	department of Insuranceor the Florida Self-Insurers Guaranty
2255	Association, Incorporated, may commence a delinquency proceeding
2256	by application to the court for an order directing the
2257	individual self-insurer to show cause why the department or
2258	association should not have the relief sought. On the return of
2259	such order to show cause, and after a full hearing, the court
2260	shall either deny the application or grant the application,
2261	together with such other relief as the nature of the case and
2262	the interests of the claimants, creditors, stockholders,
2263	members, subscribers, or public may require. The department and
2264	the association shall give reasonable written notice to each
2265	other of all hearings which pertain to an adjudication of
2266	insolvency of a member individual self-insurer.
2267	(3) GROUNDS FOR LIQUIDATION.--The department of Insurance
2268	or the association may apply to the court for an order
2269	appointing a receiver and directing the receiver to liquidate
2270	the business of a domestic individual self-insurer if such
2271	individual self-insurer is insolvent.
2272	(4) GROUNDS FOR CONSERVATION; FOREIGN INDIVIDUAL SELF-
2273	INSURERS.--
2274	(a) The department of Insuranceor the association may
2275	apply to the court for an order appointing a receiver or
2276	ancillary receiver, and directing the receiver to conserve the
2277	assets within this state, of a foreign individual self-insurer
2278	if such individual self-insurer is insolvent.
2279	(b) An order to conserve the assets of an individual self-
2280	insurer shall require the receiver forthwith to take possession
2281	of the property of the receiver within the state and to conserve
2282	it, subject to the further direction of the court.
2283	Section 18. Subsections (3), (4), and (6) of section
2284	440.44, Florida Statutes, are amended to read:
2285	440.44 Workers' compensation; staff organization.--
2286	(3) EXPENDITURES.--The department, the agency, the office,
2287	the Department of Education, and the director of the Division of
2288	Administrative Hearings shall make such expenditures, including
2289	expenditures for personal services and rent at the seat of
2290	government and elsewhere, for law books; for telephone services
2291	and WATS lines; for books of reference, periodicals, equipment,
2292	and supplies; and for printing and binding as may be necessary
2293	in the administration of this chapter. All expenditures in the
2294	administration of this chapter shall be allowed and paid as
2295	provided in s. 440.50 upon the presentation of itemized vouchers
2296	therefor approved by the department, the agency, the office,the
2297	Department of Education, or the director of the Division of
2298	Administrative Hearings.
2299	(4) PERSONNEL ADMINISTRATION.--Subject to the other
2300	provisions of this chapter, the department, the agency, the
2301	office,the Department of Education, and the Division of
2302	Administrative Hearings may appoint, and prescribe the duties
2303	and powers of, bureau chiefs, attorneys, accountants, medical
2304	advisers, technical assistants, inspectors, claims examiners,
2305	and such other employees as may be necessary in the performance
2306	of their duties under this chapter.
2307	(6) SEAL.--The department and the judges of compensation
2308	claims shall have a seal upon which shall be inscribed the words
2309	"State of Florida Department of Financial ServicesInsurance--
2310	Seal" and "Division of Administrative Hearings--Seal,"
2311	respectively.
2312	Section 19. Subsections (3) and (4) of section 440.52,
2313	Florida Statutes, are amended to read:
2314	440.52 Registration of insurance carriers; notice of
2315	cancellation or expiration of policy; suspension or revocation
2316	of authority.--
2317	(3) If the department finds, after due notice and a
2318	hearing at which the insurance carrier is entitled to be heard
2319	in person or by counsel and present evidence, that the insurance
2320	carrier has repeatedly failed to comply with its obligations
2321	under this chapter, the department may request the office to
2322	suspend or revoke the authorization of such insurance carrier to
2323	write workers' compensation insurance under this chapter. Such
2324	suspension or revocation shall not affect the liability of any
2325	such insurance carrier under policies in force prior to the
2326	suspension or revocation.
2327	(4) In addition to the penalties prescribed in subsection
2328	(3), violation of s. 440.381 by an insurance carrier shall
2329	result in the imposition of a fine not to exceed $1,000 per
2330	audit, if the insurance carrier fails to act on said audits by
2331	correcting errors in employee classification or accepted
2332	applications for coverage where it knew employee classifications
2333	were incorrect. Such fines shall be levied by the office
2334	Department of Insurance and deposited into the Insurance
2335	Commissioner'sRegulatory Trust Fund.
2336	Section 20. Section 440.525, Florida Statutes, is amended
2337	to read:
2338	440.525 Examination of carriers.--The department and
2339	officemay examine each carrier as often as is warranted to
2340	ensure that carriers are fulfilling their obligations under this
2341	chapterthe law. The examination may cover any period of the
2342	carrier's operations since the last previous examination.
2343	Section 21. Paragraph (k) of subsection (1) of section
2344	553.74, Florida Statutes, is amended to read:
2345	553.74 Florida Building Commission.--
2346	(1) The Florida Building Commission is created and shall
2347	be located within the Department of Community Affairs for
2348	administrative purposes. Members shall be appointed by the
2349	Governor subject to confirmation by the Senate. The commission
2350	shall be composed of 23 members, consisting of the following:
2351	(k) One member who represents the Department of Financial
2352	ServicesInsurance.
2353	Section 22. Effective October 1, 2003, paragraph (k) of
2354	subsection (1) of section 553.74, Florida Statutes, as amended
2355	by chapter 2002-293, Laws of Florida, is amended to read:
2356	553.74 Florida Building Commission.--
2357	(1) The Florida Building Commission is created and shall
2358	be located within the Department of Community Affairs for
2359	administrative purposes. Members shall be appointed by the
2360	Governor subject to confirmation by the Senate. The commission
2361	shall be composed of 23 members, consisting of the following:
2362	(k) One member who represents the Department of Financial
2363	ServicesInsurance.
2364
2365	Any person serving on the commission under paragraph (c) or
2366	paragraph (h) on October 1, 2003, and who has served less than
2367	two full terms is eligible for reappointment to the commission
2368	regardless of whether he or she meets the new qualification.
2369	Section 23. Section 624.05, Florida Statutes, is amended
2370	to read:
2371	624.05 "Department," "commission," and "office"
2372	defined.--As used in the Insurance Code:
2373	(1) "Department" means the Department of Financial
2374	Services. The term does not mean the Financial Services
2375	Commission or any office of the Financial Services Commission
2376	Insurance of this state, unless the context otherwise requires.
2377	(2) "Commission" means the Financial Services Commission.
2378	(3) "Office" means the Office of Insurance Regulation of
2379	the Financial Services Commission.
2380	Section 24. Subsections (2) and (5) of section 624.155,
2381	Florida Statutes, are amended to read:
2382	624.155 Civil remedy.--
2383	(2)(a) As a condition precedent to bringing an action
2384	under this section, the officedepartmentand the insurer must
2385	have been given 60 days' written notice of the violation. If
2386	the officedepartmentreturns a notice for lack of specificity,
2387	the 60-day time period shall not begin until a proper notice is
2388	filed.
2389	(b) The notice shall be on a form adopted by the
2390	commission and provided by the officedepartmentand shall state
2391	with specificity the following information,and such other
2392	information as the commission requiresdepartment may require:
2393	1. The statutory provision, including the specific
2394	language of the statute, which the insurer allegedly violated.
2395	2. The facts and circumstances giving rise to the
2396	violation.
2397	3. The name of any individual involved in the violation.
2398	4. Reference to specific policy language that is relevant
2399	to the violation, if any. If the person bringing the civil
2400	action is a third party claimant, she or he shall not be
2401	required to reference the specific policy language if the
2402	insurer has not provided a copy of the policy to the third party
2403	claimant pursuant to written request.
2404	5. A statement that the notice is given in order to
2405	perfect the right to pursue the civil remedy authorized by this
2406	section.
2407	(c) Within 20 days of receipt of the notice, the office
2408	departmentmay return any notice that does not provide the
2409	specific information required by this section, and the office
2410	departmentshall indicate the specific deficiencies contained in
2411	the notice. A determination by the officedepartmentto return a
2412	notice for lack of specificity shall be exempt from the
2413	requirements of chapter 120.
2414	(d) No action shall lie if, within 60 days after filing
2415	notice, the damages are paid or the circumstances giving rise to
2416	the violation are corrected.
2417	(e) The insurer that is the recipient of a notice filed
2418	pursuant to this section shall report to the officedepartment
2419	on the disposition of the alleged violation.
2420	(f) The applicable statute of limitations for an action
2421	under this section shall be tolled for a period of 65 days by
2422	the mailing of the notice required by this subsection or the
2423	mailing of a subsequent notice required by this subsection.
2424	(5) This section shall not be construed to authorize a
2425	class action suit against an insurer or a civil action against
2426	the commission, the office, or the department or any of their,
2427	its employees, or the Insurance Commissioner,or to create a
2428	cause of action when a health insurer refuses to pay a claim for
2429	reimbursement on the ground that the charge for a service was
2430	unreasonably high or that the service provided was not medically
2431	necessary.
2432	Section 25. Section 624.303, Florida Statutes, is amended
2433	to read:
2434	624.303 Seal; certified copies as evidence.--
2435	(1) The department, commission, and office shall eachhave
2436	an official seal by which its respectiveproceedings are
2437	authenticated.
2438	(2) All certificates executed by the department or office,
2439	other than licenses of agents, solicitors, or adjusters or
2440	similar licenses or permits, shall bear its respectiveseal.
2441	(3) Any written instrument purporting to be a copy of any
2442	action, proceeding, or finding of fact by the department,
2443	commission, or office or any record of the department,
2444	commission, or officeor copy of any document on file in its
2445	office when authenticated under hand of the respective agency
2446	head or his or her designeecommissionerby the seal shall be
2447	accepted by all the courts of this state as prima facie evidence
2448	of its contents.
2449	Section 26. Section 624.305, Florida Statutes, is amended
2450	to read:
2451	624.305 Prohibited interests, rewards.--
2452	(1) No employee of the department, commission, or office,
2453	including the members of the commission, but not including
2454	employees of the Office of Financial Institutions and Securities
2455	Regulation,Insurance Commissioner and Treasurershall:
2456	(a) Be financially interested, directly or indirectly, in
2457	any insurer or insurance agency authorized to transact insurance
2458	in this state, or in any insurance transaction except as a
2459	policyholder or claimant under a policy; or
2460	(b) Be given or receive any fee, compensation, loan, gift,
2461	or other thing of value in addition to the compensation and
2462	expense allowance provided by law, for any service rendered or
2463	to be rendered in her or his capacity as a department,
2464	commission, or officeemployee.
2465	(2) This section shall not be deemed to prohibit an
2466	insurer from making, in the regular course of business, a loan
2467	to any employee of the department, commission, or office,if
2468	such loan is adequately secured by a mortgage upon real estate
2469	or other collateral and qualifies as an eligible investment of
2470	the insurer under part II of chapter 625.
2471	(3) When there is no conflict of interest, the department,
2472	commission, and office may eachemploy or retain from time to
2473	time an insurance actuary, accountant, or other professional
2474	person who is independently practicing her or his profession
2475	even though such person is similarly employed or retained by
2476	insurers or others.
2477	(4) Any person employed by the department, commission, or
2478	office on January 7, 2003, including a member of the commission,
2479	who was not subject to this section prior to that date, has
2480	until January 1, 2004, to comply with this section.
2481	Section 27. Section 624.316, Florida Statutes, is amended
2482	to read:
2483	624.316 Examination of insurers.--
2484	(1)(a) The officedepartmentshall examine the affairs,
2485	transactions, accounts, records, and assets of each authorized
2486	insurer and of the attorney in fact of a reciprocal insurer as
2487	to its transactions affecting the insurer as often as it deems
2488	advisable, except as provided in this section. The examination
2489	may include examination of the affairs, transactions, accounts,
2490	and records relating directly or indirectly to the insurer and
2491	of the assets of the insurer's managing general agents and
2492	controlling or controlled person, as defined in s. 625.012. The
2493	examination shall be pursuant to a written order of the office
2494	department. Such order shall expire upon receipt by the office
2495	departmentof the written report of the examination.
2496	(b) As a part of its examination procedure, the office
2497	departmentshall examine each insurer regarding all of the
2498	information required by s. 627.915.
2499	(c) The officedepartmentshall examine each insurer
2500	according to accounting procedures designed to fulfill the
2501	requirements of generally accepted insurance accounting
2502	principles and practices and good internal control and in
2503	keeping with generally accepted accounting forms, accounts,
2504	records, methods, and practices relating to insurers. To
2505	facilitate uniformity in examinations, the commissiondepartment
2506	may adopt, by rule, the Market and Financial Conduct Examiners
2507	Examination Handbook and the Financial Condition Examiners
2508	Handbook of the National Association of Insurance Commissioners,
2509	20021990, and may adopt subsequent amendments thereto, if the
2510	examination methodology remains substantially consistent.
2511	(2)(a) Except as provided in paragraph (f), the office
2512	departmentmay examine each insurer as often as may be warranted
2513	for the protection of the policyholders and in the public
2514	interest, and shall examine each domestic insurer not less
2515	frequently than once every 3 years. The examination shall cover
2516	the preceding 3 fiscal years of the insurer and shall be
2517	commenced within 12 months after the end of the most recent
2518	fiscal year being covered by the examination. The examination
2519	may cover any period of the insurer's operations since the last
2520	previous examination. The examination may include examination of
2521	events subsequent to the end of the most recent fiscal year and
2522	the events of any prior period that affect the present financial
2523	condition of the insurer. In lieu of making its own examination,
2524	the officedepartmentmay accept an independent certified public
2525	accountant's audit report prepared on a statutory basis
2526	consistent with the Florida Insurance Code on that specific
2527	company. The officedepartmentmay not accept the report in lieu
2528	of the requirement imposed by paragraph (1)(b). When an
2529	examination is conducted by the officedepartmentfor the sole
2530	purpose of examining the 3 preceding fiscal years of the insurer
2531	within 12 months after the opinion date of an independent
2532	certified public accountant's audit report prepared on a
2533	statutory basis on that specific company consistent with the
2534	Florida Insurance Code, the cost of the examination as charged
2535	to the insurer pursuant to s. 624.320 shall be reduced by the
2536	cost to the insurer of the independent certified public
2537	accountant's audit reports. Requests for the reduction in cost
2538	of examination must be submitted to the officedepartmentin
2539	writing no later than 90 days after the conclusion of the
2540	examination and shall include sufficient documentation to
2541	support the charges incurred for the statutory audit performed
2542	by the independent certified public accountant.
2543	(b) The officedepartmentshall examine each insurer
2544	applying for an initial certificate of authority to transact
2545	insurance in this state before granting the initial certificate.
2546	(c) In lieu of making its own examination, the office
2547	departmentmay accept a full report of the last recent
2548	examination of a foreign insurer, certified to by the insurance
2549	supervisory official of another state.
2550	(d) The examination by the officedepartmentof an alien
2551	insurer shall be limited to the alien insurer's insurance
2552	transactions and affairs in the United States, except as
2553	otherwise required by the officedepartment.
2554	(e) The commissiondepartmentshall adopt rules providing
2555	that, upon agreement between the officedepartmentand the
2556	insurer, an examination under this section may be conducted by
2557	independent certified public accountants, actuaries meeting
2558	criteria specified by rule, and reinsurance specialists meeting
2559	criteria specified by rule. The rules shall provide:
2560	1. That the agreement of the insurer is not required if
2561	the officedepartmentreasonably suspects criminal misconduct on
2562	the part of the insurer.
2563	2. That the officedepartmentshall provide the insurer
2564	with a list of three firms acceptable to the officedepartment,
2565	and that the insurer shall select the firm to conduct the
2566	examination from the list provided by the officedepartment.
2567	3. That the insurer being examined must make payment for
2568	the examination directly to the firm performing the examination
2569	in accordance with the rates and terms agreed to by the office
2570	department, the insurer, and the firm performing the
2571	examination.
2572	4. That if the examination is conducted without the
2573	consent of the insurer, the insurer must pay all reasonable
2574	charges of the examining firm if the examination finds
2575	impairment, insolvency, or criminal misconduct on the part of
2576	the insurer.
2577	(f)1.
2578	a. An examination under this section must be conducted at
2579	least once every year with respect to a domestic insurer that
2580	has continuously held a certificate of authority for less than 3
2581	years. The examination must cover the preceding fiscal year or
2582	the period since the last examination of the insurer. The office
2583	departmentmay limit the scope of the examination.
2584	b. The officedepartmentmay not accept an independent
2585	certified public accountant's audit report in lieu of an
2586	examination required by this subparagraph.
2587	c. An insurer may not be required to pay more than $25,000
2588	to cover the costs of any one examination under this
2589	subparagraph.
2590	2. An examination under this section must be conducted not
2591	less frequently than once every 5 years with respect to an
2592	insurer that has continuously held a certificate of authority,
2593	without a change in ownership subject to s. 624.4245 or s.
2594	628.461, for more than 15 years. The examination must cover the
2595	preceding 5 fiscal years of the insurer or the period since the
2596	last examination of the insurer. This subparagraph does not
2597	limit the ability of the officedepartmentto conduct more
2598	frequent examinations.
2599	Section 28. Section 624.317, Florida Statutes, is amended
2600	to read:
2601	624.317 Investigation of agents, adjusters,
2602	administrators, service companies, and others.--If it has reason
2603	to believe that any person has violated or is violating any
2604	provision of this code, or upon the written complaint signed by
2605	any interested person indicating that any such violation may
2606	exist:,
2607	(1)The department shall conduct such investigation as it
2608	deems necessary of the accounts, records, documents, and
2609	transactions pertaining to or affecting the insurance affairs of
2610	any:
2611	(1) general agent, surplus line agent, managing general
2612	agent,adjuster, administrator, service company, or other
2613	person.
2614	(2) insurance agent, customer representative, service
2615	representative, or other person subject to its jurisdictionor
2616	solicitor, subject to the requirements of s. 626.601.
2617	(2) The office shall conduct such investigation as it
2618	deems necessary of the accounts, records, documents, and
2619	transactions pertaining to or affecting the insurance affairs of
2620	any:
2621	(a) Adjuster, administrator, service company, or other
2622	person subject to its jurisdiction.
2623	(b)(3)Person having a contract or power of attorney under
2624	which she or he enjoys in fact the exclusive or dominant right
2625	to manage or control an insurer.
2626	(c)(4)Person engaged in or proposing to be engaged in the
2627	promotion or formation of:
2628	1.(a)A domestic insurer;
2629	2.(b)An insurance holding corporation; or
2630	3.(c)A corporation to finance a domestic insurer or in
2631	the production of the domestic insurer's business.
2632	Section 29. Subsections (2), (3), (4), (5), and (7) of
2633	section 624.404, Florida Statutes, are amended to read:
2634	624.404 General eligibility of insurers for certificate of
2635	authority.--To qualify for and hold authority to transact
2636	insurance in this state, an insurer must be otherwise in
2637	compliance with this code and with its charter powers and must
2638	be an incorporated stock insurer, an incorporated mutual
2639	insurer, or a reciprocal insurer, of the same general type as
2640	may be formed as a domestic insurer under this code; except
2641	that:
2642	(2) No foreign or alien insurer or exchange shall be
2643	authorized to transact insurance in this state unless it is
2644	otherwise qualified therefor under this code and has operated
2645	satisfactorily for at least 3 years in its state or country of
2646	domicile; however, the officedepartmentmay waive the 3-year
2647	requirement if the foreign or alien insurer or exchange:
2648	(a) Has operated successfully and has capital and surplus
2649	of $5 million;
2650	(b) Is the wholly owned subsidiary of an insurer which is
2651	an authorized insurer in this state;
2652	(c) Is the successor in interest through merger or
2653	consolidation of an authorized insurer; or
2654	(d) Provides a product or service not readily available to
2655	the consumers of this state.
2656	(3)(a) The officedepartmentshall not grant or continue
2657	authority to transact insurance in this state as to any insurer
2658	the management, officers, or directors of which are found by it
2659	to be incompetent or untrustworthy; or so lacking in insurance
2660	company managerial experience as to make the proposed operation
2661	hazardous to the insurance-buying public; or so lacking in
2662	insurance experience, ability, and standing as to jeopardize the
2663	reasonable promise of successful operation; or which it has good
2664	reason to believe are affiliated directly or indirectly through
2665	ownership, control, reinsurance transactions, or other insurance
2666	or business relations, with any person or persons whose business
2667	operations are or have been marked, to the detriment of
2668	policyholders or stockholders or investors or creditors or of
2669	the public, by manipulation of assets, accounts, or reinsurance
2670	or by bad faith.
2671	(b) The officedepartmentshall not grant or continue
2672	authority to transact insurance in this state as to any insurer
2673	if any person, including any subscriber, stockholder, or
2674	incorporator, who exercises or has the ability to exercise
2675	effective control of the insurer, or who influences or has the
2676	ability to influence the transaction of the business of the
2677	insurer, does not possess the financial standing and business
2678	experience for the successful operation of the insurer.
2679	(c) The officedepartmentmay deny, suspend, or revoke the
2680	authority to transact insurance in this state of any insurer if
2681	any person, including any subscriber, stockholder, or
2682	incorporator, who exercises or has the ability to exercise
2683	effective control of the insurer, or who influences or has the
2684	ability to influence the transaction of the business of the
2685	insurer, has been found guilty of, or has pleaded guilty or nolo
2686	contendere to, any felony or crime punishable by imprisonment of
2687	1 year or more under the law of the United States or any state
2688	thereof or under the law of any other country which involves
2689	moral turpitude, without regard to whether a judgment of
2690	conviction has been entered by the court having jurisdiction in
2691	such case. However, in the case of an insurer operating under a
2692	subsisting certificate of authority, the insurer shall remove
2693	any such person immediately upon discovery of the conditions set
2694	forth in this paragraph when applicable to such person or upon
2695	the order of the officedepartment, and the failure to so act by
2696	said insurer shall be grounds for revocation or suspension of
2697	the insurer's certificate of authority.
2698	(d) The officedepartmentmay deny, suspend, or revoke the
2699	authority of an insurer to transact insurance in this state if
2700	any person, including any subscriber, stockholder, or
2701	incorporator, who exercises or has the ability to exercise
2702	effective control of the insurer, or who influences or has the
2703	ability to influence the transaction of the business of the
2704	insurer, which person the officedepartmenthas good reason to
2705	believe is now or was in the past affiliated directly or
2706	indirectly, through ownership interest of 10 percent or more,
2707	control, or reinsurance transactions, with any business,
2708	corporation, or other entity that has been found guilty of or
2709	has pleaded guilty or nolo contendere to any felony or crime
2710	punishable by imprisonment for 1 year or more under the laws of
2711	the United States, any state, or any other country, regardless
2712	of adjudication. However, in the case of an insurer operating
2713	under a subsisting certificate of authority, the insurer shall
2714	immediately remove such person or immediately notify the office
2715	departmentof such person upon discovery of the conditions set
2716	forth in this paragraph, either when applicable to such person
2717	or upon order of the officedepartment; the failure to remove
2718	such person, provide such notice, or comply with such order
2719	constitutes grounds for suspension or revocation of the
2720	insurer's certificate of authority.
2721	(4)(a) No authorized insurer shall act as a fronting
2722	company for any unauthorized insurer which is not an approved
2723	reinsurer.
2724	(b) A "fronting company" is an authorized insurer which by
2725	reinsurance or otherwise generally transfers more than 50
2726	percent to one unauthorized insurer which does not meet the
2727	requirements of s. 624.610(3)(a), (b), or (c), or more than 75
2728	percent to two or more unauthorized insurers which do not meet
2729	the requirements of s. 624.610(3)(a), (b), or (c), of the entire
2730	risk of loss on all of the insurance written by it in this
2731	state, or on one or more lines of insurance, on all of the
2732	business produced through one or more agents or agencies, or on
2733	all of the business from a designated geographical territory,
2734	without obtaining the prior approval of the officedepartment.
2735	(c) The officedepartmentmay, in its discretion, approve
2736	a transfer of risk in excess of the limits in paragraph (b) upon
2737	presentation of evidence, satisfactory to the officedepartment,
2738	that the transfer would be in the best interests of the
2739	financial condition of the insurer and in the best interests of
2740	the policyholders.
2741	(5) No insurer shall be authorized to transact insurance
2742	in this state which, during the 3 years immediately preceding
2743	its application for a certificate of authority, has violated any
2744	of the insurance laws of this state and after being informed of
2745	such violation has failed to correct the same; except that, if
2746	all other requirements are met, the officedepartmentmay
2747	nevertheless issue a certificate of authority to such an insurer
2748	upon the filing by the insurer of a sworn statement of all such
2749	insurance so written in violation of law, and upon payment to
2750	the officedepartmentof a sum of money as additional filing fee
2751	equivalent to all premium taxes and other state taxes and fees
2752	as would have been payable by the insurer if such insurance had
2753	been lawfully written by an authorized insurer under the laws of
2754	this state. This fee, when collected, shall be deposited to the
2755	credit of the Insurance Commissioner'sRegulatory Trust Fund.
2756	(7) For the purpose of satisfying the requirements of ss.
2757	624.407 and 624.408, the investment portfolio of an insurer
2758	applying for an initial certificate of authority to do business
2759	in this state shall value its bonds and stocks in accordance
2760	with the provisions of the latest edition of the publication
2761	"Purposes and Procedures Manual of the NAIC Securities Valuation
2762	Office""Valuations of Securities"by the National Association
2763	of Insurance Commissioners, July 1, 20021990, and subsequent
2764	amendments thereto, if the valuation methodology remains
2765	substantially unchanged.
2766	Section 30. Subsection (1) of section 624.4072, Florida
2767	Statutes, is amended to read:
2768	624.4072 Minority-owned property and casualty insurers;
2769	limited exemption for taxation and assessments.--
2770	(1) A minority business that is at least 51 percent owned
2771	by minority persons, as defined in s. 288.703(3), initially
2772	issued a certificate of authority in this state as an authorized
2773	insurer after May 1, 1998, and before January 1, 2002, to write
2774	property and casualty insurance shall be exempt, for a period
2775	not to exceed 10 years from the date of receiving its
2776	certificate of authority, from the following taxes and
2777	assessments:
2778	(a) Taxes imposed under ss. 175.101, 185.08, and 624.509;
2779	(b) Assessments by the Citizens Property Insurance
2780	CorporationFlorida Residential Property and Casualty Joint
2781	Underwriting Association or by the Florida Windstorm
2782	Underwriting Association, as provided under s. 627.351, except
2783	for emergency assessments collected from policyholders pursuant
2784	to s. 627.351(6)(b)3.d.s. 627.351(2)(b)2.d.(III) and(6)(b)3.d.
2785	Any such insurer shall be a member insurer of the Citizens
2786	Property Insurance CorporationFlorida Windstorm Underwriting
2787	Association and the Florida Residential Property and Casualty
2788	Joint Underwriting Association. The premiums of such insurer
2789	shall be included in determining, for the Citizens Property
2790	Insurance CorporationFlorida Windstorm Underwriting
2791	Association, the aggregate statewide direct written premium for
2792	property insurance and in determining, for the Florida
2793	Residential Property and Casualty Joint Underwriting
2794	Association, the aggregate statewide direct written premium for
2795	the subject lines of business for all member insurers.
2796	Section 31. Subsection (1) of section 624.413, Florida
2797	Statutes, is amended to read:
2798	624.413 Application for certificate of authority.--
2799	(1) To apply for a certificate of authority, an insurer
2800	shall file its application therefor with the officedepartment,
2801	upon a form adopted by the commission and furnished by the
2802	officeit, showing its name; location of its home office and, if
2803	an alien insurer, its principal office in the United States;
2804	kinds of insurance to be transacted; state or country of
2805	domicile; and such additional information as the commission
2806	department may reasonably requiresrequire, together with the
2807	following documents:
2808	(a) One copy of its corporate charter, articles of
2809	incorporation, existing and proposed nonfacultative reinsurance
2810	contracts, declaration of trust, or other charter documents,
2811	with all amendments thereto, certified by the public official
2812	with whom the originals are on file in the state or country of
2813	domicile.
2814	(b) If a mutual insurer, a copy of its bylaws, as amended,
2815	certified by its secretary or other officer having custody
2816	thereof.
2817	(c) If a foreign or alien reciprocal insurer, a copy of
2818	the power of attorney of its attorney in fact and of its
2819	subscribers' agreement, if any, certified by the attorney in
2820	fact; and, if a domestic reciprocal insurer, the declaration
2821	provided for in s. 629.081.
2822	(d) A copy of its financial statement as of December 31
2823	next preceding, containing information generally included in
2824	insurer financial statements prepared in accordance with
2825	generally accepted insurance accounting principles and practices
2826	and in a form generally utilized by insurers for financial
2827	statements, sworn to by at least two executive officers of the
2828	insurer, or certified by the public official having supervision
2829	of insurance in the insurer's state of domicile or of entry into
2830	the United States. To facilitate uniformity in financial
2831	statements, the commissiondepartmentmay by rule adopt the form
2832	for financial statements approved by the National Association of
2833	Insurance Commissioners in 20021990, and may adopt subsequent
2834	amendments thereto if the form remains substantially consistent.
2835	(e) Supplemental quarterly financial statements for each
2836	calendar quarter since the beginning of the year of its
2837	application for the certificate of authority, sworn to by at
2838	least two of its executive officers. To facilitate uniformity in
2839	financial statements, the commissiondepartmentmay by rule
2840	adopt the form for quarterly financial statements approved by
2841	the National Association of Insurance Commissioners in 2002
2842	1990, and may adopt subsequent amendments thereto if the form
2843	remains substantially consistent.
2844	(f) If a foreign or alien insurer, a copy of the report of
2845	the most recent examination of the insurer certified by the
2846	public official having supervision of insurance in its state of
2847	domicile or of entry into the United States. The end of the
2848	most recent year covered by the examination must be within the
2849	3-year period preceding the date of application. In lieu of the
2850	certified examination report, the officedepartmentmay accept
2851	an audited certified public accountant's report prepared on a
2852	basis consistent with the insurance laws of the insurer's state
2853	of domicile, certified by the public official having supervision
2854	of insurance in its state of domicile or of entry into the
2855	United States.
2856	(g) If a foreign or alien insurer, a certificate of
2857	compliance from the public official having supervision of
2858	insurance in its state or country of domicile showing that it is
2859	duly organized and authorized to transact insurance therein and
2860	the kinds of insurance it is so authorized to transact.
2861	(h) If a foreign or alien insurer, a certificate of the
2862	public official having custody of any deposit maintained by the
2863	insurer in another state in lieu of a deposit or part thereof
2864	required in this state under s. 624.411 or s. 624.412, showing
2865	the amount of such deposit and the assets or securities of which
2866	comprised.
2867	(i) If a life insurer, a certificate of valuation.
2868	(j) If an alien insurer, a copy of the appointment and
2869	authority of its United States manager, certified by its officer
2870	having custody of its records.
2871	Section 32. Section 624.424, Florida Statutes, is amended
2872	to read:
2873	624.424 Annual statement and other information.--
2874	(1)(a) Each authorized insurer shall file with the office
2875	departmentfull and true statements of its financial condition,
2876	transactions, and affairs. An annual statement covering the
2877	preceding calendar year shall be filed on or before March 1, and
2878	quarterly statements covering the periods ending on March 31,
2879	June 30, and September 30 shall be filed within 45 days after
2880	each such date. The officedepartmentmay, for good cause, grant
2881	an extension of time for filing of an annual or quarterly
2882	statement. The statements shall contain information generally
2883	included in insurers' financial statements prepared in
2884	accordance with generally accepted insurance accounting
2885	principles and practices and in a form generally utilized by
2886	insurers for financial statements, sworn to by at least two
2887	executive officers of the insurer or, if a reciprocal insurer,
2888	by the oath of the attorney in fact or its like officer if a
2889	corporation. To facilitate uniformity in financial statements
2890	and to facilitate officedepartment analysis, the commission
2891	departmentmay by rule adopt the form for financial statements
2892	approved by the National Association of Insurance Commissioners
2893	in 20021990, and may adopt subsequent amendments thereto if the
2894	methodology remains substantially consistent, and may by rule
2895	require each insurer to submit to the officedepartmentor such
2896	organization as the officedepartmentmay designate all or part
2897	of the information contained in the financial statement in a
2898	computer-readable form compatible with the electronic data
2899	processing system specified by the officedepartment.
2900	(b) Each insurer's annual statement must contain a
2901	statement of opinion on loss and loss adjustment expense
2902	reserves made by a member of the American Academy of Actuaries
2903	or by a qualified loss reserve specialist, under criteria
2904	established by rule of the commissiondepartment. In adopting
2905	the rule, the commissiondepartmentmust consider any criteria
2906	established by the National Association of Insurance
2907	Commissioners. The officedepartmentmay require semiannual
2908	updates of the annual statement of opinion as to a particular
2909	insurer if the officedepartmenthas reasonable cause to believe
2910	that such reserves are understated to the extent of materially
2911	misstating the financial position of the insurer. Workpapers in
2912	support of the statement of opinion must be provided to the
2913	officedepartmentupon request. This paragraph does not apply to
2914	life insurance or title insurance.
2915	(c) The commissiondepartmentmay by rule require reports
2916	or filings required under the insurance code to be submitted on
2917	a computer-diskette compatible with the electronic data
2918	processing equipment specified by the commissiondepartment.
2919	(2) The statement of an alien insurer shall be verified by
2920	the insurer's United States manager or other officer duly
2921	authorized. It shall be a separate statement, to be known as
2922	its general statement, of its transactions, assets, and affairs
2923	within the United States unless the officedepartmentrequires
2924	otherwise. If the officedepartmentrequires a statement as to
2925	the insurer's affairs elsewhere, the insurer shall file such
2926	statement with the officedepartmentas soon as reasonably
2927	possible.
2928	(3) Each insurer having a deposit as required under s.
2929	624.411 shall file with the officedepartmentannually with its
2930	annual statement a certificate to the effect that the assets so
2931	deposited have a market value equal to or in excess of the
2932	amount of deposit so required.
2933	(4) At the time of filing, the insurer shall pay the fee
2934	for filing its annual statement in the amount specified in s.
2935	624.501.
2936	(5) The officedepartmentmay refuse to continue, or may
2937	suspend or revoke, the certificate of authority of an insurer
2938	failing to file its annual or quarterly statements and
2939	accompanying certificates when due.
2940	(6) In addition to information called for and furnished in
2941	connection with its annual or quarterly statements, an insurer
2942	shall furnish to the officedepartmentas soon as reasonably
2943	possible such information as to its transactions or affairs as
2944	the officedepartmentmay from time to time request in writing.
2945	All such information furnished pursuant to the office's
2946	department'srequest shall be verified by the oath of two
2947	executive officers of the insurer or, if a reciprocal insurer,
2948	by the oath of the attorney in fact or its like officers if a
2949	corporation.
2950	(7) The signatures of all such persons when written on
2951	annual or quarterly statements or other reports required by this
2952	section shall be presumed to have been so written by authority
2953	of the person whose signature is affixed thereon. The affixing
2954	of any signature by anyone other than the purported signer
2955	constitutes a felony of the second degree, punishable as
2956	provided in s. 775.082, s. 775.083, or s. 775.084.
2957	(8)(a) All authorized insurers must have conducted an
2958	annual audit by an independent certified public accountant and
2959	must file an audited financial report with the officedepartment
2960	on or before June 1 for the preceding year ending December 31.
2961	The officedepartmentmay require an insurer to file an audited
2962	financial report earlier than June 1 upon 90 days' advance
2963	notice to the insurer. The officedepartmentmay immediately
2964	suspend an insurer's certificate of authority by order if an
2965	insurer's failure to file required reports, financial
2966	statements, or information required by this subsection or rule
2967	adopted pursuant thereto creates a significant uncertainty as to
2968	the insurer's continuing eligibility for a certificate of
2969	authority.
2970	(b) Any authorized insurer otherwise subject to this
2971	section having direct premiums written in this state of less
2972	than $1 million in any calendar year and fewerlessthan 1,000
2973	policyholders or certificateholders of directly written policies
2974	nationwide at the end of such calendar year is exempt from this
2975	section for such year unless the officedepartmentmakes a
2976	specific finding that compliance is necessary in order for the
2977	officedepartmentto carry out its statutory responsibilities.
2978	However, any insurer having assumed premiums pursuant to
2979	contracts or treaties or reinsurance of $1 million or more is
2980	not exempt. Any insurer subject to an exemption must submit by
2981	March 1 following the year to which the exemption applies an
2982	affidavit sworn to by a responsible officer of the insurer
2983	specifying the amount of direct premiums written in this state
2984	and number of policyholders or certificateholders.
2985	(c) The board of directors of an insurer shall hire the
2986	certified public accountant that prepares the audit required by
2987	this subsection and the board shall establish an audit committee
2988	of three or more directors of the insurer or an affiliated
2989	company. The audit committee shall be responsible for discussing
2990	audit findings and interacting with the certified public
2991	accountant with regard to her or his findings. The audit
2992	committee shall be comprised solely of members who are free from
2993	any relationship that, in the opinion of its board of directors,
2994	would interfere with the exercise of independent judgment as a
2995	committee member. The audit committee shall report to the board
2996	any findings of adverse financial conditions or significant
2997	deficiencies in internal controls that have been noted by the
2998	accountant. The insurer may request the officedepartmentto
2999	waive this requirement of the audit committee membership based
3000	upon unusual hardship to the insurer.
3001	(d) An insurer may not use the same accountant or partner
3002	of an accounting firm responsible for preparing the report
3003	required by this subsection for more than 7 consecutive years.
3004	Following this period, the insurer may not use such accountant
3005	or partner for a period of 2 years, but may use another
3006	accountant or partner of the same firm. An insurer may request
3007	the officedepartmentto waive this prohibition based upon an
3008	unusual hardship to the insurer and a determination that the
3009	accountant is exercising independent judgment that is not unduly
3010	influenced by the insurer considering such factors as the number
3011	of partners, expertise of the partners or the number of
3012	insurance clients of the accounting firm; the premium volume of
3013	the insurer; and the number of jurisdictions in which the
3014	insurer transacts business.
3015	(e) The commissiondepartmentshall adopt rules to
3016	implement this subsection, which rules must be in substantial
3017	conformity with the 19981990Model Rule Requiring Annual
3018	Audited Financial Reports adopted by the National Association of
3019	Insurance Commissioners, except where inconsistent with the
3020	requirements of this subsection. Any exception to, waiver of, or
3021	interpretation of accounting requirements of the commission
3022	departmentmust be in writing and signed by an authorized
3023	representative of the officedepartment. No insurer may raise as
3024	a defense in any action, any exception to, waiver of, or
3025	interpretation of accounting requirements, unless previously
3026	issued in writing by an authorized representative of the office
3027	department.
3028	(9)(a) Each authorized insurer shall, pursuant to s.
3029	409.910(20), provide records and information to the Agency for
3030	Health Care Administration to identify potential insurance
3031	coverage for claims filed with that agency and its fiscal agents
3032	for payment of medical services under the Medicaid program.
3033	(b) Each authorized insurer shall, pursuant to s.
3034	409.2561(5)(c), notify the Medicaid agency of a cancellation or
3035	discontinuance of a policy within 30 days if the insurer
3036	received notification from the Medicaid agency to do so.
3037	(c) Any information provided by an insurer under this
3038	subsection does not violate any right of confidentiality or
3039	contract that the insurer may have with covered persons. The
3040	insurer is immune from any liability that it may otherwise incur
3041	through its release of such information to the Agency for Health
3042	Care Administration.
3043	(10) Each insurer or insurer group doing business in this
3044	state shall file on a quarterly basis in conjunction with
3045	financial reports required by paragraph (1)(a) a supplemental
3046	report on an individual and group basis on a form prescribed by
3047	the commissiondepartmentwith information on personal lines and
3048	commercial lines residential property insurance policies in this
3049	state. The supplemental report shall include separate
3050	information for personal lines property policies and for
3051	commercial lines property policies and totals for each item
3052	specified, including premiums written for each of the property
3053	lines of business as described in ss. 215.555(2)(c) and
3054	627.351(6)(a). The report shall include the following
3055	information for each county on a monthly basis:
3056	(a) Total number of policies in force at the end of each
3057	month.
3058	(b) Total number of policies canceled.
3059	(c) Total number of policies nonrenewed.
3060	(d) Number of policies canceled due to hurricane risk.
3061	(e) Number of policies nonrenewed due to hurricane risk.
3062	(f) Number of new policies written.
3063	(g) Total dollar value of structure exposure under
3064	policies that include wind coverage.
3065	(h) Number of policies that exclude wind coverage.
3066	Section 33. Subsections (2), (3), and (4) of section
3067	624.476, Florida Statutes, are amended to read:
3068	624.476 Impaired self-insurance funds.--
3069	(2) If any fund levies an assessment pursuant to
3070	subsection (1), the officedepartmentshall require the fund to
3071	consent to administrative supervision under part VI of this
3072	chapter. The officedepartmentmay waive the requirement to
3073	consent to administrative supervision for good cause.
3074	(3) If the trustees fail to make an assessment as required
3075	by subsection(1), the officedepartmentshall order the trustees
3076	to do so. If the deficiency is not sufficiently made up within
3077	60 days after the date of the order, the fund shall be deemed
3078	insolvent and grounds shall exist to proceed against the fund as
3079	provided for in part I of chapter 631.
3080	(4) Notwithstanding the requirement of the fund to make an
3081	assessment pursuant to subsection (1) or subsection (3), the
3082	officedepartment may at any time request that the departmentto
3083	be appointed receiver for purposes of rehabilitation or
3084	liquidation if it is able to demonstrate that any grounds for
3085	rehabilitation or liquidation exist pursuant to s. 631.051 or s.
3086	631.061.
3087	Section 34. Section 624.477, Florida Statutes, is amended
3088	to read:
3089	624.477 Liquidation, rehabilitation, reorganization, and
3090	conservation.--Any rehabilitation, liquidation, conservation, or
3091	dissolution of a self-insurance fund shall be conducted under
3092	the supervision of the office and department, which shall each
3093	have all power with respect thereto granted to the fund under
3094	part I of chapter 631 governing the rehabilitation, liquidation,
3095	conservation, or dissolution of insurers and including all
3096	grounds for the appointment of a receiver contained in ss.
3097	631.051 and 631.061.
3098	Section 35. Section 625.01115, Florida Statutes, is
3099	amended to read:
3100	625.01115 Definitions.--As used in this chapter, the term
3101	"statutory accounting principles" means accounting principles as
3102	defined in the National Association of Insurance Commissioners
3103	Accounting Practices and Procedures Manual as of March 2002 and
3104	subsequent amendments thereto if the methodology remains
3105	substantially consistenteffective January 1, 2001.
3106	Section 36. Subsections (2), (3), and (4), paragraphs (c),
3107	(d), (g), (h), (i), and (j) of subsection (5), paragraph (e) of
3108	subsection (6), subsection (10), paragraph(b) of subsection
3109	(12), and subsection (14) of section 625.121, Florida Statutes,
3110	are amended to read:
3111	625.121 Standard Valuation Law; life insurance.--
3112	(2) ANNUAL VALUATION.--The officedepartmentshall
3113	annually value, or cause to be valued, the reserve liabilities,
3114	hereinafter called "reserves," for all outstanding life
3115	insurance policies and annuity and pure endowment contracts of
3116	every life insurer doing business in this state, and may certify
3117	the amount of any such reserves, specifying the mortality table
3118	or tables, rate or rates of interest, and methods, net-level
3119	premium method or others, used in the calculation of such
3120	reserves. In the case of an alien insurer, such valuation shall
3121	be limited to its insurance transactions in the United States.
3122	In calculating such reserves, the officedepartmentmay use
3123	group methods and approximate averages for fractions of a year
3124	or otherwise. It may accept in its discretion the insurer's
3125	calculation of such reserves. In lieu of the valuation of the
3126	reserves herein required of any foreign or alien insurer, it may
3127	accept any valuation made or caused to be made by the insurance
3128	supervisory official of any state or other jurisdiction when
3129	such valuation complies with the minimum standard herein
3130	provided and if the official of such state or jurisdiction
3131	accepts as sufficient and valid for all legal purposes the
3132	certificate of valuation of the officedepartmentwhen such
3133	certificate states the valuation to have been made in a
3134	specified manner according to which the aggregate reserves would
3135	be at least as large as if they had been computed in the manner
3136	prescribed by the law of that state or jurisdiction. When any
3137	such valuation is made by the officedepartment, it may use the
3138	actuary of the officedepartmentor employ an actuary for the
3139	purpose; and the reasonable compensation of the actuary, at a
3140	rate approved by the officedepartment, and reimbursement of
3141	travel expenses pursuant to s. 624.320 upon demand by the office
3142	department, supported by an itemized statement of such
3143	compensation and expenses, shall be paid by the insurer. When a
3144	domestic insurer furnishes the officedepartmentwith a
3145	valuation of its outstanding policies as computed by its own
3146	actuary or by an actuary deemed satisfactory for the purpose by
3147	the officedepartment, the valuation shall be verified by the
3148	actuary of the officedepartmentwithout cost to the insurer.
3149	(3) ACTUARIAL OPINION OF RESERVES.--
3150	(a)1. Each life insurance company doing business in this
3151	state shall annually submit the opinion of a qualified actuary
3152	as to whether the reserves and related actuarial items held in
3153	support of the policies and contracts specified by the
3154	commissiondepartmentby rule are computed appropriately, are
3155	based on assumptions which satisfy contractual provisions, are
3156	consistent with prior reported amounts, and comply with
3157	applicable laws of this state. The commissiondepartmentby rule
3158	shall define the specifics of this opinion and add any other
3159	items determined to be necessary to its scope.
3160	2. The opinion shall be submitted with the annual
3161	statement reflecting the valuation of such reserve liabilities
3162	for each year ending on or after December 31, 1992.
3163	3. The opinion shall apply to all business in force,
3164	including individual and group health insurance plans, in the
3165	form and substance acceptable to the officedepartmentas
3166	specified by rule of the commission.
3167	4. The commissiondepartmentmay adopt rules providing the
3168	standards of the actuarial opinion consistent with standards
3169	adopted by the Actuarial Standards Board on December 31, 2002
3170	October 1, 1991, and subsequent revisions thereto, provided that
3171	the standards remain substantially consistent.
3172	5. In the case of an opinion required to be submitted by a
3173	foreign or alien company, the officedepartmentmay accept the
3174	opinion filed by that company with the insurance supervisory
3175	official of another state if the officedepartmentdetermines
3176	that the opinion reasonably meets the requirements applicable to
3177	a company domiciled in this state.
3178	6. For the purposes of this subsection, "qualified
3179	actuary" means a member in good standing of the American Academy
3180	of Actuaries who also meets the requirements specified by rule
3181	of the commissiondepartment.
3182	7. Disciplinary action by the officedepartmentagainst
3183	the company or the qualified actuary shall be in accordance with
3184	the insurance code and related rules adopted by the commission
3185	department.
3186	8. A memorandum in the form and substance specified by
3187	rule shall be prepared to support each actuarial opinion.
3188	9. If the insurance company fails to provide a supporting
3189	memorandum at the request of the officedepartmentwithin a
3190	period specified by rule of the commission, or if the office
3191	departmentdetermines that the supporting memorandum provided by
3192	the insurance company fails to meet the standards prescribed by
3193	rule of the commission, the officedepartmentmay engage a
3194	qualified actuary at the expense of the company to review the
3195	opinion and the basis for the opinion and prepare such
3196	supporting memorandum as is required by the officedepartment.
3197	10. Except as otherwise provided in this paragraph, any
3198	memorandum or other material in support of the opinion is
3199	confidential and exempt from the provisions of s. 119.07(1);
3200	however, the memorandum or other material may be released by the
3201	officedepartmentwith the written consent of the company, or to
3202	the American Academy of Actuaries upon request stating that the
3203	memorandum or other material is required for the purpose of
3204	professional disciplinary proceedings and setting forth
3205	procedures satisfactory to the officedepartmentfor preserving
3206	the confidentiality of the memorandum or other material. If any
3207	portion of the confidential memorandum is cited by the company
3208	in its marketing or is cited before any governmental agency
3209	other than a state insurance department or is released by the
3210	company to the news media, no portion of the memorandum is
3211	confidential.
3212	(b) In addition to the opinion required by subparagraph
3213	(a)1., the officedepartment may, pursuant to commissionby
3214	rule,require an opinion of the same qualified actuary as to
3215	whether the reserves and related actuarial items held in support
3216	of the policies and contracts specified by the commission
3217	departmentby rule, when considered in light of the assets held
3218	by the company with respect to the reserves and related
3219	actuarial items, including but not limited to the investment
3220	earnings on the assets and considerations anticipated to be
3221	received and retained under the policies and contracts, make
3222	adequate provision for the company's obligations under the
3223	policies and contracts, including, but not limited to, the
3224	benefits under, and expenses associated with, the policies and
3225	contracts.
3226	(c) The commissiondepartmentmay provide by rule for a
3227	transition period for establishing any higher reserves which the
3228	qualified actuary may deem necessary in order to render the
3229	opinion required by this subsection.
3230	(4) MINIMUM STANDARD FOR VALUATION OF POLICIES AND
3231	CONTRACTS ISSUED BEFORE OPERATIVE DATE OF STANDARD NONFORFEITURE
3232	LAW.--The minimum standard for the valuation of all such
3233	policies and contracts issued prior to the operative date of s.
3234	627.476 (Standard Nonforfeiture Law) shall be any basis
3235	satisfactory to the officedepartment. Any basis satisfactory to
3236	the former Department of Insuranceon the effective date of this
3237	code shall be deemed to meet such minimum standards.
3238	(5) MINIMUM STANDARD FOR VALUATION OF POLICIES AND
3239	CONTRACTS ISSUED ON OR AFTER OPERATIVE DATE OF STANDARD
3240	NONFORFEITURE LAW.--Except as otherwise provided in paragraph
3241	(h) and subsections (6), (11), and (14), the minimum standard
3242	for the valuation of all such policies and contracts issued on
3243	or after the operative date of s. 627.476 (Standard
3244	Nonforfeiture Law for Life Insurance) shall be the
3245	commissioners' reserve valuation method defined in subsections
3246	(7), (11), and (14); 5 percent interest for group annuity and
3247	pure endowment contracts and 3.5 percent interest for all other
3248	such policies and contracts, or in the case of life insurance
3249	policies and contracts, other than annuity and pure endowment
3250	contracts, issued on or after July 1, 1973, 4 percent interest
3251	for such policies issued prior to October 1, 1979, and 4.5
3252	percent interest for such policies issued on or after October 1,
3253	1979; and the following tables:
3254	(c) For individual annuity and pure endowment contracts,
3255	excluding any disability and accidental death benefits in such
3256	policies, the 1937 Standard Annuity Mortality Table or, at the
3257	option of the insurer, the Annuity Mortality Table for 1949,
3258	Ultimate, or any modification of either of these tables approved
3259	by the officedepartment.
3260	(d) For group annuity and pure endowment contracts,
3261	excluding any disability and accidental death benefits in such
3262	policies, the Group Annuity Mortality Table for 1951; any
3263	modification of such table approved by the officedepartment;
3264	or, at the option of the insurer, any of the tables or
3265	modifications of tables specified for individual annuity and
3266	pure endowment contracts.
3267	(g) For group life insurance, life insurance issued on the
3268	substandard basis, and other special benefits, such tables as
3269	may be approved by the officedepartmentas being sufficient
3270	with relation to the benefits provided by such policies.
3271	(h) Except as provided in subsection (6), the minimum
3272	standard for the valuation of all individual annuity and pure
3273	endowment contracts issued on or after the operative date of
3274	this paragraph and for all annuities and pure endowments
3275	purchased on or after such operative date under group annuity
3276	and pure endowment contracts shall be the commissioners' reserve
3277	valuation method defined in subsection (7) and the following
3278	tables and interest rates:
3279	1. For individual annuity and pure endowment contracts
3280	issued prior to October 1, 1979, excluding any disability and
3281	accidental death benefits in such contracts, the 1971 Individual
3282	Annuity Mortality Table, or any modification of this table
3283	approved by the officedepartment, and 6 percent interest for
3284	single-premium immediate annuity contracts and 4 percent
3285	interest for all other individual annuity and pure endowment
3286	contracts.
3287	2. For individual single-premium immediate annuity
3288	contracts issued on or after October 1, 1979, and prior to
3289	October 1, 1986, excluding any disability and accidental death
3290	benefits in such contracts, the 1971 Individual Annuity
3291	Mortality Table, or any modification of this table approved by
3292	the officedepartment, and 7.5 percent interest. For such
3293	contracts issued on or after October 1, 1986, the 1983
3294	Individual Annual Mortality Table, or any modification of such
3295	table approved by the officedepartment, and the applicable
3296	calendar year statutory valuation interest rate as described in
3297	subsection (6).
3298	3. For individual annuity and pure endowment contracts
3299	issued on or after October 1, 1979, and prior to October 1,
3300	1986, other than single-premium immediate annuity contracts,
3301	excluding any disability and accidental death benefits in such
3302	contracts, the 1971 Individual Annuity Mortality Table, or any
3303	modification of this table approved by the officedepartment,
3304	and 5.5 percent interest for single-premium deferred annuity and
3305	pure endowment contracts and 4.5 percent interest for all other
3306	such individual annuity and pure endowment contracts. For such
3307	contracts issued on or after October 1, 1986, the 1983
3308	Individual Annual Mortality Table, or any modification of such
3309	table approved by the officedepartment, and the applicable
3310	calendar year statutory valuation interest rate as described in
3311	subsection (6).
3312	4. For all annuities and pure endowments purchased prior
3313	to October 1, 1979, under group annuity and pure endowment
3314	contracts, excluding any disability and accidental death
3315	benefits purchased under such contracts, the 1971 Group Annuity
3316	Mortality Table, or any modification of this table approved by
3317	the officedepartment, and 6 percent interest.
3318	5. For all annuities and pure endowments purchased on or
3319	after October 1, 1979, and prior to October 1, 1986, under group
3320	annuity and pure endowment contracts, excluding any disability
3321	and accidental death benefits purchased under such contracts,
3322	the 1971 Group Annuity Mortality Table, or any modification of
3323	this table approved by the officedepartment, and 7.5 percent
3324	interest. For such contracts purchased on or after October 1,
3325	1986, the 1983 Group Annuity Mortality Table, or any
3326	modification of such table approved by the officedepartment,
3327	and the applicable calendar year statutory valuation interest
3328	rate as described in subsection (6).
3329
3330
3331	After July 1, 1973, any insurer may have filedfile with the
3332	former Department of Insurancea written notice of its election
3333	to comply with the provisions of this paragraph after a
3334	specified date before January 1, 1979, which shall be the
3335	operative date of this paragraph for such insurer. However, an
3336	insurer may elect a different operative date for individual
3337	annuity and pure endowment contracts from that elected for group
3338	annuity and pure endowment contracts. If an insurer makes no
3339	such election, the operative date of this paragraph for such
3340	insurer shall be January 1, 1979.
3341	(i) In lieu of the mortality tables specified in this
3342	subsection, and subject to rules previously adopted by the
3343	former Department of Insurance, the insurance company may, at
3344	its option:
3345	1. Substitute the applicable 1958 CSO or CET Smoker and
3346	Nonsmoker Mortality Tables, in lieu of the 1980 CSO or CET
3347	mortality table standard, for policies issued on or after the
3348	operative date of s. 627.476(9) and before January 1, 1989.
3349	2. Substitute the applicable 1980 CSO or CET Smoker and
3350	Nonsmoker Mortality Tables in lieu of the 1980 CSO or CET
3351	mortality table standard;
3352	3. Use the Annuity 2000 Mortality Table for determining
3353	the minimum standard of valuation for individual annuity and
3354	pure endowment contracts issued on or after January 1, 1998, and
3355	before July 1, 1998the operative date of this section until the
3356	department, on a date certain that is on or after January 1,
3357	1998, adopts by rule that table for determining the minimum
3358	standard for valuation purposes.
3359	4. Use the 1994 GAR Table for determining the minimum
3360	standard of valuation for annuities and pure endowments
3361	purchased on or after January 1, 1998, and before July 1, 1998,
3362	the operative date of this sectionunder group annuity and pure
3363	endowment contracts until the department, on a date certain that
3364	is on or after January 1, 1998, adopts by rule that table for
3365	determining the minimum standard for valuation purposes.
3366	(j) The commissiondepartmentmay adopt by rule the model
3367	regulation for valuation of life insurance policies as approved
3368	by the National Association of Insurance Commissioners in March
3369	1999, including tables of select mortality factors, and may make
3370	the regulation effective for policies issued on or afterJanuary
3371	1, 2000.
3372	(6) MINIMUM STANDARD OF VALUATION.--
3373	(e) The interest rate index shall be the Moody's Corporate
3374	Bond Yield Average-Monthly Average Corporates as published by
3375	Moody's Investors Service, Inc., as long as this index is
3376	calculated by using substantially the same methodology as used
3377	by it on January 1, 1981. If Moody's corporate bond yield
3378	average ceases to be calculated in this manner, the interest
3379	rate index shall be the index approved by rule promulgated by
3380	the commissiondepartment. The methodology used in determining
3381	the index approved by rule shall be substantially the same as
3382	the methodology employed on January 1, 1981, for determining
3383	Moody's Corporate Bond Yield Average-Monthly Average Corporates
3384	as published by Moody's Investors Services, Inc.
3385	(10) LOWER VALUATIONS.--An insurer which at any time had
3386	adopted any standard of valuation producing greater aggregate
3387	reserves than those calculated according to the minimum standard
3388	herein provided may, with the approval of the officedepartment,
3389	adopt any lower standard of valuation, but not lower than the
3390	minimum herein provided; however, for the purposes of this
3391	subsection, the holding of additional reserves previously
3392	determined by a qualified actuary to be necessary to render the
3393	opinion required by subsection (3) shall not be deemed to be the
3394	adoption of a higher standard of valuation.
3395	(12) ALTERNATE METHOD FOR DETERMINING RESERVES IN CERTAIN
3396	CASES.--In the case of any plan of life insurance which provides
3397	for future premium determination, the amounts of which are to be
3398	determined by the insurer based on then estimates of future
3399	experience, or in the case of any plan of life insurance or
3400	annuity which is of such a nature that the minimum reserves
3401	cannot be determined by the methods described in subsection (7),
3402	the reserves which are held under any such plan shall:
3403	(b) Be computed by a method which is consistent with the
3404	principles of this section, as determined by rules promulgated
3405	by the commissiondepartment.
3406	(14) MINIMUM STANDARDS FOR HEALTH PLANS.--The commission
3407	departmentshall adopt a rule containing the minimum standards
3408	applicable to the valuation of health plans in accordance with
3409	sound actuarial principles.
3410	Section 37. Subsections (1), (2), and (4) of section
3411	625.151, Florida Statutes, are amended to read:
3412	625.151 Valuation of other securities.--
3413	(1) Securities, other than those referred to in s.
3414	625.141, held by an insurer shall be valued, in the discretion
3415	of the officedepartment, at their market value, or at their
3416	appraised value, or at prices determined by it as representing
3417	their fair market value.
3418	(2) Preferred or guaranteed stocks or shares while paying
3419	full dividends may be carried at a fixed value in lieu of market
3420	value, at the discretion of the officedepartmentand in
3421	accordance with such method of valuation as it may approve.
3422	(4) No valuations under this section shall be inconsistent
3423	with any applicable valuation or method contained in the latest
3424	edition of the publication "Valuation of Securities" published
3425	by the National Association of Insurance Commissioners or its
3426	successor organization; provided that such valuation methodology
3427	is substantially similar to the methodology used by the National
3428	Association of Insurance Commissioners in its July 1, 2002,1988
3429	edition of such publication.
3430	Section 38. Section 625.317, Florida Statutes, is amended
3431	to read:
3432	625.317 Corporate bonds and debentures.--An insurer may
3433	invest in bonds, notes, or other interest-bearing or interest-
3434	accruing obligations of any solvent corporation organized under
3435	the laws of the United States or Canada or under the laws of any
3436	state, the District of Columbia, any territory or possession of
3437	the United States, or any Province of Canada or in bonds or
3438	notes issued by the Citizens Property Insurance Corporation as
3439	authorized by s. 627.351(6)Florida Windstorm Underwriting
3440	Association or a private nonprofit corporation, a private
3441	nonprofit unincorporated association, or a nonprofit mutual
3442	company organized by that association, all as authorized in s.
3443	627.351(2)(c), or any subsidiary or affiliate thereof authorized
3444	by the Department of Insurance to issue such bonds or notes.
3445	Section 39. Subsection (4) of section 625.325, Florida
3446	Statutes, is amended to read:
3447	625.325 Investments in subsidiaries and related
3448	corporations.--
3449	(4) DEBT OBLIGATIONS.--Debt obligations, other than
3450	mortgage loans, made under the authority of this section must
3451	meet amortization requirements in accordance with the latest
3452	edition of the publication "Valuation of Securities" by the
3453	National Association of Insurance Commissioners or its successor
3454	organization; provided that such amortization methodology is
3455	substantially similar to the methodology used by the National
3456	Association of Insurance Commissioners in its July 1, 2002,1988
3457	edition of such publication.
3458	Section 40. Subsections (6) and (11) of section 626.015,
3459	Florida Statutes, are amended, and present subsections (7)-(19)
3460	of said section are renumbered as subsections (6)-(18),
3461	respectively, to read:
3462	626.015 Definitions.--As used in this part:
3463	(6) "Department" means the Department of Insurance.
3464	(10)(11)"License" means a document issued by the
3465	department or officeauthorizing a person to be appointed to
3466	transact insurance or adjust claims for the kind, line, or class
3467	of insurance identified in the document.
3468	Section 41. Section 626.016, Florida Statutes, is created
3469	to read:
3470	626.016 Powers and duties of department, commission, and
3471	office.--
3472	(1) The powers and duties of the Chief Financial Officer
3473	and the department specified in this chapter apply only with
3474	respect to insurance agents, managing general agents,
3475	reinsurance intermediaries, viatical settlement brokers,
3476	customer representatives, service representatives, agencies, and
3477	unlicensed persons subject to the regulatory jurisdiction of the
3478	department.
3479	(2) The powers and duties of the commission and office
3480	specified in this chapter apply only with respect to insurance
3481	adjusters, service companies, administrators, viatical
3482	settlement providers and contracts, and unlicensed persons
3483	subject to the regulatory jurisdiction of the commission and
3484	office.
3485	(3) The department has jurisdiction to enforce provisions
3486	of this chapter with respect to persons who engage in actions
3487	for which a license issued by the department is legally
3488	required. The office has jurisdiction to enforce provisions of
3489	this chapter with respect to persons who engage in actions for
3490	which a license or certificate of authority issued by the office
3491	is legally required. For persons who violate a provision of this
3492	chapter for whom a license or certificate of authority issued by
3493	either the department or office is not required, either the
3494	department or office may take administrative action against such
3495	person as authorized by this chapter, pursuant to agreement
3496	between the office and department.
3497	(4) Nothing in this section is intended to limit the
3498	authority of the department and the Division of Insurance Fraud,
3499	as specified in s. 626.989.
3500	Section 42. Subsection (16) of section 626.025, Florida
3501	Statutes, is amended to read:
3502	626.025 Consumer protections.--To transact insurance,
3503	agents shall comply with consumer protection laws, including the
3504	following, as applicable:
3505	(16) Any other licensing requirement, restriction, or
3506	prohibition designated a consumer protection by the Chief
3507	Financial OfficerInsurance Commissioner, but not inconsistent
3508	with the requirements of Subtitle C of the Gramm-Leach-Bliley
3509	Act, 15 U.S.C.A. ss. 6751 et seq.
3510	Section 43. Paragraph (a) of subsection (1) of section
3511	626.112, Florida Statutes, is amended to read:
3512	626.112 License and appointment required; agents, customer
3513	representatives, adjusters, insurance agencies, service
3514	representatives, managing general agents.--
3515	(1)(a) No person may be, act as, or advertise or hold
3516	himself or herself out to be an insurance agent, orcustomer
3517	representative, or adjusterunless he or she is currently
3518	licensed by the department and appointed by one or more
3519	insurers. No person may be, act as, or advertise or hold himself
3520	or herself out to be an insurance adjuster unless he or she is
3521	currently licensed by the office and appointed by one or more
3522	insurers.
3523
3524	However, an employee leasing company licensed pursuant to
3525	chapter 468 which is seeking to enter into a contract with an
3526	employer that identifies products and services offered to
3527	employees may deliver proposals for the purchase of employee
3528	leasing services to prospective clients of the employee leasing
3529	company setting forth the terms and conditions of doing
3530	business; classify employees as permitted by s. 468.529; collect
3531	information from prospective clients and other sources as
3532	necessary to perform due diligence on the prospective client and
3533	to prepare a proposal for services; provide and receive
3534	enrollment forms, plans, and other documents; and discuss or
3535	explain in general terms the conditions, limitations, options,
3536	or exclusions of insurance benefit plans available to the client
3537	or employees of the employee leasing company were the client to
3538	contract with the employee leasing company. Any advertising
3539	materials or other documents describing specific insurance
3540	coverages must identify and be from a licensed insurer or its
3541	licensed agent or a licensed and appointed agent employed by the
3542	employee leasing company. The employee leasing company may not
3543	advise or inform the prospective business client or individual
3544	employees of specific coverage provisions, exclusions, or
3545	limitations of particular plans. As to clients for which the
3546	employee leasing company is providing services pursuant to s.
3547	468.525(4), the employee leasing company may engage in
3548	activities permitted by ss. 626.7315, 626.7845, and 626.8305,
3549	subject to the restrictions specified in those sections. If a
3550	prospective client requests more specific information concerning
3551	the insurance provided by the employee leasing company, the
3552	employee leasing company must refer the prospective business
3553	client to the insurer or its licensed agent or to a licensed and
3554	appointed agent employed by the employee leasing company.
3555	Section 44. Section 626.161, Florida Statutes, is amended
3556	to read:
3557	626.161 Licensing forms.--The department shall prescribe
3558	and furnish all printed forms required in connection with the
3559	application for issuance of and termination of all licenses and
3560	appointments, except that, with respect to adjusters, the
3561	commission shall prescribe and the office shall furnish such
3562	forms.
3563	Section 45. Subsections (1), (2), and (5) of section
3564	626.171, Florida Statutes, are amended to read:
3565	626.171 Application for license.--
3566	(1) The department or officeshall not issue a license as
3567	agent, customer representative, adjuster, insurance agency,
3568	service representative, managing general agent, or reinsurance
3569	intermediary to any person except upon written application
3570	therefor filed with it, qualification therefor, and payment in
3571	advance of all applicable fees. Any such application shall be
3572	made under the oath of the applicant and be signed by the
3573	applicant. Beginning November 1, 2002, the department shall
3574	accept the uniform application for nonresident agent licensing.
3575	The department may adopt revised versions of the uniform
3576	application by rule.
3577	(2) In the application, the applicant shall set forth:
3578	(a) His or her full name, age, social security number,
3579	residence, and place of business.
3580	(b) Proof that he or she has completed or is in the
3581	process of completing any required prelicensing course.
3582	(c) Whether he or she has been refused or has voluntarily
3583	surrendered or has had suspended or revoked a license to solicit
3584	insurance by the department or by the supervising officials of
3585	any state.
3586	(d) Whether any insurer or any managing general agent
3587	claims the applicant is indebted under any agency contract or
3588	otherwise and, if so, the name of the claimant, the nature of
3589	the claim, and the applicant's defense thereto, if any.
3590	(e) Proof that the applicant meets the requirements for
3591	the type of license for which he or she is applying.
3592	(f) Such other or additional information as the department
3593	or officemay deem proper to enable it to determine the
3594	character, experience, ability, and other qualifications of the
3595	applicant to hold himself or herself out to the public as an
3596	insurance representative.
3597	(5) An application for a license as an agent, customer
3598	representative, adjuster, insurance agency, service
3599	representative, managing general agent, or reinsurance
3600	intermediary must be accompanied by a set of the individual
3601	applicant's fingerprints, or, if the applicant is not an
3602	individual, by a set of the fingerprints of the sole proprietor,
3603	majority owner, partners, officers, and directors, on a form
3604	adopted by rule of the department or commissionand accompanied
3605	by the fingerprint processing fee set forth in s. 624.501. The
3606	fingerprints shall be certified by a law enforcement officer.
3607	Section 46. Section 626.181, Florida Statutes, is amended
3608	to read:
3609	626.181 Number of applications for licensure
3610	required.--After a license as agent, customer representative, or
3611	adjuster has been issued to an individual, the same individual
3612	shall not be required to take another examination for a similar
3613	license, regardless, in the case of an agent, of the number of
3614	insurers to be represented by him or her as agent, unless:
3615	(1) Specifically ordered by the department or officeto
3616	complete a new application for license; or
3617	(2) During any period of 48 months since the filing of the
3618	original license application, such individual was not appointed
3619	as an agent, customer representative, or adjuster, unless the
3620	failure to be so appointed was due to military service, in which
3621	event the period within which a new application is not required
3622	may, in the discretion of the department or office, be extended
3623	to 12 months following the date of discharge from military
3624	service if the military service does not exceed 3 years, but in
3625	no event to extend under this clause for a period of more than 6
3626	years from the date of filing of the original application for
3627	license.
3628	Section 47. Section 626.191, Florida Statutes, is amended
3629	to read:
3630	626.191 Repeated applications.--The failure of an
3631	applicant to secure a license upon an application shall not
3632	preclude him or her from applying again as many times as
3633	desired, but the department or officeshall not give
3634	consideration to or accept any further application by the same
3635	individual for a similar license dated or filed within 30 days
3636	subsequent to the date the department or officedenied the last
3637	application, except as provided in s. 626.281.
3638	Section 48. Section 626.201, Florida Statutes, is amended
3639	to read:
3640	626.201 Investigation.--The department or officemay
3641	propound any reasonable interrogatories in addition to those
3642	contained in the application, to any applicant for license or
3643	appointment, or on any renewal, reinstatement, or continuation
3644	thereof, relating to his or her qualifications, residence,
3645	prospective place of business, and any other matter which, in
3646	the opinion of the department or office, is deemed necessary or
3647	advisable for the protection of the public and to ascertain the
3648	applicant's qualifications. The department or officemay, upon
3649	completion of the application, make such further investigation
3650	as it may deem advisable of the applicant's character,
3651	experience, background, and fitness for the license or
3652	appointment. Such an inquiry or investigation shall be in
3653	addition to any examination required to be taken by the
3654	applicant as hereinafter in this chapter provided.
3655	Section 49. Section 626.202, Florida Statutes, is amended
3656	to read:
3657	626.202 Fingerprinting requirements.--If there is a change
3658	in ownership or control of any entity licensed under this
3659	chapter, or if a new partner, officer, or director is employed
3660	or appointed, a set of fingerprints of the new owner, partner,
3661	officer, or director must be filed with the department or office
3662	within 30 days after the change. The acquisition of 10 percent
3663	or more of the voting securities of a licensed entity is
3664	considered a change of ownership or control. The fingerprints
3665	must be certified by a law enforcement officer and be
3666	accompanied by the fingerprint processing fee in s. 624.501.
3667	Section 50. Section 626.211, Florida Statutes, is amended
3668	to read:
3669	626.211 Approval, disapproval of application.--
3670	(1) If upon the basis of a completed application for
3671	license and such further inquiry or investigation as the
3672	department or officemay make concerning an applicant the
3673	department or officeis satisfied that, subject to any
3674	examination required to be taken and passed by the applicant for
3675	a license, the applicant is qualified for the license applied
3676	for and that all pertinent fees have been paid, it shall approve
3677	the application. The department or officeshall not deny,
3678	delay, or withhold approval of an application due to the fact
3679	that it has not received a criminal history report based on the
3680	applicant's fingerprints.
3681	(2) Upon approval of an applicant for license as agent,
3682	customer representative, or adjuster who is subject to written
3683	examination, the department or officeshall notify the applicant
3684	when and where he or she may take the required examination.
3685	(3) Upon approval of an applicant for license who is not
3686	subject to examination, the department or officeshall promptly
3687	issue the license.
3688	(4) If upon the basis of the completed application and
3689	such further inquiry or investigation the department or office
3690	deems the applicant to be lacking in any one or more of the
3691	required qualifications for the license applied for, the
3692	department or officeshall disapprove the application and notify
3693	the applicant, stating the grounds of disapproval.
3694	Section 51. Section 626.221, Florida Statutes, is amended
3695	to read:
3696	626.221 Examination requirement; exemptions.--
3697	(1) The department or officeshall not issue any license
3698	as agent, customer representative, or adjuster to any individual
3699	who has not qualified for, taken, and passed to the satisfaction
3700	of the department or officea written examination of the scope
3701	prescribed in s. 626.241.
3702	(2) However, no such examination shall be necessary in any
3703	of the following cases:
3704	(a) An applicant for renewal of appointment as an agent,
3705	customer representative, or adjuster, unless the department or
3706	officedetermines that an examination is necessary to establish
3707	the competence or trustworthiness of such applicant.
3708	(b) An applicant for limited license as agent for personal
3709	accident insurance, baggage and motor vehicle excess liability
3710	insurance, credit life or disability insurance, credit
3711	insurance, credit property insurance, in-transit and storage
3712	personal property insurance, or communications equipment
3713	property insurance or communication equipment inland marine
3714	insurance.
3715	(c) In the discretion of the department or office, an
3716	applicant for reinstatement of license or appointment as an
3717	agent, customer representative, or adjuster whose license has
3718	been suspended within 2 years prior to the date of application
3719	or written request for reinstatement.
3720	(d) An applicant who, within 2 years prior to application
3721	for license and appointment as an agent, customer
3722	representative, or adjuster, was a full-time salaried employee
3723	of the department or officeand had continuously been such an
3724	employee with responsible insurance duties for not less than 2
3725	years and who had been a licensee within 2 years prior to
3726	employment by the department or officewith the same class of
3727	license as that being applied for.
3728	(e) An individual who qualified as a managing general
3729	agent, service representative, customer representative, or all-
3730	lines adjuster by passing a general lines agent's examination
3731	and subsequently was licensed and appointed and has been
3732	actively engaged in all lines of property and casualty insurance
3733	may, upon filing an application for appointment, be licensed and
3734	appointed as a general lines agent for the same kinds of
3735	business without taking another examination if he or she holds
3736	any such currently effective license referred to in this
3737	paragraph or held the license within 24 months prior to the date
3738	of filing the application with the department.
3739	(f) A person who has been licensed and appointed by the
3740	departmentas a public adjuster or independent adjuster, or
3741	licensed and appointed either as an agent or company adjuster as
3742	to all property, casualty, and surety insurances, may be
3743	licensed and appointed as a company adjuster as to any of such
3744	insurances, or as an independent adjuster or public adjuster,
3745	without additional written examination if an application for
3746	appointment is filed with the officedepartmentwithin 24 months
3747	following the date of cancellation or expiration of the prior
3748	appointment.
3749	(g) A person who has been licensed by the departmentas an
3750	adjuster for motor vehicle, property and casualty, workers'
3751	compensation, and health insurance may be licensed as such an
3752	adjuster without additional written examination if his or her
3753	application for appointment is filed with the officedepartment
3754	within 24 months after cancellation or expiration of the prior
3755	license.
3756	(h) An applicant for temporary license, except as provided
3757	in this code.
3758	(i) An applicant for a life or health license who has
3759	received the designation of chartered life underwriter (CLU)
3760	from the American College of Life Underwriters and who has been
3761	engaged in the insurance business within the past 4 years,
3762	except that such an individual may be examined on pertinent
3763	provisions of this code.
3764	(j) An applicant for license as a general lines agent,
3765	customer representative, or adjuster who has received the
3766	designation of chartered property and casualty underwriter
3767	(CPCU) from the American Institute for Property and Liability
3768	Underwriters and who has been engaged in the insurance business
3769	within the past 4 years, except that such an individual may be
3770	examined on pertinent provisions of this code.
3771	(k) An applicant for license as a customer representative
3772	who has the designation of Accredited Advisor in Insurance (AAI)
3773	from the Insurance Institute of America, the designation of
3774	Certified Insurance Counselor (CIC) from the Society of
3775	Certified Insurance Service Counselors, the designation of
3776	Accredited Customer Service Representative (ACSR) from the
3777	Independent Insurance Agents of America, the designation of
3778	Certified Professional Service Representative (CPSR) from the
3779	National Association of Professional Insurance Agents, the
3780	designation of Certified Insurance Service Representative (CISR)
3781	from the Society of Certified Insurance Service Representatives.
3782	Also, an applicant for license as a customer representative who
3783	has the designation of Certified Customer Service Representative
3784	(CCSR) from the Florida Association of Insurance Agents, or the
3785	designation of Registered Customer Service Representative (RCSR)
3786	from a regionally accredited postsecondary institution in this
3787	state, or the designation of Professional Customer Service
3788	Representative (PCSR) from the Professional Career Institute,
3789	whose curriculum has been approved by the department and whose
3790	curriculum includes comprehensive analysis of basic property and
3791	casualty lines of insurance and testing at least equal to that
3792	of standard department testing for the customer representative
3793	license. The department shall adopt rules establishing standards
3794	for the approval of curriculum.
3795	(l) An applicant for license as an adjuster who has the
3796	designation of Accredited Claims Adjuster (ACA) from a
3797	regionally accredited postsecondary institution in this state,
3798	or the designation of Professional Claims Adjuster(PCA) from the
3799	Professional Career Institute, whose curriculum has been
3800	approved by the officedepartmentand whose curriculum includes
3801	comprehensive analysis of basic property and casualty lines of
3802	insurance and testing at least equal to that of standard office
3803	department testing for the all-lines adjuster license. The
3804	commissiondepartmentshall adopt rules establishing standards
3805	for the approval of curriculum.
3806	(m) An applicant qualifying for a license transfer under
3807	s. 626.292, if the applicant:
3808	1. Has successfully completed the prelicensing examination
3809	requirements in the applicant's previous state which are
3810	substantially equivalent to the examination requirements in this
3811	state, as determined by the departmentInsurance Commissioner of
3812	this state;
3813	2. Has received the designation of chartered property and
3814	casualty underwriter (CPCU) from the American Institute for
3815	Property and Liability Underwriters and has been engaged in the
3816	insurance business within the past 4 years if applying to
3817	transfer a general lines agent license; or
3818	3. Has received the designation of chartered life
3819	underwriter (CLU) from the American College of Life Underwriters
3820	and has been engaged in the insurance business within the past 4
3821	years, if applying to transfer a life or health agent license.
3822	(n) An applicant for a nonresident agent license, if the
3823	applicant:
3824	1. Has successfully completed prelicensing examination
3825	requirements in the applicant's home state which are
3826	substantially equivalent to the examination requirements in this
3827	state, as determined by the departmentInsurance Commissioner of
3828	this state, as a requirement for obtaining a resident license in
3829	his or her home state;
3830	2. Held a general lines agent license, life agent license,
3831	or health agent license prior to the time a written examination
3832	was required;
3833	3. Has received the designation of chartered property and
3834	casualty underwriter (CPCU) from the American Institute for
3835	Property and Liability Underwriters and has been engaged in the
3836	insurance business within the past 4 years, if an applicant for
3837	a nonresident license as a general lines agent; or
3838	4. Has received the designation of chartered life
3839	underwriter (CLU) from the American College of Life Underwriters
3840	and has been in the insurance business within the past 4 years,
3841	if an applicant for a nonresident license as a life agent or
3842	health agent.
3843	(3) An individual who is already licensed as a customer
3844	representative shall not be licensed as a general lines agent
3845	without application and examination for such license.
3846	Section 52. Section 626.231, Florida Statutes, is amended
3847	to read:
3848	626.231 Eligibility for examination.--No person shall be
3849	permitted to take an examination for license until his or her
3850	application for the license has been approved and the required
3851	fees have been received by the department or officeor a person
3852	designated by the department or officeto administer the
3853	examination.
3854	Section 53. Subsection (1) of section 626.241, Florida
3855	Statutes, is amended to read:
3856	626.241 Scope of examination.--
3857	(1) Each examination for a license as agent, customer
3858	representative, or adjuster shall be of such scope as is deemed
3859	by the department or officeto be reasonably necessary to test
3860	the applicant's ability and competence and knowledge of the
3861	kinds of insurance and transactions to be handled under the
3862	license applied for, of the duties and responsibilities of such
3863	a licensee, and of the pertinent provisions of the laws of this
3864	state.
3865	Section 54. Section 626.251, Florida Statutes, is amended
3866	to read:
3867	626.251 Time and place of examination; notice.--
3868	(1) The department or officeor a person designated by the
3869	department or officeshall mail written notice of the time and
3870	place of the examination to each applicant for license required
3871	to take an examination who will be eligible to take the
3872	examination as of the examination date. The notice shall be so
3873	mailed, postage prepaid, and addressed to the applicant at his
3874	or her address shown on the application for license or at such
3875	other address as requested by the applicant in writing filed
3876	with the department or officeprior to the mailing of the
3877	notice. Notice shall be deemed given when so mailed.
3878	(2) The examination shall be held in an adequate and
3879	designated examination center in this state.
3880	(3) The department or officeshall make an examination
3881	available to the applicant, to be taken as soon as reasonably
3882	possible after the applicant is eligible therefor. Any
3883	examination required under this part shall be available in this
3884	state at a designated examination center.
3885	Section 55. Section 626.261, Florida Statutes, is amended
3886	to read:
3887	626.261 Conduct of examination.--
3888	(1) The applicant for license shall appear in person and
3889	personally take the examination for license at the time and
3890	place specified by the department or officeor by a person
3891	designated by the department or office.
3892	(2) The examination shall be conducted by an employee of
3893	the department or officeor a person designated by the
3894	department or officefor that purpose.
3895	(3) The questions propounded shall be as prepared by the
3896	department or office, or by a person designated by the
3897	department or officefor that purpose, consistent with the
3898	applicable provisions of this code.
3899	(4) All examinations shall be given and graded in a fair
3900	and impartial manner and without unfair discrimination in favor
3901	of or against any particular applicant.
3902	Section 56. Section 626.266, Florida Statutes, is amended
3903	to read:
3904	626.266 Printing of examinations or related materials to
3905	preserve examination security.--A contract let for the
3906	development, administration, or grading of examinations or
3907	related materials by the department or officeof Insurance
3908	pursuant to the various agent, customer representative,
3909	solicitor, or adjuster licensing and examination provisions of
3910	this code may include the printing or furnishing of these
3911	examinations or related materials in order to preserve security.
3912	Any such contract shall be let as a contract for a contractual
3913	service pursuant to s. 287.057.
3914	Section 57. Subsection (1) of section 626.271, Florida
3915	Statutes, is amended to read:
3916	626.271 Examination fee; determination, refund.--
3917	(1) Prior to being permitted to take an examination, each
3918	applicant who is subject to examination shall pay to the
3919	department or office or a person designated by the department or
3920	officean examination fee. A separate and additional
3921	examination fee shall be payable for each separate class of
3922	license applied for, notwithstanding that all such examinations
3923	are taken on the same date and at the same place.
3924	Section 58. Section 626.281, Florida Statutes, is amended
3925	to read:
3926	626.281 Reexamination.--
3927	(1) Any applicant for license who has either:
3928	(a) Taken an examination and failed to make a passing
3929	grade, or
3930	(b) Failed to appear for the examination or to take or
3931	complete the examination at the time and place specified in the
3932	notice of the department or office,
3933
3934
3935	may take additional examinations, after filing with the
3936	department or officean application for reexamination together
3937	with applicable fees. The failure of an applicant to pass an
3938	examination or the failure to appear for the examination or to
3939	take or complete the examination does not preclude the applicant
3940	from taking subsequent examinations.
3941	(2) The department or officemay require any individual
3942	whose license as an agent, customer representative, or adjuster
3943	has expired or has been suspended to pass an examination prior
3944	to reinstating or relicensing the individual as to any class of
3945	license. The examination fee shall be paid as to each
3946	examination.
3947	Section 59. Subsections (5) and (6) of section 626.2815,
3948	Florida Statutes, are amended to read:
3949	626.2815 Continuing education required; application;
3950	exceptions; requirements; penalties.--
3951	(5) The department of Insuranceshall refuse to renew the
3952	appointment of any agent who has not had his or her continuing
3953	education requirements certified unless the agent has been
3954	granted an extension by the department. The department may not
3955	issue a new appointment of the same or similar type, with any
3956	insurer, to an agent who was denied a renewal appointment for
3957	failure to complete continuing education as required until the
3958	agent completes his or her continuing education requirement.
3959	(6)(a) There is created an 11-member continuing education
3960	advisory board to be appointed by the Chief Financial Officer
3961	Insurance Commissioner and Treasurer. Appointments shall be for
3962	terms of 4 years. The purpose of the board is to advise the
3963	department in determining standards by which courses may be
3964	evaluated and categorized as basic, intermediate, or advanced.
3965	The board shall establish such criteria and the department shall
3966	implement such criteria by January 1, 1997.The board shall
3967	submit recommendations to the department of changes needed in
3968	such criteria not less frequently than every 2 years thereafter.
3969	The department shall require all approved course providers to
3970	submit courses for approval to the department using the
3971	criteria. All materials, brochures, and advertisements related
3972	to the approved courses must specify the level assigned to the
3973	course.
3974	(b) The board members shall be appointed as follows:
3975	1. Seven members representing agents of which at least one
3976	must be a representative from each of the following
3977	organizations: the Florida Association of Insurance Agents; the
3978	Florida Association of Life Underwriters; the Professional
3979	Insurance Agents of Florida, Inc.; the Florida Association of
3980	Health Underwriters; the Specialty Agents' Association; the
3981	Latin American Agents' Association; and the National Association
3982	of Insurance Women. Such board members must possess at least a
3983	bachelor's degree or higher from an accredited college or
3984	university with major coursework in insurance, risk management,
3985	or education or possess the designation of CLU, CPCU, CHFC, CFP,
3986	AAI, or CIC. In addition, each member must possess 5 years of
3987	classroom instruction experience or 5 years of experience in the
3988	development or design of educational programs or 10 years of
3989	experience as a licensed resident agent. Each organization may
3990	submit to the department a list of recommendations for
3991	appointment. If one organization does not submit a list of
3992	recommendations, the Chief Financial OfficerInsurance
3993	Commissionermay select more than one recommended person from a
3994	list submitted by other eligible organizations.
3995	2. Two members representing insurance companies at least
3996	one of whom must represent a Florida Domestic Company and one of
3997	whom must represent the Florida Insurance Council. Such board
3998	members must be employed within the training department of the
3999	insurance company. At least one such member must be a member of
4000	the Society of Insurance Trainers and Educators.
4001	3. One member representing the general public who is not
4002	directly employed in the insurance industry. Such board member
4003	must possess a minimum of a bachelor's degree or higher from an
4004	accredited college or university with major coursework in
4005	insurance, risk management, training, or education.
4006	4. One member, appointed by the Chief Financial Officer
4007	Insurance Commissioner, who represents the department.
4008	(c) The members of the board shall serve at the pleasure
4009	of the Chief Financial OfficerInsurance Commissioner and
4010	Treasurer. Each board member shall be entitled to reimbursement
4011	for expenses pursuant to s. 112.061. The board shall designate
4012	one member as chair. The board shall meet at the call of the
4013	chair or the Chief Financial OfficerInsurance Commissioner and
4014	Treasurer.
4015	Section 60. Section 626.2817, Florida Statutes, is amended
4016	to read:
4017	626.2817 Regulation of course providers, instructors,
4018	school officials, and monitor groups involved in prelicensure
4019	education for insurance agents and other licensees.--
4020	(1) Any course provider, instructor, school official, or
4021	monitor group must be approved by and registered with the
4022	department or officebefore offering prelicensure education
4023	courses for insurance agents and other licensees.
4024	(2) The department or commissionshall adopt rules
4025	establishing standards for the approval, registration,
4026	discipline, or removal from registration of course providers,
4027	instructors, school officials, and monitor groups. The standards
4028	must be designed to ensure that such persons have the knowledge,
4029	competence, and integrity to fulfill the educational objectives
4030	of the prelicensure requirements of this chapter and chapter 648
4031	and to assure that insurance agents and licensees are competent
4032	to engage in the activities authorized under the license.
4033	(3) The department or commissionshall adopt rules to
4034	establish a process for determining compliance with the
4035	prelicensure requirements of this chapter and chapter 648 and
4036	shall establish a prelicensure cycle for insurance agents and
4037	other licensees. The department or commissionshall adopt rules
4038	prescribing the forms necessary to administer the prelicensure
4039	requirements.
4040	Section 61. Section 626.291, Florida Statutes, is amended
4041	to read:
4042	626.291 Denial, issuance of license.--
4043	(1) Within 30 days after the applicant has completed any
4044	examination required under s. 626.221, the department or office
4045	or its designee shall provide a score report; and, if it finds
4046	that the applicant has received a passing grade, the department
4047	or officeshall within such period notify the applicant and
4048	issue and transmit the license to which such examination
4049	related. If it finds that the applicant did not make a passing
4050	grade on the examination for a particular license, the
4051	department or officeor its designee shall within this period
4052	provide notice to the applicant to that effect and of its denial
4053	of the license.
4054	(2) As to an applicant for a license for which no
4055	examination is required, the department or officeshall promptly
4056	issue the license applied for as soon as it has approved the
4057	application.
4058	(3) The department or officeshall not deny, delay, or
4059	withhold issuance of a license due to the fact that it has not
4060	received a criminal history report based on the applicant's
4061	fingerprints.
4062	Section 62. Paragraph (d) of subsection (2) of section
4063	626.292, Florida Statutes, is amended to read:
4064	626.292 Transfer of license from another state.--
4065	(2) To qualify for a license transfer, an individual
4066	applicant must meet the following requirements:
4067	(d) The individual shall satisfy prelicensing education
4068	requirements in this state, unless the completion of
4069	prelicensing education requirements was a prerequisite for
4070	licensure in the other state and the prelicensing education
4071	requirements in the other state are substantially equivalent to
4072	the prelicensing requirements of this state as determined by the
4073	departmentInsurance Commissioner of this state.
4074	Section 63. Section 626.301, Florida Statutes, is amended
4075	to read:
4076	626.301 Form and contents of licenses, in general.--Each
4077	license issued by the department or officeshall be in such form
4078	as the department or commissionmay designate and contain the
4079	licensee's name, lines of authority the licensee is authorized
4080	to transact, the licensee's personal identification number, the
4081	date of issuance, and any other information the department or
4082	commissiondeems necessary to fully identify the licensee and
4083	the authority being granted. The department or commissionmay by
4084	rule require photographs of applicants as a part of the
4085	licensing process.
4086	Section 64. Section 626.322, Florida Statutes, is amended
4087	to read:
4088	626.322 License, appointment; certain military
4089	installations.--A natural person, not a resident of this state,
4090	may be licensed and appointed to represent an authorized life
4091	insurer domiciled in this state or an authorized foreign life
4092	insurer which maintains a regional home office in this state,
4093	provided such person represents such insurer exclusively at a
4094	United States military installation located in a foreign
4095	country. The department may, upon request of the applicant and
4096	the insurer on application forms furnished by the department and
4097	upon payment of fees as prescribed in s. 624.501, issue a
4098	license and appointment to such person. The insurer shall
4099	certify to the department that the applicant has the necessary
4100	training to hold himself or herself out as a life insurance
4101	representative, and the insurer shall further certify that it is
4102	willing to be bound by the acts of such applicant within the
4103	scope of his or her employment. Appointments shall be continued
4104	as prescribed in s. 626.381 and upon payment of a fee as
4105	prescribed in s. 624.501, unless sooner terminated. Such fees
4106	received shall be credited to the Insurance Commissioner's
4107	Regulatory Trust Fund as provided for in s. 624.523.
4108	Section 65. Section 626.361, Florida Statutes, is amended
4109	to read:
4110	626.361 Effective date of appointments.--All appointments
4111	shall be submitted to the department or officeon a monthly
4112	basis no later than 45 days after the date of appointment. All
4113	appointments shall be effective as of the date requested on the
4114	appointment form.
4115	Section 66. Section 626.371, Florida Statutes, is amended
4116	to read:
4117	626.371 Payment of fees, taxes for appointment period
4118	without appointment.--If, upon application and qualification for
4119	an appointment and such investigation as the department or
4120	office may make, it appears to the department or officethat an
4121	individual who was formerly appointed has been actively engaged
4122	or is currently actively engaged as such an appointee, but
4123	without being appointed as required, the department or office
4124	may, if it finds that such failure to be appointed was an
4125	inadvertent error on the part of the insurer or employer so
4126	represented, nevertheless issue the appointment as applied for
4127	but subject to the condition that, before the appointment is
4128	issued, all fees and taxes which would have been due had the
4129	applicant been so appointed during such current and prior
4130	periods, together with a continuation fee for such current and
4131	prior terms of appointment, shall be paid to the department or
4132	office.
4133	Section 67. Subsections (2), (3), and (4), of section
4134	626.381, Florida Statutes, are amended to read:
4135	626.381 Renewal, continuation, reinstatement, or
4136	termination of appointment.--
4137	(2) Each appointing entity shall file with the department
4138	or officethe lists, statements, and information as to
4139	appointees whose appointments are being renewed or terminated,
4140	accompanied by payment of the applicable renewal fees and taxes
4141	as prescribed in s. 624.501, by a date set forth by the
4142	department or officefollowing the month during which the
4143	appointments will expire.
4144	(3) Renewal of an appointment which is received on a date
4145	set forth by the department or officein the succeeding month
4146	may be renewed by the department or officewithout penalty and
4147	shall be effective as of the day the appointment would have
4148	expired.
4149	(4) Renewal of an appointment which is received by the
4150	department or office after the date set by the department or
4151	office may be accepted and effectuated by the department or
4152	officein its discretion if an additional appointment,
4153	continuation, and reinstatement fee accompanies the renewal
4154	pursuant to s. 624.501.
4155	Section 68. Subsection (2) of section 626.431, Florida
4156	Statutes, is amended to read:
4157	626.431 Effect of expiration of license and appointment.--
4158	(2) When a licensee's last appointment for a particular
4159	class of insurance has been terminated or not renewed, the
4160	department or officemust notify the licensee that his or her
4161	eligibility for appointment as such an appointee will expire
4162	unless he or she is appointed prior to expiration of the 48-
4163	month period referred to in subsection (3).
4164	Section 69. Section 626.451, Florida Statutes, is amended
4165	to read:
4166	626.451 Appointment of agent or other representative.--
4167	(1) Each appointing entity appointing an agent, adjuster,
4168	service representative, customer representative, or managing
4169	general agent in this state shall file the appointment with the
4170	department or officeand, at the same time, pay the applicable
4171	appointment fee and taxes. Every appointment shall be subject
4172	to the prior issuance of the appropriate agent's, adjuster's,
4173	service representative's, customer representative's, or managing
4174	general agent's license.
4175	(2) As a part of each appointment there shall be a
4176	certified statement or affidavit of an appropriate officer or
4177	official of the appointing entity stating what investigation the
4178	appointing entity has made concerning the proposed appointee and
4179	his or her background and the appointing entity's opinion to the
4180	best of its knowledge and belief as to the moral character,
4181	fitness, and reputation of the proposed appointee and any other
4182	information the department or officemay reasonably require
4183	relative to the proposed appointee.
4184	(3) In the appointment of an agent, adjuster, service
4185	representative, customer representative, or managing general
4186	agent the appointing entity shall also certify therein that it
4187	is willing to be bound by the acts of the agent, adjuster,
4188	service representative, customer representative, or managing
4189	general agent, within the scope of his or her employment.
4190	(4) Each appointing entity shall advise the department or
4191	officein writing within 15 days after it or its general agent,
4192	officer, or other official becomes aware that an appointee has
4193	pleaded guilty or nolo contendere to or has been found guilty of
4194	a felony after being appointed.
4195	(5) Any law enforcement agency or state attorney's office
4196	that is aware that an agent, adjuster, service representative,
4197	customer representative, or managing general agent has pleaded
4198	guilty or nolo contendere to or has been found guilty of a
4199	felony shall notify the department or officeof such fact.
4200	(6) Upon the filing of an information or indictment
4201	against an agent, adjuster, service representative, customer
4202	representative, or managing general agent, the state attorney
4203	shall immediately furnish the department or officea certified
4204	copy of the information or indictment.
4205	Section 70. Section 626.461, Florida Statutes, is amended
4206	to read:
4207	626.461 Continuation of appointment of agent or other
4208	representative.--Subject to renewal or continuation by the
4209	appointing entity, the appointment of the agent, adjuster,
4210	solicitor, service representative, customer representative, or
4211	managing general agent shall continue in effect until the
4212	person's license is revoked or otherwise terminated, unless
4213	written notice of earlier termination of the appointment is
4214	filed with the department or officeby either the appointing
4215	entity or the appointee.
4216	Section 71. Subsections (2), (3), (4), and (5) of section
4217	626.471, Florida Statutes, are amended to read:
4218	626.471 Termination of appointment.--
4219	(2) As soon as possible and at all events within 30 days
4220	after terminating the appointment of an appointee, other than as
4221	to an appointment terminated by the appointing entity's failure
4222	to continue or renew it, the appointing entity shall file
4223	written notice thereof with the department or office, together
4224	with a statement that it has given the appointee notice thereof
4225	as provided in subsection (1) and shall file with the department
4226	or officethe reasons and facts involved in such termination as
4227	required under s. 626.511.
4228	(3) Upon termination of the appointment of an appointee,
4229	whether by failure to renew or continue the appointment, the
4230	appointing entity shall:
4231	(a) File with the department or officethe information
4232	required under s. 626.511.
4233	(b) Subject to the exceptions provided under subsection
4234	(1), continue the outstanding contracts transacted by an agent
4235	until the expiration date or anniversary date when the policy is
4236	a continuous policy with no expiration date. This paragraph
4237	shall not be construed to prohibit the cancellation of such
4238	contracts when not otherwise prohibited by law.
4239	(4) An appointee may terminate the appointment at any time
4240	by giving written notice thereof to the appointing entity and
4241	filing a copy of the notice with the department or office. Such
4242	termination shall be subject to the appointee's contract rights,
4243	if any.
4244	(5) Upon receiving notice of termination, the department
4245	or officeshall terminate the appointment.
4246	Section 72. Section 626.511, Florida Statutes, is amended
4247	to read:
4248	626.511 Reasons for termination; confidential
4249	information.--
4250	(1) Any insurer terminating the appointment of an agent;
4251	any general lines agent terminating the appointment of a
4252	customer representative or a crop hail or multiple-peril crop
4253	insurance agent; and any employer terminating the appointment of
4254	an adjuster, service representative, or managing general agent,
4255	whether such termination is by direct action of the appointing
4256	insurer, agent, or employer or by failure to renew or continue
4257	the appointment as provided, shall file with the department or
4258	officea statement of the reasons, if any, for and the facts
4259	relative to such termination. In the case of termination of the
4260	appointment of an agent, such information may be filed by the
4261	insurer or by the general agent of the insurer.
4262	(2) In the case of terminations by failure to renew or
4263	continue the appointment, the information required under
4264	subsection (1) shall be filed with the department or officeas
4265	soon as possible, and at all events within 30 days, after the
4266	date notice of intention not to so renew or continue was filed
4267	with the department or officeas required in this chapter. In
4268	all other cases, the information required under subsection (1)
4269	shall be filed with the department or officeat the time, or at
4270	all events within 10 days after, notice of the termination was
4271	filed with the department or office.
4272	(3) Any information, document, record, or statement
4273	furnished to the department or officeunder subsection (1) is
4274	confidential and exempt from the provisions of s. 119.07(1).
4275	Section 73. Subsections (2), (3), and (5) of section
4276	626.521, Florida Statutes, are amended to read:
4277	626.521 Character, credit reports.--
4278	(2) If requested by the department or office, the insurer,
4279	manager, general agent, general lines agent, or employer, as the
4280	case may be, shall furnish to the department or office on a form
4281	adopted by the department or commission andfurnished by the
4282	department or office, such information as it may reasonably
4283	require relative to such individual and investigation.
4284	(3) As to an applicant for an adjuster's or reinsurance
4285	intermediary's license who is to be self-employed, the
4286	department or officemay secure, at the cost of the applicant, a
4287	full detailed credit and character report made by an established
4288	and reputable independent reporting service relative to the
4289	applicant.
4290	(5) Information contained in credit or character reports
4291	furnished to or secured by the department or officeunder this
4292	section is confidential and exempt from the provisions of s.
4293	119.07(1).
4294	Section 74. Subsections (1) and (2) of section 626.541,
4295	Florida Statutes, are amended to read:
4296	626.541 Firm, corporate, and business names; officers;
4297	associates; notice of changes.--
4298	(1) Any licensed agent or adjuster doing business under a
4299	firm or corporate name or under any business name other than his
4300	or her own individual name shall, within 30 days after the
4301	initial transaction of insurance under such business name, file
4302	with the department or office, on forms adopted by the
4303	department or commission and furnished by the department or
4304	officeit, a written statement of the firm, corporate, or
4305	business name being so used, the address of any office or
4306	offices or places of business making use of such name, and the
4307	name and social security number of each officer and director of
4308	the corporation and of each individual associated in such firm
4309	or corporation as to the insurance transactions thereof or in
4310	the use of such business name.
4311	(2) In the event of any change of such name, or of any of
4312	the officers and directors, or of any of such addresses, or in
4313	the personnel so associated, written notice of such change must
4314	be filed with the department or officewithin 30 days by or on
4315	behalf of those licensees terminating any such firm, corporate,
4316	or business name or continuing to operate thereunder.
4317	Section 75. Section 626.551, Florida Statutes, is amended
4318	to read:
4319	626.551 Notice of change of address, name.--Every licensee
4320	shall notify the department or officein writing within 60 days
4321	after a change of name, residence address, principal business
4322	street address, or mailing address. Any licensed agent who has
4323	moved his or her residence from this state shall have his or her
4324	license and all appointments immediately terminated by the
4325	department or office. Failure to notify the department or office
4326	within the required time period shall result in a fine not to
4327	exceed $250 for the first offense and, for subsequent offenses,
4328	a fine of not less than $500 or suspension or revocation of the
4329	license pursuant to s. 626.611 or s. 626.621.
4330	Section 76. Subsections (1) and (2) of section 626.561,
4331	Florida Statutes, are amended to read:
4332	626.561 Reporting and accounting for funds.--
4333	(1) All premiums, return premiums, or other funds
4334	belonging to insurers or others received by an agent, customer
4335	representative, or adjuster in transactions under his or her
4336	license are trust funds received by the licensee in a fiduciary
4337	capacity. An agent shall keep the funds belonging to each
4338	insurer for which he or she is not appointed, other than a
4339	surplus lines insurer, in a separate account so as to allow the
4340	department or officeto properly audit such funds. The licensee
4341	in the applicable regular course of business shall account for
4342	and pay the same to the insurer, insured, or other person
4343	entitled thereto.
4344	(2) The licensee shall keep and make available to the
4345	department or officebooks, accounts, and records as will enable
4346	the department or officeto determine whether such licensee is
4347	complying with the provisions of this code. Every licensee shall
4348	preserve books, accounts, and records pertaining to a premium
4349	payment for at least 3 years after payment; provided, however,
4350	the preservation of records by computer or photographic
4351	reproductions or records in photographic form shall constitute
4352	compliance with this requirement. All other records shall be
4353	maintained in accordance with s. 626.748. The 3-year
4354	requirement shall not apply to insurance binders when no policy
4355	is ultimately issued and no premium is collected.
4356	Section 77. Section 626.591, Florida Statutes, is amended
4357	to read:
4358	626.591 Penalty for violation of s. 626.581.--
4359	(1) If any insurer oragent is found by the department to
4360	be in violation of s. 626.581, the department may, in its
4361	discretion, suspend or revoke the insurer's certificate of
4362	authority and the agent's license. If any insurer is found by
4363	the office to be in violation of s. 626.581, the office may, in
4364	its discretion, suspend or revoke the insurer's certificate of
4365	authority.
4366	(2)Any such suspension or revocation shall be for a
4367	period of not less than 6 months, and the insurer or agent shall
4368	not subsequently be authorized or licensed to transact insurance
4369	unless the office ordepartment is satisfied that the insurer or
4370	agent will not again violate any of the provisions of s.
4371	626.581.
4372	Section 78. Subsection (1) of section 626.592, Florida
4373	Statutes, is amended to read:
4374	626.592 Primary agents.--
4375	(1) Each person operating an insurance agency and each
4376	location of a multiple location agency shall designate a primary
4377	agent for each insurance agency location and shall file the name
4378	of the person so designated, and the address of the insurance
4379	agency location where he or she is primary agent, with the
4380	department of Insurance, on a form approved by the department.
4381	The designation of the primary agent may be changed at the
4382	option of the agency, and any change shall be effective upon
4383	notification to the department. Notice of change must be sent to
4384	the department within 30 days after such change.
4385	Section 79. Section 626.601, Florida Statutes, is amended
4386	to read:
4387	626.601 Improper conduct; inquiry; fingerprinting.--
4388	(1) The department or officemay, upon its own motion or
4389	upon a written complaint signed by any interested person and
4390	filed with the department or office, inquire into any alleged
4391	improper conduct of any licensed agent, adjuster, service
4392	representative, managing general agent, customer representative,
4393	title insurance agent, title insurance agency, continuing
4394	education course provider, instructor, school official, or
4395	monitor group under this code. The department or officemay
4396	thereafter initiate an investigation of any such licensee if it
4397	has reasonable cause to believe that the licensee has violated
4398	any provision of the insurance code. During the course of its
4399	investigation, the department or officeshall contact the
4400	licensee being investigated unless it determines that contacting
4401	such person could jeopardize the successful completion of the
4402	investigation or cause injury to the public.
4403	(2) In the investigation by the department or officeof
4404	the alleged misconduct, the licensee shall, whenever so required
4405	by the department or office, cause his or her books and records
4406	to be open for inspection for the purpose of such inquiries.
4407	(3) The complaints against any licensee may be informally
4408	alleged and need not be in any such language as is necessary to
4409	charge a crime on an indictment or information.
4410	(4) The expense for any hearings or investigations under
4411	this law, as well as the fees and mileage of witnesses, may be
4412	paid out of the appropriate fund.
4413	(5) If the department or office, after investigation, has
4414	reason to believe that a licensee may have been found guilty of
4415	or pleaded guilty or nolo contendere to a felony or a crime
4416	related to the business of insurance in this or any other state
4417	or jurisdiction, the department or officemay require the
4418	licensee to file with the department or officea complete set of
4419	his or her fingerprints, which shall be accompanied by the
4420	fingerprint processing fee set forth in s. 624.501. The
4421	fingerprints shall be certified by an authorized law enforcement
4422	officer.
4423	(6) The complaint and any information obtained pursuant to
4424	the investigation by the department or officeare confidential
4425	and are exempt from the provisions of s. 119.07, unless the
4426	department or officefiles a formal administrative complaint,
4427	emergency order, or consent order against the licensee. Nothing
4428	in this subsection shall be construed to prevent the department
4429	or officefrom disclosing the complaint or such information as
4430	it deems necessary to conduct the investigation, to update the
4431	complainant as to the status and outcome of the complaint, or to
4432	share such information with any law enforcement agency.
4433	Section 80. Section 626.611, Florida Statutes, is amended
4434	to read:
4435	626.611 Grounds for compulsory refusal, suspension, or
4436	revocation of agent's, title agency's, adjuster's, customer
4437	representative's, service representative's, or managing general
4438	agent's license or appointment.--The department or officeshall
4439	deny an application for, suspend, revoke, or refuse to renew or
4440	continue the license or appointment of any applicant, agent,
4441	title agency, adjuster, customer representative, service
4442	representative, or managing general agent, and it shall suspend
4443	or revoke the eligibility to hold a license or appointment of
4444	any such person, if it finds that as to the applicant, licensee,
4445	or appointee any one or more of the following applicable grounds
4446	exist:
4447	(1) Lack of one or more of the qualifications for the
4448	license or appointment as specified in this code.
4449	(2) Material misstatement, misrepresentation, or fraud in
4450	obtaining the license or appointment or in attempting to obtain
4451	the license or appointment.
4452	(3) Failure to pass to the satisfaction of the department
4453	or officeany examination required under this code.
4454	(4) If the license or appointment is willfully used, or to
4455	be used, to circumvent any of the requirements or prohibitions
4456	of this code.
4457	(5) Willful misrepresentation of any insurance policy or
4458	annuity contract or willful deception with regard to any such
4459	policy or contract, done either in person or by any form of
4460	dissemination of information or advertising.
4461	(6) If, as an adjuster, or agent licensed and appointed to
4462	adjust claims under this code, he or she has materially
4463	misrepresented to an insured or other interested party the terms
4464	and coverage of an insurance contract with intent and for the
4465	purpose of effecting settlement of claim for loss or damage or
4466	benefit under such contract on less favorable terms than those
4467	provided in and contemplated by the contract.
4468	(7) Demonstrated lack of fitness or trustworthiness to
4469	engage in the business of insurance.
4470	(8) Demonstrated lack of reasonably adequate knowledge and
4471	technical competence to engage in the transactions authorized by
4472	the license or appointment.
4473	(9) Fraudulent or dishonest practices in the conduct of
4474	business under the license or appointment.
4475	(10) Misappropriation, conversion, or unlawful withholding
4476	of moneys belonging to insurers or insureds or beneficiaries or
4477	to others and received in conduct of business under the license
4478	or appointment.
4479	(11) Unlawfully rebating, attempting to unlawfully rebate,
4480	or unlawfully dividing or offering to divide his or her
4481	commission with another.
4482	(12) Having obtained or attempted to obtain, or having
4483	used or using, a license or appointment as agent or customer
4484	representative for the purpose of soliciting or handling
4485	"controlled business" as defined in s. 626.730 with respect to
4486	general lines agents, s. 626.784 with respect to life agents,
4487	and s. 626.830 with respect to health agents.
4488	(13) Willful failure to comply with, or willful violation
4489	of, any proper order or rule of the department, commission, or
4490	officeor willful violation of any provision of this code.
4491	(14) Having been found guilty of or having pleaded guilty
4492	or nolo contendere to a felony or a crime punishable by
4493	imprisonment of 1 year or more under the law of the United
4494	States of America or of any state thereof or under the law of
4495	any other country which involves moral turpitude, without regard
4496	to whether a judgment of conviction has been entered by the
4497	court having jurisdiction of such cases.
4498	(15) Fraudulent or dishonest practice in submitting or
4499	aiding or abetting any person in the submission of an
4500	application for workers' compensation coverage under chapter 440
4501	containing false or misleading information as to employee
4502	payroll or classification for the purpose of avoiding or
4503	reducing the amount of premium due for such coverage.
4504	(16) Sale of an unregistered security that was required to
4505	be registered, pursuant to chapter 517.
4506	Section 81. Section 626.621, Florida Statutes, is amended
4507	to read:
4508	626.621 Grounds for discretionary refusal, suspension, or
4509	revocation of agent's, adjuster's, customer representative's,
4510	service representative's, or managing general agent's license or
4511	appointment.--The department or officemay, in its discretion,
4512	deny an application for, suspend, revoke, or refuse to renew or
4513	continue the license or appointment of any applicant, agent,
4514	adjuster, customer representative, service representative, or
4515	managing general agent, and it may suspend or revoke the
4516	eligibility to hold a license or appointment of any such person,
4517	if it finds that as to the applicant, licensee, or appointee any
4518	one or more of the following applicable grounds exist under
4519	circumstances for which such denial, suspension, revocation, or
4520	refusal is not mandatory under s. 626.611:
4521	(1) Any cause for which issuance of the license or
4522	appointment could have been refused had it then existed and been
4523	known to the department or office.
4524	(2) Violation of any provision of this code or of any
4525	other law applicable to the business of insurance in the course
4526	of dealing under the license or appointment.
4527	(3) Violation of any lawful order or rule of the
4528	department, commission, or office.
4529	(4) Failure or refusal, upon demand, to pay over to any
4530	insurer he or she represents or has represented any money coming
4531	into his or her hands belonging to the insurer.
4532	(5) Violation of the provision against twisting, as
4533	defined in s. 626.9541(1)(l).
4534	(6) In the conduct of business under the license or
4535	appointment, engaging in unfair methods of competition or in
4536	unfair or deceptive acts or practices, as prohibited under part
4537	IX of this chapter, or having otherwise shown himself or herself
4538	to be a source of injury or loss to the public or detrimental to
4539	the public interest.
4540	(7) Willful overinsurance of any property or health
4541	insurance risk.
4542	(8) Having been found guilty of or having pleaded guilty
4543	or nolo contendere to a felony or a crime punishable by
4544	imprisonment of 1 year or more under the law of the United
4545	States of America or of any state thereof or under the law of
4546	any other country, without regard to whether a judgment of
4547	conviction has been entered by the court having jurisdiction of
4548	such cases.
4549	(9) If a life agent, violation of the code of ethics.
4550	(10) Cheating on an examination required for licensure or
4551	violating test center or examination procedures published
4552	orally, in writing, or electronically at the test site by
4553	authorized representatives of the examination program
4554	administrator. Communication of test center and examination
4555	procedures must be clearly established and documented.
4556	(11) Failure to inform the department or officein writing
4557	within 30 days after pleading guilty or nolo contendere to, or
4558	being convicted or found guilty of, any felony or a crime
4559	punishable by imprisonment of 1 year or more under the law of
4560	the United States or of any state thereof, or under the law of
4561	any other country without regard to whether a judgment of
4562	conviction has been entered by the court having jurisdiction of
4563	the case.
4564	(12) Knowingly aiding, assisting, procuring, advising, or
4565	abetting any person in the violation of or to violate a
4566	provision of the insurance code or any order or rule of the
4567	department, commission, or office.
4568	Section 82. Section 626.631, Florida Statutes, is amended
4569	to read:
4570	626.631 Procedure for refusal, suspension, or revocation
4571	of license.--
4572	(1) If any licensee is convicted by a court of a violation
4573	of this code or a felony, the licenses and appointments of such
4574	person shall be immediately revoked by the department or office.
4575	The licensee may subsequently request a hearing pursuant to ss.
4576	120.569 and 120.57, and the department or officeshall expedite
4577	any such requested hearing. The sole issue at such hearing
4578	shall be whether the revocation should be rescinded because such
4579	person was not in fact convicted of a violation of this code or
4580	a felony.
4581	(2) The papers, documents, reports, or evidence of the
4582	department or officerelative to a hearing for revocation or
4583	suspension of a license or appointment pursuant to the
4584	provisions of this chapter and chapter 120 are confidential and
4585	exempt from the provisions of s. 119.07(1) until after the same
4586	have been published at the hearing. However, such papers,
4587	documents, reports, or items of evidence are subject to
4588	discovery in a hearing for revocation or suspension of a license
4589	or appointment.
4590	Section 83. Subsections (1) and (2) of section 626.641,
4591	Florida Statutes, are amended to read:
4592	626.641 Duration of suspension or revocation.--
4593	(1) The department or officeshall, in its order
4594	suspending a license or appointment or in its order suspending
4595	the eligibility of a person to hold or apply for such license or
4596	appointment, specify the period during which the suspension is
4597	to be in effect; but such period shall not exceed 2 years. The
4598	license, appointment, or eligibility shall remain suspended
4599	during the period so specified, subject, however, to any
4600	rescission or modification of the order by the department or
4601	office, or modification or reversal thereof by the court, prior
4602	to expiration of the suspension period. A license, appointment,
4603	or eligibility which has been suspended shall not be reinstated
4604	except upon request for such reinstatement; but the department
4605	or officeshall not grant such reinstatement if it finds that
4606	the circumstance or circumstances for which the license,
4607	appointment, or eligibility was suspended still exist or are
4608	likely to recur.
4609	(2) No person or appointee under any license or
4610	appointment revoked by the department or office, nor any person
4611	whose eligibility to hold same has been revoked by the
4612	department or office, shall have the right to apply for another
4613	license or appointment under this code within 2 years from the
4614	effective date of such revocation or, if judicial review of such
4615	revocation is sought, within 2 years from the date of final
4616	court order or decree affirming the revocation. The department
4617	or officeshall not, however, grant a new license or appointment
4618	or reinstate eligibility to hold such license or appointment if
4619	it finds that the circumstance or circumstances for which the
4620	eligibility was revoked or for which the previous license or
4621	appointment was revoked still exist or are likely to recur; if
4622	an individual's license as agent or customer representative or
4623	eligibility to hold same has been revoked upon the ground
4624	specified in s. 626.611(12), the department or officeshall
4625	refuse to grant or issue any new license or appointment so
4626	applied for.
4627	Section 84. Subsection (2) of section 626.661, Florida
4628	Statutes, is amended to read:
4629	626.661 Surrender of license.--
4630	(2) This section shall not be deemed to require the
4631	surrender to the department or officeof any license unless such
4632	surrender has been requested by the department or office.
4633	Section 85. Section 626.681, Florida Statutes, is amended
4634	to read:
4635	626.681 Administrative fine in lieu of or in addition to
4636	suspension, revocation, or refusal of license, appointment, or
4637	disapproval.--
4638	(1) Except as to insurance agencies, if the department or
4639	officefinds that one or more grounds exist for the suspension,
4640	revocation, or refusal to issue, renew, or continue any license
4641	or appointment issued under this chapter, or disapproval of a
4642	continuing education course provider, instructor, school
4643	official, or monitor groups, the department or officemay, in
4644	its discretion, in lieu of or in addition to such suspension or
4645	revocation, or in lieu of such refusal, or disapproval, and
4646	except on a second offense or when such suspension, revocation,
4647	or refusal is mandatory, impose upon the licensee, appointee,
4648	course provider, instructor, school official, or monitor group
4649	an administrative penalty in an amount up to $500 or, if the
4650	department or officehas found willful misconduct or willful
4651	violation on the part of the licensee, appointee, course
4652	provider, instructor, school official, or monitor group up to
4653	$3,500. The administrative penalty may, in the discretion of the
4654	department or office, be augmented by an amount equal to any
4655	commissions received by or accruing to the credit of the
4656	licensee or appointee in connection with any transaction as to
4657	which the grounds for suspension, revocation, or refusal
4658	related.
4659	(2) With respect to insurance agencies, if the department
4660	finds that one or more grounds exist for the suspension,
4661	revocation, or refusal to issue, renew, or continue any license
4662	issued under this chapter, the department may, in its
4663	discretion, in lieu of or in addition to such suspension or
4664	revocation, or in lieu of such refusal, impose upon the licensee
4665	an administrative penalty in an amount not to exceed $10,000 per
4666	violation. The administrative penalty may, in the discretion of
4667	the department, be augmented by an amount equal to any
4668	commissions received by or accruing to the credit of the
4669	licensee in connection with any transaction as to which the
4670	grounds for suspension, revocation, or refusal related.
4671	(3) The department or officemay allow the licensee,
4672	appointee, or continuing education course provider, instructor,
4673	school official, or monitor group a reasonable period, not to
4674	exceed 30 days, within which to pay to the department or office
4675	the amount of the penalty so imposed. If the licensee,
4676	appointee, course provider, instructor, school official, or
4677	monitor group fails to pay the penalty in its entirety to the
4678	department or officewithin the period so allowed, the license,
4679	appointments, approval, or status of that person shall stand
4680	suspended or revoked or issuance, renewal, or continuation shall
4681	be refused, as the case may be, upon expiration of such period.
4682	Section 86. Section 626.691, Florida Statutes, is amended
4683	to read:
4684	626.691 Probation.--
4685	(1) If the department or officefinds that one or more
4686	grounds exist for the suspension, revocation, or refusal to
4687	renew or continue any license or appointment issued under this
4688	part, the department or officemay, in its discretion, except
4689	when an administrative fine is not permissible under s. 626.681
4690	or when such suspension, revocation, or refusal is mandatory, in
4691	lieu of or in addition to such suspension or revocation, or in
4692	lieu of such refusal, or in connection with any administrative
4693	monetary penalty imposed under s. 626.681, place the offending
4694	licensee or appointee on probation for a period, not to exceed 2
4695	years, as specified by the department or officein its order.
4696	(2) As a condition to such probation or in connection
4697	therewith, the department or officemay specify in its order
4698	reasonable terms and conditions to be fulfilled by the
4699	probationer during the probation period. If during the
4700	probation period the department or officehas good cause to
4701	believe that the probationer has violated a term or condition,
4702	it shall suspend, revoke, or refuse to issue, renew, or continue
4703	the license or appointment of the probationer, as upon the
4704	original grounds referred to in subsection (1).
4705	Section 87. Section 626.692, Florida Statutes, is amended
4706	to read:
4707	626.692 Restitution.--If any ground exists for the
4708	suspension, revocation, or refusal of a license or appointment,
4709	the department or officemay, in addition to any other penalty
4710	authorized under this chapter, order the licensee to pay
4711	restitution to any person who has been deprived of money by the
4712	licensee's misappropriation, conversion, or unlawful withholding
4713	of moneys belonging to insurers, insureds, beneficiaries, or
4714	others. In no instance shall the amount of restitution required
4715	to be paid under this section exceed the amount of money
4716	misappropriated, converted, or unlawfully withheld. Nothing in
4717	this section limits or restricts a person's right to seek other
4718	remedies as provided for by law.
4719	Section 88. Section 626.7315, Florida Statutes, is amended
4720	to read:
4721	626.7315 Prohibition against the unlicensed transaction of
4722	general lines insurance.--With respect to any line of authority
4723	as defined in s. 626.015(6)(7), no individual shall, unless
4724	licensed as a general lines agent:
4725	(1) Solicit insurance or procure applications therefor;
4726	(2) In this state, receive or issue a receipt for any
4727	money on account of or for any insurer, or receive or issue a
4728	receipt for money from other persons to be transmitted to any
4729	insurer for a policy, contract, or certificate of insurance or
4730	any renewal thereof, even though the policy, certificate, or
4731	contract is not signed by him or her as agent or representative
4732	of the insurer;
4733	(3) Directly or indirectly represent himself or herself to
4734	be an agent of any insurer or as an agent, to collect or forward
4735	any insurance premium, or to solicit, negotiate, effect,
4736	procure, receive, deliver, or forward, directly or indirectly,
4737	any insurance contract or renewal thereof or any endorsement
4738	relating to an insurance contract, or attempt to effect the
4739	same, of property or insurable business activities or interests,
4740	located in this state;
4741	(4) In this state, engage or hold himself or herself out
4742	as engaging in the business of analyzing or abstracting
4743	insurance policies or of counseling or advising or giving
4744	opinions, other than as a licensed attorney at law, relative to
4745	insurance or insurance contracts, for fee, commission, or other
4746	compensation, other than as a salaried bona fide full-time
4747	employee so counseling and advising his or her employer relative
4748	to the insurance interests of the employer and of the
4749	subsidiaries or business affiliates of the employer;
4750	(5) In any way, directly or indirectly, make or cause to
4751	be made, or attempt to make or cause to be made, any contract of
4752	insurance for or on account of any insurer;
4753	(6) Solicit, negotiate, or in any way, directly or
4754	indirectly, effect insurance contracts, if a member of a
4755	partnership or association, or a stockholder, officer, or agent
4756	of a corporation which holds an agency appointment from any
4757	insurer; or
4758	(7) Receive or transmit applications for suretyship, or
4759	receive for delivery bonds founded on applications forwarded
4760	from this state, or otherwise procure suretyship to be effected
4761	by a surety insurer upon the bonds of persons in this state or
4762	upon bonds given to persons in this state.
4763	Section 89. Subsection (3) of section 626.732, Florida
4764	Statutes, is amended to read:
4765	626.732 Requirement as to knowledge, experience, or
4766	instruction.--
4767	(3) An individual who was or became qualified to sit for
4768	an agent's, customer representative's, or adjuster's examination
4769	at or during the time he or she was employed by the department
4770	or officeand who, while so employed, was employed in
4771	responsible insurance duties as a full-time bona fide employee
4772	shall be permitted to take an examination if application for
4773	such examination is made within 90 days after the date of
4774	termination of his or her employment with the department or
4775	office.
4776	Section 90. Section 626.742, Florida Statutes, is amended
4777	to read:
4778	626.742 Nonresident agents; service of process.--
4779	(1) Each licensed nonresident agent shall appoint the
4780	Chief Financial OfficerInsurance Commissioner and Treasureras
4781	his or her attorney to receive service of legal process issued
4782	against the agent in this state, upon causes of action arising
4783	within this state out of transactions under the agent's license
4784	and appointment. Service upon the Chief Financial Officer
4785	Insurance Commissioner and Treasureras attorney shall
4786	constitute effective legal service upon the agent.
4787	(2) The appointment of the Chief Financial Officer
4788	Insurance Commissioner and Treasurerfor service of process
4789	shall be irrevocable for as long as there could be any cause of
4790	action against the agent arising out of his or her insurance
4791	transactions in this state.
4792	(3) Duplicate copies of such legal process against such
4793	agent shall be served upon the Chief Financial OfficerInsurance
4794	Commissioner and Treasurerby a person competent to serve a
4795	summons.
4796	(4) Upon receiving such service, the Chief Financial
4797	OfficerInsurance Commissioner and Treasurershall forthwith
4798	send one of the copies of the process, by registered mail with
4799	return receipt requested, to the defendant agent at his or her
4800	last address of record with the department.
4801	(5) The Chief Financial OfficerInsurance Commissioner and
4802	Treasurershall keep a record of the day and hour of service
4803	upon him or her of all such legal process.
4804	Section 91. Subsections (4) and (7) of section 626.7451,
4805	Florida Statutes, are amended to read:
4806	626.7451 Managing general agents; required contract
4807	provisions.--No person acting in the capacity of a managing
4808	general agent shall place business with an insurer unless there
4809	is in force a written contract between the parties which sets
4810	forth the responsibility for a particular function, specifies
4811	the division of responsibilities, and contains the following
4812	minimum provisions:
4813	(4) Separate records of business written by the managing
4814	general agent shall be maintained unless the managing general
4815	agent is a controlled or controlling person. The insurer shall
4816	have access and the right to copy all accounts and records
4817	related to its business in a form usable by the insurer, and the
4818	department and officeshall have access to all books, bank
4819	accounts, and records of the managing general agent in a form
4820	usable to the department and office. The records shall be
4821	retained according to s. 626.561.
4822	(7) If the contract permits the managing general agent to
4823	settle claims on behalf of the insurer:
4824	(a) All claims must be reported to the company in a timely
4825	manner and all claims must be adjusted by properly licensed
4826	persons.
4827	(b) Notice shall be sent by the managing general agent to
4828	the insurer as soon as it becomes known that the claim:
4829	1. Exceeds the limit set by the insurer;
4830	2. Involves a coverage dispute;
4831	3. Exceeds the managing general agent's claims settlement
4832	authority;
4833	4. Is open for more than 6 months; or
4834	5. Is closed by payment of an amount set by the office
4835	departmentor an amount set by the insurer, whichever is less.
4836	(c) All claims files shall be the joint property of the
4837	insurer and managing general agent. However, upon an order of
4838	liquidation of the insurer the claims and related application
4839	files shall become the sole property of the insurer or its
4840	estate. The managing general agent shall have reasonable access
4841	to and the right to copy the files on a timely basis.
4842	(d) Any settlement authority granted to the managing
4843	general agent may be terminated for cause upon the insurer's
4844	written notice to the managing general agent or upon the
4845	termination of the contract. The insurer may suspend the
4846	settlement authority during the pendency of any dispute
4847	regarding the cause for termination.
4848
4849	For the purposes of this section and ss. 626.7453 and 626.7454,
4850	the term "controlling person" or "controlling" has the meaning
4851	set forth in s. 625.012(5)(b)1., and the term "controlled
4852	person" or "controlled" has the meaning set forth in s.
4853	625.012(5)(b)2.
4854	Section 92. Subsections (1), (5), and (6) of section
4855	626.7454, Florida Statutes, are amended to read:
4856	626.7454 Managing general agents; duties of insurers.--
4857	(1) The insurer shall have on file for each managing
4858	general agent with which it has done business an independent
4859	financial examination in a form acceptable to the office
4860	department.
4861	(5) Within 30 days after entering into or terminating a
4862	contract with a managing general agent, the insurer shall
4863	provide written notification of the appointment or termination
4864	to the department and office. Notices of appointment of a
4865	managing general agent shall include a statement of duties which
4866	the applicant is expected to perform on behalf of the insurer,
4867	the lines of insurance for which the applicant is to be
4868	authorized to act, and any other information the department or
4869	officemay request.
4870	(6) An insurer shall review its books and records on a
4871	quarterly basis to determine if any producer has become a
4872	managing general agent as defined in s. 626.015. If the insurer
4873	determines that a producer has become a managing general agent,
4874	the insurer shall promptly notify the producer and the
4875	department and officeof such determination and the insurer and
4876	producer must fully comply with the provisions of this section
4877	and ss. 626.7451, 626.7452, and 626.7453 within 30 days after
4878	such determination.
4879
4880
4881	Subsections (1), (3), and (4) do not apply to a managing
4882	general agent that is a controlled or controlling person.
4883	Section 93. Subsections (6), (7), and (8) of section
4884	626.7491, Florida Statutes, are amended to read:
4885	626.7491 Business transacted with producer controlled
4886	property and casualty insurer.--
4887	(6) AUDIT COMMITTEE.--Every controlled insurer shall have
4888	an audit committee of the board of directors composed of
4889	independent directors. The audit committee shall annually meet
4890	with management, the insurer's independent certified public
4891	accountants, and an independent casualty actuary or other
4892	independent loss reserve specialist acceptable to the office
4893	departmentto review the adequacy of the insurer's loss
4894	reserves.
4895	(7) REPORTING REQUIREMENTS.--
4896	(a) In addition to any other required loss reserve
4897	certification, the controlled insurer shall, on April 1 of each
4898	year, file with the officedepartmentthe opinion of an
4899	independent casualty actuary, or such other independent loss
4900	reserve specialist acceptable to the officedepartment,
4901	reporting loss ratios for each line of business written and
4902	attesting to the adequacy of loss reserves established for
4903	losses incurred and outstanding as of the year end, including
4904	incurred but not reported losses, on business placed by the
4905	producer.
4906	(b) The controlled insurer shall annually report to the
4907	officedepartmentthe amount of commissions paid to the
4908	producer, the percentage such amount represents of the net
4909	premiums written, and comparable amounts and percentages paid to
4910	noncontrolling producers for placements of the same kinds of
4911	insurance.
4912	(8) PENALTIES.--
4913	(a) If the department believes that the controlling
4914	producer or any other person has not materially complied with
4915	this section, or any rule adopted or order issued hereunder, the
4916	department may order the controlling producer to cease placing
4917	business with the controlled insurer.
4918	(b) If, due to such material noncompliance, the controlled
4919	insurer or any policyholder thereof has suffered any loss or
4920	damage, the department or officemay maintain a civil action or
4921	intervene in an action brought by or on behalf of the insurer or
4922	policyholder for recovery of compensatory damages for the
4923	benefit of the insurer or policyholder or other appropriate
4924	relief.
4925	(c) If an order for liquidation or rehabilitation of the
4926	controlled insurer has been entered pursuant to chapter 631 and
4927	the receiver appointed under such order believes that the
4928	controlling producer or any other person has not materially
4929	complied with this section or any rule adopted or order issued
4930	hereunder and the insurer has suffered any loss or damage
4931	therefrom, the receiver may maintain a civil action for recovery
4932	of damages or other appropriate sanctions for the benefit of the
4933	insurer.
4934	(d) Nothing contained in this section shall affect the
4935	right of the department or officeto impose any other penalties
4936	provided for in the Florida Insurance Code.
4937	(e) Nothing contained in this section is intended to or
4938	shall in any manner alter or affect the rights of policyholders,
4939	claimants, creditors, or other third parties.
4940	Section 94. Paragraph (e) of subsection (3) and
4941	subsections (11) and (12) of section 626.7492, Florida Statutes,
4942	are amended to read:
4943	626.7492 Reinsurance intermediaries.--
4944	(3) LICENSURE.--
4945	(e) If the applicant for a reinsurance intermediary
4946	license is a nonresident, the applicant, as a condition
4947	precedent to receiving or holding a license, must designate the
4948	Chief Financial OfficerInsurance Commissioneras agent for
4949	service of process in the manner, and with the same legal
4950	effect, provided for by this section for designation of service
4951	of process upon unauthorized insurers. Such applicant shall also
4952	furnish the department with the name and address of a resident
4953	of this state upon whom notices or orders of the department or
4954	process affecting the nonresident reinsurance intermediary may
4955	be served. The licensee shall promptly notify the department in
4956	writing of each change in its designated agent for service of
4957	process, and the change shall not become effective until
4958	acknowledged by the department.
4959	(11) PENALTIES AND LIABILITIES.--
4960	(a) A reinsurance intermediary found by the department, or
4961	an insurer, or reinsurer found by the office,departmentto be
4962	in violation of any provision of this section must:
4963	1. For each separate violation pay a penalty in an amount
4964	not to exceed $5,000;
4965	2. Be subject to revocation or suspension of its license;
4966	and
4967	3. If a violation was committed by the reinsurance
4968	intermediary, the reinsurance intermediary must make restitution
4969	to the insurer, reinsurer, rehabilitator, or liquidator of the
4970	insurer or reinsurer for the net losses incurred by the insurer
4971	or reinsurer attributable to the violation.
4972	(b) Nothing contained in this section shall affect the
4973	right of the office ordepartment to impose any other penalties
4974	provided in the Florida Insurance Code.
4975	(c) Nothing contained in this section is intended to or
4976	shall in any manner limit or restrict the rights of
4977	policyholders, claimants, creditors, or other third parties or
4978	confer any rights to these persons.
4979	(12) No insurer or reinsurer may continue to use the
4980	services of a reinsurance intermediary on or after April 8,
4981	1992, unless such use is in compliance with this section.
4982	Section 95. Subsection (5) of section 626.752, Florida
4983	Statutes, is amended to read:
4984	626.752 Exchange of business.--
4985	(5) Within 15 days after the last day of each month, any
4986	insurer accepting business under this section shall report to
4987	the department the name, address, telephone number, and social
4988	security number of each agent from which the insurer received
4989	more than 24 personal lines risks during the calendar year,
4990	except for risks being removed from the Citizens Property
4991	Insurance CorporationResidential Property and Casualty Joint
4992	Underwriting Associationand placed with that insurer by a
4993	brokering agent. Once the insurer has reported pursuant to this
4994	subsection an agent's name to the department, additional reports
4995	on the same agent shall not be required. However, the fee set
4996	forth in s. 624.501 shall be paid for the agent by the insurer
4997	for each year until the insurer notifies the department that the
4998	insurer is no longer accepting business from the agent pursuant
4999	to this section. The insurer may require that the agent
5000	reimburse the insurer for the fee.
5001	Section 96. Subsection (2) of section 626.7845, Florida
5002	Statutes, is amended to read:
5003	626.7845 Prohibition against unlicensed transaction of
5004	life insurance.--
5005	(2) Except as provided in s. 626.112(6), with respect to
5006	any line of authority specified in s. 626.015(11)(12), no
5007	individual shall, unless licensed as a life agent:
5008	(a) Solicit insurance or annuities or procure
5009	applications; or
5010	(b) In this state, engage or hold himself or herself out
5011	as engaging in the business of analyzing or abstracting
5012	insurance policies or of counseling or advising or giving
5013	opinions to persons relative to insurance or insurance contracts
5014	other than:
5015	1. As a consulting actuary advising an insurer; or
5016	2. As to the counseling and advising of labor unions,
5017	associations, trustees, employers, or other business entities,
5018	the subsidiaries and affiliates of each, relative to their
5019	interests and those of their members or employees under
5020	insurance benefit plans.
5021	Section 97. Section 626.7851, Florida Statutes, is amended
5022	to read:
5023	626.7851 Requirement as to knowledge, experience, or
5024	instruction.--No applicant for a license as a life agent, except
5025	for a chartered life underwriter (CLU), shall be qualified or
5026	licensed unless within the 4 years immediately preceding the
5027	date the application for a license is filed with the department
5028	he or she has:
5029	(1) Successfully completed 40 hours of classroom courses
5030	in insurance satisfactory to the department at a school or
5031	college, or extension division thereof, or other authorized
5032	course of study, approved by the department. Courses must
5033	include instruction on the subject matter of unauthorized
5034	entities engaging in the business of insurance, to include the
5035	Florida Nonprofit Multiple-Employer Welfare Arrangement Act and
5036	the Employee Retirement Income Security Act, 29 U.S.C. ss. 1001
5037	et seq., as it relates to the provision of life insurance by
5038	employers to their employees and the regulation thereof;
5039	(2) Successfully completed a correspondence course in
5040	insurance satisfactory to the department and regularly offered
5041	by accredited institutions of higher learning in this state,
5042	approved by the department. Courses must include instruction on
5043	the subject matter of unauthorized entities engaging in the
5044	business of insurance, to include the Florida Nonprofit
5045	Multiple-Employer Welfare Arrangement Act and the Employee
5046	Retirement Income Security Act, 29 U.S.C. ss. 1001 et seq., as
5047	it relates to the provision of life insurance by employers to
5048	their employees and the regulation thereof;
5049	(3) Held an active license in life, or life and health,
5050	insurance in another state. This provision may not be utilized
5051	unless the other state grants reciprocal treatment to licensees
5052	formerly licensed in Florida; or
5053	(4) Been employed by the department or officefor at least
5054	1 year, full time in life or life and health insurance
5055	regulatory matters and who was not terminated for cause, and
5056	application for examination is made within 90 days after the
5057	date of termination of his or her employment with the department
5058	or office.
5059	Section 98. Section 626.8305, Florida Statutes, is amended
5060	to read:
5061	626.8305 Prohibition against the unlicensed transaction of
5062	health insurance.--Except as provided in s. 626.112(6), with
5063	respect to any line of authority specified in s. 626.015(7)(8),
5064	no individual shall, unless licensed as a health agent:
5065	(1) Solicit insurance or procure applications; or
5066	(2) In this state, engage or hold himself or herself out
5067	as engaging in the business of analyzing or abstracting
5068	insurance policies or of counseling or advising or giving
5069	opinions to persons relative to insurance contracts other than:
5070	(a) As a consulting actuary advising insurers; or
5071	(b) As to the counseling and advising of labor unions,
5072	associations, trustees, employers, or other business entities,
5073	the subsidiaries and affiliates of each, relative to their
5074	interests and those of their members or employees under
5075	insurance benefit plans.
5076	Section 99. Subsection (4) of section 626.8311, Florida
5077	Statutes, is amended to read:
5078	626.8311 Requirement as to knowledge, experience, or
5079	instruction.--No applicant for a license as a health agent,
5080	except for a chartered life underwriter (CLU), shall be
5081	qualified or licensed unless within the 4 years immediately
5082	preceding the date the application for license is filed with the
5083	department he or she has:
5084	(4) Been employed by the department or officefor at least
5085	1 year, full time in health insurance regulatory matters and who
5086	was not terminated for cause, and application for examination is
5087	made within 90 days after the date of termination of his or her
5088	employment with the department or office.
5089	Section 100. Subsection (1) of section 626.8427, Florida
5090	Statutes, is amended to read:
5091	626.8427 Number of applications for licensure required;
5092	exemption; effect of expiration of license.--
5093	(1) After a license as a title insurance agent has been
5094	issued to a title insurance agent, the agent is not required to
5095	file another license application for a similar license,
5096	irrespective of the number of insurers to be represented by the
5097	agent, unless:
5098	(a) The agent is specifically ordered by the department to
5099	complete a new application; or
5100	(b) During any period of 48 months since the filing of the
5101	original license application, the agent was not appointed,
5102	unless in the case of individuals the failure to be so appointed
5103	was due to military service, in which event the period within
5104	which a new application is not required may, in the discretion
5105	of the department of Insurance, be extended for 12 months
5106	following the date of discharge from military service if the
5107	military service does not exceed 3 years, but in no event shall
5108	the period be extended under this clause for a period of more
5109	than 6 years from the date of filing the original application.
5110	Section 101. Subsections (1) and (3) of section 626.8463,
5111	Florida Statutes, are amended to read:
5112	626.8463 Witnesses and evidence.--
5113	(1) As to the subject of any examination, investigation,
5114	or hearing being conducted by him or her under s. 624.5015, ss.
5115	626.8417-626.847, or s. 627.791, an examiner appointed by the
5116	department or officeof Insurancemay administer oaths, examine
5117	and cross-examine witnesses, and receive oral and documentary
5118	evidence and shall have the power to subpoena witnesses, compel
5119	their attendance and testimony, and require by subpoena the
5120	production of books, papers, records, files, correspondence,
5121	documents, or other evidence which the examiner deems relevant
5122	to the inquiry.
5123	(3) If a person refuses to comply with any such subpoena
5124	or to testify as to any matter concerning which the person may
5125	be lawfully interrogated, the circuit court in and for Leon
5126	County, or the county in which such examination, investigation,
5127	or hearing is being conducted, or the county in which such
5128	person resides, upon application by the department or office,
5129	may issue an order requiring such person to comply with the
5130	subpoena and to testify. A person who fails to obey such an
5131	order of the court may be punished by the court for contempt.
5132	Section 102. Section 626.8467, Florida Statutes, is
5133	amended to read:
5134	626.8467 Testimony compelled; immunity from prosecution.--
5135	(1) If a person asks to be excused from attending or
5136	testifying or from producing any books, papers, records,
5137	contracts, documents, or other evidence in connection with any
5138	examination, hearing, or investigation being conducted under s.
5139	624.5015, ss. 626.8417-626.847, or s. 627.791 by the department
5140	or officeor its examiner on the ground that the testimony or
5141	evidence required of the person may tend to incriminate him or
5142	her or subject him or her to a penalty or forfeiture and
5143	notwithstanding is directed to give such testimony or produce
5144	such evidence, the person must, if so directed by the Department
5145	of Financial ServicesInsuranceand the Department of Legal
5146	Affairs or by the office and the Department of Legal Affairs,
5147	nonetheless comply with such direction, but he or she shall not
5148	thereafter be prosecuted or subjected to any penalty or
5149	forfeiture for or on account of any transaction, matter, or
5150	thing concerning which he or she may have so testified or
5151	produced evidence, and no testimony so given or evidence
5152	produced shall be received against the person upon any criminal
5153	action, investigation, or proceeding. However, a person so
5154	testifying shall not be exempt from prosecution or punishment
5155	for any perjury committed by him or her in such testimony, and
5156	the testimony or evidence so given or produced shall be
5157	admissible against him or her upon any criminal action,
5158	investigation, or proceeding concerning such perjury; and such
5159	person shall not be exempt from the refusal, suspension, or
5160	revocation of any license or appointment, permission, or
5161	authority conferred or to be conferred pursuant to s. 624.5015,
5162	ss. 626.8417-626.847, or s. 627.791.
5163	(2) Any such person may execute, acknowledge, and file
5164	within the office of the Department of Financial Services or
5165	the office, as appropriate,Insurancea statement expressly
5166	waiving such immunity or privilege with respect to any
5167	transaction, matter, or thing specified in the statement, and
5168	thereupon the testimony of such person or such evidence in
5169	relation to such transaction, matter, or thing may be received
5170	or produced before any judge or justice, court, tribunal, or
5171	grand jury or otherwise and, if so received or produced, such
5172	person shall not be entitled to any immunity or privilege on
5173	account of any testimony he or she may so give or evidence so
5174	produced.
5175	Section 103. Section 626.847, Florida Statutes, is amended
5176	to read:
5177	626.847 Penalty for refusal to testify.--A person who
5178	refuses or fails, without lawful cause, to testify relative to
5179	the affairs of any title insurer or other person when subpoenaed
5180	under s. 626.8463 and requested by the department or officeof
5181	Insuranceto so testify is guilty of a misdemeanor of the second
5182	degree and, upon conviction, is punishable as provided in s.
5183	775.082 or s. 775.083.
5184	Section 104. Subsection (3) of section 626.8473, Florida
5185	Statutes, is amended to read:
5186	626.8473 Escrow; trust fund.--
5187	(3) All funds received by a title insurance agent to be
5188	held in trust shall be immediately placed in a financial
5189	institution that is located within this state and is a member of
5190	the Federal Deposit Insurance Corporation or the National Credit
5191	Union Share Insurance Fund. These funds shall be invested in an
5192	escrow account in accordance with the investment requirements
5193	and standards established for deposits and investments of state
5194	funds in s. 17.5718.10, where the funds shall be kept until
5195	disbursement thereof is properly authorized.
5196	Section 105. Section 626.8582, Florida Statutes, is
5197	amended to read:
5198	626.8582 "Nonresident public adjuster" defined.--A
5199	"nonresident public adjuster" is a person who:
5200	(1) Is not a resident of this state;
5201	(2) Is a currently licensed public adjuster in his or her
5202	state of residence for the type or kinds of insurance for which
5203	the licensee intends to adjust claims in this state or, if a
5204	resident of a state that does not license public adjusters, has
5205	passed the office'sdepartment'sadjuster examination as
5206	prescribed in s. 626.8732(1)(b); and
5207	(3) Is a self-employed public adjuster or associated with
5208	or employed by a public adjusting firm or other public adjuster.
5209	Section 106. Section 626.8584, Florida Statutes, is
5210	amended to read:
5211	626.8584 "Nonresident independent adjuster" defined.--A
5212	"nonresident independent adjuster" is a person who:
5213	(1) Is not a resident of this state;
5214	(2) Is a currently licensed independent adjuster in his or
5215	her state of residence for the type or kinds of insurance for
5216	which the licensee intends to adjust claims in this state or, if
5217	a resident of a state that does not license independent
5218	adjusters, has passed the office'sdepartment'sadjuster
5219	examination as prescribed in s. 626.8734(1)(b); and
5220	(3) Is a self-employed independent adjuster or associated
5221	with or employed by an independent adjusting firm or other
5222	independent adjuster.
5223	Section 107. Section 626.859, Florida Statutes, is amended
5224	to read:
5225	626.859 "Catastrophe" or "emergency" adjuster defined.--A
5226	"catastrophe" or "emergency" adjuster is a person who is not a
5227	licensed adjuster under this part, but who has been designated
5228	and certified to the officedepartmentby insurers as qualified
5229	to adjust claims, losses, or damages under policies or contracts
5230	of insurance issued by such insurer, and whom the office
5231	departmentmay license, in the event of a catastrophe or
5232	emergency, for the purposes and under the conditions which the
5233	officedepartmentshall fix and for the period of the emergency
5234	as the officedepartmentshall determine, to adjust claims,
5235	losses, or damages under the policies of insurance issued by the
5236	insurers.
5237	Section 108. Subsection (2) of section 626.861, Florida
5238	Statutes, is amended to read:
5239	626.861 Insurer's officers, insurer's employees,
5240	reciprocal insurer's representatives; adjustments by.--
5241	(2) If any such officer, employee, attorney, or agent in
5242	connection with the adjustment of any such claim, loss, or
5243	damage engages in any of the misconduct described in or
5244	contemplated by s. 626.611(6), the officedepartmentmay suspend
5245	or revoke the insurer's certificate of authority.
5246	Section 109. Subsection (2) of section 626.863, Florida
5247	Statutes, is amended to read:
5248	626.863 Licensed independent adjusters required; insurers'
5249	responsibility.--
5250	(2) Before referring any claim or loss, the insurer shall
5251	ascertain from the officedepartmentwhether the proposed
5252	independent adjuster is currently licensed and appointed as
5253	such. Having once ascertained that a particular person is so
5254	licensed and appointed, the insurer may assume that he or she
5255	will continue to be so licensed and appointed until the insurer
5256	has knowledge, or receives information from the office
5257	department, to the contrary.
5258	Section 110. Section 626.865, Florida Statutes, is amended
5259	to read:
5260	626.865 Public adjuster's qualifications, bond.--
5261	(1) The officedepartmentshall issue a license to an
5262	applicant for a public adjuster's license upon determining that
5263	the applicant has paid the applicable fees specified in s.
5264	624.501 and possesses the following qualifications:
5265	(a) Is a natural person at least 18 years of age.
5266	(b) Is a bona fide resident of this state.
5267	(c) Is trustworthy and has such business reputation as
5268	would reasonably assure that the applicant will conduct his or
5269	her business as insurance adjuster fairly and in good faith and
5270	without detriment to the public.
5271	(d) Has had sufficient experience, training, or
5272	instruction concerning the adjusting of damages or losses under
5273	insurance contracts, other than life and annuity contracts, is
5274	sufficiently informed as to the terms and effects of the
5275	provisions of those types of insurance contracts, and possesses
5276	adequate knowledge of the laws of this state relating to such
5277	contracts as to enable and qualify him or her to engage in the
5278	business of insurance adjuster fairly and without injury to the
5279	public or any member thereof with whom the applicant may have
5280	business as a public adjuster.
5281	(e) Has passed any required written examination.
5282	(2) At the time of application for license as a public
5283	adjuster, the applicant shall file with the officedepartmenta
5284	bond executed and issued by a surety insurer authorized to
5285	transact such business in this state, in the amount of $50,000,
5286	conditioned for the faithful performance of his or her duties as
5287	a public adjuster under the license applied for. The bond shall
5288	be in favor of the officedepartmentand shall specifically
5289	authorize recovery by the officedepartmentof the damages
5290	sustained in case the licensee is guilty of fraud or unfair
5291	practices in connection with his or her business as public
5292	adjuster. The aggregate liability of the surety for all such
5293	damages shall in no event exceed the amount of the bond. Such
5294	bond shall not be terminated unless at least 30 days' written
5295	notice is given to the licensee and filed with the office
5296	department.
5297	Section 111. Section 626.866, Florida Statutes, is amended
5298	to read:
5299	626.866 Independent adjuster's qualifications.--The office
5300	departmentshall issue a license to an applicant for an
5301	independent adjuster's license upon determining that the
5302	applicable license fee specified in s. 624.501 has been paid and
5303	that the applicant possesses the following qualifications:
5304	(1) Is a natural person at least 18 years of age.
5305	(2) Is a bona fide resident of this state.
5306	(3) Is trustworthy and has such business reputation as
5307	would reasonably assure that the applicant will conduct his or
5308	her business as insurance adjuster fairly and in good faith and
5309	without detriment to the public.
5310	(4) Has had sufficient experience, training, or
5311	instruction concerning the adjusting of damage or loss under
5312	insurance contracts, other than life and annuity contracts, is
5313	sufficiently informed as to the terms and the effects of the
5314	provisions of such types of contracts, and possesses adequate
5315	knowledge of the insurance laws of this state relating to such
5316	contracts as to enable and qualify him or her to engage in the
5317	business of insurance adjuster fairly and without injury to the
5318	public or any member thereof with whom he or she may have
5319	relations as an insurance adjuster and to adjust all claims in
5320	accordance with the policy or contract and the insurance laws of
5321	this state.
5322	(5) Has passed any required written examination.
5323	Section 112. Section 626.867, Florida Statutes, is amended
5324	to read:
5325	626.867 Company employee adjuster's qualifications.--The
5326	officedepartmentshall issue a license to an applicant for a
5327	company employee adjuster's license upon determining that the
5328	applicable license fee specified in s. 624.501 has been paid and
5329	that the applicant possesses the following qualifications:
5330	(1) Is a natural person at least 18 years of age.
5331	(2) Is a bona fide resident of this state.
5332	(3) Is trustworthy and has such business reputation as
5333	would reasonably assure that the applicant will conduct his or
5334	her business as insurance adjuster fairly and in good faith and
5335	without detriment to the public.
5336	(4) Has had sufficient experience, training, or
5337	instruction concerning the adjusting of damage or loss of risks
5338	described in his or her application, is sufficiently informed as
5339	to the terms and the effects of the provisions of insurance
5340	contracts covering such risks, and possesses adequate knowledge
5341	of the insurance laws of this state relating to such insurance
5342	contracts as to enable and qualify him or her to engage in such
5343	business as insurance adjuster fairly and without injury to the
5344	public or any member thereof with whom he or she may have
5345	relations as an insurance adjuster and to adjust all claims in
5346	accordance with the policy or contract and the insurance laws of
5347	this state.
5348	(5) Has passed any required written examination.
5349	Section 113. Subsection (5) of section 626.869, Florida
5350	Statutes, is amended to read:
5351	626.869 License, adjusters.--
5352	(5) Any person holding a license for 24 consecutive months
5353	or longer and who engages in adjusting workers' compensation
5354	insurance must, beginning in their birth month and every 2 years
5355	thereafter, have completed 24 hours of courses, 2 hours of which
5356	relate to ethics, in subjects designed to inform the licensee
5357	regarding the current workers' compensation laws of this state,
5358	so as to enable him or her to engage in business as a workers'
5359	compensation insurance adjuster fairly and without injury to the
5360	public and to adjust all claims in accordance with the policy or
5361	contract and the workers' compensation laws of this state. In
5362	order to qualify as an eligible course under this subsection,
5363	the course must:
5364	(a) Have a course outline approved by the office
5365	department.
5366	(b) Be taught at a school training facility or other
5367	location approved by the officedepartment.
5368	(c) Be taught by instructors with at least 5 years of
5369	experience in the area of workers' compensation, general lines
5370	of insurance, or other persons approved by the office
5371	department. However, a member of The Florida Bar is exempt from
5372	the 5 years' experience requirement.
5373	(d) Furnish the attendee a certificate of completion. The
5374	course provider shall send a roster to the officedepartmentin
5375	a format prescribed by the commissiondepartment.
5376	Section 114. Section 626.8695, Florida Statutes, is
5377	amended to read:
5378	626.8695 Primary adjuster.--
5379	(1) Each person operating an adjusting firm and each
5380	location of a multiple location adjusting firm must designate a
5381	primary adjuster for each such firm or location and must file
5382	with the officedepartmentthe name of such primary adjuster and
5383	the address of the firm or location where he or she is the
5384	primary adjuster, on a form approved by the commission
5385	department. The designation of the primary adjuster may be
5386	changed at the option of the adjusting firm. Any such change is
5387	effective upon notification to the officedepartment. Notice of
5388	change must be sent to the officedepartmentwithin 30 days
5389	after such change.
5390	(2)(a) For purposes of this section, a "primary adjuster"
5391	is the licensed adjuster who is responsible for the hiring and
5392	supervision of all individuals within an adjusting firm location
5393	who deal with the public and who acts in the capacity of a
5394	public adjuster as defined in s. 626.854, or an independent
5395	adjuster as defined in s. 626.855. An adjuster may be
5396	designated as a primary adjuster for only one adjusting firm
5397	location.
5398	(b) For purposes of this section, an "adjusting firm" is a
5399	location where an independent or public adjuster is engaged in
5400	the business of insurance.
5401	(3) The officedepartmentmay suspend or revoke the
5402	license of the primary adjuster if the adjusting firm employs
5403	any person who has had a license denied or any person whose
5404	license is currently suspended or revoked. However, if a person
5405	has been denied a license for failure to pass a required
5406	examination, he or she may be employed to perform clerical or
5407	administrative functions for which licensure is not required.
5408	(4) The primary adjuster in an unincorporated adjusting
5409	firm, or the primary adjuster in an incorporated adjusting firm
5410	in which no officer, director, or stockholder is an adjuster, is
5411	responsible and accountable for the acts of salaried employees
5412	under his or her direct supervision and control while acting on
5413	behalf of the adjusting firm. Nothing in this section renders
5414	any person criminally liable or subject to any disciplinary
5415	proceedings for any act unless the person personally committed
5416	or knew or should have known of the act and of the facts
5417	constituting a violation of this code.
5418	(5) The officedepartmentmay suspend or revoke the
5419	license of any adjuster who is employed by a person whose
5420	license is currently suspended or revoked.
5421	(6) An adjusting firm location may not conduct the
5422	business of insurance unless a primary adjuster is designated.
5423	Failure of the person operating the adjusting firm to designate
5424	a primary adjuster for the firm, or for each location, as
5425	applicable, on a form prescribed by the commissiondepartment
5426	within 30 days after inception of the firm or change of primary
5427	adjuster designation, constitutes grounds for requiring the
5428	adjusting firm to obtain an adjusting firm license pursuant to
5429	s. 626.8696.
5430	(7) Any adjusting firm may request, on a form prescribed
5431	by the commissiondepartment, verification from the office
5432	departmentof any person's current licensure status. If a
5433	request is mailed to the officedepartmentwithin 5 working days
5434	after the date an adjuster is hired, and the officedepartment
5435	subsequently notifies the adjusting firm that an employee's
5436	license is currently suspended, revoked, or has been denied, the
5437	license of the primary adjuster shall not be revoked or
5438	suspended if the unlicensed person is immediately dismissed from
5439	employment as an adjuster with the firm.
5440	Section 115. Subsections (1) and (5) of section 626.8696,
5441	Florida Statutes, are amended to read:
5442	626.8696 Application for adjusting firm license.--
5443	(1) The application for an adjusting firm license must
5444	include:
5445	(a) The name of each majority owner, partner, officer, and
5446	director of the adjusting firm.
5447	(b) The resident address of each person required to be
5448	listed in the application under paragraph (a).
5449	(c) The name of the adjusting firm and its principal
5450	business address.
5451	(d) The location of each adjusting firm office and the
5452	name under which each office conducts or will conduct business.
5453	(e) Any additional information which the commission
5454	departmentmay require.
5455	(5) An adjusting firm required to be licensed pursuant to
5456	s. 626.8695 must remain so licensed for a period of 3 years from
5457	the date of licensure, unless the license is suspended or
5458	revoked. The officedepartmentmay suspend or revoke the
5459	adjusting firm's authority to do business for activities
5460	occurring during the time the firm is licensed, regardless of
5461	whether the licensing period has terminated.
5462	Section 116. Section 626.8697, Florida Statutes, is
5463	amended to read:
5464	626.8697 Grounds for refusal, suspension, or revocation of
5465	adjusting firm license.--
5466	(1) The officedepartmentshall deny, suspend, revoke, or
5467	refuse to continue the license of any adjusting firm if it
5468	finds, as to any adjusting firm or as to any majority owner,
5469	partner, manager, director, officer, or other person who manages
5470	or controls the firm, that any of the following grounds exist:
5471	(a) Lack by the firm of one or more of the qualifications
5472	for the license as specified in this code.
5473	(b) Material misstatement, misrepresentation, or fraud in
5474	obtaining the license or in attempting to obtain the license.
5475	(2) The officedepartmentmay, in its discretion, deny,
5476	suspend, revoke, or refuse to continue the license of any
5477	adjusting firm if it finds that any of the following applicable
5478	grounds exist with respect to the firm or any owner, partner,
5479	manager, director, officer, or other person who is otherwise
5480	involved in the operation of the firm:
5481	(a) Any cause for which issuance of the license could have
5482	been refused had it then existed and been known to the office
5483	department.
5484	(b) Violation of any provision of this code or of any
5485	other law applicable to the business of insurance.
5486	(c) Violation of any order or rule of the office or
5487	commissiondepartment.
5488	(d) An owner, partner, manager, director, officer, or
5489	other person who manages or controls the firm having been found
5490	guilty of or having pleaded guilty or nolo contendere to a
5491	felony or a crime punishable by imprisonment of 1 year or more
5492	under the laws of the United States or of any state or under the
5493	laws of any other country, without regard to whether
5494	adjudication was made or withheld by the court.
5495	(e) Failure to inform the officedepartmentin writing
5496	within 30 days after a pleading by an owner, partner, manager,
5497	director, officer, or other person managing or controlling the
5498	firm of guilty or nolo contendere to, or being convicted or
5499	found guilty of, any felony or a crime punishable by
5500	imprisonment of 1 year or more under the laws of the United
5501	States or of any state, or under the laws of any other country,
5502	without regard to whether adjudication was made or withheld by
5503	the court.
5504	(f) Knowingly aiding, assisting, procuring, advising, or
5505	abetting any person in the violation of or to violate a
5506	provision of the insurance code or any order or rule of the
5507	office or commissiondepartment.
5508	(g) Knowingly employing any individual in a managerial
5509	capacity or in a capacity dealing with the public who is under
5510	an order of revocation or suspension issued by the office
5511	department.
5512	(h) Committing any of the following acts with such a
5513	frequency as to have made the operation of the adjusting firm
5514	hazardous to the insurance-buying public or other persons:
5515	1. Misappropriation, conversion, or unlawful or
5516	unreasonable withholding of moneys belonging to insurers or
5517	insureds or beneficiaries or claimants or to others and received
5518	in the conduct of business under the license.
5519	2. Misrepresentation or deception with regard to the
5520	business of insurance, dissemination of information, or
5521	advertising.
5522	3. Demonstrated lack of fitness or trustworthiness to
5523	engage in the business of insurance adjusting arising out of
5524	activities related to insurance adjusting or the adjusting firm.
5525	(i) Failure to appoint a primary adjuster.
5526	(3) In lieu of discretionary refusal, suspension, or
5527	revocation of an adjusting firm's license, the officedepartment
5528	may impose an administrative penalty of up to $1,000 for each
5529	violation or ground provided under this section, not to exceed
5530	an aggregate amount of $10,000 for all violations or grounds.
5531	(4) If any adjusting firm, having been licensed,
5532	thereafter has such license revoked or suspended, the firm shall
5533	terminate all adjusting activities while the license is revoked
5534	or suspended.
5535	Section 117. Section 626.8698, Florida Statutes, is
5536	amended to read:
5537	626.8698 Disciplinary guidelines for public
5538	adjusters.--The officedepartmentmay deny, suspend, or revoke
5539	the license of a public adjuster, and administer a fine not to
5540	exceed $5,000 per act, for any of the following:
5541	(1) Violating any provision of this chapter or a rule or
5542	order of the office or commissiondepartment;
5543	(2) Receiving payment or anything of value as a result of
5544	an unfair or deceptive practice;
5545	(3) Receiving or accepting any fee, kickback, or other
5546	thing of value pursuant to any agreement or understanding, oral
5547	or otherwise; entering into a split-fee arrangement with another
5548	person who is not a public adjuster; or being otherwise paid or
5549	accepting payment for services that have not been performed;
5550	(4) Violating s. 316.066 or s. 817.234;
5551	(5) Soliciting or otherwise taking advantage of a person
5552	who is vulnerable, emotional, or otherwise upset as the result
5553	of a trauma, accident, or other similar occurrence; or
5554	(6) Violating any ethical rule of the commission
5555	department.
5556	Section 118. Section 626.870, Florida Statutes, is amended
5557	to read:
5558	626.870 Application for license.--
5559	(1) Application for a license under this part shall be
5560	made as provided in s. 626.171 and related sections of this
5561	code.
5562	(2) The commissiondepartmentshall so prepare the form of
5563	the application as to elicit and require from the applicant the
5564	information necessary to enable the officedepartmentto
5565	determine whether the applicant possesses the qualifications
5566	prerequisite to issuance of the license to the applicant.
5567	(3) The commissiondepartmentmay, in its discretion,
5568	require that the application be supplemented by the certificate
5569	or affidavit of such person or persons as it deems necessary for
5570	its determination of the applicant's residence, business
5571	reputation, and reputation for trustworthiness. The commission
5572	department shall prescribe and the officemay furnish the forms
5573	for such certificates and affidavits.
5574	Section 119. Section 626.871, Florida Statutes, is amended
5575	to read:
5576	626.871 Reappointment after military service.--The office
5577	departmentmay, without requiring a further written examination,
5578	issue an appointment as an adjuster to a formerly licensed and
5579	appointed adjuster of this state who held a current adjuster's
5580	appointment at the time of entering service in the Armed Forces
5581	of the United States, subject to the following conditions:
5582	(1) The period of military service must not have been in
5583	excess of 3 years;
5584	(2) The application for the appointment must be filed with
5585	the officedepartmentand the applicable fee paid, within 12
5586	months following the date of honorable discharge of the
5587	applicant from the military service; and
5588	(3) The new appointment will be of the same type and class
5589	as that currently effective at the time the applicant entered
5590	military service; but, if such type and class of appointment is
5591	not being currently issued under this code, the new appointment
5592	shall be of that type and class or classes most closely
5593	resembling those of the former appointment.
5594	Section 120. Subsections (1) and (5) of section 626.872,
5595	Florida Statutes, are amended to read:
5596	626.872 Temporary license.--
5597	(1) The officedepartmentmay, in its discretion, issue a
5598	temporary license as an independent adjuster or as a company
5599	employee adjuster, subject to the following conditions:
5600	(a) The applicant must be an employee of an adjuster
5601	currently licensed by the officedepartment, an employee of an
5602	authorized insurer, or an employee of an established adjusting
5603	firm or corporation which is supervised by a currently licensed
5604	independent adjuster.
5605	(b) The application must be accompanied by a certificate
5606	of employment and a report as to the applicant's integrity and
5607	moral character on a form prescribed by the commission
5608	departmentand executed by the employer.
5609	(c) The applicant must be a natural person of at least 18
5610	years of age, must be a bona fide resident of this state, must
5611	be trustworthy, and must have such business reputation as would
5612	reasonably assure that the applicant will conduct his or her
5613	business as an adjuster fairly and in good faith and without
5614	detriment to the public.
5615	(d) The applicant's employer is responsible for the
5616	adjustment acts of any licensee under this section.
5617	(e) The applicable license fee specified must be paid
5618	before issuance of the temporary license.
5619	(f) The temporary license shall be effective for a period
5620	of 1 year, but subject to earlier termination at the request of
5621	the employer, or if the licensee fails to take an examination as
5622	an independent adjuster or company employee adjuster within 6
5623	months after issuance of the temporary license, or if suspended
5624	or revoked by the officedepartment.
5625	(5) The officedepartmentshall not issue a temporary
5626	license as an independent adjuster or as a company employee
5627	adjuster to any individual who has ever held such a license in
5628	this state.
5629	Section 121. Subsection (1) of section 626.873, Florida
5630	Statutes, is amended to read:
5631	626.873 Nonresident company employee adjusters.--
5632	(1) The officedepartmentshall, upon application
5633	therefor, issue a license to an applicant for a nonresident
5634	adjuster's license upon determining that the applicant has paid
5635	the applicable license fees required under s. 624.501 and:
5636	(a) Is a currently licensed insurance adjuster in his or
5637	her home state, if such state requires a license.
5638	(b) Is an employee of an insurer, or a wholly owned
5639	subsidiary of an insurer, admitted to do business in this state.
5640	(c) Has filed a certificate or letter of authorization
5641	from the insurance department of his or her home state, if such
5642	state requires an adjuster to be licensed, stating that he or
5643	she holds a current license or authorization to adjust insurance
5644	losses. Such certificate or authorization must be signed by the
5645	insurance commissioner, or his or her deputy, of the adjuster's
5646	home state and must reflect whether or not the adjuster has ever
5647	had his or her license or authorization in the adjuster's home
5648	state suspended or revoked and, if such is the case, the reason
5649	for such action.
5650	Section 122. Section 626.8732, Florida Statutes, is
5651	amended to read:
5652	626.8732 Nonresident public adjuster's qualifications,
5653	bond.--
5654	(1) The officedepartmentshall, upon application
5655	therefor, issue a license to an applicant for a nonresident
5656	public adjuster's license upon determining that the applicant
5657	has paid the applicable license fees required under s. 624.501
5658	and:
5659	(a) Is a natural person at least 18 years of age.
5660	(b) Has passed to the satisfaction of the office
5661	departmenta written Florida public adjuster's examination of
5662	the scope prescribed in s. 626.241(6); however, the requirement
5663	for such an examination does not apply to any of the following:
5664	1. An applicant who is licensed as a resident public
5665	adjuster in his or her state of residence, when that state
5666	requires the passing of a written examination in order to obtain
5667	the license and a reciprocal agreement with the appropriate
5668	official of that state has been entered into by the office
5669	department; or
5670	2. An applicant who is licensed as a nonresident public
5671	adjuster in a state other than his or her state of residence
5672	when the state of licensure requires the passing of a written
5673	examination in order to obtain the license and a reciprocal
5674	agreement with the appropriate official of the state of
5675	licensure has been entered into by the officedepartment.
5676	(c) Is self-employed as a public adjuster or associated
5677	with or employed by a public adjusting firm or other public
5678	adjuster. Applicants licensed as nonresident public adjusters
5679	under this section must be appointed as such in accordance with
5680	the provisions of ss. 626.112 and 626.451. Appointment fees in
5681	the amount specified in s. 624.501 must be paid to the office
5682	departmentin advance. The appointment of a nonresident public
5683	adjuster shall continue in force until suspended, revoked, or
5684	otherwise terminated, but subject to biennial renewal or
5685	continuation by the licensee in accordance with procedures
5686	prescribed in s. 626.381 for licensees in general.
5687	(d) Is trustworthy and has such business reputation as
5688	would reasonably assure that he or she will conduct his or her
5689	business as a nonresident public adjuster fairly and in good
5690	faith and without detriment to the public.
5691	(e) Has had sufficient experience, training, or
5692	instruction concerning the adjusting of damages or losses under
5693	insurance contracts, other than life and annuity contracts; is
5694	sufficiently informed as to the terms and effects of the
5695	provisions of those types of insurance contracts; and possesses
5696	adequate knowledge of the laws of this state relating to such
5697	contracts as to enable and qualify him or her to engage in the
5698	business of insurance adjuster fairly and without injury to the
5699	public or any member thereof with whom he or she may have
5700	business as a public adjuster.
5701	(2) The applicant shall furnish the following with his or
5702	her application:
5703	(a) A complete set of his or her fingerprints. The
5704	applicant's fingerprints must be certified by an authorized law
5705	enforcement officer. The officedepartmentmay not authorize an
5706	applicant to take the required examination or issue a
5707	nonresident public adjuster's license to the applicant until the
5708	officedepartmenthas received a report from the Florida
5709	Department of Law Enforcement and the Federal Bureau of
5710	Investigation relative to the existence or nonexistence of a
5711	criminal history report based on the applicant's fingerprints.
5712	(b) If currently licensed as a resident public adjuster in
5713	the applicant's state of residence, a certificate or letter of
5714	authorization from the licensing authority of the applicant's
5715	state of residence, stating that the applicant holds a current
5716	or comparable license to act as a public adjuster. The
5717	certificate or letter of authorization must be signed by the
5718	insurance commissioner or his or her deputy or the appropriate
5719	licensing official and must disclose whether the adjuster has
5720	ever had any license or eligibility to hold any license
5721	declined, denied, suspended, revoked, or placed on probation or
5722	whether an administrative fine or penalty has been levied
5723	against the adjuster and, if so, the reason for the action.
5724	(c) If the applicant's state of residence does not require
5725	licensure as a public adjuster and the applicant has been
5726	licensed as a resident insurance adjuster, agent, broker, or
5727	other insurance representative in his or her state of residence
5728	or any other state within the past 3 years, a certificate or
5729	letter of authorization from the licensing authority stating
5730	that the applicant holds or has held a license to act as such an
5731	insurance adjuster, agent, or other insurance representative.
5732	The certificate or letter of authorization must be signed by the
5733	insurance commissioner or his or her deputy or the appropriate
5734	licensing official and must disclose whether or not the
5735	adjuster, agent, or other insurance representative has ever had
5736	any license or eligibility to hold any license declined, denied,
5737	suspended, revoked, or placed on probation or whether an
5738	administrative fine or penalty has been levied against the
5739	adjuster and, if so, the reason for the action.
5740	(3) At the time of application for license as a
5741	nonresident public adjuster, the applicant shall file with the
5742	officedepartmenta bond executed and issued by a surety insurer
5743	authorized to transact surety business in this state, in the
5744	amount of $50,000, conditioned for the faithful performance of
5745	his or her duties as a nonresident public adjuster under the
5746	license applied for. The bond must be in favor of the office
5747	department and must specifically authorize recovery by the
5748	officedepartmentof the damages sustained if the licensee
5749	commits fraud or unfair practices in connection with his or her
5750	business as nonresident public adjuster. The aggregate liability
5751	of the surety for all the damages may not exceed the amount of
5752	the bond. The bond may not be terminated unless at least 30
5753	days' written notice is given to the licensee and filed with the
5754	officedepartment.
5755	(4) The usual and customary records pertaining to
5756	transactions under the license of a nonresident public adjuster
5757	must be retained for at least 3 years after completion of the
5758	adjustment and must be made available in this state to the
5759	officedepartmentupon request. The failure of a nonresident
5760	public adjuster to properly maintain records and make them
5761	available to the officedepartmentupon request constitutes
5762	grounds for the immediate suspension of the license issued under
5763	this section.
5764	(5) After licensure as a nonresident public adjuster, as a
5765	condition of doing business in this state, the licensee must
5766	annually on or before January 1, on a form prescribed by the
5767	commissiondepartment, submit an affidavit certifying that the
5768	licensee is familiar with and understands the insurance code and
5769	rules adopted thereunder and the provisions of the contracts
5770	negotiated or to be negotiated. Compliance with this filing
5771	requirement is a condition precedent to the issuance,
5772	continuation, reinstatement, or renewal of a nonresident public
5773	adjuster's appointment.
5774	Section 123. Subsections (1), (3), and (4) of section
5775	626.8734, Florida Statutes, are amended to read:
5776	626.8734 Nonresident independent adjuster's
5777	qualifications.--
5778	(1) The officedepartmentshall, upon application
5779	therefor, issue a license to an applicant for a nonresident
5780	independent adjuster's license upon determining that the
5781	applicant has paid the applicable license fees required under s.
5782	624.501 and:
5783	(a) Is a natural person at least 18 years of age.
5784	(b) Has passed to the satisfaction of the office
5785	departmenta written Florida independent adjuster's examination
5786	of the scope prescribed in s. 626.241(6); however, the
5787	requirement for the examination does not apply to any of the
5788	following:
5789	1. An applicant who is licensed as a resident independent
5790	adjuster in his or her state of residence when that state
5791	requires the passing of a written examination in order to obtain
5792	the license and a reciprocal agreement with the appropriate
5793	official of that state has been entered into by the office
5794	department; or
5795	2. An applicant who is licensed as a nonresident
5796	independent adjuster in a state other than his or her state of
5797	residence when the state of licensure requires the passing of a
5798	written examination in order to obtain the license and a
5799	reciprocal agreement with the appropriate official of the state
5800	of licensure has been entered into by the officedepartment.
5801	(c) Is self-employed or associated with or employed by an
5802	independent adjusting firm or other independent adjuster.
5803	Applicants licensed as nonresident independent adjusters under
5804	this section must be appointed as such in accordance with the
5805	provisions of ss. 626.112 and 626.451. Appointment fees in the
5806	amount specified in s. 624.501 must be paid to the office
5807	departmentin advance. The appointment of a nonresident
5808	independent adjuster shall continue in force until suspended,
5809	revoked, or otherwise terminated, but subject to biennial
5810	renewal or continuation by the licensee in accordance with
5811	procedures prescribed in s. 626.381 for licensees in general.
5812	(d) Is trustworthy and has such business reputation as
5813	would reasonably assure that he or she will conduct his or her
5814	business as a nonresident independent adjuster fairly and in
5815	good faith and without detriment to the public.
5816	(e) Has had sufficient experience, training, or
5817	instruction concerning the adjusting of damages or losses under
5818	insurance contracts, other than life and annuity contracts; is
5819	sufficiently informed as to the terms and effects of the
5820	provisions of those types of insurance contracts; and possesses
5821	adequate knowledge of the laws of this state relating to such
5822	contracts as to enable and qualify him or her to engage in the
5823	business of insurance adjuster fairly and without injury to the
5824	public or any member thereof with whom he or she may have
5825	business as an independent adjuster.
5826	(3) The usual and customary records pertaining to
5827	transactions under the license of a nonresident independent
5828	adjuster must be retained for at least 3 years after completion
5829	of the adjustment and must be made available in this state to
5830	the officedepartmentupon request. The failure of a nonresident
5831	independent adjuster to properly maintain records and make them
5832	available to the officedepartmentupon request constitutes
5833	grounds for the immediate suspension of the license issued under
5834	this section.
5835	(4) After licensure as a nonresident independent adjuster,
5836	as a condition of doing business in this state, the licensee
5837	must annually on or before January 1, on a form prescribed by
5838	the commissiondepartment, submit an affidavit certifying that
5839	the licensee is familiar with and understands the insurance laws
5840	and administrative rules of this state and the provisions of the
5841	contracts negotiated or to be negotiated. Compliance with this
5842	filing requirement is a condition precedent to the issuance,
5843	continuation, reinstatement, or renewal of a nonresident
5844	independent adjuster's appointment.
5845	Section 124. Section 626.8736, Florida Statutes, is
5846	amended to read:
5847	626.8736 Nonresident independent or public adjusters;
5848	service of process.--
5849	(1) Each licensed nonresident independent or public
5850	adjuster shall appoint the Chief Financial OfficerInsurance
5851	Commissioner and Treasurerand his or her successors in office
5852	as his or her attorney to receive service of legal process
5853	issued against the nonresident independent or public adjuster in
5854	this state, upon causes of action arising within this state out
5855	of transactions under his license and appointment. Service upon
5856	the Chief Financial OfficerInsurance Commissioner and Treasurer
5857	as attorney shall constitute effective legal service upon the
5858	nonresident independent or public adjuster.
5859	(2) The appointment of the Chief Financial Officer
5860	Insurance Commissioner and Treasurerfor service of process
5861	shall be irrevocable for as long as there could be any cause of
5862	action against the nonresident independent or public adjuster
5863	arising out of his or her insurance transactions in this state.
5864	(3) Duplicate copies of legal process against the
5865	nonresident independent or public adjuster shall be served upon
5866	the Chief Financial OfficerInsurance Commissioner and Treasurer
5867	by a person competent to serve a summons.
5868	(4) Upon receiving the service, the Chief Financial
5869	OfficerInsurance Commissioner and Treasurershall forthwith
5870	send one of the copies of the process, by registered mail with
5871	return receipt requested, to the defendant nonresident
5872	independent or public adjuster at his or her last address of
5873	record with the officedepartment.
5874	(5) The Chief Financial OfficerInsurance Commissioner and
5875	Treasurershall keep a record of the day and hour of service
5876	upon him or her of all legal process received under this
5877	section.
5878	Section 125. Section 626.8738, Florida Statutes, is
5879	amended to read:
5880	626.8738 Penalty for violation.--In addition to any other
5881	remedy imposed pursuant to this code, any person who acts as a
5882	resident or nonresident public adjuster or holds himself or
5883	herself out to be a public adjuster to adjust claims in this
5884	state, without being licensed by the officedepartmentas a
5885	public adjuster and appointed as a public adjuster, commits a
5886	felony of the third degree, punishable as provided in s.
5887	775.082, s. 775.083, or s. 775.084. Each act in violation of
5888	this section constitutes a separate offense.
5889	Section 126. Section 626.874, Florida Statutes, is amended
5890	to read:
5891	626.874 Catastrophe or emergency adjusters.--
5892	(1) In the event of a catastrophe or emergency, the office
5893	departmentmay issue a license, for the purposes and under the
5894	conditions which it shall fix and for the period of emergency as
5895	it shall determine, to persons who are residents or nonresidents
5896	of this state and who are not licensed adjusters under this part
5897	but who have been designated and certified to it as qualified to
5898	act as adjusters by independent resident adjusters or by an
5899	authorized insurer or by a licensed general lines agent to
5900	adjust claims, losses, or damages under policies or contracts of
5901	insurance issued by such insurers. The fee for the license
5902	shall be as provided in s. 624.501(12)(c).
5903	(2) If any person not a licensed adjuster who has been
5904	permitted to adjust such losses, claims, or damages under the
5905	conditions and circumstances set forth in subsection (1),
5906	engages in any of the misconduct described in or contemplated by
5907	ss. 626.611 and 626.621, the officedepartment, without notice
5908	and hearing, shall be authorized to issue its order denying such
5909	person the privileges granted under this section; and thereafter
5910	it shall be unlawful for any such person to adjust any such
5911	losses, claims, or damages in this state.
5912	Section 127. Section 626.878, Florida Statutes, is amended
5913	to read:
5914	626.878 Rules; code of ethics.--An adjuster shall
5915	subscribe to the code of ethics specified in the rules of the
5916	commissiondepartment.
5917	Section 128. Paragraphs (d) and (m) of subsection (1) of
5918	section 626.88, Florida Statutes, are amended to read:
5919	626.88 Definitions of "administrator" and "insurer".--
5920	(1) For the purposes of this part, an "administrator" is
5921	any person who directly or indirectly solicits or effects
5922	coverage of, collects charges or premiums from, or adjusts or
5923	settles claims on residents of this state in connection with
5924	authorized commercial self-insurance funds or with insured or
5925	self-insured programs which provide life or health insurance
5926	coverage or coverage of any other expenses described in s.
5927	624.33(1) or any person who, through a health care risk contract
5928	as defined in s. 641.234 with an insurer or health maintenance
5929	organization, provides billing and collection services to health
5930	insurers and health maintenance organizations on behalf of
5931	health care providers, other than any of the following persons:
5932	(d) A health care services plan, health maintenance
5933	organization, professional service plan corporation, or person
5934	in the business of providing continuing care, possessing a valid
5935	certificate of authority issued by the officedepartment, and
5936	the sales representatives thereof, if the activities of such
5937	entity are limited to the activities permitted under the
5938	certificate of authority.
5939	(m) A person approved by the department of Insurancewho
5940	administers only self-insured workers' compensation plans.
5941
5942
5943	A person who provides billing and collection services to health
5944	insurers and health maintenance organizations on behalf of
5945	health care providers shall comply with the provisions of ss.
5946	627.6131, 641.3155, and 641.51(4).
5947	Section 129. Section 626.8805, Florida Statutes, is
5948	amended to read:
5949	626.8805 Certificate of authority to act as
5950	administrator.--
5951	(1) It is unlawful for any person to act as or hold
5952	himself or herself out to be an administrator in this state
5953	without a valid certificate of authority issued by the office
5954	departmentpursuant to ss. 626.88-626.894. To qualify for and
5955	hold authority to act as an administrator in this state, an
5956	administrator must otherwise be in compliance with this code and
5957	with its organizational agreement. The failure of any person to
5958	hold such a certificate while acting as an administrator shall
5959	subject such person to a fine of not less than $5,000 or more
5960	than $10,000 for each violation.
5961	(2) The administrator shall file with the office
5962	departmentan application for a certificate of authority upon a
5963	form to be adopted by the commission and furnished by the office
5964	department, which application shall include or have attached the
5965	following information and documents:
5966	(a) All basic organizational documents of the
5967	administrator, such as the articles of incorporation, articles
5968	of association, partnership agreement, trade name certificate,
5969	trust agreement, shareholder agreement, and other applicable
5970	documents, and all amendments to those documents.
5971	(b) The bylaws, rules, and regulations or similar
5972	documents regulating the conduct or the internal affairs of the
5973	administrator.
5974	(c) The names, addresses, official positions, and
5975	professional qualifications of the individuals who are
5976	responsible for the conduct of the affairs of the administrator,
5977	including all members of the board of directors, board of
5978	trustees, executive committee, or other governing board or
5979	committee, the principal officers in the case of a corporation,
5980	the partners or members in the case of a partnership or
5981	association, and any other person who exercises control or
5982	influence over the affairs of the administrator.
5983	(d) Annual statements or reports for the 3 most recent
5984	years, or such other information as the officedepartmentmay
5985	require in order to review the current financial condition of
5986	the applicant.
5987	(e) If the applicant is not currently acting as an
5988	administrator, a statement of the amounts and sources of the
5989	funds available for organization expenses and the proposed
5990	arrangements for reimbursement and compensation of incorporators
5991	or other principals.
5992	(3) The applicant shall make available for inspection by
5993	the officedepartmentcopies of all contracts with insurers or
5994	other persons utilizing the services of the administrator.
5995	(4) The officedepartmentshall not issue a certificate of
5996	authority if it determines that the administrator or any
5997	principal thereof is not competent, trustworthy, financially
5998	responsible, or of good personal and business reputation or has
5999	had an insurance license denied for cause by any state.
6000	(5) A certificate of authority issued under this section
6001	shall remain valid, unless suspended or revoked by the office
6002	department, so long as the certificateholder continues in
6003	business in this state.
6004	(6) A certificate of authority issued under this section
6005	shall indicate that the administrator is authorized to
6006	administer commercial self-insurance funds or life and health
6007	programs or both, except that a certificate of authority issued
6008	prior to October 1, 1988, does not authorize the administration
6009	of commercial self-insurance funds.
6010	Section 130. Section 626.8809, Florida Statutes, is
6011	amended to read:
6012	626.8809 Fidelity bond.--An administrator shall have and
6013	keep in full force and effect a fidelity bond equal to at least
6014	10 percent of the amount of the funds handled or managed
6015	annually by the administrator. However, the officedepartment
6016	may not require a bond greater than $500,000 unless the office
6017	department, after due notice to all interested parties and
6018	opportunity for hearing and after consideration of the record,
6019	requires an amount in excess of $500,000 but not more than 10
6020	percent of the amount of the funds handled or managed annually
6021	by the administrator.
6022	Section 131. Section 626.8814, Florida Statutes, is
6023	amended to read:
6024	626.8814 Disclosure of ownership or affiliation.--Each
6025	administrator shall identify to the officedepartmentany
6026	ownership interest or affiliation of any kind with any insurance
6027	company responsible for providing benefits directly or through
6028	reinsurance to any plan for which the administrator provides
6029	administrative services.
6030	Section 132. Subsection (2) of section 626.884, Florida
6031	Statutes, is amended to read:
6032	626.884 Maintenance of records by administrator; access;
6033	confidentiality.--
6034	(2) The officedepartmentshall have access to books and
6035	records maintained by the administrator for the purpose of
6036	examination, audit, and inspection. Information contained in
6037	such books and records is confidential and exempt from the
6038	provisions of s. 119.07(1) if the disclosure of such information
6039	would reveal a trade secret as defined in s. 688.002. However,
6040	the officedepartmentmay use such information in any proceeding
6041	instituted against the administrator.
6042	Section 133. Subsections (1) and (3) of section 626.89,
6043	Florida Statutes, are amended to read:
6044	626.89 Annual financial statement and filing fee; notice
6045	of change of ownership.--
6046	(1) Each authorized administrator shall file with the
6047	officedepartmenta full and true statement of its financial
6048	condition, transactions, and affairs. The statement shall be
6049	filed annually on or before March 1 or within such extension of
6050	time therefor as the officedepartmentfor good cause may have
6051	granted and shall be for the preceding calendar year. The
6052	statement shall be in such form and contain such matters as the
6053	commissiondepartmentprescribes and shall be verified by at
6054	least two officers of such administrator.
6055	(3) In addition, the administrator shall immediately
6056	notify the officedepartmentof any material change in its
6057	ownership.
6058	Section 134. Section 626.891, Florida Statutes, is amended
6059	to read:
6060	626.891 Grounds for suspension or revocation of
6061	certificate of authority.--
6062	(1) The certificate of authority of an administrator shall
6063	be suspended or revoked if the officedepartmentdetermines that
6064	the administrator:
6065	(a) Is in an unsound financial condition;
6066	(b) Has used or is using such methods or practices in the
6067	conduct of its business so as to render its further transaction
6068	of business in this state hazardous or injurious to insured
6069	persons or the public; or
6070	(c) Has failed to pay any judgment rendered against it in
6071	this state within 60 days after the judgment has become final.
6072	(2) The officedepartmentmay, in its discretion, suspend
6073	or revoke the certificate of authority of an administrator if it
6074	finds that the administrator:
6075	(a) Has violated any lawful rule or order of the
6076	commission or officedepartmentor any provision of this
6077	chapter;
6078	(b) Has refused to be examined or to produce its accounts,
6079	records, and files for examination, or if any of its officers
6080	has refused to give information with respect to its affairs or
6081	has refused to perform any other legal obligation as to such
6082	examination, when required by the officedepartment;
6083	(c) Has, without just cause, refused to pay proper claims
6084	or perform services arising under its contracts or has, without
6085	just cause, compelled insured persons to accept less than the
6086	amount due them or to employ attorneys or bring suit against the
6087	administrator to secure full payment or settlement of such
6088	claims;
6089	(d) Is or was affiliated with and under the same general
6090	management or interlocking directorate or ownership as another
6091	administrator which transacts business in this state without
6092	having a certificate of authority;
6093	(e) At any time fails to meet any qualification for which
6094	issuance of the certificate could have been refused had such
6095	failure then existed and been known to the officedepartment;
6096	(f) Has been convicted of, or has entered a plea of guilty
6097	or nolo contendere to, a felony relating to the business of
6098	insurance or insurance administration in this state or in any
6099	other state without regard to whether adjudication was withheld;
6100	or
6101	(g) Is under suspension or revocation in another state.
6102	(3) The officedepartmentmay, pursuant to s. 120.60, in
6103	its discretion and without advance notice or hearing thereon,
6104	immediately suspend the certificate of any administrator if it
6105	finds that one or more of the following circumstances exist:
6106	(a) The administrator is insolvent or impaired.
6107	(b) The fidelity bond required by s. 626.8809 is not
6108	maintained.
6109	(c) A proceeding for receivership, conservatorship,
6110	rehabilitation, or other delinquency proceeding regarding the
6111	administrator has been commenced in any state.
6112	(d) The financial condition or business practices of the
6113	administrator otherwise pose an imminent threat to the public
6114	health, safety, or welfare of the residents of this state.
6115	(4) The violation of this part by any insurer shall be a
6116	ground for suspension or revocation of the certificate of
6117	authority of that insurer in this state.
6118	Section 135. Section 626.892, Florida Statutes, is amended
6119	to read:
6120	626.892 Order of suspension or revocation of certificate
6121	of authority; notice.--
6122	(1) The suspension or revocation of a certificate of
6123	authority of an administrator shall be effected by order of the
6124	officedepartmentmailed to the administrator by registered or
6125	certified mail.
6126	(2) In its discretion, the officedepartmentmay cause
6127	notice of any such revocation or suspension to be published in
6128	one or more newspapers of general circulation published in this
6129	state.
6130	Section 136. Subsections (1), (3), and (4) of section
6131	626.894, Florida Statutes, are amended to read:
6132	626.894 Administrative fine in lieu of suspension or
6133	revocation.--
6134	(1) If the officedepartmentfinds that one or more
6135	grounds exist for the suspension or revocation of a certificate
6136	of authority issued under this part, the officedepartmentmay,
6137	in lieu of such suspension or revocation, impose a fine upon the
6138	administrator.
6139	(3) With respect to any knowing and willful violation of a
6140	lawful order or rule of the office or commissiondepartmentor a
6141	provision of this part, the officedepartmentmay impose a fine
6142	upon the administrator in an amount not to exceed $5,000 for
6143	each such violation. In no event may such fine exceed an
6144	aggregate amount of $25,000 for all knowing and willful
6145	violations arising out of the same action. In addition to such
6146	fine, the administrator shall make restitution when due in
6147	accordance with the provisions of subsection (2).
6148	(4) The failure of an administrator to make restitution
6149	when due as required under this section constitutes a willful
6150	violation of this part. However, if an administrator in good
6151	faith is uncertain as to whether any restitution is due or as to
6152	the amount of restitution due, it shall promptly notify the
6153	officedepartmentof the circumstances; and the failure to make
6154	restitution pending a determination of whether restitution is
6155	due or the amount of restitution due will not constitute a
6156	violation of this part.
6157	Section 137. Section 626.895, Florida Statutes, is amended
6158	to read:
6159	626.895 Definition of "service company" or "service
6160	agent".--For the purpose of this part, a "service company" is
6161	any business entity which has met all the requirements of ss.
6162	626.895-626.899, which does not control funds, and which has
6163	obtained officedepartmentapproval to contract with self-
6164	insurers or multiple-employer welfare arrangements for the
6165	purpose of providing all or any part of the services necessary
6166	to establish and maintain a multiple-employer welfare
6167	arrangement as defined in s. 624.437(1). The term "service
6168	agent" is synonymous with the term "service company" as used in
6169	this part.
6170	Section 138. Subsection (3) of section 626.896, Florida
6171	Statutes, is amended to read:
6172	626.896 Servicing requirements for self-insurers and
6173	multiple-employer welfare arrangements.--
6174	(3) It is the responsibility of the self-insurer or
6175	multiple-employer welfare arrangement to notify the office
6176	departmentwithin 90 days of changing its method of fulfilling
6177	its servicing requirements from those which were previously
6178	filed with the officedepartment.
6179	Section 139. Subsection (2) of section 626.897, Florida
6180	Statutes, is amended to read:
6181	626.897 Application for authorization to act as service
6182	company; bond.--
6183	(2) Any business desiring to act as a service company for
6184	individual self-insurers or multiple-employer welfare
6185	arrangements shall be approved by the officedepartment. Any
6186	business acting as a service company prior to October 1, 1983,
6187	will be approved as a service company upon complying with the
6188	filing requirements of this section and s. 626.898. The failure
6189	of any person to obtain such approval while acting as a service
6190	company shall subject such person to a fine of not less than
6191	$5,000 or more than $10,000 for each violation.
6192	Section 140. Subsections (3) and (10) of section 626.898,
6193	Florida Statutes, are amended to read:
6194	626.898 Requirements for retaining authorization as
6195	service company; recertification.--
6196	(3)(a) Each service company shall maintain at one or more
6197	locations within this state copies of all contracts with each
6198	self-insurer or multiple-employer welfare arrangement that it
6199	services and records relating thereto which are sufficient in
6200	type and quantity to verify the accuracy and completeness of all
6201	reports and documents submitted to the officedepartment
6202	pursuant to this part. In the event that the service company has
6203	its records distributed in multiple locations, it shall inform
6204	the officedepartmentas to the location of each type of record,
6205	as well as the location of specific records for the self-
6206	insurers or multiple-employer welfare arrangements it services.
6207	(b) These records shall be open to inspection by
6208	representatives of the officedepartmentduring regular business
6209	hours. All records shall be retained according to the schedule
6210	adopted by the commissiondepartmentfor similar documents. The
6211	location of these records shall be made known to the office
6212	departmentas necessary.
6213	(10) Each service company shall identify to the office
6214	departmentany ownership interest or affiliation of any kind
6215	with any insurance company responsible directly or through
6216	reinsurance for providing benefits to any plan for which it
6217	provides services.
6218	Section 141. Section 626.899, Florida Statutes, is amended
6219	to read:
6220	626.899 Withdrawal of authorization as service
6221	company.--The failure to comply with any provision of ss.
6222	626.895-626.899 or with any rule or any order of the commission
6223	or officedepartmentwithin the time prescribed shall be
6224	considered good cause for withdrawal of the certificate of
6225	approval. The officedepartmentshall by registered or
6226	certified mail give to the service company prior written notice
6227	of such withdrawal. The service company shall have 30 days from
6228	the date of mailing to request a hearing. The failure to
6229	request a hearing within the time prescribed shall result in the
6230	withdrawal becoming effective 45 days from the date of mailing
6231	of the original notice. In no event shall the withdrawal of the
6232	certificate of approval be effective prior to the date upon
6233	which a hearing, if requested, is scheduled. Copies of such
6234	notice of withdrawal of a certificate of approval shall be
6235	furnished by the officedepartmentto each self-funded program
6236	serviced.
6237	Section 142. Subsection (4) of section 626.901, Florida
6238	Statutes, is amended to read:
6239	626.901 Representing or aiding unauthorized insurer
6240	prohibited.--
6241	(4) This section does not apply to:
6242	(a) Matters authorized to be done by the officedepartment
6243	under the Unauthorized Insurers Process Law, ss. 626.904-
6244	626.912.
6245	(b) Surplus lines insurance when written pursuant to the
6246	Surplus Lines Law, ss. 626.913-626.937.
6247	(c) Transactions as to which a certificate of authority is
6248	not required of an insurer, as stated in s. 624.402.
6249	(d) Independently procured coverage written pursuant to s.
6250	626.938.
6251	Section 143. Section 626.906, Florida Statutes, is amended
6252	to read:
6253	626.906 Acts constituting Chief Financial Officer
6254	Insurance Commissioner and Treasureras process agent.--Any of
6255	the following acts in this state, effected by mail or otherwise,
6256	by an unauthorized foreign insurer, alien insurer, or person
6257	representing or aiding such an insurer is equivalent to and
6258	shall constitute an appointment by such insurer or person
6259	representing or aiding such insurer of the Chief Financial
6260	OfficerInsurance Commissioner and Treasurer, and his or her
6261	successor or successors in office,to be its true and lawful
6262	attorney, upon whom may be served all lawful process in any
6263	action, suit, or proceeding instituted by or on behalf of an
6264	insured or beneficiary, arising out of any such contract of
6265	insurance; and any such act shall be signification of the
6266	insurer's or person's agreement that such service of process is
6267	of the same legal force and validity as personal service of
6268	process in this state upon such insurer or person representing
6269	or aiding such insurer:
6270	(1) The issuance or delivery of contracts of insurance to
6271	residents of this state or to corporations authorized to do
6272	business therein;
6273	(2) The solicitation of applications for such contracts;
6274	(3) The collection of premiums, membership fees,
6275	assessments, or other considerations for such contracts; or
6276	(4) Any other transaction of insurance.
6277	Section 144. Subsection (1) of section 626.907, Florida
6278	Statutes, is amended to read:
6279	626.907 Service of process; judgment by default.--
6280	(1) Service of process upon an insurer or person
6281	representing or aiding such insurer pursuant to s. 626.906 shall
6282	be made by delivering to and leaving with the Chief Financial
6283	OfficerInsurance Commissioner and Treasureror some person in
6284	apparent charge of his or her office two copies thereof. The
6285	Chief Financial OfficerInsurance Commissioner and Treasurer
6286	shall forthwith mail by registered mail one of the copies of
6287	such process to the defendant at the defendant's last known
6288	principal place of business and shall keep a record of all
6289	process so served upon him or her. The service of process is
6290	sufficient, provided notice of such service and a copy of the
6291	process are sent within 10 days thereafter by registered mail by
6292	plaintiff or plaintiff's attorney to the defendant at the
6293	defendant's last known principal place of business, and the
6294	defendant's receipt, or receipt issued by the post office with
6295	which the letter is registered, showing the name of the sender
6296	of the letter and the name and address of the person to whom the
6297	letter is addressed, and the affidavit of the plaintiff or
6298	plaintiff's attorney showing a compliance herewith are filed
6299	with the clerk of the court in which the action is pending on or
6300	before the date the defendant is required to appear, or within
6301	such further time as the court may allow.
6302	Section 145. Section 626.909, Florida Statutes, is amended
6303	to read:
6304	626.909 Jurisdiction of office anddepartment; service of
6305	process on Secretary of State.--
6306	(1) The Legislature hereby declares that it is a subject
6307	of concern that the purpose of the Unauthorized Insurers Process
6308	Law as expressed in s. 626.905 may be denied by the possibility
6309	that the right of service of process provided for in that law
6310	may be restricted only to those actions, suits, or proceedings
6311	brought by insureds or beneficiaries. It therefore declares that
6312	it is the intent of s. 626.905 that it is the obligation and
6313	duty of the state to protect its residents and also proceed
6314	under this law through the office ordepartment in the courts of
6315	this state. It further declares that it is also the intent of
6316	the Legislature to subject unauthorized insurers and persons
6317	representing or aiding such insurers to the jurisdiction of the
6318	office ordepartment in proceedings, examinations, or hearings
6319	before it as provided for in this code.
6320	(2) In addition to the procedure for service of process on
6321	unauthorized insurers or persons representing or aiding such
6322	insurers contained in ss. 626.906 and 626.907, the office or
6323	department shall have the right to bring any action, suit, or
6324	proceeding in the name of the state or conduct any proceeding,
6325	examination, or hearing provided for in this code against any
6326	unauthorized insurer or person representing or aiding such
6327	insurer for violation of any lawful order of the office or
6328	department or any provision of this code, specifically including
6329	but not limited to the regulation of trade practices provided
6330	for in part IX of this chapter, if the insurer or person
6331	representing or aiding such insurer transacts insurance in this
6332	state as defined in ss. 624.10 and 626.906 and the insurer does
6333	not transact such business under a subsisting certificate of
6334	authority as required by s. 624.401. In the event the
6335	transaction of business is done by mail, the venue of the act is
6336	at the point where the matter transmitted by mail is delivered
6337	and takes effect.
6338	(3) In addition to the right of action, suit, or
6339	proceeding authorized by subsection (2), the office or
6340	department shall have the right to bring a civil action in the
6341	name of the state, as parens patriae on behalf of any insured,
6342	beneficiary of any insured, claimant or dependent, or any other
6343	person or class of persons injured as a result of the
6344	transaction of any insurance business as defined in s. 626.906
6345	by any unauthorized insurer, as defined in s. 624.09 who is also
6346	an ineligible insurer as set forth in ss. 626.917 and 626.918,
6347	or any person who represents or aids any unauthorized insurer,
6348	in violation of s. 626.901, to recover actual damages on behalf
6349	of individuals who were residents at the time the transaction
6350	occurred and the cost of such suit, including a reasonable
6351	attorney's fee. The court shall exclude from the amount of
6352	monetary relief awarded in such action any amount of monetary
6353	relief which duplicates amounts which have been awarded for the
6354	same injury.
6355	(4) Transaction of business in this state, as so defined,
6356	by any unauthorized insurer or person representing or aiding
6357	such insurer shall be deemed consent by the insurer or person
6358	representing or aiding such insurer to the jurisdiction of the
6359	office ordepartment in proceedings, examinations, and hearings
6360	before it as provided for in this code and shall constitute an
6361	irrevocable appointment by the insurer or person representing or
6362	aiding such insurer of the Secretary of State and his or her
6363	successor or successors in office as its true and lawful
6364	attorney upon whom may be served all lawful process in any
6365	action, suit, or proceeding in any court by the office or
6366	department or by the state and upon whom may be served all
6367	notices and orders of the office ordepartment arising out of
6368	any such transaction of business; and such transaction of
6369	business shall constitute the agreement of the insurer or person
6370	representing or aiding such insurer that any such process
6371	against it or any such notice or order which is so served shall
6372	be of the same legal force and validity as if served personally
6373	within this state on the insurer or person representing or
6374	aiding such insurer. Service of process shall be in accordance
6375	with and in the same manner as now provided for service of
6376	process upon nonresidents under the provision of s. 48.161, and
6377	service of process shall also be valid if made as provided in s.
6378	626.907(2).
6379	(5) No plaintiff shall be entitled to a judgment by
6380	default or a decree pro confesso under this section until the
6381	expiration of 30 days after date of the filing of the affidavit
6382	of compliance.
6383	(6) Nothing in this section shall limit or abridge the
6384	right to serve any process, notice, orders, or demand upon the
6385	insurer or person representing or aiding such insurer in any
6386	other manner now or hereafter permitted by law.
6387	(7) Nothing in this section shall apply as to surplus
6388	lines insurance when written pursuant to the Surplus Lines Law,
6389	ss. 626.913-626.937, or as to transactions as to which a
6390	certificate of authority is not required of the insurer, as
6391	stated in s. 624.402.
6392	Section 146. Section 626.910, Florida Statutes, is amended
6393	to read:
6394	626.910 Penalty for violation by unauthorized insurers and
6395	persons representing or aiding such insurers.--Any unauthorized
6396	insurer or person representing or aiding such insurer
6397	transacting insurance in this state and subject to service of
6398	process as referred to in s. 626.909 shall forfeit and pay to
6399	the state a civil penalty of not more than $1,000 for each
6400	nonwillful violation, or not more than $10,000 for each willful
6401	violation, of any lawful order of the office ordepartment or
6402	any provision of this code.
6403	Section 147. Section 626.912, Florida Statutes, is amended
6404	to read:
6405	626.912 Exemptions from ss. 626.904-626.911.--The
6406	provisions of ss. 626.904-626.911 do not apply to any action,
6407	suit, or proceeding against any unauthorized foreign insurer,
6408	alien insurer, or person representing or aiding such an insurer
6409	arising out of any contract of insurance:
6410	(1) Covering reinsurance, wet marine and transportation,
6411	commercial aircraft, or railway insurance risks;
6412	(2) Against legal liability arising out of the ownership,
6413	operation, or maintenance of any property having a permanent
6414	situs outside this state;
6415	(3) Against loss of or damage to any property having a
6416	permanent situs outside this state; or
6417	(4) Issued under and in accordance with the Surplus Lines
6418	Law, when such insurer or person representing or aiding such
6419	insurer enters a general appearance or when such contract of
6420	insurance contains a provision designating the Chief Financial
6421	OfficerInsurance Commissioner and Treasurer and his or her
6422	successor or successors inoffice or designating a Florida
6423	resident agent to be the true and lawful attorney of such
6424	unauthorized insurer or person representing or aiding such
6425	insurer upon whom may be served all lawful process in any
6426	action, suit, or proceeding instituted by or on behalf of an
6427	insured or person representing or aiding such insurer or
6428	beneficiary arising out of any such contract of insurance; and
6429	service of process effected on such Chief Financial Officer
6430	Insurance Commissioner and Treasurer, his or her successor or
6431	successors in office,or such resident agent shall be deemed to
6432	confer complete jurisdiction over such unauthorized insurer or
6433	person representing or aiding such insurer in such action.
6434	Section 148. Subsection (2) of section 626.914, Florida
6435	Statutes, is amended to read:
6436	626.914 Definitions.--As used in this Surplus Lines Law,
6437	the term:
6438	(2) "Eligible surplus lines insurer" means an unauthorized
6439	insurer which has been made eligible by the officedepartmentto
6440	issue insurance coverage under this Surplus Lines Law.
6441	Section 149. Subsections (1) and (2) of section 626.916,
6442	Florida Statutes, are amended to read:
6443	626.916 Eligibility for export.--
6444	(1) No insurance coverage shall be eligible for export
6445	unless it meets all of the following conditions:
6446	(a) The full amount of insurance required must not be
6447	procurable, after a diligent effort has been made by the
6448	producing agent to do so, from among the insurers authorized to
6449	transact and actually writing that kind and class of insurance
6450	in this state, and the amount of insurance exported shall be
6451	only the excess over the amount so procurable from authorized
6452	insurers. Surplus lines agents must verify that a diligent
6453	effort has been made by requiring a properly documented
6454	statement of diligent effort from the retail or producing agent.
6455	However, to be in compliance with the diligent effort
6456	requirement, the surplus lines agent's reliance must be
6457	reasonable under the particular circumstances surrounding the
6458	export of that particular risk. Reasonableness shall be assessed
6459	by taking into account factors which include, but are not
6460	limited to, a regularly conducted program of verification of the
6461	information provided by the retail or producing agent.
6462	Declinations must be documented on a risk-by-risk basis. If it
6463	is not possible to obtain the full amount of insurance required
6464	by layering the risk, it is permissible to export the full
6465	amount.
6466	(b) The premium rate at which the coverage is exported
6467	shall not be lower than that rate applicable, if any, in actual
6468	and current use by a majority of the authorized insurers for the
6469	same coverage on a similar risk.
6470	(c) The policy or contract form under which the insurance
6471	is exported shall not be more favorable to the insured as to the
6472	coverage or rate than under similar contracts on file and in
6473	actual current use in this state by the majority of authorized
6474	insurers actually writing similar coverages on similar risks;
6475	except that a coverage may be exported under a unique form of
6476	policy designed for use with respect to a particular subject of
6477	insurance if a copy of such form is filed with the office
6478	departmentby the surplus lines agent desiring to use the same
6479	and is subject to the disapproval of the officedepartment
6480	within 10 days of filing such form exclusive of Saturdays,
6481	Sundays, and legal holidays if it finds that the use of such
6482	special form is not reasonably necessary for the principal
6483	purposes of the coverage or that its use would be contrary to
6484	the purposes of this Surplus Lines Law with respect to the
6485	reasonable protection of authorized insurers from unwarranted
6486	competition by unauthorized insurers.
6487	(d) Except as to extended coverage in connection with fire
6488	insurance policies and except as to windstorm insurance, the
6489	policy or contract under which the insurance is exported shall
6490	not provide for deductible amounts, in determining the existence
6491	or extent of the insurer's liability, other than those available
6492	under similar policies or contracts in actual and current use by
6493	one or more authorized insurers.
6494	(2) The commissiondepartment may by rulerules and
6495	regulationsdeclare eligible for export generally, and
6496	notwithstanding the provisions of paragraphs (a), (b), (c), and
6497	(d) of subsection (1), any class or classes of insurance
6498	coverage or risk for which it finds, after a hearing, that there
6499	is no reasonable or adequate market among authorized insurers.
6500	Any such rules and regulationsshall continue in effect during
6501	the existence of the conditions upon which predicated, but
6502	subject to termination by the commissiondepartment.
6503	Section 150. Subsection (1) of section 626.917, Florida
6504	Statutes, is amended to read:
6505	626.917 Eligibility for export; wet marine and
6506	transportation, aviation risks.--
6507	(1) Insurance coverage of wet marine and transportation
6508	risks, as defined in this code in s. 624.607(2), or aviation
6509	risks, including airport and products liability incidental
6510	thereto and hangarkeeper's liability, may be exported under the
6511	following conditions:
6512	(a) The insurance must be placed only by or through a
6513	licensed Florida surplus lines agent; and
6514	(b) The insurer must be one made eligible by the office
6515	departmentspecifically for such coverages, based upon
6516	information furnished by the insurer and indicating that the
6517	insurer is well able to meet its financial obligations.
6518	Section 151. Section 626.918, Florida Statutes, is amended
6519	to read:
6520	626.918 Eligible surplus lines insurers.--
6521	(1) No surplus lines agent shall place any coverage with
6522	any unauthorized insurer which is not then an eligible surplus
6523	lines insurer, except as permitted under subsections (5) and
6524	(6).
6525	(2) No unauthorized insurer shall be or become an eligible
6526	surplus lines insurer unless made eligible by the office
6527	departmentin accordance with the following conditions:
6528	(a) Eligibility of the insurer must be requested in
6529	writing by the Florida Surplus Lines Service Office;
6530	(b) The insurer must be currently an authorized insurer in
6531	the state or country of its domicile as to the kind or kinds of
6532	insurance proposed to be so placed and must have been such an
6533	insurer for not less than the 3 years next preceding or must be
6534	the wholly owned subsidiary of such authorized insurer or must
6535	be the wholly owned subsidiary of an already eligible surplus
6536	lines insurer as to the kind or kinds of insurance proposed for
6537	a period of not less than the 3 years next preceding. However,
6538	the officedepartmentmay waive the 3-year requirement if the
6539	insurer provides a product or service not readily available to
6540	the consumers of this state or has operated successfully for a
6541	period of at least 1 year next preceding and has capital and
6542	surplus of not less than $25 million;
6543	(c) Before granting eligibility, the requesting surplus
6544	lines agent or the insurer shall furnish the officedepartment
6545	with a duly authenticated copy of its current annual financial
6546	statement in the English language and with all monetary values
6547	therein expressed in United States dollars, at an exchange rate
6548	(in the case of statements originally made in the currencies of
6549	other countries) then-current and shown in the statement, and
6550	with such additional information relative to the insurer as the
6551	officedepartmentmay request;
6552	(d)1. The insurer must have and maintain surplus as to
6553	policyholders of not less than $15 million; in addition, an
6554	alien insurer must also have and maintain in the United States a
6555	trust fund for the protection of all its policyholders in the
6556	United States under terms deemed by the officedepartmentto be
6557	reasonably adequate, in an amount not less than $5.4 million.
6558	Any such surplus as to policyholders or trust fund shall be
6559	represented by investments consisting of eligible investments
6560	for like funds of like domestic insurers under part II of
6561	chapter 625 provided, however, that in the case of an alien
6562	insurance company, any such surplus as to policyholders may be
6563	represented by investments permitted by the domestic regulator
6564	of such alien insurance company if such investments are
6565	substantially similar in terms of quality, liquidity, and
6566	security to eligible investments for like funds of like domestic
6567	insurers under part II of chapter 625;
6568	2. For those surplus lines insurers that were eligible on
6569	January 1, 1994, and that maintained their eligibility
6570	thereafter, the required surplus as to policyholders shall be:
6571	a. On December 31, 1994, and until December 30, 1995, $2.5
6572	million.
6573	b. On December 31, 1995, and until December 30, 1996, $3.5
6574	million.
6575	c. On December 31, 1996, and until December 30, 1997, $4.5
6576	million.
6577	d. On December 31, 1997, and until December 30, 1998, $5.5
6578	million.
6579	e. On December 31, 1998, and until December 30, 1999, $6.5
6580	million.
6581	f. On December 31, 1999, and until December 30, 2000, $8
6582	million.
6583	g. On December 31, 2000, and until December 30, 2001, $9.5
6584	million.
6585	h. On December 31, 2001, and until December 30, 2002, $11
6586	million.
6587	i. On December 31, 2002, and until December 30, 2003, $13
6588	million.
6589	j. On December 31, 2003, and thereafter, $15 million.
6590	3. The capital and surplus requirements as set forth in
6591	subparagraph 2. do not apply in the case of an insurance
6592	exchange created by the laws of individual states, where the
6593	exchange maintains capital and surplus pursuant to the
6594	requirements of that state, or maintains capital and surplus in
6595	an amount not less than $50 million in the aggregate. For an
6596	insurance exchange which maintains funds in the amount of at
6597	least $12 million for the protection of all insurance exchange
6598	policyholders, each individual syndicate shall maintain minimum
6599	capital and surplus in an amount not less than $3 million. If
6600	the insurance exchange does not maintain funds in the amount of
6601	at least $12 million for the protection of all insurance
6602	exchange policyholders, each individual syndicate shall meet the
6603	minimum capital and surplus requirements set forth in
6604	subparagraph 2.;
6605	4. A surplus lines insurer which is a member of an
6606	insurance holding company that includes a member which is a
6607	Florida domestic insurer as set forth in its holding company
6608	registration statement, as set forth in s. 628.801 and rules
6609	adopted thereunder, may elect to maintain surplus as to
6610	policyholders in an amount equal to the requirements of s.
6611	624.408, subject to the requirement that the surplus lines
6612	insurer shall at all times be in compliance with the
6613	requirements of chapter 625.
6614
6615
6616	The election shall be submitted to the officedepartmentand
6617	shall be effective upon the office'sdepartment'sbeing
6618	satisfied that the requirements of subparagraph 4. have been
6619	met. The initial date of election shall be the date of office
6620	departmentapproval. The election approval application shall be
6621	on a form adopted by commissiondepartment rule. The office
6622	departmentmay approve an election form submitted pursuant to
6623	subparagraph 4. only if it was on file with the former
6624	Department of Insurancebefore February 28, 1998;
6625	(e) The insurer must be of good reputation as to the
6626	providing of service to its policyholders and the payment of
6627	losses and claims;
6628	(f) The insurer must be eligible, as for authority to
6629	transact insurance in this state, under s. 624.404(3); and
6630	(g) This subsection does not apply as to unauthorized
6631	insurers made eligible under s. 626.917 as to wet marine and
6632	aviation risks.
6633	(3) The officedepartmentshall from time to time publish
6634	a list of all currently eligible surplus lines insurers and
6635	shall mail a copy thereof to each licensed surplus lines agent
6636	at his or her office of record with the officedepartment.
6637	(4) This section shall not be deemed to cast upon the
6638	officedepartmentany duty or responsibility to determine the
6639	actual financial condition or claims practices of any
6640	unauthorized insurer; and the status of eligibility, if granted
6641	by the officedepartment, shall indicate only that the insurer
6642	appears to be sound financially and to have satisfactory claims
6643	practices and that the officedepartmenthas no credible
6644	evidence to the contrary.
6645	(5) When it appears that any particular insurance risk
6646	which is eligible for export, but on which insurance coverage,
6647	in whole or in part, is not procurable from the eligible surplus
6648	lines insurers, after a search of eligible surplus lines
6649	insurers, then the surplus lines agent may file a supplemental
6650	signed statement setting forth such facts and advising the
6651	officedepartmentthat such part of the risk as shall be
6652	unprocurable, as aforesaid, is being placed with named
6653	unauthorized insurers, in the amounts and percentages set forth
6654	in the statement. Such named unauthorized insurer shall,
6655	however, before accepting any risk in this state, deposit with
6656	the department cash or securities acceptable to the office and
6657	department of the market value of $50,000 for each individual
6658	risk, contract, or certificate, which deposit shall be held by
6659	the department for the benefit of Florida policyholders only;
6660	and the surplus lines agent shall procure from such unauthorized
6661	insurer and file with the officedepartmenta certified copy of
6662	its statement of condition as of the close of the last calendar
6663	year. If such statement reveals, including both capital and
6664	surplus, net assets of at least that amount required for
6665	licensure of a domestic insurer, then the surplus lines agent
6666	may proceed to consummate such contract of insurance. Whenever
6667	any insurance risk, or any part thereof, is placed with an
6668	unauthorized insurer, as provided herein, the policy, binder, or
6669	cover note shall contain a statement signed by the insured and
6670	the agent with the following notation: "The insured is aware
6671	that certain insurers participating in this risk have not been
6672	approved to transact business in Florida nor have they been
6673	declared eligible as surplus lines insurers by the Office of
6674	Insurance RegulationDepartment of Insuranceof Florida. The
6675	placing of such insurance by a duly licensed surplus lines agent
6676	in Florida shall not be construed as approval of such insurer by
6677	the Office of Insurance RegulationDepartment of Insuranceof
6678	Florida. Consequently, the insured is aware that the insured
6679	has severely limited the assistance available under the
6680	insurance laws of Florida. The insured is further aware that he
6681	or she may be charged a reasonable per policy fee, as provided
6682	in s. 626.916(4), Florida Statutes, for each policy certified
6683	for export." All other provisions of this code shall apply to
6684	such placement the same as if such risks were placed with an
6685	eligible surplus lines insurer.
6686	(6) When any particular insurance risk subject to
6687	subsection (5) is eligible for placement with an unauthorized
6688	insurer and not more than 12.5 percent of the risk is so
6689	subject, the officeDepartment of Insurancemay, at its
6690	discretion, permit the agent to obtain from the insured a signed
6691	statement as indicated in subsection (5). All other provisions
6692	of this code apply to such placement the same as if such risks
6693	were placed with an eligible surplus lines insurer.
6694	Section 152. Section 626.919, Florida Statutes, is amended
6695	to read:
6696	626.919 Withdrawal of eligibility; surplus lines
6697	insurer.--
6698	(1) If at any time the officedepartmenthas reason to
6699	believe that any unauthorized insurer then on the list of
6700	eligible surplus lines insurers is insolvent or in unsound
6701	financial condition, or does not make reasonable prompt payment
6702	of just losses and claims in this state, or that it is no longer
6703	eligible under the conditions therefor provided in s. 626.918,
6704	it shall withdraw the eligibility of the insurer to insure
6705	surplus lines risks in this state.
6706	(2) If the officedepartmentfinds that an insurer
6707	currently eligible as a surplus lines insurer has willfully
6708	violated the laws of this state or a rule of the commission
6709	department, it may, in its discretion, withdraw the eligibility
6710	of the insurer to insure surplus lines risks in this state.
6711	(3) The officedepartmentshall promptly mail notice of
6712	all such withdrawals of eligibility to each surplus lines agent
6713	at his or her address of record with the department.
6714	Section 153. Subsection (8) of section 626.921, Florida
6715	Statutes, is amended to read:
6716	626.921 Florida Surplus Lines Service Office.--
6717	(8)(a) Information furnished to the department under s.
6718	626.923 or contained in the records subject to examination by
6719	the department under s. 626.930 is confidential and exempt from
6720	the provisions of s. 119.07(1) and s. 24(a), Art. I of the State
6721	Constitution if the disclosure of the information would reveal
6722	information specific to a particular policy or policyholder.
6723	The exemption does not apply to any proceeding instituted by the
6724	department or officeagainst an agent or insurer.
6725	(b) Information furnished to the Florida Surplus Lines
6726	Service Office under the Surplus Lines Law is confidential and
6727	exempt from the provisions of s. 119.07(1) and s. 24(a), Art. I
6728	of the State Constitution if the disclosure of the information
6729	would reveal information specific to a particular policy or
6730	policyholder. This exemption does not prevent the disclosure of
6731	any information by the Florida Surplus Lines Service Office to
6732	the department, but the exemption applies to records obtained by
6733	the department from the Florida Surplus Lines Service Office.
6734	The exemption does not apply to any proceeding instituted by the
6735	department or officeagainst an agent or insurer. This paragraph
6736	is subject to the Open Government Sunset Review Act of 1995 in
6737	accordance with s. 119.15, and shall stand repealed on October
6738	2, 2006, unless reviewed and saved from repeal through
6739	reenactment by the Legislature.
6740	Section 154. Subsection (5) of section 626.931, Florida
6741	Statutes, is amended to read:
6742	626.931 Agent affidavit and insurer reporting
6743	requirements.--
6744	(5) The department mayInsurance Commissioner shall have
6745	the authority towaive the filing requirements described in
6746	subsections(3) and (4).
6747	Section 155. Subsections (2) and (5) of section 626.932,
6748	Florida Statutes, are amended to read:
6749	626.932 Surplus lines tax.--
6750	(2)(a) The surplus lines agent shall make payable to the
6751	department of Insurancethe tax related to each calendar
6752	quarter's business as reported to the Florida Surplus Lines
6753	Service Office, and remit the tax to the Florida Surplus Lines
6754	Service Office at the same time as provided for the filing of
6755	the quarterly affidavit, under s. 626.931. The Florida Surplus
6756	Lines Service Office shall forward to the department the taxes
6757	and any interest collected pursuant to paragraph (b), within 10
6758	days of receipt.
6759	(b) The agent shall pay interest on the amount of any
6760	delinquent tax due, at the rate of 9 percent per year,
6761	compounded annually, beginning the day the amount becomes
6762	delinquent.
6763	(5) The department shall deposit 55 percent of all taxes
6764	collected under this section to the credit of the Insurance
6765	Commissioner'sRegulatory Trust Fund. Forty-five percent of all
6766	taxes collected under this section shall be deposited into the
6767	General Revenue Fund.
6768	Section 156. Section 626.936, Florida Statutes, is amended
6769	to read:
6770	626.936 Failure to file reports or pay tax or service fee;
6771	administrative penalty.--
6772	(1) Any licensed surplus lines agent who neglects to file
6773	a report or an affidavit in the form and within the time
6774	required or provided for in the Surplus Lines Law may be fined
6775	up to $50 per day for each day the neglect continues, beginning
6776	the day after the report or affidavit was due until the date the
6777	report or affidavit is received. All sums collected under this
6778	section shall be deposited into the Insurance Commissioner's
6779	Regulatory Trust Fund.
6780	(2) Any licensed surplus lines agent who neglects to pay
6781	the taxes or service fees as required under the Surplus Lines
6782	Law and within the time required may be fined up to $500 per day
6783	for each day the failure to pay continues, beginning the day
6784	after the tax or service fees were due. The agent shall pay
6785	interest on the amount of any delinquent tax due, at the rate of
6786	9 percent per year, compounded annually, beginning the day the
6787	amount becomes delinquent. The department shall deposit all
6788	sums collected under this section into the Insurance
6789	Commissioner'sRegulatory Trust Fund.
6790	Section 157. Section 626.9361, Florida Statutes, is
6791	amended to read:
6792	626.9361 Failure to file report; administrative
6793	penalty.--Any eligible surplus lines insurer who fails to file a
6794	report in the form and within the time required or provided for
6795	in the Surplus Lines Law may be fined up to $500 per day for
6796	each day such failure continues, beginning the day after the
6797	report was due, until the date the report is received. Failure
6798	to file a report may also result in withdrawal of eligibility as
6799	a surplus lines insurer in this state. All sums collected by the
6800	department under this section shall be deposited into the
6801	Insurance Commissioner'sRegulatory Trust Fund.
6802	Section 158. Subsections (2), (3), and (4) of section
6803	626.937, Florida Statutes, are amended to read:
6804	626.937 Actions against insurer; service of process.--
6805	(2) The unauthorized insurer accepting the risk or issuing
6806	the policy shall be deemed thereby to have authorized service of
6807	process against it in the manner and to the effect as provided
6808	in this section, and to have appointed the Chief Financial
6809	OfficerInsurance Commissioner and Treasureras its agent for
6810	service of process issuing upon any cause of action arising in
6811	this state under any such policy, contract, or insurance.
6812	(3) Each unauthorized insurer requesting eligibility
6813	pursuant to s. 626.918 shall file with the department its
6814	appointment of the Chief Financial OfficerInsurance
6815	Commissioner and Treasurer and his or her successors in office,
6816	on a form as furnished by the department, as its attorney to
6817	receive service of all legal process issued against it in any
6818	civil action or proceeding in this state, and agreeing that
6819	process so served shall be valid and binding upon the insurer.
6820	The appointment shall be irrevocable, shall bind the insurer and
6821	any successor in interest as to the assets or liabilities of the
6822	insurer, and shall remain in effect as long as there is
6823	outstanding in this state any obligation or liability of the
6824	insurer resulting from its insurance transactions therein.
6825	(4) At the time of such appointment of the Chief Financial
6826	OfficerInsurance Commissioner and Treasureras its process
6827	agent, the insurer shall file with the department designation of
6828	the name and address of the person to whom process against it
6829	served upon the Chief Financial OfficerInsurance Commissioner
6830	and Treasureris to be forwarded. The insurer may change the
6831	designation at any time by a new filing.
6832	Section 159. Subsections (3) and (7) of section 626.938,
6833	Florida Statutes, are amended to read:
6834	626.938 Report and tax of independently procured
6835	coverages.--
6836	(3) For the general support of the government of this
6837	state, there is levied upon the obligation, chose in action, or
6838	right represented by the premium charged for such insurance a
6839	tax at the rate of 5 percent of the gross amount of such premium
6840	and a 0.3 percent service fee pursuant to s. 626.9325. The
6841	insured shall withhold the amount of the tax and service fee
6842	from the amount of premium charged by and otherwise payable to
6843	the insurer for such insurance. Within 30 days after the
6844	insurance is procured, continued, or renewed, and simultaneously
6845	with the filing of the report provided for in subsection (1)
6846	with the Florida Surplus Lines Service Office, the insured shall
6847	make payable to the department of Insurancethe amount of the
6848	tax and make payable to the Florida Surplus Lines Service Office
6849	the amount of the service fee. The insured shall remit the tax
6850	and the service fee to the Florida Surplus Lines Service Office.
6851	The Florida Surplus Lines Service Office shall forward to the
6852	department the taxes, and any interest collected pursuant to
6853	subsection (5), within 10 days after receipt.
6854	(7) The department shall deposit 55 percent of all taxes
6855	and interest collected under this section to the credit of the
6856	Insurance Commissioner'sRegulatory Trust Fund. Forty-five
6857	percent of all taxes and interest collected under this section
6858	shall be deposited into the General Revenue Fund.
6859	Section 160. Section 626.9511, Florida Statutes, is
6860	amended to read:
6861	626.9511 Definitions.--When used in this part:
6862	(1) "Person" means any individual, corporation,
6863	association, partnership, reciprocal exchange, interinsurer,
6864	Lloyds insurer, fraternal benefit society, or business trust or
6865	any entity involved in the business of insurance.
6866	(2) "Department" means the Department of Insurance of this
6867	state.
6868	(2)(3)"Insurance policy" or "insurance contract" means a
6869	written contract of, or a written agreement for or effecting,
6870	insurance, or the certificate thereof, by whatever name called,
6871	and includes all clauses, riders, endorsements, and papers which
6872	are a part thereof.
6873	Section 161. Paragraphs (h), (o), (w), and (aa) of
6874	subsection (1) of section 626.9541, Florida Statutes, are
6875	amended to read:
6876	626.9541 Unfair methods of competition and unfair or
6877	deceptive acts or practices defined.--
6878	(1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE
6879	ACTS.--The following are defined as unfair methods of
6880	competition and unfair or deceptive acts or practices:
6881	(h) Unlawful rebates.--
6882	1. Except as otherwise expressly provided by law, or in an
6883	applicable filing with the officedepartment, knowingly:
6884	a. Permitting, or offering to make, or making, any
6885	contract or agreement as to such contract other than as plainly
6886	expressed in the insurance contract issued thereon;
6887	b. Paying, allowing, or giving, or offering to pay, allow,
6888	or give, directly or indirectly, as inducement to such insurance
6889	contract, any unlawful rebate of premiums payable on the
6890	contract, any special favor or advantage in the dividends or
6891	other benefits thereon, or any valuable consideration or
6892	inducement whatever not specified in the contract;
6893	c. Giving, selling, or purchasing, or offering to give,
6894	sell, or purchase, as inducement to such insurance contract or
6895	in connection therewith, any stocks, bonds, or other securities
6896	of any insurance company or other corporation, association, or
6897	partnership, or any dividends or profits accrued thereon, or
6898	anything of value whatsoever not specified in the insurance
6899	contract.
6900	2. Nothing in paragraph (g) or subparagraph 1. of this
6901	paragraph shall be construed as including within the definition
6902	of discrimination or unlawful rebates:
6903	a. In the case of any contract of life insurance or life
6904	annuity, paying bonuses to all policyholders or otherwise
6905	abating their premiums in whole or in part out of surplus
6906	accumulated from nonparticipating insurance; provided that any
6907	such bonuses or abatement of premiums is fair and equitable to
6908	all policyholders and for the best interests of the company and
6909	its policyholders.
6910	b. In the case of life insurance policies issued on the
6911	industrial debit plan, making allowance to policyholders who
6912	have continuously for a specified period made premium payments
6913	directly to an office of the insurer in an amount which fairly
6914	represents the saving in collection expenses.
6915	c. Readjustment of the rate of premium for a group
6916	insurance policy based on the loss or expense thereunder, at the
6917	end of the first or any subsequent policy year of insurance
6918	thereunder, which may be made retroactive only for such policy
6919	year.
6920	d. Issuance of life insurance policies or annuity
6921	contracts at rates less than the usual rates of premiums for
6922	such policies or contracts, as group insurance or employee
6923	insurance as defined in this code.
6924	e. Issuing life or disability insurance policies on a
6925	salary savings, bank draft, preauthorized check, payroll
6926	deduction, or other similar plan at a reduced rate reasonably
6927	related to the savings made by the use of such plan.
6928	3.a. No title insurer, or any member, employee, attorney,
6929	agent, agency, or solicitor thereof, shall pay, allow, or give,
6930	or offer to pay, allow, or give, directly or indirectly, as
6931	inducement to title insurance, or after such insurance has been
6932	effected, any rebate or abatement of the agent's, agency's, or
6933	title insurer's share of the premium or any charge for related
6934	title services below the cost for providing such services, or
6935	provide any special favor or advantage, or any monetary
6936	consideration or inducement whatever. Nothing herein contained
6937	shall preclude an abatement in an attorney's fee charged for
6938	legal services.
6939	b. Nothing in this subparagraph shall be construed as
6940	prohibiting the payment of fees to attorneys at law duly
6941	licensed to practice law in the courts of this state, for
6942	professional services, or as prohibiting the payment of earned
6943	portions of the premium to duly appointed agents or agencies who
6944	actually perform services for the title insurer.
6945	c. No insured named in a policy, or any other person
6946	directly or indirectly connected with the transaction involving
6947	the issuance of such policy, including, but not limited to, any
6948	mortgage broker, real estate broker, builder, or attorney, any
6949	employee, agent, agency, or representative thereof, or any other
6950	person whatsoever, shall knowingly receive or accept, directly
6951	or indirectly, any rebate or abatement of said charge, or any
6952	monetary consideration or inducement, other than as set forth in
6953	sub-subparagraph b.
6954	(o) Illegal dealings in premiums; excess or reduced
6955	charges for insurance.--
6956	1. Knowingly collecting any sum as a premium or charge for
6957	insurance, which is not then provided, or is not in due course
6958	to be provided, subject to acceptance of the risk by the
6959	insurer, by an insurance policy issued by an insurer as
6960	permitted by this code.
6961	2. Knowingly collecting as a premium or charge for
6962	insurance any sum in excess of or less than the premium or
6963	charge applicable to such insurance, in accordance with the
6964	applicable classifications and rates as filed with and approved
6965	by the officedepartment, and as specified in the policy; or, in
6966	cases when classifications, premiums, or rates are not required
6967	by this code to be so filed and approved, premiums and charges
6968	in excess of or less than those specified in the policy and as
6969	fixed by the insurer. This provision shall not be deemed to
6970	prohibit the charging and collection, by surplus lines agents
6971	licensed under part VIII of this chapter, of the amount of
6972	applicable state and federal taxes, or fees as authorized by s.
6973	626.916(4), in addition to the premium required by the insurer
6974	or the charging and collection, by licensed agents, of the exact
6975	amount of any discount or other such fee charged by a credit
6976	card facility in connection with the use of a credit card, as
6977	authorized by subparagraph (q)3., in addition to the premium
6978	required by the insurer. This subparagraph shall not be
6979	construed to prohibit collection of a premium for a universal
6980	life or a variable or indeterminate value insurance policy made
6981	in accordance with the terms of the contract.
6982	3.a. Imposing or requesting an additional premium for a
6983	policy of motor vehicle liability, personal injury protection,
6984	medical payment, or collision insurance or any combination
6985	thereof or refusing to renew the policy solely because the
6986	insured was involved in a motor vehicle accident unless the
6987	insurer's file contains information from which the insurer in
6988	good faith determines that the insured was substantially at
6989	fault in the accident.
6990	b. An insurer which imposes and collects such a surcharge
6991	or which refuses to renew such policy shall, in conjunction with
6992	the notice of premium due or notice of nonrenewal, notify the
6993	named insured that he or she is entitled to reimbursement of
6994	such amount or renewal of the policy under the conditions listed
6995	below and will subsequently reimburse him or her or renew the
6996	policy, if the named insured demonstrates that the operator
6997	involved in the accident was:
6998	(I) Lawfully parked;
6999	(II) Reimbursed by, or on behalf of, a person responsible
7000	for the accident or has a judgment against such person;
7001	(III) Struck in the rear by another vehicle headed in the
7002	same direction and was not convicted of a moving traffic
7003	violation in connection with the accident;
7004	(IV) Hit by a "hit-and-run" driver, if the accident was
7005	reported to the proper authorities within 24 hours after
7006	discovering the accident;
7007	(V) Not convicted of a moving traffic violation in
7008	connection with the accident, but the operator of the other
7009	automobile involved in such accident was convicted of a moving
7010	traffic violation;
7011	(VI) Finally adjudicated not to be liable by a court of
7012	competent jurisdiction;
7013	(VII) In receipt of a traffic citation which was dismissed
7014	or nolle prossed; or
7015	(VIII) Not at fault as evidenced by a written statement
7016	from the insured establishing facts demonstrating lack of fault
7017	which are not rebutted by information in the insurer's file from
7018	which the insurer in good faith determines that the insured was
7019	substantially at fault.
7020	c. In addition to the other provisions of this
7021	subparagraph, an insurer may not fail to renew a policy if the
7022	insured has had only one accident in which he or she was at
7023	fault within the current 3-year period. However, an insurer may
7024	nonrenew a policy for reasons other than accidents in accordance
7025	with s. 627.728. This subparagraph does not prohibit nonrenewal
7026	of a policy under which the insured has had three or more
7027	accidents, regardless of fault, during the most recent 3-year
7028	period.
7029	4. Imposing or requesting an additional premium for, or
7030	refusing to renew, a policy for motor vehicle insurance solely
7031	because the insured committed a noncriminal traffic infraction
7032	as described in s. 318.14 unless the infraction is:
7033	a. A second infraction committed within an 18-month
7034	period, or a third or subsequent infraction committed within a
7035	36-month period.
7036	b. A violation of s. 316.183, when such violation is a
7037	result of exceeding the lawful speed limit by more than 15 miles
7038	per hour.
7039	5. Upon the request of the insured, the insurer and
7040	licensed agent shall supply to the insured the complete proof of
7041	fault or other criteria which justifies the additional charge or
7042	cancellation.
7043	6. No insurer shall impose or request an additional
7044	premium for motor vehicle insurance, cancel or refuse to issue a
7045	policy, or refuse to renew a policy because the insured or the
7046	applicant is a handicapped or physically disabled person, so
7047	long as such handicap or physical disability does not
7048	substantially impair such person's mechanically assisted driving
7049	ability.
7050	7. No insurer may cancel or otherwise terminate any
7051	insurance contract or coverage, or require execution of a
7052	consent to rate endorsement, during the stated policy term for
7053	the purpose of offering to issue, or issuing, a similar or
7054	identical contract or coverage to the same insured with the same
7055	exposure at a higher premium rate or continuing an existing
7056	contract or coverage with the same exposure at an increased
7057	premium.
7058	8. No insurer may issue a nonrenewal notice on any
7059	insurance contract or coverage, or require execution of a
7060	consent to rate endorsement, for the purpose of offering to
7061	issue, or issuing, a similar or identical contract or coverage
7062	to the same insured at a higher premium rate or continuing an
7063	existing contract or coverage at an increased premium without
7064	meeting any applicable notice requirements.
7065	9. No insurer shall, with respect to premiums charged for
7066	motor vehicle insurance, unfairly discriminate solely on the
7067	basis of age, sex, marital status, or scholastic achievement.
7068	10. Imposing or requesting an additional premium for motor
7069	vehicle comprehensive or uninsured motorist coverage solely
7070	because the insured was involved in a motor vehicle accident or
7071	was convicted of a moving traffic violation.
7072	11. No insurer shall cancel or issue a nonrenewal notice
7073	on any insurance policy or contract without complying with any
7074	applicable cancellation or nonrenewal provision required under
7075	the Florida Insurance Code.
7076	12. No insurer shall impose or request an additional
7077	premium, cancel a policy, or issue a nonrenewal notice on any
7078	insurance policy or contract because of any traffic infraction
7079	when adjudication has been withheld and no points have been
7080	assessed pursuant to s. 318.14(9) and (10). However, this
7081	subparagraph does not apply to traffic infractions involving
7082	accidents in which the insurer has incurred a loss due to the
7083	fault of the insured.
7084	(w) Soliciting or accepting new or renewal insurance risks
7085	by insolvent or impaired insurer prohibited; penalty.--
7086	1. Whether or not delinquency proceedings as to the
7087	insurer have been or are to be initiated, but while such
7088	insolvency or impairment exists, no director or officer of an
7089	insurer, except with the written permission of the office
7090	Department of Insurance, shall authorize or permit the insurer
7091	to solicit or accept new or renewal insurance risks in this
7092	state after such director or officer knew, or reasonably should
7093	have known, that the insurer was insolvent or impaired.
7094	"Impaired" includes impairment of capital or surplus, as defined
7095	in s. 631.011(12) and (13).
7096	2. Any such director or officer, upon conviction of a
7097	violation of this paragraph, is guilty of a felony of the third
7098	degree, punishable as provided in s. 775.082, s. 775.083, or s.
7099	775.084.
7100	(aa) Churning.--
7101	1. Churning is the practice whereby policy values in an
7102	existing life insurance policy or annuity contract, including,
7103	but not limited to, cash, loan values, or dividend values, and
7104	in any riders to that policy or contract, are utilized to
7105	purchase another insurance policy or annuity contract with that
7106	same insurer for the purpose of earning additional premiums,
7107	fees, commissions, or other compensation:
7108	a. Without an objectively reasonable basis for believing
7109	that the replacement or extraction will result in an actual and
7110	demonstrable benefit to the policyholder;
7111	b. In a fashion that is fraudulent, deceptive, or
7112	otherwise misleading or that involves a deceptive omission;
7113	c. Effective October 1, 1995,When the applicant is not
7114	informed that the policy values including cash values,
7115	dividends, and other assets of the existing policy or contract
7116	will be reduced, forfeited, or utilized in the purchase of the
7117	replacing or additional policy or contract, if this is the case;
7118	or
7119	d. Effective October 1, 1995,Without informing the
7120	applicant that the replacing or additional policy or contract
7121	will not be a paid-up policy or that additional premiums will be
7122	due, if this is the case.
7123
7124
7125	Churning by an insurer or an agent is an unfair method of
7126	competition and an unfair or deceptive act or practice.
7127	2. Effective October 1, 1995,Each insurer shall comply
7128	with sub-subparagraphs 1.c. and 1.d. by disclosing to the
7129	applicant at the time of the offer on a form designed and
7130	adopted by rule by the commissiondepartmentif, how, and the
7131	extent to which the policy or contract values (including cash
7132	value, dividends, and other assets) of a previously issued
7133	policy or contract will be used to purchase a replacing or
7134	additional policy or contract with the same insurer. The form
7135	shall include disclosure of the premium, the death benefit of
7136	the proposed replacing or additional policy, and the date when
7137	the policy values of the existing policy or contract will be
7138	insufficient to pay the premiums of the replacing or additional
7139	policy or contract.
7140	3. Effective October 1, 1995,Each insurer shall adopt
7141	written procedures to reasonably avoid churning of policies or
7142	contracts that it has issued, and failure to adopt written
7143	procedures sufficient to reasonably avoid churning shall be an
7144	unfair method of competition and an unfair or deceptive act or
7145	practice.
7146	Section 162. Subsections (3), (5), (7), (8), (10), and
7147	(11) of section 626.9543, Florida Statutes, are amended to read:
7148	626.9543 Holocaust victims.--
7149	(3) DEFINITIONS.--For the purpose of this section, the
7150	term:
7151	(a) "Department" means the Department of Insurance.
7152	(a)(b)"Holocaust victim" means any person who lost his or
7153	her life or property as a result of discriminatory laws,
7154	policies, or actions targeted against discrete groups of persons
7155	between 1920 and 1945, inclusive, in Nazi Germany, areas
7156	occupied by Nazi Germany, or countries allied with Nazi Germany.
7157	(b)(c)"Insurance policy" means, but is not limited to,
7158	life insurance, property insurance, or education policies.
7159	(c)(d)"Legal relationship" means any parent, subsidiary,
7160	or affiliated company with an insurer doing business in this
7161	state.
7162	(d)(e)"Proceeds" means the face or other payout value of
7163	policies and annuities plus reasonable interest to date of
7164	payments without diminution for wartime or immediate postwar
7165	currency devaluation.
7166	(5) PROOF OF A CLAIM.--Any insurer doing business in this
7167	state, in receipt of a claim from a Holocaust victim or from a
7168	beneficiary, descendant, or heir of a Holocaust victim, shall:
7169	(a) Diligently and expeditiously investigate all such
7170	claims.
7171	(b) Allow such claimants to meet a reasonable, not unduly
7172	restrictive, standard of proof to substantiate a claim, pursuant
7173	to standards established by rule of the commissiondepartment.
7174	(c) Permit claims irrespective of any statute of
7175	limitations or notice requirements imposed by any insurance
7176	policy issued, provided the claim is submitted within 10 years
7177	after the effective date of this section.
7178	(7) REPORTS FROM INSURERS.--Any insurer doing business in
7179	this state shall have an affirmative duty to ascertain to the
7180	extent possible and report to the officedepartmentwithin 90
7181	days after the effective date of this section and annually
7182	thereafter all efforts made and results of such efforts to
7183	ascertain:
7184	(a) Any legal relationship with an international insurer
7185	that issued an insurance policy to a Holocaust victim between
7186	1920 and 1945, inclusive.
7187	(b) The number and total value of such policies.
7188	(c) Any claim filed by a Holocaust victim, his or her
7189	beneficiary, heir, or descendant that has been paid, denied
7190	payment, or is pending.
7191	(d) Attempts made by the insurer to locate the
7192	beneficiaries of any such policies for which no claim of
7193	benefits has been made.
7194	(e) An explanation of any denial or pending payment of a
7195	claim to a Holocaust victim, his or her beneficiary, heir, or
7196	descendant.
7197	(8) REPORTS TO THE LEGISLATURE.--The office anddepartment
7198	shall jointlyreport to the Legislature 1 year after the
7199	effective date of this section and annually thereafter:
7200	(a) The number of insurers doing business in this state
7201	which have a legal relationship with an international insurer
7202	that could have issued a policy to a Holocaust victim between
7203	1920 and 1945, inclusive.
7204	(b) A list of all claims paid, denied, or pending to a
7205	Holocaust victim, his or her beneficiary, heir, or descendant.
7206	(c) A summary of the length of time for the processing and
7207	disposition of a claim by the insurer.
7208	(10) PRIVATE RIGHT OF ACTION.--An action to recover
7209	damages caused by a violation of this section must be commenced
7210	within 5 years after the cause of action has accrued. Any
7211	person who shall sustain damages by the reason of a violation of
7212	this section shall recover threefold the actual damages
7213	sustained thereby, as well as costs not exceeding $50,000, and
7214	reasonable attorneys' fees. At or before the commencement of
7215	any civil action by a party, notice thereof shall be served upon
7216	the officedepartment.
7217	(11) RULES.--The commissiondepartment, by rule, shall
7218	provide for the implementation of the provisions of this section
7219	by establishing procedures and related forms for facilitating,
7220	monitoring, and verifying compliance with this section and for
7221	the establishment of a restitution program for Holocaust
7222	victims, survivors, and their heirs and beneficiaries.
7223	Section 163. Section 626.9545, Florida Statutes, is
7224	amended to read:
7225	626.9545 Improper charge identification incentive
7226	program.--No section or provision of the Florida Insurance Code
7227	shall be construed as prohibiting an insurer from establishing a
7228	financial incentive program for remunerating a policyholder or
7229	an insured person with a selected percentage or stated portion
7230	of any health care charge identified by the policyholder or the
7231	insured person as an error or overcharge if the health care
7232	charge is recovered by the insurer. The financial incentive
7233	program shall be written and shall be available for inspection
7234	by the officedepartment.
7235	Section 164. Subsection (5) of section 626.9551, Florida
7236	Statutes, is amended to read:
7237	626.9551 Favored agent or insurer; coercion of debtors.--
7238	(5) The department or officemay investigate the affairs
7239	of any person to whom this section applies to determine whether
7240	such person has violated this section. If a violation of this
7241	section is found to have been committed knowingly, the person in
7242	violation shall be subject to the same procedures and penalties
7243	as provided in ss. 626.9571, 626.9581, 626.9591, and 626.9601.
7244	Section 165. Section 626.9561, Florida Statutes, is
7245	amended to read:
7246	626.9561 Power of department and office.--The department
7247	and office shall each have power within its respective
7248	regulatory jurisdictionto examine and investigate the affairs
7249	of every person involved in the business of insurance in this
7250	state in order to determine whether such person has been or is
7251	engaged in any unfair method of competition or in any unfair or
7252	deceptive act or practice prohibited by s. 626.9521, and shall
7253	each have the powers and duties specified in ss. 626.9571-
7254	626.9601 in connection therewith.
7255	Section 166. Section 626.9571, Florida Statutes, is
7256	amended to read:
7257	626.9571 Defined practices; hearings, witnesses,
7258	appearances, production of books and service of process.--
7259	(1) Whenever the department or officehas reason to
7260	believe that any person has engaged, or is engaging, in this
7261	state in any unfair method of competition or any unfair or
7262	deceptive act or practice as defined in s. 626.9541 or s.
7263	626.9551 or is engaging in the business of insurance without
7264	being properly licensed as required by this code and that a
7265	proceeding by it in respect thereto would be to the interest of
7266	the public, it shall conduct or cause to have conducted a
7267	hearing in accordance with chapter 120.
7268	(2) The department or office, a duly empowered hearing
7269	officer, or an administrative law judge shall, during the
7270	conduct of such hearing, have those powers enumerated in s.
7271	120.569; however, the penalties for failure to comply with a
7272	subpoena or with an order directing discovery shall be limited
7273	to a fine not to exceed $1,000 per violation.
7274	(3) Statements of charges, notices, and orders under this
7275	act may be served by anyone duly authorized by the department or
7276	office, either in the manner provided by law for service of
7277	process in civil actions or by certifying and mailing a copy
7278	thereof to the person affected by such statement, notice, order,
7279	or other process at his or her or its residence or principal
7280	office or place of business. The verified return by the person
7281	so serving such statement, notice, order, or other process,
7282	setting forth the manner of the service, shall be proof of the
7283	same, and the return postcard receipt for such statement,
7284	notice, order, or other process, certified and mailed as
7285	aforesaid, shall be proof of service of the same.
7286	Section 167. Section 626.9581, Florida Statutes, is
7287	amended to read:
7288	626.9581 Cease and desist and penalty orders.--After the
7289	hearing provided in s. 626.9571, the department or officeshall
7290	enter a final order in accordance with s. 120.569. If it is
7291	determined that the person charged has engaged in an unfair or
7292	deceptive act or practice or the unlawful transaction of
7293	insurance, the department or officeshall also issue an order
7294	requiring the violator to cease and desist from engaging in such
7295	method of competition, act, or practice or the unlawful
7296	transaction of insurance. Further, if the act or practice is a
7297	violation of s. 626.9541 or s. 626.9551, the department or
7298	officemay, at its discretion, order any one or more of the
7299	following:
7300	(1) Suspension or revocation of the person's certificate
7301	of authority, license, or eligibility for any certificate of
7302	authority or license, if he or she knew, or reasonably should
7303	have known, he or she was in violation of this act.
7304	(2) Such other relief as may be provided in the insurance
7305	code.
7306	Section 168. Section 626.9591, Florida Statutes, is
7307	amended to read:
7308	626.9591 Appeals from the department or office.--Any
7309	person subject to an order of the department or officeunder s.
7310	626.9581 or s. 626.9601 may obtain a review of such order by
7311	filing an appeal therefrom in accordance with the provisions and
7312	procedures for appeal from the orders of the department or
7313	officein general under s. 120.68.
7314	Section 169. Section 626.9601, Florida Statutes, is
7315	amended to read:
7316	626.9601 Penalty for violation of cease and desist
7317	orders.--Any person who violates a cease and desist order of the
7318	department or officeunder s. 626.9581 while such order is in
7319	effect, after notice and hearing as provided in s. 626.9571,
7320	shall be subject, at the discretion of the department or office,
7321	to any one or more of the following:
7322	(1) A monetary penalty of not more than $50,000 as to all
7323	matters determined in such hearing.
7324	(2) Suspension or revocation of such person's certificate
7325	of authority, license, or eligibility to hold such certificate
7326	of authority or license.
7327	(3) Such other relief as may be provided in the insurance
7328	code.
7329	Section 170. Section 626.9611, Florida Statutes, is
7330	amended to read:
7331	626.9611 Rules.--The department or commissionmay, in
7332	accordance with chapter 120, adoptpromulgatereasonable rules
7333	as are necessary or proper to identify specific methods of
7334	competition or acts or practices which are prohibited by s.
7335	626.9541 or s. 626.9551, but the rules shall not enlarge upon or
7336	extend the provisions of ss. 626.9541 and 626.9551.
7337	Section 171. Section 626.9621, Florida Statutes, is
7338	amended to read:
7339	626.9621 Provisions of part additional to existing
7340	law.--The powers vested in the department, commission, and
7341	officeby this part shall be additional to any other powers to
7342	enforce any penalties, fines, or forfeitures authorized by law.
7343	Section 172. Section 626.9631, Florida Statutes, is
7344	amended to read:
7345	626.9631 Civil liability.--The provisions of this part are
7346	cumulative to rights under the general civil and common law, and
7347	no action of the department, commission, or officeshall
7348	abrogate such rights to damages or other relief in any court.
7349	Section 173. Subsection (1) of section 626.9641, Florida
7350	Statutes, is amended to read:
7351	626.9641 Policyholders, bill of rights.--
7352	(1) The principles expressed in the following statements
7353	shall serve as standards to be followed by the department,
7354	commission, and office in exercising theiritspowers and
7355	duties, in exercising administrative discretion, in dispensing
7356	administrative interpretations of the law, and in adopting
7357	promulgatingrules:
7358	(a) Policyholders shall have the right to competitive
7359	pricing practices and marketing methods that enable them to
7360	determine the best value among comparable policies.
7361	(b) Policyholders shall have the right to obtain
7362	comprehensive coverage.
7363	(c) Policyholders shall have the right to insurance
7364	advertising and other selling approaches that provide accurate
7365	and balanced information on the benefits and limitations of a
7366	policy.
7367	(d) Policyholders shall have a right to an insurance
7368	company that is financially stable.
7369	(e) Policyholders shall have the right to be serviced by a
7370	competent, honest insurance agent or broker.
7371	(f) Policyholders shall have the right to a readable
7372	policy.
7373	(g) Policyholders shall have the right to an insurance
7374	company that provides an economic delivery of coverage and that
7375	tries to prevent losses.
7376	(h) Policyholders shall have the right to a balanced and
7377	positive regulation by the department, commission, and office.
7378	Section 174. Section 626.9651, Florida Statutes, is
7379	amended to read:
7380	626.9651 Privacy.--The department and commission shall
7381	eachadopt rules consistent with other provisions of the Florida
7382	Insurance Code to govern the use of a consumer's nonpublic
7383	personal financial and health information. These rules must be
7384	based on, consistent with, and not more restrictive than the
7385	Privacy of Consumer Financial and Health Information Regulation,
7386	adopted September 26, 2000, by the National Association of
7387	Insurance Commissioners; however, the rules must permit the use
7388	and disclosure of nonpublic personal health information for
7389	scientific, medical, or public policy research, in accordance
7390	with federal law. In addition, these rules must be consistent
7391	with, and not more restrictive than, the standards contained in
7392	Title V of the Gramm-Leach-Bliley Act of 1999, Pub. L. No. 106-
7393	102. If the officedepartmentdetermines that a health insurer
7394	or health maintenance organization is in compliance with, or is
7395	actively undertaking compliance with, the consumer privacy
7396	protection rules adopted by the United States Department of
7397	Health and Human Services, in conformance with the Health
7398	Insurance Portability and Affordability Act, that health insurer
7399	or health maintenance organization is in compliance with this
7400	section.
7401	Section 175. Paragraph (e) of subsection (4) and
7402	subsections (5) and (9) of section 626.989, Florida Statutes,
7403	are amended to read:
7404	626.989 Investigation by department or Division of
7405	Insurance Fraud; compliance; immunity; confidential information;
7406	reports to division; division investigator's power of arrest.--
7407	(4)
7408	(e) The Chief Financial OfficerInsurance Commissionerand
7409	any employee or agent of the department, commission, office,or
7410	division, when acting without malice and in the absence of fraud
7411	or bad faith, is not subject to civil liability for libel,
7412	slander, or any other relevant tort, and no civil cause of
7413	action of any nature exists against such person by virtue of the
7414	execution of official activities or duties of the department,
7415	commission, or officeunder this section or by virtue of the
7416	publication of any report or bulletin related to the official
7417	activities or duties of the department,or division, commission,
7418	or officeunder this section.
7419	(5) The office's and thedepartment's papers, documents,
7420	reports, or evidence relative to the subject of an investigation
7421	under this section are confidential and exempt from the
7422	provisions of s. 119.07(1) until such investigation is completed
7423	or ceases to be active. For purposes of this subsection, an
7424	investigation is considered "active" while the investigation is
7425	being conducted by the office ordepartment with a reasonable,
7426	good faith belief that it could lead to the filing of
7427	administrative, civil, or criminal proceedings. An investigation
7428	does not cease to be active if the office ordepartment is
7429	proceeding with reasonable dispatch and has a good faith belief
7430	that action could be initiated by the office ordepartment or
7431	other administrative or law enforcement agency. After an
7432	investigation is completed or ceases to be active, portions of
7433	records relating to the investigation shall remain exempt from
7434	the provisions of s. 119.07(1) if disclosure would:
7435	(a) Jeopardize the integrity of another active
7436	investigation;
7437	(b) Impair the safety and soundness of an insurer;
7438	(c) Reveal personal financial information;
7439	(d) Reveal the identity of a confidential source;
7440	(e) Defame or cause unwarranted damage to the good name or
7441	reputation of an individual or jeopardize the safety of an
7442	individual; or
7443	(f) Reveal investigative techniques or procedures.
7444	Further, such papers, documents, reports, or evidence relative
7445	to the subject of an investigation under this section shall not
7446	be subject to discovery until the investigation is completed or
7447	ceases to be active. Office, department,or division
7448	investigators shall not be subject to subpoena in civil actions
7449	by any court of this state to testify concerning any matter of
7450	which they have knowledge pursuant to a pending insurance fraud
7451	investigation by the division.
7452	(9) In recognition of the complementary roles of
7453	investigating instances of workers' compensation fraud and
7454	enforcing compliance with the workers' compensation coverage
7455	requirements under chapter 440, the department of Insuranceis
7456	directed to prepare and submit a joint performance report to the
7457	President of the Senate and the Speaker of the House of
7458	Representatives by November 1, 2003, and then by November 1
7459	every 3 years thereafter, describing the results obtained in
7460	achieving compliance with the workers' compensation coverage
7461	requirements and reducing the incidence of workers' compensation
7462	fraud.
7463	Section 176. Subsection (1) of section 626.9892, Florida
7464	Statutes, is amended to read:
7465	626.9892 Anti-Fraud Reward Program; reporting of insurance
7466	fraud.--
7467	(1) The Anti-Fraud Reward Program is hereby established
7468	within the department, to be funded from the Insurance
7469	Commissioner'sRegulatory Trust Fund.
7470	Section 177. Paragraph (k) of subsection (5) of section
7471	626.99, Florida Statutes, is amended to read:
7472	626.99 Life insurance solicitation.--
7473	(5) GENERAL RULES RELATING TO SOLICITATION.--
7474	(k) If an appropriately licensed agent proposes to replace
7475	a life insurance policy or an in-force annuity with a registered
7476	securities product, preapplication notice requirements to the
7477	departmentshall not apply.
7478	Section 178. Section 626.9911, Florida Statutes, is
7479	amended to read:
7480	626.9911 Definitions.--As used in this act, the term:
7481	(1) "Department" means the Department of Insurance.
7482	(1)(2)"Independent third-party trustee or escrow agent"
7483	means an attorney, certified public accountant, financial
7484	institution, or other person providing escrow services under the
7485	authority of a regulatory body. The term does not include any
7486	person associated, affiliated, or under common control with a
7487	viatical settlement provider or viatical settlement broker.
7488	(2)(3)"Person" has the meaning specified in s. 1.01.
7489	(3)(4)"Viatical settlement broker" means a person who, on
7490	behalf of a viator and for a fee, commission, or other valuable
7491	consideration, offers or attempts to negotiate viatical
7492	settlement contracts between a viator resident in this state and
7493	one or more viatical settlement providers. Notwithstanding the
7494	manner in which the viatical settlement broker is compensated, a
7495	viatical settlement broker is deemed to represent only the
7496	viator and owes a fiduciary duty to the viator to act according
7497	to the viator's instructions and in the best interest of the
7498	viator. The term does not include an attorney, licensed
7499	Certified Public Accountant, or investment adviser lawfully
7500	registered with the department of Banking and Financeunder
7501	chapter 517, who is retained to represent the viator and whose
7502	compensation is paid directly by or at the direction and on
7503	behalf of the viator.
7504	(4)(5)"Viatical settlement contract" means a written
7505	agreement entered into between a viatical settlement provider,
7506	or its related provider trust, and a viator. The viatical
7507	settlement contract includes an agreement to transfer ownership
7508	or change the beneficiary designation of a life insurance policy
7509	at a later date, regardless of the date that compensation is
7510	paid to the viator. The agreement must establish the terms
7511	under which the viatical settlement provider will pay
7512	compensation or anything of value, which compensation or value
7513	is less than the expected death benefit of the insurance policy
7514	or certificate, in return for the viator's assignment, transfer,
7515	sale, devise, or bequest of the death benefit or ownership of
7516	all or a portion of the insurance policy or certificate of
7517	insurance to the viatical settlement provider. A viatical
7518	settlement contract also includes a contract for a loan or other
7519	financial transaction secured primarily by an individual or
7520	group life insurance policy, other than a loan by a life
7521	insurance company pursuant to the terms of the life insurance
7522	contract, or a loan secured by the cash value of a policy.
7523	(5)(6)"Viatical settlement provider" means a person who,
7524	in this state, from this state, or with a resident of this
7525	state, effectuates a viatical settlement contract. The term
7526	does not include:
7527	(a) Any bank, savings bank, savings and loan association,
7528	credit union, or other licensed lending institution that takes
7529	an assignment of a life insurance policy as collateral for a
7530	loan.;
7531	(b) A life and health insurer that has lawfully issued a
7532	life insurance policy that provides accelerated benefits to
7533	terminally ill policyholders or certificateholders.; or
7534	(c) Any natural person who enters into no more than one
7535	viatical settlement contract with a viator in 1 calendar year,
7536	unless such natural person has previously been licensed under
7537	this act or is currently licensed under this act.
7538	(d) A trust that meets the definition of a "related
7539	provider trust."
7540	(e) A viator in this state.
7541	(f) A viatical settlement purchaser.
7542	(g) A financing entity.
7543	(6)(7)"Viator" means the owner of a life insurance policy
7544	or a certificateholder under a group policy who enters or seeks
7545	to enter into a viatical settlement contract. This term does not
7546	include a viatical settlement purchaser or a viatical settlement
7547	provider or any person acquiring a policy or interest in a
7548	policy from a viatical settlement provider, nor does it include
7549	an independent third-party trustee or escrow agent.
7550	(7)(8)"Related provider trust" means a titling trust or
7551	other trust established by a licensed viatical settlement
7552	provider or financing entity for the sole purpose of holding the
7553	ownership or beneficial interest in purchased policies in
7554	connection with a financing transaction. The trust must have a
7555	written agreement with a licensed viatical settlement provider
7556	or financing entity under which the licensed viatical settlement
7557	provider or financing entity is responsible for insuring
7558	compliance with all statutory and regulatory requirements and
7559	under which the trust agrees to make all records and files
7560	relating to viatical settlement transactions available to the
7561	officedepartmentas if those records and files were maintained
7562	directly by the licensed viatical settlement provider. This term
7563	does not include an independent third-party trustee or escrow
7564	agent or a trust that does not enter into agreements with a
7565	viator. A related provider trust shall be subject to all
7566	provisions of this act that apply to the viatical settlement
7567	provider who established the related provider trust, except s.
7568	626.9912, which shall not be applicable. A viatical settlement
7569	provider may establish no more than one related provider trust,
7570	and the sole trustee of such related provider trust shall be the
7571	viatical settlement provider licensed under s. 626.9912. The
7572	name of the licensed viatical settlement provider shall be
7573	included within the name of the related provider trust.
7574	(8)(9)"Viatical settlement purchase agreement" means a
7575	contract or agreement, entered into by a viatical settlement
7576	purchaser, to which the viator is not a party, to purchase a
7577	life insurance policy or an interest in a life insurance policy,
7578	which is entered into for the purpose of deriving an economic
7579	benefit. The term also includes purchases made by viatical
7580	settlement purchasers from any person other than the provider
7581	who effectuated the viatical settlement contract.
7582	(9)(10)"Viatical settlement purchaser" means a person who
7583	gives a sum of money as consideration for a life insurance
7584	policy or an equitable or legal interest in the death benefits
7585	of a life insurance policy that has been or will be the subject
7586	of a viatical settlement contract, for the purpose of deriving
7587	an economic benefit, including purchases made from any person
7588	other than the provider who effectuated the viatical settlement
7589	contract or an entity affiliated with the provider. The term
7590	does not include a licensee under this part, an accredited
7591	investor as defined in Rule 501, Regulation D of the Securities
7592	Act Rules, or a qualified institutional buyer as defined by Rule
7593	144(a) of the Federal Securities Act, a special purpose entity,
7594	a financing entity, or a contingency insurer. The above
7595	references to Rule 501, Regulation D and Rule 144(a) of the
7596	Federal Securities Act are used strictly for defining purposes
7597	and shall not be interpreted in any other manner. Any person who
7598	claims to be an accredited investor shall sign an affidavit
7599	stating that he or she is an accredited investor, the basis of
7600	that claim, and that he or she understands that as an accredited
7601	investor he or she will not be entitled to certain protections
7602	of the Viatical Settlement Act. This affidavit must be kept with
7603	other documents required to be maintained by this act.
7604	(10)(11)"Viatical settlement sales agent" means a person
7605	other than a licensed viatical settlement provider who arranges
7606	the purchase through a viatical settlement purchase agreement of
7607	a life insurance policy or an interest in a life insurance
7608	policy.
7609	(11)(12)"Viaticated policy" means a life insurance
7610	policy, or a certificate under a group policy, which is the
7611	subject of a viatical settlement contract.
7612	(12)(13)"Related form" means any form, created by or on
7613	behalf of a licensee, which a viator or viatical settlement
7614	purchaser is required to sign or initial. The forms include, but
7615	are not limited to, a power of attorney, a release of medical
7616	information form, a suitability questionnaire, a disclosure
7617	document, or any addendum, schedule, or amendment to a viatical
7618	settlement contract or viatical settlement purchase agreement
7619	considered necessary by a provider to effectuate a viatical
7620	settlement transaction.
7621	(13)(14)"Special purpose entity" means an entity
7622	established by a licensed viatical settlement provider or by a
7623	financing entity, which may be a corporation, partnership,
7624	trust, limited liability company, or other similar entity formed
7625	solely to provide, either directly or indirectly, access to
7626	institutional capital markets to a viatical settlement provider
7627	or financing entity. A special purpose entity shall not enter
7628	into a viatical settlement contract or a viatical settlement
7629	purchase agreement.
7630	(14)(15)"Financing entity" means an underwriter,
7631	placement agent, lender, purchaser of securities, or purchaser
7632	of a policy or certificate from a viatical settlement provider,
7633	credit enhancer, or any entity that has direct ownership in a
7634	policy or certificate that is the subject of a viatical
7635	settlement contract, but whose principal activity related to the
7636	transaction is providing funds or credit enhancement to effect
7637	the viatical settlement or the purchase of one or more viatical
7638	policies and who has an agreement in writing with one or more
7639	licensed viatical settlement providers to finance the
7640	acquisition of viatical settlement contracts. The term does not
7641	include a nonaccredited investor, a viatical settlement
7642	purchaser, or other natural person. A financing entity may not
7643	enter into a viatical settlement contract.
7644	Section 179. Section 626.9912, Florida Statutes, is
7645	amended to read:
7646	626.9912 Viatical settlement provider license required;
7647	application for license.--
7648	(1) A person may not perform the functions of a viatical
7649	settlement provider as defined in this act or enter into or
7650	solicit a viatical settlement contract without first having
7651	obtained a license from the officedepartment.
7652	(2) Application for a viatical settlement provider license
7653	must be made to the officedepartmentby the applicant on a form
7654	prescribed by the commissiondepartment, under oath and signed
7655	by the applicant. The application must be accompanied by a fee
7656	of $500. If the applicant is a corporation, the application must
7657	be under oath and signed by the president and the secretary of
7658	the corporation.
7659	(3) In the application, the applicant must provide all of
7660	the following:
7661	(a) The applicant's full name, age, residence address, and
7662	business address, and all occupations engaged in by the
7663	applicant during the 5 years preceding the date of the
7664	application.
7665	(b) A copy of the applicant's basic organizational
7666	documents, if any, including the articles of incorporation,
7667	articles of association, partnership agreement, trust agreement,
7668	or other similar documents, together with all amendments to such
7669	documents.
7670	(c) Copies of all bylaws, rules, regulations, or similar
7671	documents regulating the conduct of the applicant's internal
7672	affairs.
7673	(d) A list showing the name, business and residence
7674	addresses, and official position of each individual who is
7675	responsible for conduct of the applicant's affairs, including,
7676	but not limited to, any member of the applicant's board of
7677	directors, board of trustees, executive committee, or other
7678	governing board or committee and any other person or entity
7679	owning or having the right to acquire 10 percent or more of the
7680	voting securities of the applicant.
7681	(e) With respect to each individual identified under
7682	paragraph (d):
7683	1. A sworn biographical statement on forms adopted by the
7684	commission and supplied by the officedepartment.
7685	2. A set of fingerprints on forms prescribed by the
7686	commissiondepartment, certified by a law enforcement officer,
7687	and accompanied by the fingerprinting fee specified in s.
7688	624.501.
7689	3. Authority for release of information relating to the
7690	investigation of the individual's background.
7691	(f) All applications, viatical settlement contract forms,
7692	viatical settlement purchase agreement forms, escrow forms, and
7693	other related forms proposed to be used by the applicant.
7694	(g) Such other information as the commission or office
7695	departmentdeems necessary to determine that the applicant and
7696	the individuals identified under paragraph (d) are competent and
7697	trustworthy and can lawfully and successfully act as a viatical
7698	settlement provider.
7699	(4) The officedepartmentmay not issue a license to an
7700	entity other than a natural person if it is not satisfied that
7701	all officers, directors, employees, stockholders, partners, and
7702	any other persons who exercise or have the ability to exercise
7703	effective control of the entity or who have the ability to
7704	influence the transaction of business by the entity meet the
7705	standards of this act and have not violated any provision of
7706	this act or rules of the commissiondepartmentrelated to the
7707	business of viatical settlement contracts or viatical settlement
7708	purchase agreements.
7709	(5) Upon the filing of a sworn application and the payment
7710	of the license fee, the officedepartmentshall investigate each
7711	applicant and may issue the applicant a license if the office
7712	departmentfinds that the applicant:
7713	(a) Has provided a detailed plan of operation.
7714	(b) Is competent and trustworthy and intends to act in
7715	good faith in the business authorized by the license applied
7716	for.
7717	(c) Has a good business reputation and has had experience,
7718	training, or education that qualifies the applicant to conduct
7719	the business authorized by the license applied for.
7720	(d) If the applicant is a corporation, is a corporation
7721	incorporated under the laws of this state, or is a foreign
7722	corporation authorized to transact business in this state.
7723	(e) Has designated the Chief Financial OfficerInsurance
7724	Commissioner and Treasureras its agent for service of process.
7725	(f) Has made the deposit required by s. 626.9913(3).
7726	Section 180. Subsections (2) and (3) of section 626.9913,
7727	Florida Statutes, are amended to read:
7728	626.9913 Viatical settlement provider license continuance;
7729	annual report; fees; deposit.--
7730	(2) Annually, on or before March 1, the viatical
7731	settlement provider licensee shall file a statement containing
7732	information the commissiondepartmentrequires and shall pay to
7733	the officedepartmenta license fee in the amount of $500. A
7734	viatical settlement provider shall include in all statements
7735	filed with the officedepartmentall information requested by
7736	the officedepartmentregarding a related provider trust
7737	established by the viatical settlement provider. The office
7738	departmentmay require more frequent reporting. Failure to
7739	timely file the annual statement or to timely pay the license
7740	fee is grounds for immediate suspension of the license.
7741	(3) A viatical settlement provider licensee must deposit
7742	and maintain deposited in trust with the department securities
7743	eligible for deposit under s. 625.52, having at all times a
7744	value of not less than $100,000. As an alternative to meeting
7745	the $100,000 deposit requirement, the provider may deposit and
7746	maintain deposited in trust with the department such securities
7747	in the amount of $25,000 and post with the officedepartmenta
7748	surety bond acceptable to the officedepartmentin the amount of
7749	$75,000.
7750	Section 181. Section 626.9914, Florida Statutes, is
7751	amended to read:
7752	626.9914 Suspension, revocation, or nonrenewal of viatical
7753	settlement provider license; grounds; administrative fine.--
7754	(1) The officedepartmentshall suspend, revoke, or refuse
7755	to renew the license of any viatical settlement provider if the
7756	officedepartmentfinds that the licensee:
7757	(a) Has made a misrepresentation in the application for
7758	the license;
7759	(b) Has engaged in fraudulent or dishonest practices, or
7760	otherwise has been shown to be untrustworthy or incompetent to
7761	act as a viatical settlement provider;
7762	(c) Demonstrates a pattern of unreasonable payments to
7763	viators;
7764	(d) Has been found guilty of, or has pleaded guilty or
7765	nolo contendere to, any felony, or a misdemeanor involving fraud
7766	or moral turpitude, regardless of whether a judgment of
7767	conviction has been entered by the court;
7768	(e) Has issued viatical settlement contracts that have not
7769	been approved pursuant to this act;
7770	(f) Has failed to honor contractual obligations related to
7771	the business of viatical settlement contracts;
7772	(g) Deals in bad faith with viators;
7773	(h) Has violated any provision of the insurance code or of
7774	this act;
7775	(i) Employs any person who materially influences the
7776	licensee's conduct and who fails to meet the requirements of
7777	this act; or
7778	(j) No longer meets the requirements for initial
7779	licensure.
7780	(2) The officedepartmentmay, in lieu of or in addition
7781	to any suspension or revocation, assess an administrative fine
7782	not to exceed $2,500 for each nonwillful violation or $10,000
7783	for each willful violation by a viatical settlement provider
7784	licensee. The officedepartmentmay also place a viatical
7785	settlement provider licensee on probation for a period not to
7786	exceed 2 years.
7787	(3) If an employee of a viatical settlement provider
7788	violates any provision of this act, the officedepartmentmay
7789	take disciplinary action against such employee as if the
7790	employee were licensed under this act, including suspending or
7791	otherwise prohibiting the employee from performing the functions
7792	of a viatical settlement provider or viatical settlement broker
7793	as defined in this act.
7794	(4) If a viatical settlement provider establishes a
7795	related provider trust as permitted by this act, the viatical
7796	settlement provider shall be liable and responsible for the
7797	performance of all obligations of the related provider trust
7798	under all viatical settlement contracts entered into by the
7799	related provider trust, and for the compliance of the related
7800	provider trust with all provisions of this act. Any violation of
7801	this act by the related provider trust shall be deemed a
7802	violation of this act by the viatical settlement provider as
7803	well as the related provider trust. If the related provider
7804	trust violates any provisions of this act, the officedepartment
7805	may exercise all remedies set forth in this act for such
7806	violations against the viatical settlement provider, as well as
7807	the related provider trust.
7808	Section 182. Subsections (1), (2), and (4) of section
7809	626.9915, Florida Statutes, are amended to read:
7810	626.9915 Effect of suspension or revocation of viatical
7811	settlement provider license; duration of suspension;
7812	reinstatement.--
7813	(1) When its license is suspended or revoked, the provider
7814	must proceed, immediately following the effective date of the
7815	suspension or revocation, to conclude the affairs it is
7816	transacting under its license. The provider may not solicit,
7817	negotiate, advertise, or effectuate new contracts. The office
7818	departmentretains jurisdiction over the provider until all
7819	contracts have been fulfilled or canceled or have expired. A
7820	provider whose license is suspended or revoked may continue to
7821	maintain and service viaticated policies subject to the approval
7822	of the officedepartment.
7823	(2) The suspension of the license of a viatical settlement
7824	provider licensee may be for such period, not to exceed 2 years,
7825	as determined by the officedepartment. The officedepartment
7826	may shorten, rescind, or modify the suspension.
7827	(4) If, upon expiration of the suspension order, the
7828	license has not otherwise been terminated, the officedepartment
7829	must reinstate the license only upon written request by the
7830	suspended licensee unless the officedepartmentfinds that the
7831	grounds giving rise to the suspension have not been removed or
7832	that the licensee is otherwise not in compliance with the
7833	requirements of this act. The officedepartmentshall give the
7834	licensee notice of its findings no later than 90 days after
7835	receipt of the request or upon expiration of the suspension
7836	order, whichever occurs later. If a license is not reinstated
7837	pursuant to the procedures set forth in this subsection, it
7838	expires at the end of the suspension or on the date it otherwise
7839	would have expired, whichever is sooner.
7840	Section 183. Subsections (7), (8), and (9) of section
7841	626.9916, Florida Statutes, are amended to read:
7842	626.9916 Viatical settlement broker license required;
7843	application for license.--
7844	(7) Upon the filing of a sworn application and the payment
7845	of the license fee and all other applicable fees under this act,
7846	the department shall investigate each applicant and may issue
7847	the applicant a license if the department finds that the
7848	applicant:
7849	(a) Is competent and trustworthy and intends to act in
7850	good faith in the business authorized by the license applied
7851	for.
7852	(b) Has a good business reputation and has had experience,
7853	training, or education that qualifies the applicant to conduct
7854	the business authorized by the license applied for.
7855	(c) Except with respect to applicants for nonresident
7856	licenses, is a bona fide resident of this state and actually
7857	resides in this state at least 180 days a year. If an applicant
7858	holds a similar license or an insurance agent's or broker's
7859	license in another state at the time of applying for a license
7860	under this section, the applicant may be found to meet the
7861	residency requirement of this paragraph only after he or she
7862	furnishes a letter of clearance satisfactory to the department
7863	or other proof that the applicant's resident licenses have been
7864	canceled or changed to nonresident status and that the applicant
7865	is in good standing with the licensing authority.
7866	(d) Is a corporation, a corporation incorporated under the
7867	laws of this state, or a foreign corporation authorized to
7868	transact business in this state.
7869	(e) Has designated the Chief Financial OfficerInsurance
7870	Commissioner and Treasureras its agent for service of process.
7871	(8) An applicant for a nonresident viatical settlement
7872	broker license must, in addition to designating the Chief
7873	Financial OfficerInsurance Commissioner and Treasureras agent
7874	for service of process as required by this section, also furnish
7875	the department with the name and address of a resident of this
7876	state upon whom notices or orders of the department or process
7877	affecting the applicant or licensee may be served. After
7878	issuance of the license, the licensee must also notify the
7879	department of change of the person to receive such notices,
7880	orders, or process; such change is not effective until
7881	acknowledged by the department.
7882	(9) Beginning July 1, 1997,The department may, by rule,
7883	specify experience, educational, or other training standards
7884	required for licensure under this section.
7885	Section 184. Section 626.9919, Florida Statutes, is
7886	amended to read:
7887	626.9919 Notice of change of licensee address or
7888	name.--Each viatical settlement provider licensee, viatical
7889	settlement broker licensee, and viatical settlement sales agent
7890	licensee must provide the office or department, as applicable,
7891	at least 30 days' advance notice of any change in the licensee's
7892	name, residence address, principal business address, or mailing
7893	address.
7894	Section 185. Section 626.9921, Florida Statutes, is
7895	amended to read:
7896	626.9921 Filing of forms; required procedures; approval.--
7897	(1) A viatical settlement contract form, viatical
7898	settlement purchase agreement form, escrow form, or related form
7899	may be used in this state only after the form has been filed
7900	with the officedepartmentand only after the form has been
7901	approved by the officedepartment.
7902	(2) The viatical settlement contract form, viatical
7903	settlement purchase agreement form, escrow form, or related form
7904	must be filed with the officedepartmentat least 60 days before
7905	its use. The form is considered approved on the 60th day after
7906	its date of filing unless it has been previously disapproved by
7907	the officedepartment. The officedepartmentmust disapprove a
7908	viatical settlement contract form, viatical settlement purchase
7909	agreement form, escrow form, or related form that is
7910	unreasonable, contrary to the public interest, discriminatory,
7911	or misleading or unfair to the viator or the purchaser.
7912	(3) If a viatical settlement provider elects to use a
7913	related provider trust in accordance with this act, the viatical
7914	settlement provider shall file notice of its intention to use a
7915	related provider trust with the officedepartment, including a
7916	copy of the trust agreement of the related provider trust. The
7917	organizational documents of the trust must be submitted to and
7918	approved by the officedepartmentbefore the transacting of
7919	business by the trust.
7920	(4) The commissiondepartmentmay adopt, by rule,
7921	standardized forms to be used by licensees, at the licensee's
7922	option in place of separately approved forms.
7923	Section 186. Section 626.9922, Florida Statutes, is
7924	amended to read:
7925	626.9922 Examination.--
7926	(1) The office ordepartment may examine the business and
7927	affairs of any of its respective licensees or applicants
7928	licensee or applicant for a license. The office ordepartment
7929	may order any suchlicensee or applicant to produce any records,
7930	books, files, advertising and solicitation materials, or other
7931	information and may take statements under oath to determine
7932	whether the licensee or applicant is in violation of the law or
7933	is acting contrary to the public interest. The expenses
7934	incurred in conducting any examination or investigation must be
7935	paid by the licensee or applicant. Examinations and
7936	investigations must be conducted as provided in chapter 624, and
7937	licensees are subject to all applicable provisions of the
7938	insurance code.
7939	(2) All accounts, books and records, documents, files,
7940	contracts, and other information relating to all transactions of
7941	viatical settlement contracts or viatical settlement purchase
7942	agreements must be maintained by the licensee for a period of at
7943	least 3 years after the death of the insured and must be
7944	available to the office ordepartment for inspection during
7945	reasonable business hours.
7946	(3) All such records or accurate copies of such records
7947	must be maintained at the licensee's home office. As used in
7948	this section, the term "home office" means the principal place
7949	of business and any other single storage facility, the street
7950	address of which shall be disclosed to the office ordepartment
7951	within 20 days after its initial use, or within 20 days of the
7952	effective date of this subsection.
7953	(4) The originals of records required to be maintained
7954	under this section must be made available to the office or
7955	department for examination at the office's ordepartment's
7956	request.
7957	Section 187. Subsection (2) of section 626.99235, Florida
7958	Statutes, is amended to read:
7959	626.99235 Disclosures to viatical settlement purchasers;
7960	misrepresentations.--
7961	(2) The viatical settlement provider and the viatical
7962	settlement sales agent, themselves or through another person,
7963	shall provide in writing the following disclosures to any
7964	viatical settlement purchaser or purchaser prospect:
7965	(a) That the return represented as being available under
7966	the viatical settlement purchase agreement is directly tied to
7967	the projected life span of one or more insureds.
7968	(b) If a return is represented, the disclosure shall
7969	indicate the projected life span of the insured or insureds
7970	whose life or lives are tied to the return.
7971	(c) If required by the terms of the viatical settlement
7972	purchase agreement, that the viatical settlement purchaser shall
7973	be responsible for the payment of insurance premiums on the life
7974	of the insured, late or surrender fees, or other costs related
7975	to the life insurance policy on the life of the insured or
7976	insureds which may reduce the return.
7977	(d) The amount of any trust fees, commissions, deductions,
7978	or other expenses, if any, to be charged to the viatical
7979	settlement purchaser.
7980	(e) The name and address of the person responsible for
7981	tracking the insured.
7982	(f) That group policies may contain limitations or caps in
7983	the conversion rights, that additional premiums may have to be
7984	paid if the policy is converted, and that the party responsible
7985	for the payment of such additional premiums shall be identified.
7986	(g) That the life expectancy and rate of return are only
7987	estimates and cannot be guaranteed.
7988	(h) That the purchase of a viatical settlement contract
7989	should not be considered a liquid purchase, since it is
7990	impossible to predict the exact timing of its maturity and the
7991	funds may not be available until the death of the insured.
7992	(i) The name and address of the person with the
7993	responsibility for paying the premium until the death of the
7994	insured.
7995
7996
7997	The written disclosure required under this subsection shall be
7998	conspicuously displayed in any viatical settlement purchase
7999	agreement, and in any solicitation material furnished to the
8000	viatical settlement purchaser by such viatical settlement
8001	provider, related provider trust, or person, and shall be in
8002	contrasting color and in not less than 10-point type or no
8003	smaller than the largest type on the page if larger than 10-
8004	point type. The commission maydepartment is authorized toadopt
8005	by rule the disclosure form to be used. The disclosures need not
8006	be furnished in an invitation to inquire, the objective of which
8007	is to create a desire to inquire further about entering into a
8008	viatical settlement purchase agreement. The invitation to
8009	inquire may not quote rates of return, may not include material
8010	attendant to the execution of any specific viatical settlement
8011	purchase agreement, and may not relate to any specific viator.
8012	Section 188. Section 626.99245, Florida Statutes, is
8013	amended to read:
8014	626.99245 Conflict of regulation of viaticals.--
8015	(1) A viatical settlement provider who from this state
8016	enters into a viatical settlement purchase agreement with a
8017	purchaser who is a resident of another state that has enacted
8018	statutes or adopted regulations governing viatical settlement
8019	purchase agreements, shall be governed in the effectuation of
8020	that viatical settlement purchase agreement by the statutes and
8021	regulations of the purchaser's state of residence. If the state
8022	in which the purchaser is a resident has not enacted statutes or
8023	regulations governing viatical settlement purchase agreements,
8024	the provider shall give the purchaser notice that neither
8025	Florida nor his or her state regulates the transaction upon
8026	which he or she is entering. For transactions in these states,
8027	however, the viatical settlement provider is to maintain all
8028	records required as if the transactions were executed in
8029	Florida. However, the forms used in those states need not be
8030	approved by the officedepartment.
8031	(2) A viatical settlement provider who from this state
8032	enters into a viatical settlement contract with a viator who is
8033	a resident of another state that has enacted statutes or adopted
8034	regulations governing viatical settlement contracts shall be
8035	governed in the effectuation of that viatical settlement
8036	contract by the statutes and regulations of the viator's state
8037	of residence. If the state in which the viator is a resident has
8038	not enacted statutes or regulations governing viatical
8039	settlement agreements, the provider shall give the viator notice
8040	that neither Florida nor his or her state regulates the
8041	transaction upon which he or she is entering. For transactions
8042	in those states, however, the viatical settlement provider is to
8043	maintain all records required as if the transactions were
8044	executed in Florida. The forms used in those states need not be
8045	approved by the officedepartment.
8046	(3) This section does not affect the requirement of ss.
8047	626.9911(5)(6)and 626.9912(1) that a viatical settlement
8048	provider doing business from this state must obtain a viatical
8049	settlement license from the officedepartment. As used in this
8050	subsection, the term "doing business from this state" includes
8051	effectuating viatical settlement contracts and effectuating
8052	viatical settlement purchase agreements from offices in this
8053	state, regardless of the state of residence of the viator or the
8054	viatical settlement purchaser.
8055	Section 189. Section 626.9925, Florida Statutes, is
8056	amended to read:
8057	626.9925 Rules.--The commissiondepartmentmay adopt rules
8058	to administer this act, including rules establishing standards
8059	for evaluating advertising by licensees; rules providing for the
8060	collection of data, for disclosures to viators or purchasers,
8061	and for the reporting of life expectancies; and rules defining
8062	terms used in this act and prescribing recordkeeping
8063	requirements relating to executed viatical settlement contracts
8064	and viatical settlement purchase agreements.
8065	Section 190. Section 626.9926, Florida Statutes, is
8066	amended to read:
8067	626.9926 Rate regulation not authorized.--Nothing in this
8068	act shall be construed to authorize the office ordepartment to
8069	directly or indirectly regulate the amount paid as consideration
8070	for entry into a viatical settlement contract or viatical
8071	settlement purchase agreement.
8072	Section 191. Subsection (2) of section 626.9927, Florida
8073	Statutes, is amended to read:
8074	626.9927 Unfair trade practices; cease and desist;
8075	injunctions; civil remedy.--
8076	(2) In addition to the penalties and other enforcement
8077	provisions of this act, if any person violates this act or any
8078	rule implementing this act, the office or department, as
8079	appropriate,may seek an injunction in the circuit court of the
8080	county where the person resides or has a principal place of
8081	business and may apply for temporary and permanent orders that
8082	the office ordepartment determines necessary to restrain the
8083	person from committing the violation.
8084	Section 192. Section 626.99272, Florida Statutes, is
8085	amended to read:
8086	626.99272 Cease and desist orders and fines.--
8087	(1) The office or department as appropriatemay issue a
8088	cease and desist order upon a person that violates any provision
8089	of this part, any rule or order adopted by the commission,
8090	office, ordepartment, or any written agreement entered into
8091	with the office ordepartment.
8092	(2) When the office ordepartment finds that such an
8093	action presents an immediate danger to the public which requires
8094	an immediate final order, it may issue an emergency cease and
8095	desist order reciting with particularity the facts underlying
8096	such findings. The emergency cease and desist order is effective
8097	immediately upon service of a copy of the order on the
8098	respondent and remains effective for 90 days. If the office or
8099	department begins nonemergency cease and desist proceedings
8100	under subsection(1), the emergency cease and desist order
8101	remains effective, absent an order by an appellate court of
8102	competent jurisdiction pursuant to s. 120.68, until the
8103	conclusion of proceedings under ss. 120.569 and 120.57.
8104	(3) The office ordepartment may impose and collect an
8105	administrative fine not to exceed $10,000 for each nonwillful
8106	violation and $25,000 for each willful violation of any
8107	provision of this part.
8108	Section 193. Section 626.99285, Florida Statutes, is
8109	amended to read:
8110	626.99285 Applicability of insurance code.--In addition to
8111	other applicable provisions cited in the insurance code, the
8112	office or department, as appropriate,has the authority granted
8113	under ss. 624.310, 626.901, and 626.989 to regulate viatical
8114	settlement providers, viatical settlement brokers, viatical
8115	settlement sales agents, viatical settlement contracts, viatical
8116	settlement purchase agreements, and viatical settlement
8117	transactions.
8118	Section 194. Section 626.99295, Florida Statutes, is
8119	amended to read:
8120	626.99295 Grace period.--An unlicensed viatical settlement
8121	provider or viatical settlement broker that was legally
8122	transacting business in this state on June 30, 2000, may
8123	continue to transact such business, in the absence of any orders
8124	by the office, department, or the former Department of Insurance
8125	to the contrary, until the office or department, as applicable,
8126	approves or disapproves the viatical settlement provider's
8127	application for licensure if the viatical settlement provider or
8128	viatical settlement broker filedfiles with the former
8129	department an application for licensure no later than August 1,
8130	2000, and if the viatical settlement provider or viatical
8131	settlement broker complies with all other provisions of this
8132	act. Any form for which former department approval wasis
8133	required under this part must have beenbefiled by August 1,
8134	2000, and may continue to be used until disapproved by the
8135	office ordepartment.
8136	Section 195. Paragraphs (a), (b), and (c) of subsection
8137	(2) and paragraph (c) of subsection(3) of section 627.0628,
8138	Florida Statutes, are amended to read:
8139	627.0628 Florida Commission on Hurricane Loss Projection
8140	Methodology.--
8141	(2) COMMISSION CREATED.--
8142	(a) There is created the Florida Commission on Hurricane
8143	Loss Projection Methodology, which is assigned to the State
8144	Board of Administration. For the purposes of this section, the
8145	term "commission" means the Florida Commission on Hurricane Loss
8146	Projection Methodology.The commission shall be administratively
8147	housed within the State Board of Administration, but it shall
8148	independently exercise the powers and duties specified in this
8149	section.
8150	(b) The commission shall consist of the following 11
8151	members:
8152	1. The insurance consumer advocate.
8153	2. The senior employee of the State Board of
8154	Administration responsible for operationsChief Operating
8155	Officerof the Florida Hurricane Catastrophe Fund.
8156	3. The Executive Director of the Citizens Property
8157	Insurance CorporationResidential Property and Casualty Joint
8158	Underwriting Association.
8159	4. The Director of the Division of Emergency Management of
8160	the Department of Community Affairs.
8161	5. The actuary member of the Florida Hurricane Catastrophe
8162	Fund Advisory Council.
8163	6. Six members appointed by the Chief Financial Officer
8164	Insurance Commissioner, as follows:
8165	a. An employee of the officeDepartment of Insurancewho
8166	is an actuary responsible for property insurance rate filings.
8167	b. An actuary who is employed full time by a property and
8168	casualty insurer which was responsible for at least 1 percent of
8169	the aggregate statewide direct written premium for homeowner's
8170	insurance in the calendar year preceding the member's
8171	appointment to the commission.
8172	c. An expert in insurance finance who is a full time
8173	member of the faculty of the State University System and who has
8174	a background in actuarial science.
8175	d. An expert in statistics who is a full time member of
8176	the faculty of the State University System and who has a
8177	background in insurance.
8178	e. An expert in computer system design who is a full time
8179	member of the faculty of the State University System.
8180	f. An expert in meteorology who is a full time member of
8181	the faculty of the State University System and who specializes
8182	in hurricanes.
8183	(c) Members designated under subparagraphs (b)1.-5. shall
8184	serve on the commission as long as they maintain the respective
8185	offices designated in subparagraphs (b)1.-5. Members appointed
8186	by the Chief Financial OfficerInsurance Commissionerunder
8187	subparagraph (b)6. shall serve on the commission until the end
8188	of the term of office of the Chief Financial OfficerInsurance
8189	Commissioner who appointed them, unless earlier removed by the
8190	Chief Financial OfficerInsurance Commissionerfor cause.
8191	Vacancies on the commission shall be filled in the same manner
8192	as the original appointment.
8193	(3) ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.--
8194	(c) With respect to a rate filing under s. 627.062, an
8195	insurer may employ actuarial methods, principles, standards,
8196	models, or output ranges found by the commission to be accurate
8197	or reliable to determine hurricane loss factors for use in a
8198	rate filing under s. 627.062, which findings and factors are
8199	admissible and relevant in consideration of a rate filing by the
8200	officedepartmentor in any arbitration or administrative or
8201	judicial review.
8202	Section 196. Paragraph (b) of subsection (2) and
8203	subsections (5), (6), and (9) of section 627.0629, Florida
8204	Statutes, are amended to read:
8205	627.0629 Residential property insurance; rate filings.--
8206	(2)
8207	(b) A rate filing for residential property insurance made
8208	more than 150 days after approval by the officedepartmentof a
8209	building code rating factor plan submitted by a statewide rating
8210	organization shall include positive and negative rate factors
8211	that reflect the manner in which building code enforcement in a
8212	particular jurisdiction addresses risk of wind damage. The rate
8213	filing shall include variations from standard rate factors on an
8214	individual basis based on inspection of a particular structure
8215	by a licensed home inspector. If an inspection is requested by
8216	the insured, the insurer may require the insured to pay the
8217	reasonable cost of the inspection. This paragraph applies to
8218	structures constructed or renovated after the implementation of
8219	this paragraph.
8220	(5) In order to provide an appropriate transition period,
8221	an insurer may, in its sole discretion, implement an approved
8222	rate filing for residential property insurance over a period of
8223	years. An insurer electing to phase in its rate filing must
8224	provide an informational notice to the officedepartmentsetting
8225	out its schedule for implementation of the phased-in rate
8226	filing.
8227	(6) An insurer may not write a residential property
8228	insurance policy without providing windstorm coverage or
8229	hurricane coverage as defined in s. 627.4025. This subsection
8230	does not apply with respect to risks located in an area eligible
8231	for coverage under the high-risk account of the Citizens
8232	Property Insurance Corporation pursuant to s. 627.351(6)Florida
8233	Windstorm Underwriting Association under s. 627.351(2).
8234	(9) EVALUATION OF RESIDENTIAL PROPERTY STRUCTURAL
8235	SOUNDNESS.--
8236	(a) It is the intent of the Legislature to provide a
8237	program whereby homeowners may obtain an evaluation of the wind
8238	resistance of their homes with respect to preventing damage from
8239	hurricanes, together with a recommendation of reasonable steps
8240	that may be taken to upgrade their homes to better withstand
8241	hurricane force winds.
8242	(b) To the extent that funds are provided for this purpose
8243	in the General Appropriations Act, the Legislature hereby
8244	authorizes the establishment of a program to be administered by
8245	the Citizens Property Insurance Corporation for homeowners
8246	insured in the high-risk accountFlorida Windstorm Underwriting
8247	Association.
8248	(c) The program shall provide grants to homeowners, for
8249	the purpose of providing homeowner applicants with funds to
8250	conduct an evaluation of the integrity of their homes with
8251	respect to withstanding hurricane force winds, recommendations
8252	to retrofit the homes to better withstand damage from such
8253	winds, and the estimated cost to make the recommended retrofits.
8254	(d) The Department of Community Affairs shall establish by
8255	rule standards to govern the quality of the evaluation, the
8256	quality of the recommendations for retrofitting, the eligibility
8257	of the persons conducting the evaluation, and the selection of
8258	applicants under the program. In establishing the rule, the
8259	Department of Community Affairsshall consult with the advisory
8260	committee to minimize the possibility of fraud or abuse in the
8261	evaluation and retrofitting process, and to ensure that funds
8262	spent by homeowners acting on the recommendations achieve
8263	positive results.
8264	(e) The Citizens Property Insurance CorporationFlorida
8265	Windstorm Underwriting Associationshall identify areas of this
8266	state with the greatest wind risk to residential properties and
8267	recommend annually to the Department of Community Affairs
8268	priority target areas for such evaluations and inclusion with
8269	the associated residential construction mitigation program.
8270	Section 197. Subsections (2) and (3) and paragraphs (a),
8271	(b), (c), (e), (f), and (g) of subsection (4) of section
8272	627.311, Florida Statutes, are amended to read:
8273	627.311 Joint underwriters and joint reinsurers.--
8274	(2) If the officedepartmentfinds that any activity or
8275	practice of any such group, association, or other organization
8276	is unfair or unreasonable or otherwise inconsistent with the
8277	provisions of this chapter, it may issue a written order
8278	specifying in what respects such activity or practice is unfair
8279	or unreasonable or otherwise inconsistent with the provisions of
8280	this chapter, and requiring the discontinuance of such activity
8281	or practice.
8282	(3) The officedepartmentmay, after consultation with
8283	insurers licensed to write automobile insurance in this state,
8284	approve a joint underwriting plan for purposes of equitable
8285	apportionment or sharing among insurers of automobile liability
8286	insurance and other motor vehicle insurance, as an alternate to
8287	the plan required in s. 627.351(1). All insurers authorized to
8288	write automobile insurance in this state shall subscribe to the
8289	plan and participate therein. The plan shall be subject to
8290	continuous review by the officedepartmentwhich may at any time
8291	disapprove the entire plan or any part thereof if it determines
8292	that conditions have changed since prior approval and that in
8293	view of the purposes of the plan changes are warranted. Any
8294	disapproval by the officedepartmentshall be subject to the
8295	provisions of chapter 120. If adopted, the plan and the
8296	association created under the plan:
8297	(a) Must be subject to all provisions of s. 627.351(1),
8298	except apportionment of applicants.
8299	(b) May provide for one or more designated insurers, able
8300	and willing to provide policy and claims service, to act on
8301	behalf of all other insurers to provide insurance for applicants
8302	who are in good faith entitled to, but unable to, procure
8303	insurance through the voluntary insurance market at standard
8304	rates.
8305	(c) Must provide that designated insurers will issue
8306	policies of insurance and provide policyholder and claims
8307	service on behalf of all insurers for the joint underwriting
8308	association.
8309	(d) Must provide for the equitable apportionment among
8310	insurers of losses and expenses incurred.
8311	(e) Must provide that the joint underwriting association
8312	will operate subject to the supervision and approval of a board
8313	of governors consisting of 11 individuals, including 1 who will
8314	be elected as chair. Five members of the board must be appointed
8315	by the Chief Financial OfficerInsurance Commissioner. Two of
8316	the Chief Financial Officer'scommissioner'sappointees must be
8317	chosen from the insurance industry. Any board member appointed
8318	by the Chief Financial OfficerInsurance Commissionermay be
8319	removed and replaced by her or him at any time without cause.
8320	Six members of the board must be appointed by the participating
8321	insurers, two of whom must be from the insurance agents'
8322	associations. All board members, including the chair, must be
8323	appointed to serve for 2-year terms beginning annually on a date
8324	designated by the plan.
8325	(f) Must provide that an agent appointed to a servicing
8326	carrier must be a licensed general lines agent of an insurer
8327	which is authorized to write automobile liability and physical
8328	damage insurance in the state and which is actively writing such
8329	coverage in the county in which the agent is located, or the
8330	immediately adjoining counties, or an agent who places a volume
8331	of other property and casualty insurance in an amount equal to
8332	the premium volume placed with the Florida Joint Underwriting
8333	Association. The officedepartmentmay, however, determine that
8334	an agent may be appointed to a servicing carrier if, after
8335	public hearing, the officedepartmentfinds that consumers in
8336	the agent's operating area would not have adequate and
8337	reasonable access to the purchase of automobile insurance if the
8338	agent were not appointed to a servicing carrier.
8339	(g) Must make available noncancelable coverage as provided
8340	in s. 627.7275(2).
8341	(h) Must provide for the furnishing of a list of insureds
8342	and their mailing addresses upon the request of a member of the
8343	association or an insurance agent licensed to place business
8344	with an association member. The list must indicate whether the
8345	insured is currently receiving a good driver discount from the
8346	association. The plan may charge a reasonable fee to cover the
8347	cost incurred in providing the list.
8348	(i) Must not provide a renewal credit or discount or any
8349	other inducement designed to retain a risk.
8350	(j) Must not provide any other good driver credit or
8351	discount that is not actuarially sound. In addition to other
8352	criteria that the plan may specify, to be eligible for a good
8353	driver credit, an insured must not have any criminal traffic
8354	violations within the most recent 36-month period preceding the
8355	date the discount is received.
8356	(k) Shall have no liability, and no cause of action of any
8357	nature shall arise against, any member insurer or its agents or
8358	employees, agents or employees of the association, members of
8359	the board of governors of the association, the Chief Financial
8360	Officer, or the officedepartmentor its representatives, for
8361	any action taken by them in the performance of their duties or
8362	responsibilities under this subsection. Such immunity does not
8363	apply to actions for or arising out of breach of any contract or
8364	agreement pertaining to insurance, or any willful tort.
8365	(l)1. Shall be subject to the public records requirements
8366	of chapter 119 and the public meeting requirements of s.
8367	286.011. However, the following records of the Florida
8368	Automobile Joint Underwriting Association are confidential and
8369	exempt from s. 119.07(1) and s. 24(a), Art. I of the State
8370	Constitution:
8371	a. Underwriting files, except that a policyholder or an
8372	applicant shall have access to his or her own underwriting
8373	files.
8374	b. Claims files, until termination of all litigation and
8375	settlement of all claims arising out of the same incident,
8376	although portions of the claims files may remain exempt, as
8377	otherwise provided by law. Confidential and exempt claims file
8378	records may be released to other governmental agencies upon
8379	written request and demonstration of need; such records held by
8380	the receiving agency remain confidential and exempt as provided
8381	by this paragraph.
8382	c. Records obtained or generated by an internal auditor
8383	pursuant to a routine audit, until the audit is completed or, if
8384	the audit is conducted as part of an investigation, until the
8385	investigation is closed or ceases to be active. An
8386	investigation is considered "active" while the investigation is
8387	being conducted with a reasonable, good faith belief that it
8388	could lead to the filing of administrative, civil, or criminal
8389	proceedings.
8390	d. Matters reasonably encompassed in privileged attorney-
8391	client communications.
8392	e. Proprietary information licensed to the association
8393	under contract when the contract provides for the
8394	confidentiality of such proprietary information.
8395	f. All information relating to the medical condition or
8396	medical status of an association employee which is not relevant
8397	to the employee's capacity to perform his or her duties, except
8398	as otherwise provided in this paragraph. Information which is
8399	exempt shall include, but is not limited to, information
8400	relating to workers' compensation, insurance benefits, and
8401	retirement or disability benefits.
8402	g. All records relative to an employee's participation in
8403	an employee assistance program designed to assist any employee
8404	who has a behavioral or medical disorder, substance abuse
8405	problem, or emotional difficulty which affects the employee's
8406	job performance, except as otherwise provided in s.
8407	112.0455(11).
8408	h. Information relating to negotiations for financing,
8409	reinsurance, depopulation, or contractual services, until the
8410	conclusion of the negotiations.
8411	i. Minutes of closed meetings regarding underwriting
8412	files, and minutes of closed meetings regarding an open claims
8413	file until termination of all litigation and settlement of all
8414	claims with regard to that claim, except that information
8415	otherwise confidential or exempt by law must be redacted.
8416
8417
8418	When an authorized insurer is considering underwriting a risk
8419	insured by the association, relevant underwriting files and
8420	confidential claims files may be released to the insurer
8421	provided the insurer agrees in writing, notarized and under
8422	oath, to maintain the confidentiality of such files. When a
8423	file is transferred to an insurer, that file is no longer a
8424	public record because it is not held by an agency subject to the
8425	provisions of the public records law. The association may make
8426	the following information obtained from underwriting files and
8427	confidential claims files available to licensed general lines
8428	insurance agents: name, address, and telephone number of the
8429	automobile owner or insured; location of the risk; rating
8430	information; loss history; and policy type. The receiving
8431	licensed general lines insurance agent must retain the
8432	confidentiality of the information received.
8433	2. Portions of meetings of the Florida Automobile Joint
8434	Underwriting Association during which confidential underwriting
8435	files or confidential open claims files are discussed are exempt
8436	from the provisions of s. 286.011 and s. 24(b), Art. I of the
8437	State Constitution. All portions of association meetings which
8438	are closed to the public shall be recorded by a court reporter.
8439	The court reporter shall record the times of commencement and
8440	termination of the meeting, all discussion and proceedings, the
8441	names of all persons present at any time, and the names of all
8442	persons speaking. No portion of any closed meeting shall be off
8443	the record. Subject to the provisions of this paragraph and s.
8444	119.07(2)(a), the court reporter's notes of any closed meeting
8445	shall be retained by the association for a minimum of 5 years.
8446	A copy of the transcript, less any exempt matters, of any closed
8447	meeting during which claims are discussed shall become public as
8448	to individual claims after settlement of the claim.
8449
8450
8451	This paragraph is subject to the Open Government Sunset Review
8452	Act of 1995 in accordance with s. 119.15, and shall stand
8453	repealed on October 2, 2003, unless reviewed and saved from
8454	repeal through reenactment by the Legislature.
8455	(4)(a) Effective upon this act becoming a law, The office
8456	departmentshall, after consultation with insurers, approve a
8457	joint underwriting plan of insurers which shall operate as a
8458	nonprofit entity. For the purposes of this subsection, the term
8459	"insurer" includes group self-insurance funds authorized by s.
8460	624.4621, commercial self-insurance funds authorized by s.
8461	624.462, assessable mutual insurers authorized under s.
8462	628.6011, and insurers licensed to write workers' compensation
8463	and employer's liability insurance in this state. The purpose of
8464	the plan is to provide workers' compensation and employer's
8465	liability insurance to applicants who are required by law to
8466	maintain workers' compensation and employer's liability
8467	insurance and who are in good faith entitled to but who are
8468	unable to purchase such insurance through the voluntary market.
8469	The joint underwriting plan shall issue policies beginning
8470	January 1, 1994.The plan must have actuarially sound rates that
8471	assure that the plan is self-supporting.
8472	(b) The operation of the plan is subject to the
8473	supervision of a 13-member board of governors. The board of
8474	governors shall be comprised of:
8475	1. Five of the 20 domestic insurers, as defined in s.
8476	624.06(1), having the largest voluntary direct premiums written
8477	in this state for workers' compensation and employer's liability
8478	insurance, which shall be elected by those 20 domestic insurers;
8479	2. Five of the 20 foreign insurers as defined in s.
8480	624.06(2) having the largest voluntary direct premiums written
8481	in this state for workers' compensation and employer's liability
8482	insurance, which shall be elected by those 20 foreign insurers;
8483	3. One person, who shall serve as the chair, appointed by
8484	the Chief Financial OfficerInsurance Commissioner;
8485	4. One person appointed by the largest property and
8486	casualty insurance agents' association in this state; and
8487	5. The consumer advocate appointed under s. 627.0613 or
8488	the consumer advocate's designee.
8489
8490
8491	Each board member shall serve a 4-year term and may serve
8492	consecutive terms. No board member shall be an insurer which
8493	provides service to the plan or which has an affiliate which
8494	provides services to the plan or which is serviced by a service
8495	company or third-party administrator which provides services to
8496	the plan or which has an affiliate which provides services to
8497	the plan. The minutes, audits, and procedures of the board of
8498	governors are subject to chapter 119.
8499	(c) The operation of the plan shall be governed by a plan
8500	of operation that is prepared at the direction of the board of
8501	governors. The plan of operation may be changed at any time by
8502	the board of governors or upon request of the officedepartment.
8503	The plan of operation and all changes thereto are subject to the
8504	approval of the officedepartment. The plan of operation shall:
8505	1. Authorize the board to engage in the activities
8506	necessary to implement this subsection, including, but not
8507	limited to, borrowing money.
8508	2. Develop criteria for eligibility for coverage by the
8509	plan, including, but not limited to, documented rejection by at
8510	least two insurers which reasonably assures that insureds
8511	covered under the plan are unable to acquire coverage in the
8512	voluntary market. Any insured may voluntarily elect to accept
8513	coverage from an insurer for a premium equal to or greater than
8514	the plan premium if the insurer writing the coverage adheres to
8515	the provisions of s. 627.171.
8516	3. Require notice from the agent to the insured at the
8517	time of the application for coverage that the application is for
8518	coverage with the plan and that coverage may be available
8519	through an insurer, group self-insurers' fund, commercial self-
8520	insurance fund, or assessable mutual insurer through another
8521	agent at a lower cost.
8522	4. Establish programs to encourage insurers to provide
8523	coverage to applicants of the plan in the voluntary market and
8524	to insureds of the plan, including, but not limited to:
8525	a. Establishing procedures for an insurer to use in
8526	notifying the plan of the insurer's desire to provide coverage
8527	to applicants to the plan or existing insureds of the plan and
8528	in describing the types of risks in which the insurer is
8529	interested. The description of the desired risks must be on a
8530	form developed by the plan.
8531	b. Developing forms and procedures that provide an insurer
8532	with the information necessary to determine whether the insurer
8533	wants to write particular applicants to the plan or insureds of
8534	the plan.
8535	c. Developing procedures for notice to the plan and the
8536	applicant to the plan or insured of the plan that an insurer
8537	will insure the applicant or the insured of the plan, and notice
8538	of the cost of the coverage offered; and developing procedures
8539	for the selection of an insuring entity by the applicant or
8540	insured of the plan.
8541	d. Provide for a market-assistance plan to assist in the
8542	placement of employers. All applications for coverage in the
8543	plan received 45 days before the effective date for coverage
8544	shall be processed through the market-assistance plan. A market-
8545	assistance plan specifically designed to serve the needs of
8546	small good policyholders as defined by the board must be
8547	finalized by January 1, 1994.
8548	5. Provide for policy and claims services to the insureds
8549	of the plan of the nature and quality provided for insureds in
8550	the voluntary market.
8551	6. Provide for the review of applications for coverage
8552	with the plan for reasonableness and accuracy, using any
8553	available historic information regarding the insured.
8554	7. Provide for procedures for auditing insureds of the
8555	plan which are based on reasonable business judgment and are
8556	designed to maximize the likelihood that the plan will collect
8557	the appropriate premiums.
8558	8. Authorize the plan to terminate the coverage of and
8559	refuse future coverage for any insured that submits a fraudulent
8560	application to the plan or provides fraudulent or grossly
8561	erroneous records to the plan or to any service provider of the
8562	plan in conjunction with the activities of the plan.
8563	9. Establish service standards for agents who submit
8564	business to the plan.
8565	10. Establish criteria and procedures to prohibit any
8566	agent who does not adhere to the established service standards
8567	from placing business with the plan or receiving, directly or
8568	indirectly, any commissions for business placed with the plan.
8569	11. Provide for the establishment of reasonable safety
8570	programs for all insureds in the plan.
8571	12. Authorize the plan to terminate the coverage of and
8572	refuse future coverage to any insured who fails to pay premiums
8573	or surcharges when due; who, at the time of application, is
8574	delinquent in payments of workers' compensation or employer's
8575	liability insurance premiums or surcharges owed to an insurer,
8576	group self-insurers' fund, commercial self-insurance fund, or
8577	assessable mutual insurer licensed to write such coverage in
8578	this state; or who refuses to substantially comply with any
8579	safety programs recommended by the plan.
8580	13. Authorize the board of governors to provide the
8581	services required by the plan through staff employed by the
8582	plan, through reasonably compensated service providers who
8583	contract with the plan to provide services as specified by the
8584	board of governors, or through a combination of employees and
8585	service providers.
8586	14. Provide for service standards for service providers,
8587	methods of determining adherence to those service standards,
8588	incentives and disincentives for service, and procedures for
8589	terminating contracts for service providers that fail to adhere
8590	to service standards.
8591	15. Provide procedures for selecting service providers and
8592	standards for qualification as a service provider that
8593	reasonably assure that any service provider selected will
8594	continue to operate as an ongoing concern and is capable of
8595	providing the specified services in the manner required.
8596	16. Provide for reasonable accounting and data-reporting
8597	practices.
8598	17. Provide for annual review of costs associated with the
8599	administration and servicing of the policies issued by the plan
8600	to determine alternatives by which costs can be reduced.
8601	18. Authorize the acquisition of such excess insurance or
8602	reinsurance as is consistent with the purposes of the plan.
8603	19. Provide for an annual report to the officedepartment
8604	on a date specified by the officedepartmentand containing such
8605	information as the officedepartmentreasonably requires.
8606	20. Establish multiple rating plans for various
8607	classifications of risk which reflect risk of loss, hazard
8608	grade, actual losses, size of premium, and compliance with loss
8609	control. At least one of such plans must be a preferred-rating
8610	plan to accommodate small-premium policyholders with good
8611	experience as defined in sub-subparagraph 22.a.
8612	21. Establish agent commission schedules.
8613	22. Establish three subplans as follows:
8614	a. Subplan "A" must include those insureds whose annual
8615	premium does not exceed $2,500 and who have neither incurred any
8616	lost-time claims nor incurred medical-only claims exceeding 50
8617	percent of their premium for the immediate 2 years.
8618	b. Subplan "B" must include insureds that are employers
8619	identified by the board of governors as high-risk employers due
8620	solely to the nature of the operations being performed by those
8621	insureds and for whom no market exists in the voluntary market,
8622	and whose experience modifications are less than 1.00.
8623	c. Subplan "C" must include all other insureds within the
8624	plan.
8625	(e) The plan shall establish and use its rates and rating
8626	plans, and the plan may establish and use changes in rating
8627	plans at any time, but no more frequently than two times per any
8628	rating class for any calendar year. By December 1, 1993, and
8629	December 1 of each year thereafter, the board shall establish
8630	and use actuarially sound rates for use by the plan to assure
8631	that the plan is self-funding while those rates are in effect.
8632	Such rates and rating plans must be filed with the office
8633	departmentwithin 30 calendar days after their effective dates,
8634	and shall be considered a "use and file" filing. Any disapproval
8635	by the officedepartmentmust have an effective date that is at
8636	least 60 days from the date of disapproval of the rates and
8637	rating plan and must have prospective effect only. The plan may
8638	not be subject to any order by the officedepartmentto return
8639	to policyholders any portion of the rates disapproved by the
8640	officedepartment. The officedepartmentmay not disapprove any
8641	rates or rating plans unless it demonstrates that such rates and
8642	rating plans are excessive, inadequate, or unfairly
8643	discriminatory.
8644	(f) No later than June 1 of each year, the plan shall
8645	obtain an independent actuarial certification of the results of
8646	the operations of the plan for prior years, and shall furnish a
8647	copy of the certification to the officedepartment. If, after
8648	the effective date of the plan, the projected ultimate incurred
8649	losses and expenses and dividends for prior years exceed
8650	collected premiums, accrued net investment income, and prior
8651	assessments for prior years, the certification is subject to
8652	review and approval by the officedepartmentbefore it becomes
8653	final.
8654	(g) Whenever a deficit exists, the plan shall, within 90
8655	days, provide the officedepartmentwith a program to eliminate
8656	the deficit within a reasonable time. The deficit may be funded
8657	through increased premiums charged to insureds of the plan for
8658	subsequent years, through the use of policyholder surplus
8659	attributable to any year, and through assessments on insureds in
8660	the plan if the plan uses assessable policies.
8661	Section 198. Section 627.3111, Florida Statutes, is
8662	amended to read:
8663	627.3111 Public records exemption.--All bank account
8664	numbers and debit, charge, and credit card numbers, and all
8665	other personal financial and health information of a consumer
8666	held by the department or officeof Insurance or theirits
8667	service providers or agents, relating to a consumer's complaint
8668	or inquiry regarding a matter or activity regulated under the
8669	Florida Insurance Code, are confidential and exempt from s.
8670	119.07(1) and s. 24(a), Art. I of the State Constitution. For
8671	the purpose of this section, the term "consumer" includes but is
8672	not limited to a prospective purchaser, purchaser, or
8673	beneficiary of, or applicant for, any product or service
8674	regulated under the Florida Insurance Code, and a family member
8675	or dependent of a consumer, a subscriber under a group policy,
8676	or a policyholder. This information shall be redacted from
8677	records that contain nonexempt information prior to disclosure.
8678	This exemption applies to information made confidential and
8679	exempt by this section held by the department or officeof
8680	Insurance or theiritsservice providers or agents before, on,
8681	or after the effective date of this exemption. Such confidential
8682	and exempt information may be disclosed to another governmental
8683	entity, if disclosure is necessary for the receiving entity to
8684	perform its duties and responsibilities, and may be disclosed to
8685	the National Association of Insurance Commissioners. The
8686	receiving governmental entity and the association must maintain
8687	the confidential and exempt status of such information. The
8688	information made confidential and exempt by this section may be
8689	used in a criminal, civil, or administrative proceeding so long
8690	as the confidential and exempt status of such information is
8691	maintained. This exemption does not include the name and address
8692	of an inquirer or complainant to the department or officeor the
8693	name of an insurer or other regulated entity which is the
8694	subject of the inquiry or complaint. This section is subject to
8695	the Open Government Sunset Review Act of 1995 in accordance with
8696	s. 119.15 and shall stand repealed on October 2, 2007, unless
8697	reviewed and saved from repeal through reenactment by the
8698	Legislature.
8699	Section 199. Subsection (1), paragraphs (a) and (c) of
8700	subsection (3), paragraphs (a), (c), and (d) of subsection (4),
8701	and subsections (5) and (6) of section 627.351, Florida
8702	Statutes, are amended, and paragraph (f) is added to subsection
8703	(2) of that section to read:
8704	627.351 Insurance risk apportionment plans.--
8705	(1) MOTOR VEHICLE INSURANCE RISK
8706	APPORTIONMENT.--Agreements may be made among casualty and surety
8707	insurers with respect to the equitable apportionment among them
8708	of insurance which may be afforded applicants who are in good
8709	faith entitled to, but are unable to, procure such insurance
8710	through ordinary methods, and such insurers may agree among
8711	themselves on the use of reasonable rate modifications for such
8712	insurance. Such agreements and rate modifications shall be
8713	subject to the approval of the officedepartment. The office
8714	departmentshall, after consultation with the insurers licensed
8715	to write automobile liability insurance in this state, adopt a
8716	reasonable plan or plans for the equitable apportionment among
8717	such insurers of applicants for such insurance who are in good
8718	faith entitled to, but are unable to, procure such insurance
8719	through ordinary methods, and, when such plan has been adopted,
8720	all such insurers shall subscribe thereto and shall participate
8721	therein. Such plan or plans shall include rules for
8722	classification of risks and rates therefor. The plan or plans
8723	shall make available noncancelable coverage as provided in s.
8724	627.7275(2). Any insured placed with the plan shall be notified
8725	of the fact that insurance coverage is being afforded through
8726	the plan and not through the private market, and such
8727	notification shall be given in writing within 10 days of such
8728	placement. To assure that plan rates are made adequate to pay
8729	claims and expenses, insurers shall develop a means of obtaining
8730	loss and expense experience at least annually, and the plan
8731	shall file such experience, when available, with the office
8732	departmentin sufficient detail to make a determination of rate
8733	adequacy. Prior to the filing of such experience with the office
8734	department, the plan shall poll each member insurer as to the
8735	need for an actuary who is a member of the Casualty Actuarial
8736	Society and who is not affiliated with the plan's statistical
8737	agent to certify the plan's rate adequacy. If a majority of
8738	those insurers responding indicate a need for such
8739	certification, the plan shall include the certification as part
8740	of its experience filing. Such experience shall be filed with
8741	the officedepartmentnot more than 9 months following the end
8742	of the annual statistical period under review, together with a
8743	rate filing based on said experience. The officedepartment
8744	shall initiate proceedings to disapprove the rate and so notify
8745	the plan or shall finalize its review within 60 days of receipt
8746	of the filing. Notification to the plan by the officedepartment
8747	of its preliminary findings, which include a point of entry to
8748	the plan pursuant to chapter 120, shall toll the 60-day period
8749	during any such proceedings and subsequent judicial review. The
8750	rate shall be deemed approved if the officedepartmentdoes not
8751	issue notice to the plan of its preliminary findings within 60
8752	days of the filing. In addition to provisions for claims and
8753	expenses, the ratemaking formula shall include a factor for
8754	projected claims trending and 5 percent for contingencies. In no
8755	instance shall the formula include a renewal discount for plan
8756	insureds. However, the plan shall reunderwrite each insured on
8757	an annual basis, based upon all applicable rating factors
8758	approved by the officedepartment. Trend factors shall not be
8759	found to be inappropriate if not in excess of trend factors
8760	normally used in the development of residual market rates by the
8761	appropriate licensed rating organization. Each application for
8762	coverage in the plan shall include, in boldfaced 12-point type
8763	immediately preceding the applicant's signature, the following
8764	statement:
8765
8766	"THIS INSURANCE IS BEING AFFORDED THROUGH THE FLORIDA JOINT
8767	UNDERWRITING ASSOCIATION AND NOT THROUGH THE PRIVATE MARKET.
8768	PLEASE BE ADVISED THAT COVERAGE WITH A PRIVATE INSURER MAY BE
8769	AVAILABLE FROM ANOTHER AGENT AT A LOWER COST. AGENT AND COMPANY
8770	LISTINGS ARE AVAILABLE IN THE LOCAL YELLOW PAGES."
8771
8772	The plan shall annually report to the officedepartmentthe
8773	number and percentage of plan insureds who are not surcharged
8774	due to their driving record.
8775	(2) WINDSTORM INSURANCE RISK APPORTIONMENT.--
8776	(f) As used in this subsection, the term "department"
8777	means the former Department of Insurance.
8778	(3) POLITICAL SUBDIVISION; CASUALTY INSURANCE RISK
8779	APPORTIONMENT.--
8780	(a) The officedepartmentshall, after consultation with
8781	the casualty insurers licensed in this state, adopt a plan or
8782	plans for the equitable apportionment among them of casualty
8783	insurance coverage which may be afforded political subdivisions
8784	which are in good faith entitled to, but are unable to, procure
8785	such coverage through the voluntary market at standard rates or
8786	through a statutorily approved plan authorized by the office
8787	department. The officedepartmentmay adopt a joint underwriting
8788	plan which shall provide for one or more designated insurers
8789	able and willing to provide policyholder and claims service,
8790	including the issuance of insurance policies, to act on behalf
8791	of all other insurers required to participate in the joint
8792	underwriting plan. Any joint underwriting plan adopted shall
8793	provide for the equitable apportionment of any profits realized,
8794	or of losses and expenses incurred, among participating
8795	insurers. The plan shall include, but shall not be limited to:
8796	1. Rules for the classification of risks and rates which
8797	reflect the past loss experience and prospective loss experience
8798	in different geographic areas.
8799	2. A rating plan which reasonably reflects the prior
8800	claims experience of the insureds.
8801	3. Excess coverage by insurers if the officeInsurance
8802	Commissioner, in itshis or herdiscretion, requires such
8803	coverage by insurers participating in the joint underwriting
8804	plan.
8805	(c) Any deficit sustained under the plan shall first be
8806	recovered through a premium contingency assessment.
8807	Concurrently, the rates for insureds shall be adjusted for the
8808	next year so as to be actuarially sound in conformance with
8809	rules adopted byof the commissiondepartment.
8810	(4) MEDICAL MALPRACTICE RISK APPORTIONMENT.--
8811	(a) The officedepartmentshall, after consultation with
8812	insurers as set forth in paragraph (b), adopt a joint
8813	underwriting plan as set forth in paragraph (d).
8814	(c) The Joint Underwriting Association shall operate
8815	subject to the supervision and approval of a board of governors
8816	consisting of representatives of five of the insurers
8817	participating in the Joint Underwriting Association, an attorney
8818	to be named by The Florida Bar, a physician to be named by the
8819	Florida Medical Association, a dentist to be named by the
8820	Florida Dental Association, and a hospital representative to be
8821	named by the Florida Hospital Association. The board of
8822	governors shall choose, during the first meeting of the board
8823	after June 30 of each year, one of its members to serve as chair
8824	of the board and another member to serve as vice chair of the
8825	board. There shall be no liability on the part of, and no cause
8826	of action of any nature shall arise against, any member insurer,
8827	self-insurer, or its agents or employees, the Joint Underwriting
8828	Association or its agents or employees, members of the board of
8829	governors, or the officedepartmentor its representatives for
8830	any action taken by them in the performance of their powers and
8831	duties under this subsection.
8832	(d) The plan shall provide coverage for claims arising out
8833	of the rendering of, or failure to render, medical care or
8834	services and, in the case of health care facilities, coverage
8835	for bodily injury or property damage to the person or property
8836	of any patient arising out of the insured's activities, in
8837	appropriate policy forms for all health care providers as
8838	defined in paragraph (h). The plan shall include, but shall not
8839	be limited to:
8840	1. Classifications of risks and rates which reflect past
8841	and prospective loss and expense experience in different areas
8842	of practice and in different geographical areas. To assure that
8843	plan rates are adequate to pay claims and expenses, the Joint
8844	Underwriting Association shall develop a means of obtaining loss
8845	and expense experience; and the plan shall file such experience,
8846	when available, with the officedepartmentin sufficient detail
8847	to make a determination of rate adequacy. Within 60 days after a
8848	rate filing, the officedepartmentshall approve such rates or
8849	rate revisions as are fully supported by the filing. In addition
8850	to provisions for claims and expenses, the ratemaking formula
8851	may include a factor for projected claims trending and a margin
8852	for contingencies. The use of trend factors shall not be found
8853	to be inappropriate.
8854	2. A rating plan which reasonably recognizes the prior
8855	claims experience of insureds.
8856	3. Provisions as to rates for:
8857	a. Insureds who are retired or semiretired.
8858	b. The estates of deceased insureds.
8859	c. Part-time professionals.
8860	4. Protection in an amount not to exceed $250,000 per
8861	claim, $750,000 annual aggregate for health care providers other
8862	than hospitals and in an amount not to exceed $1.5 million per
8863	claim, $5 million annual aggregate for hospitals. Such coverage
8864	for health care providers other than hospitals shall be
8865	available as primary coverage and as excess coverage for the
8866	layer of coverage between the primary coverage and the total
8867	limits of $250,000 per claim, $750,000 annual aggregate. The
8868	plan shall also provide tail coverage in these amounts to
8869	insureds whose claims-made coverage with another insurer or
8870	trust has or will be terminated. Such tail coverage shall
8871	provide coverage for incidents that occurred during the claims-
8872	made policy period for which a claim is made after the policy
8873	period.
8874	5. A risk management program for insureds of the
8875	association. This program shall include, but not be limited to:
8876	investigation and analysis of frequency, severity, and causes of
8877	adverse or untoward medical injuries; development of measures to
8878	control these injuries; systematic reporting of medical
8879	incidents; investigation and analysis of patient complaints; and
8880	auditing of association members to assure implementation of this
8881	program. The plan may refuse to insure any insured who refuses
8882	or fails to comply with the risk management program implemented
8883	by the association. Prior to cancellation or refusal to renew
8884	an insured, the association shall provide the insured 60 days'
8885	notice of intent to cancel or nonrenew and shall further notify
8886	the insured of any action which must be taken to be in
8887	compliance with the risk management program.
8888	(5) PROPERTY AND CASUALTY INSURANCE RISK
8889	APPORTIONMENT.--The commissiondepartmentshall adopt by rule a
8890	joint underwriting plan to equitably apportion among insurers
8891	authorized in this state to write property insurance as defined
8892	in s. 624.604 or casualty insurance as defined in s. 624.605,
8893	the underwriting of one or more classes of property insurance or
8894	casualty insurance, except for the types of insurance that are
8895	included within property insurance or casualty insurance for
8896	which an equitable apportionment plan, assigned risk plan, or
8897	joint underwriting plan is authorized under s. 627.311 or
8898	subsection (1), subsection (2), subsection(3), subsection (4),
8899	or subsection (5) and except for risks eligible for flood
8900	insurance written through the federal flood insurance program to
8901	persons with risks eligible under subparagraph (a)1. and who are
8902	in good faith entitled to, but are unable to, obtain such
8903	property or casualty insurance coverage, including excess
8904	coverage, through the voluntary market. For purposes of this
8905	subsection, an adequate level of coverage means that coverage
8906	which is required by state law or by responsible or prudent
8907	business practices. The Joint Underwriting Association shall not
8908	be required to provide coverage for any type of risk for which
8909	there are no insurers providing similar coverage in this state.
8910	The officedepartmentmay designate one or more participating
8911	insurers who agree to provide policyholder and claims service,
8912	including the issuance of policies, on behalf of the
8913	participating insurers.
8914	(a) The plan shall provide:
8915	1. A means of establishing eligibility of a risk for
8916	obtaining insurance through the plan, which provides that:
8917	a. A risk shall be eligible for such property insurance or
8918	casualty insurance as is required by Florida law if the
8919	insurance is unavailable in the voluntary market, including the
8920	market assistance program and the surplus lines market.
8921	b. A commercial risk not eligible under sub-subparagraph
8922	a. shall be eligible for property or casualty insurance if:
8923	(I) The insurance is unavailable in the voluntary market,
8924	including the market assistance plan and the surplus lines
8925	market;
8926	(II) Failure to secure the insurance would substantially
8927	impair the ability of the entity to conduct its affairs; and
8928	(III) The risk is not determined by the Risk Underwriting
8929	Committee to be uninsurable.
8930	c. In the event the Federal Government terminates the
8931	Federal Crime Insurance Program established under 44 C.F.R. ss.
8932	80-83, Florida commercial and residential risks previously
8933	insured under the federal program shall be eligible under the
8934	plan.
8935	d.(I) In the event a risk is eligible under this paragraph
8936	and in the event the market assistance plan receives a minimum
8937	of 100 applications for coverage within a 3-month period, or 200
8938	applications for coverage within a 1-year period or less, for a
8939	given class of risk contained in the classification system
8940	defined in the plan of operation of the Joint Underwriting
8941	Association, and unless the market assistance plan provides a
8942	quotation for at least 80 percent of such applicants, such
8943	classification shall immediately be eligible for coverage in the
8944	Joint Underwriting Association.
8945	(II) Any market assistance plan application which is
8946	rejected because an individual risk is so hazardous as to be
8947	practically uninsurable, considering whether the likelihood of a
8948	loss for such a risk is substantially higher than for other
8949	risks of the same class due to individual risk characteristics,
8950	prior loss experience, unwillingness to cooperate with a prior
8951	insurer, physical characteristics and physical location shall
8952	not be included in the minimum percentage calculation provided
8953	above. In the event that there is any legal or administrative
8954	challenge to a determination by the officedepartmentthat the
8955	conditions of this subparagraph have been met for eligibility
8956	for coverage in the Joint Underwriting Association for a given
8957	classification, any eligible risk may obtain coverage during the
8958	pendency of any such challenge.
8959	e. In order to qualify as a quotation for the purpose of
8960	meeting the minimum percentage calculation in this subparagraph,
8961	the quoted premium must meet the following criteria:
8962	(I) In the case of an admitted carrier, the quoted premium
8963	must not exceed the premium available for a given classification
8964	currently in use by the Joint Underwriting Association or the
8965	premium developed by using the rates and rating plans on file
8966	with the officedepartmentby the quoting insurer, whichever is
8967	greater.
8968	(II) In the case of an authorized surplus lines insurer,
8969	the quoted premium must not exceed the premium available for a
8970	given classification currently in use by the Joint Underwriting
8971	Association by more than 25 percent, after consideration of any
8972	individual risk surcharge or credit.
8973	f. Any agent who falsely certifies the unavailability of
8974	coverage as provided by sub-subparagraphs a. and b., is subject
8975	to the penalties provided in s. 626.611.
8976	2. A means for the equitable apportionment of profits or
8977	losses and expenses among participating insurers.
8978	3. Rules for the classification of risks and rates which
8979	reflect the past and prospective loss experience.
8980	4. A rating plan which reasonably reflects the prior
8981	claims experience of the insureds. Such rating plan shall
8982	include at least two levels of rates for risks that have
8983	favorable loss experience and risks that have unfavorable loss
8984	experience, as established by the plan.
8985	5. Reasonable limits to available amounts of insurance.
8986	Such limits may not be less than the amounts of insurance
8987	required of eligible risks by Florida law.
8988	6. Risk management requirements for insurance where such
8989	requirements are reasonable and are expected to reduce losses.
8990	7. Deductibles as may be necessary to meet the needs of
8991	insureds.
8992	8. Policy forms which are consistent with the forms in use
8993	by the majority of the insurers providing coverage in the
8994	voluntary market for the coverage requested by the applicant.
8995	9. A means to remove risks from the plan once such risks
8996	no longer meet the eligibility requirements of this paragraph.
8997	For this purpose, the plan shall include the following
8998	requirements: At each 6-month interval after the activation of
8999	any class of insureds, the board of governors or its designated
9000	committee shall review the number of applications to the market
9001	assistance plan for that class. If, based on these latest
9002	numbers, at least 90 percent of such applications have been
9003	provided a quotation, the Joint Underwriting Association shall
9004	cease underwriting new applications for such class within 30
9005	days, and notification of this decision shall be sent to the
9006	officeInsurance Commissioner, the major agents' associations,
9007	and the board of directors of the market assistance plan. A
9008	quotation for the purpose of this subparagraph shall meet the
9009	same criteria for a quotation as provided in sub-subparagraph
9010	1.esub-subparagraph d. All policies which were previously
9011	written for that class shall continue in force until their
9012	normal expiration date, at which time, subject to the required
9013	timely notification of nonrenewal by the Joint Underwriting
9014	Association, the insured may then elect to reapply to the Joint
9015	Underwriting Association according to the requirements of
9016	eligibility. If, upon reapplication, those previously insured
9017	Joint Underwriting Association risks meet the eligibility
9018	requirements, the Joint Underwriting Association shall provide
9019	the coverage requested.
9020	10. A means for providing credits to insurers against any
9021	deficit assessment levied pursuant to paragraph (c), for risks
9022	voluntarily written through the market assistance plan by such
9023	insurers.
9024	11. That the Joint Underwriting Association shall operate
9025	subject to the supervision and approval of a board of governors
9026	consisting of 13 individuals appointed by the Chief Financial
9027	OfficerInsurance Commissioner, and shall have an executive or
9028	underwriting committee. At least four of the members shall be
9029	representatives of insurance trade associations as follows: one
9030	member from the American Insurance Association, one member from
9031	the Alliance of American Insurers, one member from the National
9032	Association of Independent Insurers, and one member from an
9033	unaffiliated insurer writing coverage on a national basis. Two
9034	representatives shall be from two of the statewide agents'
9035	associations. Each board member shall be appointed to serve for
9036	2-year terms beginning on a date designated by the plan and
9037	shall serve at the pleasure of the Chief Financial Officer
9038	commissioner. Members may be reappointed for subsequent terms.
9039	(b) Rates used by the Joint Underwriting Association shall
9040	be actuarially sound. To the extent applicable, the rate
9041	standards set forth in s. 627.062 shall be considered by the
9042	officedepartmentin establishing rates to be used by the joint
9043	underwriting plan. The initial rate level shall be determined
9044	using the rates, rules, rating plans, and classifications
9045	contained in the most current Insurance Services Office (ISO)
9046	filing with the officedepartmentor the filing of other
9047	licensed rating organizations with an additional increment of 25
9048	percent of premium. For any type of coverage or classification
9049	which lends itself to manual rating for which the Insurance
9050	Services Office or another licensed rating organization does not
9051	file or publish a rate, the Joint Underwriting Association shall
9052	file and use an initial rate based on the average current market
9053	rate. The initial rate level for the rate plan shall also be
9054	subject to an experience and schedule rating plan which may
9055	produce a maximum of 25 percent debits or credits. For any risk
9056	which does not lend itself to manual rating and for which no
9057	rate has been promulgated under the rate plan, the board shall
9058	develop and file with the officecommissioner, subject to its
9059	his or herapproval, appropriate criteria and factors for rating
9060	the individual risk. Such criteria and factors shall include,
9061	but not be limited to, loss rating plans, composite rating
9062	plans, and unique and unusual risk rating plans. The initial
9063	rates required under this paragraph shall be adjusted in
9064	conformity with future filings by the Insurance Services Office
9065	with the officedepartmentand shall remain in effect until such
9066	time as the Joint Underwriting Association has sufficient data
9067	as to independently justify an actuarially sound change in such
9068	rates.
9069	(c)1. In the event an underwriting deficit exists for any
9070	policy year the plan is in effect, any surplus which has accrued
9071	from previous years and is not projected within reasonable
9072	actuarial certainty to be needed for payment for claims in the
9073	year the surplus arose shall be used to offset the deficit to
9074	the extent available.
9075	2. As to any remaining deficit, the board of governors of
9076	the Joint Underwriting Association shall levy and collect an
9077	assessment in an amount sufficient to offset such deficit. Such
9078	assessment shall be levied against the insurers participating in
9079	the plan during the year giving rise to the assessment. Any
9080	assessments against insurers for the lines of property and
9081	casualty insurance issued to commercial risks shall be recovered
9082	from the participating insurers in the proportion that the net
9083	direct premium of each insurer for commercial risks written
9084	during the preceding calendar year bears to the aggregate net
9085	direct premium written for commercial risks by all members of
9086	the plan for the lines of insurance included in the plan. Any
9087	assessments against insurers for the lines of property and
9088	casualty insurance issued to personal risks eligible under sub-
9089	subparagraph (a)1.a. or sub-subparagraph (a)1.c. shall be
9090	recovered from the participating insurers in the proportion that
9091	the net direct premium of each insurer for personal risks
9092	written during the preceding calendar year bears to the
9093	aggregate net direct premium written for personal risks by all
9094	members of the plan for the lines of insurance included in the
9095	plan.
9096	3. The board shall take all reasonable and prudent steps
9097	necessary to collect the amount of assessment due from each
9098	participating insurer and policyholder, including, if prudent,
9099	filing suit to collect such assessment. If the board is unable
9100	to collect an assessment from any insurer, the uncollected
9101	assessments shall be levied as an additional assessment against
9102	the participating insurers and any participating insurer
9103	required to pay an additional assessment as a result of such
9104	failure to pay shall have a cause of action against such
9105	nonpaying insurer.
9106	4. Any funds or entitlements that the state may be
9107	eligible to receive by virtue of the Federal Government's
9108	termination of the Federal Crime Insurance Program referenced in
9109	sub-subparagraph (a)1.c. may be used under the plan to offset
9110	any subsequent underwriting deficits that may occur from risks
9111	previously insured with the Federal Crime Insurance Program.
9112	5. Assessments shall be included as an appropriate factor
9113	in the making of rates as provided in s. 627.3512.
9114	6.a. The Legislature finds that the potential for
9115	unlimited assessments under this paragraph may induce insurers
9116	to attempt to reduce their writings in the voluntary market, and
9117	that such actions would worsen the availability problems that
9118	the association was created to remedy. It is the intent of the
9119	Legislature that insurers remain fully responsible for covering
9120	any deficits of the association; however, it is also the intent
9121	of the Legislature to provide a means by which assessment
9122	liabilities may be amortized over a period of years.
9123	b. The total amount of deficit assessments under this
9124	paragraph with respect to any year may not exceed 10 percent of
9125	the statewide total gross written premium for all insurers for
9126	the coverages referred to in the introductory language of this
9127	subsection for the prior year, except that if the deficit with
9128	respect to any plan year exceeds such amount and bonds are
9129	issued under sub-subparagraph c. to defray the deficit, the
9130	total amount of assessments with respect to such deficit may not
9131	in any year exceed 10 percent of the deficit, or such lesser
9132	percentage as is sufficient to retire the bonds as determined by
9133	the board, and shall continue annually until the bonds are
9134	retired.
9135	c. The governing body of any unit of local government, any
9136	residents or businesses of which are insured by the association,
9137	may issue bonds as defined in s. 125.013 or s. 166.101 from time
9138	to time to fund an assistance program, in conjunction with the
9139	association, for the purpose of defraying deficits of the
9140	association. Revenue bonds may not be issued until validated
9141	pursuant to chapter 75, unless a state of emergency is declared
9142	by executive order or proclamation of the Governor pursuant to
9143	s. 252.36 making such findings as are necessary to determine
9144	that it is in the best interests of, and necessary for, the
9145	protection of the public health, safety, and general welfare of
9146	residents of this state and the protection and preservation of
9147	the economic stability of insurers operating in this state, and
9148	declaring it an essential public purpose to permit certain
9149	municipalities or counties to issue such bonds as will provide
9150	relief to claimants and policyholders of the joint underwriting
9151	association and insurers responsible for apportionment of
9152	association losses. The unit of local government shall enter
9153	into such contracts with the association as are necessary to
9154	carry out this paragraph. Any bonds issued under this sub-
9155	subparagraph shall be payable from and secured by moneys
9156	received by the association from assessments under this
9157	paragraph, and assigned and pledged to or on behalf of the unit
9158	of local government for the benefit of the holders of such
9159	bonds. The funds, credit, property, and taxing power of the
9160	state or of the unit of local government shall not be pledged
9161	for the payment of such bonds. If any of the bonds remain unsold
9162	60 days after issuance, the officedepartmentshall require all
9163	insurers subject to assessment to purchase the bonds, which
9164	shall be treated as admitted assets; each insurer shall be
9165	required to purchase that percentage of the unsold portion of
9166	the bond issue that equals the insurer's relative share of
9167	assessment liability under this subsection. An insurer shall not
9168	be required to purchase the bonds to the extent that the office
9169	departmentdetermines that the purchase would endanger or impair
9170	the solvency of the insurer.
9171	7. The plan shall provide for the deferment, in whole or
9172	in part, of the assessment of an insurer if the office
9173	departmentfinds that payment of the assessment would endanger
9174	or impair the solvency of the insurer. In the event an
9175	assessment against an insurer is deferred in whole or in part,
9176	the amount by which such assessment is deferred may be assessed
9177	against the other member insurers in a manner consistent with
9178	the basis for assessments set forth in subparagraph 2.
9179	(d) Upon adoption of the plan, all insurers authorized in
9180	this state to underwrite property or casualty insurance shall
9181	participate in the plan.
9182	(e) A Risk Underwriting Committee of the Joint
9183	Underwriting Association composed of three members experienced
9184	in evaluating insurance risks is created to review risks
9185	rejected by the voluntary market for which application is made
9186	for insurance through the joint underwriting plan. The committee
9187	shall consist of a representative of the market assistance plan
9188	created under s. 627.3515, a member selected by the insurers
9189	participating in the Joint Underwriting Association, and a
9190	member named by the Chief Financial OfficerInsurance
9191	Commissioner. The Risk Underwriting Committee shall appoint such
9192	advisory committees as are provided for in the plan and are
9193	necessary to conduct its functions. The salaries and expenses of
9194	the members of the Risk Underwriting Committee and its advisory
9195	committees shall be paid by the joint underwriting plan. The
9196	plan approved by the officedepartmentshall establish criteria
9197	and procedures for use by the Risk Underwriting Committee for
9198	determining whether an individual risk is so hazardous as to be
9199	uninsurable. In making this determination and in establishing
9200	the criteria and procedures, the following shall be considered:
9201	1. Whether the likelihood of a loss for the individual
9202	risk is substantially higher than for other risks of the same
9203	class; and
9204	2. Whether the uncertainty associated with the individual
9205	risk is such that an appropriate premium cannot be determined.
9206
9207
9208	The acceptance or rejection of a risk by the underwriting
9209	committee shall be construed as the private placement of
9210	insurance, and the provisions of chapter 120 shall not apply.
9211	(f) There shall be no liability on the part of, and no
9212	cause of action of any nature shall arise against, any member
9213	insurer or its agents or employees, the Florida Property and
9214	Casualty Joint Underwriting Association or its agents or
9215	employees, members of the board of governors, the Chief
9216	Financial Officer, or the officedepartmentor its
9217	representatives for any action taken by them in the performance
9218	of their duties under this subsection. Such immunity does not
9219	apply to actions for breach of any contract or agreement
9220	pertaining to insurance, or any other willful tort.
9221	(6) CITIZENS PROPERTY INSURANCE CORPORATION.--
9222	(a)1. The Legislature finds that actual and threatened
9223	catastrophic losses to property in this state from hurricanes
9224	have caused insurers to be unwilling or unable to provide
9225	property insurance coverage to the extent sought and needed. It
9226	is in the public interest and a public purpose to assist in
9227	assuring that property in the state is insured so as to
9228	facilitate the remediation, reconstruction, and replacement of
9229	damaged or destroyed property in order to reduce or avoid the
9230	negative effects otherwise resulting to the public health,
9231	safety, and welfare; to the economy of the state; and to the
9232	revenues of the state and local governments needed to provide
9233	for the public welfare. It is necessary, therefore, to provide
9234	property insurance to applicants who are in good faith entitled
9235	to procure insurance through the voluntary market but are unable
9236	to do so. The Legislature intends by this subsection that
9237	property insurance be provided and that it continues, as long as
9238	necessary, through an entity organized to achieve efficiencies
9239	and economies, all toward the achievement of the foregoing
9240	public purposes. Because it is essential for the corporation to
9241	have the maximum financial resources to pay claims following a
9242	catastrophic hurricane, it is the intent of the Legislature that
9243	the income of the corporation be exempt from federal income
9244	taxation and that interest on the debt obligations issued by the
9245	corporation be exempt from federal income taxation.
9246	2. The Residential Property and Casualty Joint
9247	Underwriting Association originally created by this statute
9248	shall be known, as of July 1, 2002, as the Citizens Property
9249	Insurance Corporation. The corporation shall provide insurance
9250	for residential and commercial property, for applicants who are
9251	in good faith entitled, but are unable, to procure insurance
9252	through the voluntary market. The corporation shall operate
9253	pursuant to a plan of operation approved by order of the office
9254	department. The plan is subject to continuous review by the
9255	officedepartment. The officedepartmentmay, by order, withdraw
9256	approval of all or part of a plan if the officedepartment
9257	determines that conditions have changed since approval was
9258	granted and that the purposes of the plan require changes in the
9259	plan. For the purposes of this subsection, residential coverage
9260	includes both personal lines residential coverage, which
9261	consists of the type of coverage provided by homeowner's, mobile
9262	home owner's, dwelling, tenant's, condominium unit owner's, and
9263	similar policies, and commercial lines residential coverage,
9264	which consists of the type of coverage provided by condominium
9265	association, apartment building, and similar policies.
9266	(b)1. All insurers authorized to write one or more subject
9267	lines of business in this state are subject to assessment by the
9268	corporation and, for the purposes of this subsection, are
9269	referred to collectively as "assessable insurers." Insurers
9270	writing one or more subject lines of business in this state
9271	pursuant to part VIII of chapter 626 are not assessable
9272	insurers, but insureds who procure one or more subject lines of
9273	business in this state pursuant to part VIII of chapter 626 are
9274	subject to assessment by the corporation and are referred to
9275	collectively as "assessable insureds." An authorized insurer's
9276	assessment liability shall begin on the first day of the
9277	calendar year following the year in which the insurer was issued
9278	a certificate of authority to transact insurance for subject
9279	lines of business in this state and shall terminate 1 year after
9280	the end of the first calendar year during which the insurer no
9281	longer holds a certificate of authority to transact insurance
9282	for subject lines of business in this state.
9283	2.a. All revenues, assets, liabilities, losses, and
9284	expenses of the corporation shall be divided into three separate
9285	accounts as follows:
9286	(I) A personal lines account for personal residential
9287	policies issued by the corporation or issued by the Residential
9288	Property and Casualty Joint Underwriting Association and renewed
9289	by the corporation that provide comprehensive, multiperil
9290	coverage on risks that are not located in areas eligible for
9291	coverage in the Florida Windstorm Underwriting Association as
9292	those areas were defined on January 1, 2002 and for such
9293	policies that do not provide coverage for the peril of wind on
9294	risks that are located in such areas;
9295	(II) A commercial lines account for commercial residential
9296	policies issued by the corporation or issued by the Residential
9297	Property and Casualty Joint Underwriting Association and renewed
9298	by the corporation that provide coverage for basic property
9299	perils on risks that are not located in areas eligible for
9300	coverage in the Florida Windstorm Underwriting Association as
9301	those areas were defined on January 1, 2002, and for such
9302	policies that do not provide coverage for the peril of wind on
9303	risks that are located in such areas; and
9304	(III) A high-risk account for personal residential
9305	policies and commercial residential and commercial
9306	nonresidential property policies issued by the corporation or
9307	transferred to the corporation that provide coverage for the
9308	peril of wind on risks that are located in areas eligible for
9309	coverage in the Florida Windstorm Underwriting Association as
9310	those areas were defined on January 1, 2002. The high-risk
9311	account must also include quota share primary insurance under
9312	subparagraph (c)2. The area eligible for coverage under the
9313	high-risk account also includes the area within Port Canaveral,
9314	which is bordered on the south by the City of Cape Canaveral,
9315	bordered on the west by the Banana River, and bordered on the
9316	north by Federal Government property. The officedepartmentmay
9317	remove territory from the area eligible for wind-only and quota
9318	share coverage if, after a public hearing, the officedepartment
9319	finds that authorized insurers in the voluntary market are
9320	willing and able to write sufficient amounts of personal and
9321	commercial residential coverage for all perils in the territory,
9322	including coverage for the peril of wind, such that risks
9323	covered by wind-only policies in the removed territory could be
9324	issued a policy by the corporation in either the personal lines
9325	or commercial lines account without a significant increase in
9326	the corporation's probable maximum loss in such account. Removal
9327	of territory from the area eligible for wind-only or quota share
9328	coverage does not alter the assignment of wind coverage written
9329	in such areas to the high-risk account.
9330	b. The three separate accounts must be maintained as long
9331	as financing obligations entered into by the Florida Windstorm
9332	Underwriting Association or Residential Property and Casualty
9333	Joint Underwriting Association are outstanding, in accordance
9334	with the terms of the corresponding financing documents. When
9335	the financing obligations are no longer outstanding, in
9336	accordance with the terms of the corresponding financing
9337	documents, the corporation may use a single account for all
9338	revenues, assets, liabilities, losses, and expenses of the
9339	corporation.
9340	c. Creditors of the Residential Property and Casualty
9341	Joint Underwriting Association shall have a claim against, and
9342	recourse to, the accounts referred to in sub-sub-subparagraphs
9343	a.(I) and (II) and shall have no claim against, or recourse to,
9344	the account referred to in sub-sub-subparagraph a.(III).
9345	Creditors of the Florida Windstorm Underwriting Association
9346	shall have a claim against, and recourse to, the account
9347	referred to in sub-sub-subparagraph a.(III) and shall have no
9348	claim against, or recourse to, the accounts referred to in sub-
9349	sub-subparagraphs a.(I) and (II).
9350	d. Revenues, assets, liabilities, losses, and expenses not
9351	attributable to particular accounts shall be prorated among the
9352	accounts.
9353	e. The Legislature finds that the revenues of the
9354	corporation are revenues that are necessary to meet the
9355	requirements set forth in documents authorizing the issuance of
9356	bonds under this subsection.
9357	f. No part of the income of the corporation may inure to
9358	the benefit of any private person.
9359	3. With respect to a deficit in an account:
9360	a. When the deficit incurred in a particular calendar year
9361	is not greater than 10 percent of the aggregate statewide direct
9362	written premium for the subject lines of business for the prior
9363	calendar year, the entire deficit shall be recovered through
9364	regular assessments of assessable insurers under paragraph (g)
9365	and assessable insureds.
9366	b. When the deficit incurred in a particular calendar year
9367	exceeds 10 percent of the aggregate statewide direct written
9368	premium for the subject lines of business for the prior calendar
9369	year, the corporation shall levy regular assessments on
9370	assessable insurers under paragraph (g) and on assessable
9371	insureds in an amount equal to the greater of 10 percent of the
9372	deficit or 10 percent of the aggregate statewide direct written
9373	premium for the subject lines of business for the prior calendar
9374	year. Any remaining deficit shall be recovered through emergency
9375	assessments under sub-subparagraph d.
9376	c. Each assessable insurer's share of the amount being
9377	assessed under sub-subparagraph a. or sub-subparagraph b. shall
9378	be in the proportion that the assessable insurer's direct
9379	written premium for the subject lines of business for the year
9380	preceding the assessment bears to the aggregate statewide direct
9381	written premium for the subject lines of business for that year.
9382	The assessment percentage applicable to each assessable insured
9383	is the ratio of the amount being assessed under sub-subparagraph
9384	a. or sub-subparagraph b. to the aggregate statewide direct
9385	written premium for the subject lines of business for the prior
9386	year. Assessments levied by the corporation on assessable
9387	insurers under sub-subparagraphs a. and b. shall be paid as
9388	required by the corporation's plan of operation and paragraph
9389	(g). Assessments levied by the corporation on assessable
9390	insureds under sub-subparagraphs a. and b. shall be collected by
9391	the surplus lines agent at the time the surplus lines agent
9392	collects the surplus lines tax required by s. 626.932 and shall
9393	be paid to the Florida Surplus Lines Service Office at the time
9394	the surplus lines agent pays the surplus lines tax to the
9395	Florida Surplus Lines Service Office. Upon receipt of regular
9396	assessments from surplus lines agents, the Florida Surplus Lines
9397	Service Office shall transfer the assessments directly to the
9398	corporation as determined by the corporation.
9399	d. Upon a determination by the board of governors that a
9400	deficit in an account exceeds the amount that will be recovered
9401	through regular assessments under sub-subparagraph a. or sub-
9402	subparagraph b., the board shall levy, after verification by the
9403	officedepartment, emergency assessments, for as many years as
9404	necessary to cover the deficits, to be collected by assessable
9405	insurers and the corporation and collected from assessable
9406	insureds upon issuance or renewal of policies for subject lines
9407	of business, excluding National Flood Insurance policies. The
9408	amount of the emergency assessment collected in a particular
9409	year shall be a uniform percentage of that year's direct written
9410	premium for subject lines of business and all accounts of the
9411	corporation, excluding National Flood Insurance Program policy
9412	premiums, as annually determined by the board and verified by
9413	the officedepartment. The officedepartmentshall verify the
9414	arithmetic calculations involved in the board's determination
9415	within 30 days after receipt of the information on which the
9416	determination was based. Notwithstanding any other provision of
9417	law, the corporation and each assessable insurer that writes
9418	subject lines of business shall collect emergency assessments
9419	from its policyholders without such obligation being affected by
9420	any credit, limitation, exemption, or deferment. Emergency
9421	assessments levied by the corporation on assessable insureds
9422	shall be collected by the surplus lines agent at the time the
9423	surplus lines agent collects the surplus lines tax required by
9424	s. 626.932 and shall be paid to the Florida Surplus Lines
9425	Service Office at the time the surplus lines agent pays the
9426	surplus lines tax to the Florida Surplus Lines Service Office.
9427	The emergency assessments so collected shall be transferred
9428	directly to the corporation on a periodic basis as determined by
9429	the corporation and shall be held by the corporation solely in
9430	the applicable account. The aggregate amount of emergency
9431	assessments levied for an account under this sub-subparagraph in
9432	any calendar year may not exceed the greater of 10 percent of
9433	the amount needed to cover the original deficit, plus interest,
9434	fees, commissions, required reserves, and other costs associated
9435	with financing of the original deficit, or 10 percent of the
9436	aggregate statewide direct written premium for subject lines of
9437	business and for all accounts of the corporation for the prior
9438	year, plus interest, fees, commissions, required reserves, and
9439	other costs associated with financing the original deficit.
9440	e. The corporation may pledge the proceeds of assessments,
9441	projected recoveries from the Florida Hurricane Catastrophe
9442	Fund, other insurance and reinsurance recoverables, market
9443	equalization surcharges and other surcharges, and other funds
9444	available to the corporation as the source of revenue for and to
9445	secure bonds issued under paragraph (g), bonds or other
9446	indebtedness issued under subparagraph (c)3., or lines of credit
9447	or other financing mechanisms issued or created under this
9448	subsection, or to retire any other debt incurred as a result of
9449	deficits or events giving rise to deficits, or in any other way
9450	that the board determines will efficiently recover such
9451	deficits. The purpose of the lines of credit or other financing
9452	mechanisms is to provide additional resources to assist the
9453	corporation in covering claims and expenses attributable to a
9454	catastrophe. As used in this subsection, the term "assessments"
9455	includes regular assessments under sub-subparagraph a., sub-
9456	subparagraph b., or subparagraph (g)1. and emergency assessments
9457	under sub-subparagraph d. Emergency assessments collected under
9458	sub-subparagraph d. are not part of an insurer's rates, are not
9459	premium, and are not subject to premium tax, fees, or
9460	commissions; however, failure to pay the emergency assessment
9461	shall be treated as failure to pay premium. The emergency
9462	assessments under sub-subparagraph d. shall continue as long as
9463	any bonds issued or other indebtedness incurred with respect to
9464	a deficit for which the assessment was imposed remain
9465	outstanding, unless adequate provision has been made for the
9466	payment of such bonds or other indebtedness pursuant to the
9467	documents governing such bonds or other indebtedness.
9468	f. As used in this subsection, the term "subject lines of
9469	business" means insurance written by assessable insurers or
9470	procured by assessable insureds on real or personal property, as
9471	defined in s. 624.604, including insurance for fire, industrial
9472	fire, allied lines, farmowners multiperil, homeowners
9473	multiperil, commercial multiperil, and mobile homes, and
9474	including liability coverage on all such insurance, but
9475	excluding inland marine as defined in s. 624.607(3) and
9476	excluding vehicle insurance as defined in s. 624.605(1) other
9477	than insurance on mobile homes used as permanent dwellings.
9478	g. The Florida Surplus Lines Service Office shall
9479	determine annually the aggregate statewide written premium in
9480	subject lines of business procured by assessable insureds and
9481	shall report that information to the corporation in a form and
9482	at a time the corporation specifies to ensure that the
9483	corporation can meet the requirements of this subsection and the
9484	corporation's financing obligations.
9485	h. The Florida Surplus Lines Service Office shall verify
9486	the proper application by surplus lines agents of assessment
9487	percentages for regular assessments and emergency assessments
9488	levied under this subparagraph on assessable insureds and shall
9489	assist the corporation in ensuring the accurate, timely
9490	collection and payment of assessments by surplus lines agents as
9491	required by the corporation.
9492	(c) The plan of operation of the corporation:
9493	1. Must provide for adoption of residential property and
9494	casualty insurance policy forms and commercial residential and
9495	nonresidential property insurance forms, which forms must be
9496	approved by the officedepartmentprior to use. The corporation
9497	shall adopt the following policy forms:
9498	a. Standard personal lines policy forms that are
9499	comprehensive multiperil policies providing full coverage of a
9500	residential property equivalent to the coverage provided in the
9501	private insurance market under an HO-3, HO-4, or HO-6 policy.
9502	b. Basic personal lines policy forms that are policies
9503	similar to an HO-8 policy or a dwelling fire policy that provide
9504	coverage meeting the requirements of the secondary mortgage
9505	market, but which coverage is more limited than the coverage
9506	under a standard policy.
9507	c. Commercial lines residential policy forms that are
9508	generally similar to the basic perils of full coverage
9509	obtainable for commercial residential structures in the admitted
9510	voluntary market.
9511	d. Personal lines and commercial lines residential
9512	property insurance forms that cover the peril of wind only. The
9513	forms are applicable only to residential properties located in
9514	areas eligible for coverage under the high-risk account referred
9515	to in sub-subparagraph (b)2.a.
9516	e. Commercial lines nonresidential property insurance
9517	forms that cover the peril of wind only. The forms are
9518	applicable only to nonresidential properties located in areas
9519	eligible for coverage under the high-risk account referred to in
9520	sub-subparagraph (b)2.a.
9521	2.a. Must provide that the corporation adopt a program in
9522	which the corporation and authorized insurers enter into quota
9523	share primary insurance agreements for hurricane coverage, as
9524	defined in s. 627.4025(2)(a), for eligible risks, and adopt
9525	property insurance forms for eligible risks which cover the
9526	peril of wind only. As used in this subsection, the term:
9527	(I) "Quota share primary insurance" means an arrangement
9528	in which the primary hurricane coverage of an eligible risk is
9529	provided in specified percentages by the corporation and an
9530	authorized insurer. The corporation and authorized insurer are
9531	each solely responsible for a specified percentage of hurricane
9532	coverage of an eligible risk as set forth in a quota share
9533	primary insurance agreement between the corporation and an
9534	authorized insurer and the insurance contract. The
9535	responsibility of the corporation or authorized insurer to pay
9536	its specified percentage of hurricane losses of an eligible
9537	risk, as set forth in the quota share primary insurance
9538	agreement, may not be altered by the inability of the other
9539	party to the agreement to pay its specified percentage of
9540	hurricane losses. Eligible risks that are provided hurricane
9541	coverage through a quota share primary insurance arrangement
9542	must be provided policy forms that set forth the obligations of
9543	the corporation and authorized insurer under the arrangement,
9544	clearly specify the percentages of quota share primary insurance
9545	provided by the corporation and authorized insurer, and
9546	conspicuously and clearly state that neither the authorized
9547	insurer nor the corporation may be held responsible beyond its
9548	specified percentage of coverage of hurricane losses.
9549	(II) "Eligible risks" means personal lines residential and
9550	commercial lines residential risks that meet the underwriting
9551	criteria of the corporation and are located in areas that were
9552	eligible for coverage by the Florida Windstorm Underwriting
9553	Association on January 1, 2002.
9554	b. The corporation may enter into quota share primary
9555	insurance agreements with authorized insurers at corporation
9556	coverage levels of 90 percent and 50 percent.
9557	c. If the corporation determines that additional coverage
9558	levels are necessary to maximize participation in quota share
9559	primary insurance agreements by authorized insurers, the
9560	corporation may establish additional coverage levels. However,
9561	the corporation's quota share primary insurance coverage level
9562	may not exceed 90 percent.
9563	d. Any quota share primary insurance agreement entered
9564	into between an authorized insurer and the corporation must
9565	provide for a uniform specified percentage of coverage of
9566	hurricane losses, by county or territory as set forth by the
9567	corporation board, for all eligible risks of the authorized
9568	insurer covered under the quota share primary insurance
9569	agreement.
9570	e. Any quota share primary insurance agreement entered
9571	into between an authorized insurer and the corporation is
9572	subject to review and approval by the officedepartment.
9573	However, such agreement shall be authorized only as to insurance
9574	contracts entered into between an authorized insurer and an
9575	insured who is already insured by the corporation for wind
9576	coverage.
9577	f. For all eligible risks covered under quota share
9578	primary insurance agreements, the exposure and coverage levels
9579	for both the corporation and authorized insurers shall be
9580	reported by the corporation to the Florida Hurricane Catastrophe
9581	Fund. For all policies of eligible risks covered under quota
9582	share primary insurance agreements, the corporation and the
9583	authorized insurer shall maintain complete and accurate records
9584	for the purpose of exposure and loss reimbursement audits as
9585	required by Florida Hurricane Catastrophe Fund rules. The
9586	corporation and the authorized insurer shall each maintain
9587	duplicate copies of policy declaration pages and supporting
9588	claims documents.
9589	g. The corporation board shall establish in its plan of
9590	operation standards for quota share agreements which ensure that
9591	there is no discriminatory application among insurers as to the
9592	terms of quota share agreements, pricing of quota share
9593	agreements, incentive provisions if any, and consideration paid
9594	for servicing policies or adjusting claims.
9595	h. The quota share primary insurance agreement between the
9596	corporation and an authorized insurer must set forth the
9597	specific terms under which coverage is provided, including, but
9598	not limited to, the sale and servicing of policies issued under
9599	the agreement by the insurance agent of the authorized insurer
9600	producing the business, the reporting of information concerning
9601	eligible risks, the payment of premium to the corporation, and
9602	arrangements for the adjustment and payment of hurricane claims
9603	incurred on eligible risks by the claims adjuster and personnel
9604	of the authorized insurer. Entering into a quota sharing
9605	insurance agreement between the corporation and an authorized
9606	insurer shall be voluntary and at the discretion of the
9607	authorized insurer.
9608	3. May provide that the corporation may employ or
9609	otherwise contract with individuals or other entities to provide
9610	administrative or professional services that may be appropriate
9611	to effectuate the plan. The corporation shall have the power to
9612	borrow funds, by issuing bonds or by incurring other
9613	indebtedness, and shall have other powers reasonably necessary
9614	to effectuate the requirements of this subsection. The
9615	corporation may, but is not required to, seek judicial
9616	validation of its bonds or other indebtedness under chapter 75.
9617	The corporation may issue bonds or incur other indebtedness, or
9618	have bonds issued on its behalf by a unit of local government
9619	pursuant to subparagraph(g)2., in the absence of a hurricane or
9620	other weather-related event, upon a determination by the
9621	corporation, subject to approval by the officedepartment, that
9622	such action would enable it to efficiently meet the financial
9623	obligations of the corporation and that such financings are
9624	reasonably necessary to effectuate the requirements of this
9625	subsection. The corporation is authorized to take all actions
9626	needed to facilitate tax-free status for any such bonds or
9627	indebtedness, including formation of trusts or other affiliated
9628	entities. The corporation shall have the authority to pledge
9629	assessments, projected recoveries from the Florida Hurricane
9630	Catastrophe Fund, other reinsurance recoverables, market
9631	equalization and other surcharges, and other funds available to
9632	the corporation as security for bonds or other indebtedness. In
9633	recognition of s. 10, Art. I of the State Constitution,
9634	prohibiting the impairment of obligations of contracts, it is
9635	the intent of the Legislature that no action be taken whose
9636	purpose is to impair any bond indenture or financing agreement
9637	or any revenue source committed by contract to such bond or
9638	other indebtedness.
9639	4.a.Must require that the corporation operate subject to
9640	the supervision and approval of a board of governors consisting
9641	of 7 individuals who are residents of this state, from different
9642	geographical areas of this state, appointed by the Chief
9643	Financial OfficerTreasurer. The Chief Financial Officer
9644	Treasurershall designate one of the appointees as chair. All
9645	board members serve at the pleasure of the Chief Financial
9646	OfficerTreasurer. All board members, including the chair, must
9647	be appointed to serve for 3-year terms beginning annually on a
9648	date designated by the plan. Any board vacancy shall be filled
9649	for the unexpired term by the Chief Financial OfficerTreasurer.
9650	The Chief Financial OfficerTreasurershall appoint a technical
9651	advisory group to provide information and advice to the board of
9652	governors in connection with the board's duties under this
9653	subsection. The executive director and senior managers of the
9654	corporation shall be engaged by the Chief Financial Officer
9655	Treasurer and serve at the pleasure of the Chief Financial
9656	OfficerTreasurer. The executive director is responsible for
9657	employing other staff as the corporation may require, subject to
9658	review and concurrence by the Office of the Chief Financial
9659	OfficerTreasurer.
9660	b. To ensure the effective and efficient implementation of
9661	this subsection, the Treasurer shall appoint the board of
9662	governors by July 1, 2002. The board of governors shall work in
9663	conjunction with the Residential Property Insurance Market
9664	Coordinating Council to address appropriate organizational,
9665	operational, and financial matters relating to the corporation.
9666	In addition, after consultation with the Residential Property
9667	Insurance Market Coordinating Council, the bond trustees and
9668	rating agencies, the Treasurer may postpone for a period not to
9669	exceed 180 days after the effective date, the implementation of
9670	the corporation or the implementation of one or more of the
9671	provisions relating to transfer of Florida Windstorm
9672	Underwriting Association policies, obligations, rights, assets,
9673	and liabilities into the high-risk accounts and such other
9674	provisions that may be affected thereby if the Treasurer
9675	determines that postponement is necessary:
9676	(I) Due to emergency conditions;
9677	(II) To ensure the effective and efficient implementation
9678	of the corporation's operations; or
9679	(III) To maintain existing financing arrangements without
9680	a material adverse effect on the creditors of the Residential
9681	Property and Casualty Joint Underwriting Association or the
9682	Florida Windstorm Underwriting Association.
9683	5. Must provide a procedure for determining the
9684	eligibility of a risk for coverage, as follows:
9685	a. Subject to the provisions of s. 627.3517, with respect
9686	to personal lines residential risks, if the risk is offered
9687	coverage from an authorized insurer at the insurer's approved
9688	rate under either a standard policy including wind coverage or,
9689	if consistent with the insurer's underwriting rules as filed
9690	with the officedepartment, a basic policy including wind
9691	coverage, the risk is not eligible for any policy issued by the
9692	corporationassociation. If the risk is not able to obtain any
9693	such offer, the risk is eligible for either a standard policy
9694	including wind coverage or a basic policy including wind
9695	coverage issued by the corporationassociation; however, if the
9696	risk could not be insured under a standard policy including wind
9697	coverage regardless of market conditions, the risk shall be
9698	eligible for a basic policy including wind coverage unless
9699	rejected under subparagraph 8. The corporationassociationshall
9700	determine the type of policy to be provided on the basis of
9701	objective standards specified in the underwriting manual and
9702	based on generally accepted underwriting practices.
9703	(I) If the risk accepts an offer of coverage through the
9704	market assistance plan or an offer of coverage through a
9705	mechanism established by the corporationassociationbefore a
9706	policy is issued to the risk by the corporationassociationor
9707	during the first 30 days of coverage by the corporation
9708	association, and the producing agent who submitted the
9709	application to the plan or to the corporationassociationis not
9710	currently appointed by the insurer, the insurer shall:
9711	(A) Pay to the producing agent of record of the policy,
9712	for the first year, an amount that is the greater of the
9713	insurer's usual and customary commission for the type of policy
9714	written or a fee equal to the usual and customary commission of
9715	the corporationassociation; or
9716	(B) Offer to allow the producing agent of record of the
9717	policy to continue servicing the policy for a period of not less
9718	than 1 year and offer to pay the agent the greater of the
9719	insurer's or the corporation'sassociation'susual and customary
9720	commission for the type of policy written.
9721
9722
9723	If the producing agent is unwilling or unable to accept
9724	appointment, the new insurer shall pay the agent in accordance
9725	with sub-sub-sub-subparagraph (A).
9726	(II) When the corporationassociationenters into a
9727	contractual agreement for a take-out plan, the producing agent
9728	of record of the corporationassociationpolicy is entitled to
9729	retain any unearned commission on the policy, and the insurer
9730	shall:
9731	(A) Pay to the producing agent of record of the
9732	corporationassociationpolicy, for the first year, an amount
9733	that is the greater of the insurer's usual and customary
9734	commission for the type of policy written or a fee equal to the
9735	usual and customary commission of the corporationassociation;
9736	or
9737	(B) Offer to allow the producing agent of record of the
9738	corporationassociationpolicy to continue servicing the policy
9739	for a period of not less than 1 year and offer to pay the agent
9740	the greater of the insurer's or the corporation'sassociation's
9741	usual and customary commission for the type of policy written.
9742
9743
9744	If the producing agent is unwilling or unable to accept
9745	appointment, the new insurer shall pay the agent in accordance
9746	with sub-sub-sub-subparagraph (A).
9747	b. With respect to commercial lines residential risks, if
9748	the risk is offered coverage under a policy including wind
9749	coverage from an authorized insurer at its approved rate, the
9750	risk is not eligible for any policy issued by the corporation
9751	association. If the risk is not able to obtain any such offer,
9752	the risk is eligible for a policy including wind coverage issued
9753	by the corporationassociation.
9754	(I) If the risk accepts an offer of coverage through the
9755	market assistance plan or an offer of coverage through a
9756	mechanism established by the corporationassociationbefore a
9757	policy is issued to the risk by the corporationassociationor
9758	during the first 30 days of coverage by the corporation
9759	association, and the producing agent who submitted the
9760	application to the plan or the corporationassociationis not
9761	currently appointed by the insurer, the insurer shall:
9762	(A) Pay to the producing agent of record of the policy,
9763	for the first year, an amount that is the greater of the
9764	insurer's usual and customary commission for the type of policy
9765	written or a fee equal to the usual and customary commission of
9766	the corporationassociation; or
9767	(B) Offer to allow the producing agent of record of the
9768	policy to continue servicing the policy for a period of not less
9769	than 1 year and offer to pay the agent the greater of the
9770	insurer's or the corporation'sassociation'susual and customary
9771	commission for the type of policy written.
9772
9773
9774	If the producing agent is unwilling or unable to accept
9775	appointment, the new insurer shall pay the agent in accordance
9776	with sub-sub-sub-subparagraph (A).
9777	(II) When the corporationassociationenters into a
9778	contractual agreement for a take-out plan, the producing agent
9779	of record of the corporationassociationpolicy is entitled to
9780	retain any unearned commission on the policy, and the insurer
9781	shall:
9782	(A) Pay to the producing agent of record of the
9783	corporationassociationpolicy, for the first year, an amount
9784	that is the greater of the insurer's usual and customary
9785	commission for the type of policy written or a fee equal to the
9786	usual and customary commission of the corporationassociation;
9787	or
9788	(B) Offer to allow the producing agent of record of the
9789	corporationassociationpolicy to continue servicing the policy
9790	for a period of not less than 1 year and offer to pay the agent
9791	the greater of the insurer's or the corporation'sassociation's
9792	usual and customary commission for the type of policy written.
9793
9794
9795	If the producing agent is unwilling or unable to accept
9796	appointment, the new insurer shall pay the agent in accordance
9797	with sub-sub-sub-subparagraph (A).
9798	c. This subparagraph does not require the association to
9799	provide wind coverage or hurricane coverage in any area in which
9800	such coverage is available through the Florida Windstorm
9801	Underwriting Association.
9802	6. Must include rules for classifications of risks and
9803	rates therefor.
9804	7. Must provide that if premium and investment income for
9805	an account attributable to a particular calendar year are in
9806	excess of projected losses and expenses for the account
9807	attributable to that year, such excess shall be held in surplus
9808	in the account. Such surplus shall be available to defray
9809	deficits in that account as to future years and shall be used
9810	for that purpose prior to assessing assessable insurers and
9811	assessable insureds as to any calendar year.
9812	8. Must provide objective criteria and procedures to be
9813	uniformly applied for all applicants in determining whether an
9814	individual risk is so hazardous as to be uninsurable. In making
9815	this determination and in establishing the criteria and
9816	procedures, the following shall be considered:
9817	a. Whether the likelihood of a loss for the individual
9818	risk is substantially higher than for other risks of the same
9819	class; and
9820	b. Whether the uncertainty associated with the individual
9821	risk is such that an appropriate premium cannot be determined.
9822
9823
9824	The acceptance or rejection of a risk by the corporation shall
9825	be construed as the private placement of insurance, and the
9826	provisions of chapter 120 shall not apply.
9827	9. Must provide that the corporation shall make its best
9828	efforts to procure catastrophe reinsurance at reasonable rates,
9829	as determined by the board of governors.
9830	10. Must provide that in the event of regular deficit
9831	assessments under sub-subparagraph (b)3.a. or sub-subparagraph
9832	(b)3.b., in the personal lines account, the commercial lines
9833	residential account, or the high-risk account, the corporation
9834	shall levy upon corporation policyholders in its next rate
9835	filing, or by a separate rate filing solely for this purpose, a
9836	market equalization surcharge arising from a regular assessment
9837	in such account in a percentage equal to the total amount of
9838	such regular assessments divided by the aggregate statewide
9839	direct written premium for subject lines of business for the
9840	prior calendar year. Market equalization surcharges under this
9841	subparagraph are not considered premium and are not subject to
9842	commissions, fees, or premium taxes; however, failure to pay a
9843	market equalization surcharge shall be treated as failure to pay
9844	premium.
9845	11. The policies issued by the corporation must provide
9846	that, if the corporation or the market assistance plan obtains
9847	an offer from an authorized insurer to cover the risk at its
9848	approved rates, the risk is no longer eligible for renewal
9849	through the corporation.
9850	12. Corporation policies and applications must include a
9851	notice that the corporation policy could, under this section, be
9852	replaced with a policy issued by an authorized insurer that does
9853	not provide coverage identical to the coverage provided by the
9854	corporation. The notice shall also specify that acceptance of
9855	corporation coverage creates a conclusive presumption that the
9856	applicant or policyholder is aware of this potential.
9857	13. May establish, subject to approval by the office
9858	department, different eligibility requirements and operational
9859	procedures for any line or type of coverage for any specified
9860	county or area if the board determines that such changes to the
9861	eligibility requirements and operational procedures are
9862	justified due to the voluntary market being sufficiently stable
9863	and competitive in such area or for such line or type of
9864	coverage and that consumers who, in good faith, are unable to
9865	obtain insurance through the voluntary market through ordinary
9866	methods would continue to have access to coverage from the
9867	corporation. When coverage is sought in connection with a real
9868	property transfer, such requirements and procedures shall not
9869	provide for an effective date of coverage later than the date of
9870	the closing of the transfer as established by the transferor,
9871	the transferee, and, if applicable, the lender.
9872	14. Must provide that, with respect to the high-risk
9873	account, any assessable insurer with a surplus as to
9874	policyholders of $25 million or less writing 25 percent or more
9875	of its total countrywide property insurance premiums in this
9876	state may petition the officedepartment, within the first 90
9877	days of each calendar year, to qualify as a limited
9878	apportionment company. In no event shall a limited apportionment
9879	company be required to participate in the portion of any
9880	assessment, within the high-risk account, pursuant to sub-
9881	subparagraph (b)3.a. or sub-subparagraph (b)3.b. in the
9882	aggregate which exceeds $50 million after payment of available
9883	high-risk account funds in any calendar year. However, a limited
9884	apportionment company shall collect from its policyholders any
9885	emergency assessment imposed under sub-subparagraph (b)3.d. The
9886	plan shall provide that, if the officedepartmentdetermines
9887	that any regular assessment will result in an impairment of the
9888	surplus of a limited apportionment company, the office
9889	departmentmay direct that all or part of such assessment be
9890	deferred as provided in subparagraph (g)4. However, there shall
9891	be no limitation or deferment of an emergency assessment to be
9892	collected from policyholders under sub-subparagraph(b)3.d.
9893	15. Must provide that the corporation appoint as its
9894	licensed agents only those agents who also hold an appointment
9895	as defined in s. 626.104 with an insurer who at the time of the
9896	agent's initial appointment by the corporation is authorized to
9897	write and is actually writing personal lines residential
9898	property coverage, commercial residential property coverage, or
9899	commercial nonresidential property coverage within the state.
9900	(d)1. It is the intent of the Legislature that the rates
9901	for coverage provided by the corporation be actuarially sound
9902	and not competitive with approved rates charged in the admitted
9903	voluntary market, so that the corporation functions as a
9904	residual market mechanism to provide insurance only when the
9905	insurance cannot be procured in the voluntary market. Rates
9906	shall include an appropriate catastrophe loading factor that
9907	reflects the actual catastrophic exposure of the corporation.
9908	2. For each county, the average rates of the corporation
9909	for each line of business for personal lines residential
9910	policies excluding rates for wind-only policies shall be no
9911	lower than the average rates charged by the insurer that had the
9912	highest average rate in that county among the 20 insurers with
9913	the greatest total direct written premium in the state for that
9914	line of business in the preceding year, except that with respect
9915	to mobile home coverages, the average rates of the corporation
9916	shall be no lower than the average rates charged by the insurer
9917	that had the highest average rate in that county among the 5
9918	insurers with the greatest total written premium for mobile home
9919	owner's policies in the state in the preceding year.
9920	3. Rates for personal lines residential wind-only policies
9921	must be actuarially sound and not competitive with approved
9922	rates charged by authorized insurers. However, for personal
9923	lines residential wind-only policies issued or renewed between
9924	July 1, 2002, and June 30, 2003, the maximum premium increase
9925	must be no greater than 10 percent of the Florida Windstorm
9926	Underwriting Association premium for that policy in effect on
9927	June 30, 2002, as adjusted for coverage changes and seasonal
9928	occupancy surcharges. The personal lines residential wind-only
9929	rates for the corporation effective July 1, 2003, must be based
9930	on a rate filing by the corporation which establishes rates
9931	which are actuarially sound and not competitive with approved
9932	rates charged by authorized insurers. Corporation rate manuals
9933	shall include a rate surcharge for seasonal occupancy. To
9934	ensure that personal lines residential wind-only rates effective
9935	on or after July 1, 2003, are not competitive with approved
9936	rates charged by authorized insurers, the officedepartment, by
9937	March 1 of each year, shall provide the corporation, for each
9938	county in which there are geographical areas in which personal
9939	lines residential wind-only policies may be issued, the average
9940	rates charged by the insurer that had the highest average rate
9941	in that county for wind coverage in that insurer's rating
9942	territories which most closely approximate the geographical area
9943	in that county in which personal lines residential wind-only
9944	policies may be written by the corporation. The average rates
9945	provided must be from an insurer among the 20 insurers with the
9946	greatest total direct written premium in the state for personal
9947	lines residential property insurance for the preceding year.
9948	With respect to mobile homes, the five insurers with the
9949	greatest total written premium for that line of business in the
9950	preceding year shall be used. The corporation shall certify to
9951	the officedepartmentthat its average personal lines
9952	residential wind-only rates are no lower in each county than the
9953	average rates provided by the officedepartment. The commission
9954	maydepartment is authorized toadopt rules to establish
9955	reporting requirements to obtain the necessary wind-only rate
9956	information from insurers to implement this provision.
9957	4. Rates for commercial lines coverage shall not be
9958	subject to the requirements of subparagraph 2., but shall be
9959	subject to all other requirements of this paragraph and s.
9960	627.062.
9961	5. Nothing in this paragraph shall require or allow the
9962	corporation to adopt a rate that is inadequate under s. 627.062.
9963	6. The corporation shall make a rate filing at least once
9964	a year, but no more often than quarterly.
9965	7. In addition to the rates otherwise determined pursuant
9966	to this paragraph, the corporation shall impose and collect an
9967	amount equal to the premium tax provided for in s. 624.509 to
9968	augment the financial resources of the corporation.
9969	(e) If coverage in an account is deactivated pursuant to
9970	paragraph (f), coverage through the corporation shall be
9971	reactivated by order of the officedepartmentonly under one of
9972	the following circumstances:
9973	1. If the market assistance plan receives a minimum of 100
9974	applications for coverage within a 3-month period, or 200
9975	applications for coverage within a 1-year period or less for
9976	residential coverage, unless the market assistance plan provides
9977	a quotation from admitted carriers at their filed rates for at
9978	least 90 percent of such applicants. Any market assistance plan
9979	application that is rejected because an individual risk is so
9980	hazardous as to be uninsurable using the criteria specified in
9981	subparagraph (c)8. shall not be included in the minimum
9982	percentage calculation provided herein. In the event that there
9983	is a legal or administrative challenge to a determination by the
9984	officedepartmentthat the conditions of this subparagraph have
9985	been met for eligibility for coverage in the corporation, any
9986	eligible risk may obtain coverage during the pendency of such
9987	challenge.
9988	2. In response to a state of emergency declared by the
9989	Governor under s. 252.36, the officedepartmentmay activate
9990	coverage by order for the period of the emergency upon a finding
9991	by the officedepartmentthat the emergency significantly
9992	affects the availability of residential property insurance.
9993	(f)1. The corporation shall file with the office
9994	departmentquarterly statements of financial condition, an
9995	annual statement of financial condition, and audited financial
9996	statements in the manner prescribed by law. In addition, the
9997	corporation shall report to the officedepartmentmonthly on the
9998	types, premium, exposure, and distribution by county of its
9999	policies in force, and shall submit other reports as the office
10000	departmentrequires to carry out its oversight of the
10001	corporation.
10002	2. The activities of the corporation shall be reviewed at
10003	least annually by the officedepartmentto determine whether
10004	coverage shall be deactivated in an account on the basis that
10005	the conditions giving rise to its activation no longer exist.
10006	(g)1. The corporation shall certify to the office
10007	departmentits needs for annual assessments as to a particular
10008	calendar year, and for any interim assessments that it deems to
10009	be necessary to sustain operations as to a particular year
10010	pending the receipt of annual assessments. Upon verification,
10011	the officedepartmentshall approve such certification, and the
10012	corporation shall levy such annual or interim assessments. Such
10013	assessments shall be prorated as provided in paragraph (b). The
10014	corporation shall take all reasonable and prudent steps
10015	necessary to collect the amount of assessment due from each
10016	assessable insurer, including, if prudent, filing suit to
10017	collect such assessment. If the corporation is unable to collect
10018	an assessment from any assessable insurer, the uncollected
10019	assessments shall be levied as an additional assessment against
10020	the assessable insurers and any assessable insurer required to
10021	pay an additional assessment as a result of such failure to pay
10022	shall have a cause of action against such nonpaying assessable
10023	insurer. Assessments shall be included as an appropriate factor
10024	in the making of rates. The failure of a surplus lines agent to
10025	collect and remit any regular or emergency assessment levied by
10026	the corporation is considered to be a violation of s. 626.936
10027	and subjects the surplus lines agent to the penalties provided
10028	in that section.
10029	2. The governing body of any unit of local government, any
10030	residents of which are insured by the corporation, may issue
10031	bonds as defined in s. 125.013 or s. 166.101 from time to time
10032	to fund an assistance program, in conjunction with the
10033	corporation, for the purpose of defraying deficits of the
10034	corporation. In order to avoid needless and indiscriminate
10035	proliferation, duplication, and fragmentation of such assistance
10036	programs, any unit of local government, any residents of which
10037	are insured by the corporation, may provide for the payment of
10038	losses, regardless of whether or not the losses occurred within
10039	or outside of the territorial jurisdiction of the local
10040	government. Revenue bonds under this subparagraph may not be
10041	issued until validated pursuant to chapter 75, unless a state of
10042	emergency is declared by executive order or proclamation of the
10043	Governor pursuant to s. 252.36 making such findings as are
10044	necessary to determine that it is in the best interests of, and
10045	necessary for, the protection of the public health, safety, and
10046	general welfare of residents of this state and declaring it an
10047	essential public purpose to permit certain municipalities or
10048	counties to issue such bonds as will permit relief to claimants
10049	and policyholders of the corporation. Any such unit of local
10050	government may enter into such contracts with the corporation
10051	and with any other entity created pursuant to this subsection as
10052	are necessary to carry out this paragraph. Any bonds issued
10053	under this subparagraph shall be payable from and secured by
10054	moneys received by the corporation from emergency assessments
10055	under sub-subparagraph (b)3.d., and assigned and pledged to or
10056	on behalf of the unit of local government for the benefit of the
10057	holders of such bonds. The funds, credit, property, and taxing
10058	power of the state or of the unit of local government shall not
10059	be pledged for the payment of such bonds. If any of the bonds
10060	remain unsold 60 days after issuance, the officedepartment
10061	shall require all insurers subject to assessment to purchase the
10062	bonds, which shall be treated as admitted assets; each insurer
10063	shall be required to purchase that percentage of the unsold
10064	portion of the bond issue that equals the insurer's relative
10065	share of assessment liability under this subsection. An insurer
10066	shall not be required to purchase the bonds to the extent that
10067	the officedepartmentdetermines that the purchase would
10068	endanger or impair the solvency of the insurer.
10069	3.a. The corporation shall adopt one or more programs
10070	subject to approval by the officedepartmentfor the reduction
10071	of both new and renewal writings in the corporation. The
10072	corporation may consider any prudent and not unfairly
10073	discriminatory approach to reducing corporation writings, and
10074	may adopt a credit against assessment liability or other
10075	liability that provides an incentive for insurers to take risks
10076	out of the corporation and to keep risks out of the corporation
10077	by maintaining or increasing voluntary writings in counties or
10078	areas in which corporation risks are highly concentrated and a
10079	program to provide a formula under which an insurer voluntarily
10080	taking risks out of the corporation by maintaining or increasing
10081	voluntary writings will be relieved wholly or partially from
10082	assessments under sub-subparagraphs (b)3.a. and b. When the
10083	corporation enters into a contractual agreement for a take-out
10084	plan, the producing agent of record of the corporation policy is
10085	entitled to retain any unearned commission on such policy, and
10086	the insurer shall either:
10087	(I) Pay to the producing agent of record of the policy,
10088	for the first year, an amount which is the greater of the
10089	insurer's usual and customary commission for the type of policy
10090	written or a policy fee equal to the usual and customary
10091	commission of the corporation; or
10092	(II) Offer to allow the producing agent of record of the
10093	policy to continue servicing the policy for a period of not less
10094	than 1 year and offer to pay the agent the insurer's usual and
10095	customary commission for the type of policy written. If the
10096	producing agent is unwilling or unable to accept appointment by
10097	the new insurer, the new insurer shall pay the agent in
10098	accordance with sub-sub-subparagraph (I).
10099	b. Any credit or exemption from regular assessments
10100	adopted under this subparagraph shall last no longer than the 3
10101	years following the cancellation or expiration of the policy by
10102	the corporation. With the approval of the officedepartment, the
10103	board may extend such credits for an additional year if the
10104	insurer guarantees an additional year of renewability for all
10105	policies removed from the corporation, or for 2 additional years
10106	if the insurer guarantees 2 additional years of renewability for
10107	all policies so removed.
10108	c. There shall be no credit, limitation, exemption, or
10109	deferment from emergency assessments to be collected from
10110	policyholders pursuant to sub-subparagraph (b)3.d.
10111	4. The plan shall provide for the deferment, in whole or
10112	in part, of the assessment of an assessable insurer, other than
10113	an emergency assessment collected from policyholders pursuant to
10114	sub-subparagraph (b)3.d., if the officedepartmentfinds that
10115	payment of the assessment would endanger or impair the solvency
10116	of the insurer. In the event an assessment against an assessable
10117	insurer is deferred in whole or in part, the amount by which
10118	such assessment is deferred may be assessed against the other
10119	assessable insurers in a manner consistent with the basis for
10120	assessments set forth in paragraph (b).
10121	(h) Nothing in this subsection shall be construed to
10122	preclude the issuance of residential property insurance coverage
10123	pursuant to part VIII of chapter 626.
10124	(i) There shall be no liability on the part of, and no
10125	cause of action of any nature shall arise against, any
10126	assessable insurer or its agents or employees, the corporation
10127	or its agents or employees, members of the board of governors or
10128	their respective designees at a board meeting, corporation
10129	committee members, or the officedepartmentor its
10130	representatives, for any action taken by them in the performance
10131	of their duties or responsibilities under this subsection. Such
10132	immunity does not apply to:
10133	1. Any of the foregoing persons or entities for any
10134	willful tort;
10135	2. The corporation or its producing agents for breach of
10136	any contract or agreement pertaining to insurance coverage;
10137	3. The corporation with respect to issuance or payment of
10138	debt; or
10139	4. Any assessable insurer with respect to any action to
10140	enforce an assessable insurer's obligations to the corporation
10141	under this subsection.
10142	(j) For the purposes of s. 199.183(1), the corporation
10143	shall be considered a political subdivision of the state and
10144	shall be exempt from the corporate income tax. The premiums,
10145	assessments, investment income, and other revenue of the
10146	corporation are funds received for providing property insurance
10147	coverage as required by this subsection, paying claims for
10148	Florida citizens insured by the corporation, securing and
10149	repaying debt obligations issued by the corporation, and
10150	conducting all other activities of the corporation, and shall
10151	not be considered taxes, fees, licenses, or charges for services
10152	imposed by the Legislature on individuals, businesses, or
10153	agencies outside state government. Bonds and other debt
10154	obligations issued by or on behalf of the corporation are not to
10155	be considered "state bonds" within the meaning of s.
10156	215.58(8)(10). The corporation is not subject to the procurement
10157	provisions of chapter 287, and policies and decisions of the
10158	corporation relating to incurring debt, levying of assessments
10159	and the sale, issuance, continuation, terms and claims under
10160	corporation policies, and all services relating thereto, are not
10161	subject to the provisions of chapter 120. The corporation is not
10162	required to obtain or to hold a certificate of authority issued
10163	by the officedepartment, nor is it required to participate as a
10164	member insurer of the Florida Insurance Guaranty Association.
10165	However, the corporation is required to pay, in the same manner
10166	as an authorized insurer, assessments pledged by the Florida
10167	Insurance Guaranty Association to secure bonds issued or other
10168	indebtedness incurred to pay covered claims arising from insurer
10169	insolvencies caused by, or proximately related to, hurricane
10170	losses. It is the intent of the Legislature that the tax
10171	exemptions provided in this paragraph will augment the financial
10172	resources of the corporation to better enable the corporation to
10173	fulfill its public purposes. Any bonds issued by the
10174	corporation, their transfer, and the income therefrom, including
10175	any profit made on the sale thereof, shall at all times be free
10176	from taxation of every kind by the state and any political
10177	subdivision or local unit or other instrumentality thereof;
10178	however, this exemption does not apply to any tax imposed by
10179	chapter 220chapter 200on interest, income, or profits on debt
10180	obligations owned by corporations other than the corporation.
10181	(k) Upon a determination by the officedepartmentthat the
10182	conditions giving rise to the establishment and activation of
10183	the corporation no longer exist, the corporation is dissolved.
10184	Upon dissolution, the assets of the corporationassociation
10185	shall be applied first to pay all debts, liabilities, and
10186	obligations of the corporation, including the establishment of
10187	reasonable reserves for any contingent liabilities or
10188	obligations, and all remaining assets of the corporation shall
10189	become property of the state and be deposited in the Florida
10190	Hurricane Catastrophe Fund. However, no dissolution shall take
10191	effect as long as the corporation has bonds or other financial
10192	obligations outstanding unless adequate provision has been made
10193	for the payment of the bonds or other financial obligations
10194	pursuant to the documents authorizing the issuance of the bonds
10195	or other financial obligations.
10196	(l)1. Effective July 1, 2002, policies of the Residential
10197	Property and Casualty Joint Underwriting Association shall
10198	become policies of the corporation. All obligations, rights,
10199	assets and liabilities of the Residential Property and Casualty
10200	Joint Underwriting Association, including bonds, note and debt
10201	obligations, and the financing documents pertaining to them
10202	become those of the corporation as of July 1, 2002. The
10203	corporation is not required to issue endorsements or
10204	certificates of assumption to insureds during the remaining term
10205	of in-force transferred policies.
10206	2. Effective July 1, 2002, policies of the Florida
10207	Windstorm Underwriting Association are transferred to the
10208	corporation and shall become policies of the corporation. All
10209	obligations, rights, assets, and liabilities of the Florida
10210	Windstorm Underwriting Association, including bonds, note, and
10211	debt obligations, and the financing documents pertaining to them
10212	are transferred to and assumed by the corporation on July 1,
10213	2002. The corporation is not required to issue endorsement or
10214	certificates of assumption to insureds during the remaining term
10215	of in-force transferred policies.
10216	3. The Florida Windstorm Underwriting Association and the
10217	Residential Property and Casualty Joint Underwriting Association
10218	shall take all actions as may be proper to further evidence the
10219	transfers and shall provide the documents and instruments of
10220	further assurance as may reasonably be requested by the
10221	corporation for that purpose. The corporation shall execute
10222	assumptions and instruments as the trustees or other parties to
10223	the financing documents of the Florida Windstorm Underwriting
10224	Association or the Residential Property and Casualty Joint
10225	Underwriting Association may reasonably request to further
10226	evidence the transfers and assumptions, which transfers and
10227	assumptions, however, are effective on the date provided under
10228	this paragraph whether or not, and regardless of the date on
10229	which, the assumptions or instruments are executed by the
10230	corporation. Subject to the relevant financing documents
10231	pertaining to their outstanding bonds, notes, indebtedness, or
10232	other financing obligations, the moneys, investments,
10233	receivables, choses in action, and other intangibles of the
10234	Florida Windstorm Underwriting Association shall be credited to
10235	the high-risk account of the corporation, and those of the
10236	personal lines residential coverage account and the commercial
10237	lines residential coverage account of the Residential Property
10238	and Casualty Joint Underwriting Association shall be credited to
10239	the personal lines account and the commercial lines account,
10240	respectively, of the corporation.
10241	4. Effective July 1, 2002, a new applicant for property
10242	insurance coverage who would otherwise have been eligible for
10243	coverage in the Florida Windstorm Underwriting Association is
10244	eligible for coverage from the corporation as provided in this
10245	subsection.
10246	5. The transfer of all policies, obligations, rights,
10247	assets, and liabilities from the Florida Windstorm Underwriting
10248	Association to the corporation and the renaming of the
10249	Residential Property and Casualty Joint Underwriting Association
10250	as the corporation shall in no way affect the coverage with
10251	respect to covered policies as defined in s. 215.555(2)(c)
10252	provided to these entities by the Florida Hurricane Catastrophe
10253	Fund. The coverage provided by the Florida Hurricane Catastrophe
10254	Fund to the Florida Windstorm Underwriting Association based on
10255	its exposures as of June 30, 2002, and each June 30 thereafter
10256	shall be redesignated as coverage for the high-risk account of
10257	the corporation. Notwithstanding any other provision of law, the
10258	coverage provided by the Florida Hurricane Catastrophe Fund to
10259	the Residential Property and Casualty Joint Underwriting
10260	Association based on its exposures as of June 30, 2002, and each
10261	June 30 thereafter shall be transferred to the personal lines
10262	account and the commercial lines account of the corporation.
10263	Notwithstanding any other provision of law, the high-risk
10264	account shall be treated, for all Florida Hurricane Catastrophe
10265	Fund purposes, as if it were a separate participating insurer
10266	with its own exposures, reimbursement premium, and loss
10267	reimbursement. Likewise, the personal lines and commercial lines
10268	accounts shall be viewed together, for all Florida Hurricane
10269	Catastrophe Fund purposes, as if the two accounts were one and
10270	represent a single, separate participating insurer with its own
10271	exposures, reimbursement premium, and loss reimbursement. The
10272	coverage provided by the Florida Hurricane Catastrophe Fund to
10273	the corporation shall constitute and operate as a full transfer
10274	of coverage from the Florida Windstorm Underwriting Association
10275	and Residential Property and Casualty Joint Underwriting to the
10276	corporation.
10277	(m) Notwithstanding any other provision of law:
10278	1. The pledge or sale of, the lien upon, and the security
10279	interest in any rights, revenues, or other assets of the
10280	corporation created or purported to be created pursuant to any
10281	financing documents to secure any bonds or other indebtedness of
10282	the corporation shall be and remain valid and enforceable,
10283	notwithstanding the commencement of and during the continuation
10284	of, and after, any rehabilitation, insolvency, liquidation,
10285	bankruptcy, receivership, conservatorship, reorganization, or
10286	similar proceeding against the corporation under the laws of
10287	this state.
10288	2. No such proceeding shall relieve the corporation of its
10289	obligation, or otherwise affect its ability to perform its
10290	obligation, to continue to collect, or levy and collect,
10291	assessments, market equalization or other surcharges under
10292	subparagraph (c)10., or any other rights, revenues, or other
10293	assets of the corporation pledged pursuant to any financing
10294	documents.
10295	3. Each such pledge or sale of, lien upon, and security
10296	interest in, including the priority of such pledge, lien, or
10297	security interest, any such assessments, market equalization or
10298	other surcharges, or other rights, revenues, or other assets
10299	which are collected, or levied and collected, after the
10300	commencement of and during the pendency of, or after, any such
10301	proceeding shall continue unaffected by such proceeding. As
10302	used in this subsection, the term "financing documents" means
10303	any agreement or agreements, instrument or instruments, or other
10304	document or documents now existing or hereafter created
10305	evidencing any bonds or other indebtedness of the corporation or
10306	pursuant to which any such bonds or other indebtedness has been
10307	or may be issued and pursuant to which any rights, revenues, or
10308	other assets of the corporation are pledged or sold to secure
10309	the repayment of such bonds or indebtedness, together with the
10310	payment of interest on such bonds or such indebtedness, or the
10311	payment of any other obligation or financial product, as defined
10312	in the plan of operation of the corporation related to such
10313	bonds or indebtedness.
10314	4. Any such pledge or sale of assessments, revenues,
10315	contract rights, or other rights or assets of the corporation
10316	shall constitute a lien and security interest, or sale, as the
10317	case may be, that is immediately effective and attaches to such
10318	assessments, revenues, or contract rights or other rights or
10319	assets, whether or not imposed or collected at the time the
10320	pledge or sale is made. Any such pledge or sale is effective,
10321	valid, binding, and enforceable against the corporation or other
10322	entity making such pledge or sale, and valid and binding against
10323	and superior to any competing claims or obligations owed to any
10324	other person or entity, including policyholders in this state,
10325	asserting rights in any such assessments, revenues, or contract
10326	rights or other rights or assets to the extent set forth in and
10327	in accordance with the terms of the pledge or sale contained in
10328	the applicable financing documents, whether or not any such
10329	person or entity has notice of such pledge or sale and without
10330	the need for any physical delivery, recordation, filing, or
10331	other action.
10332	(n)1. The following records of the corporation are
10333	confidential and exempt from the provisions of s. 119.07(1) and
10334	s. 24(a), Art. I of the State Constitution:
10335	a. Underwriting files, except that a policyholder or an
10336	applicant shall have access to his or her own underwriting
10337	files.
10338	b. Claims files, until termination of all litigation and
10339	settlement of all claims arising out of the same incident,
10340	although portions of the claims files may remain exempt, as
10341	otherwise provided by law. Confidential and exempt claims file
10342	records may be released to other governmental agencies upon
10343	written request and demonstration of need; such records held by
10344	the receiving agency remain confidential and exempt as provided
10345	for herein.
10346	c. Records obtained or generated by an internal auditor
10347	pursuant to a routine audit, until the audit is completed, or if
10348	the audit is conducted as part of an investigation, until the
10349	investigation is closed or ceases to be active. An
10350	investigation is considered "active" while the investigation is
10351	being conducted with a reasonable, good faith belief that it
10352	could lead to the filing of administrative, civil, or criminal
10353	proceedings.
10354	d. Matters reasonably encompassed in privileged attorney-
10355	client communications.
10356	e. Proprietary information licensed to the corporation
10357	under contract and the contract provides for the confidentiality
10358	of such proprietary information.
10359	f. All information relating to the medical condition or
10360	medical status of a corporation employee which is not relevant
10361	to the employee's capacity to perform his or her duties, except
10362	as otherwise provided in this paragraph. Information which is
10363	exempt shall include, but is not limited to, information
10364	relating to workers' compensation, insurance benefits, and
10365	retirement or disability benefits.
10366	g. Upon an employee's entrance into the employee
10367	assistance program, a program to assist any employee who has a
10368	behavioral or medical disorder, substance abuse problem, or
10369	emotional difficulty which affects the employee's job
10370	performance, all records relative to that participation shall be
10371	confidential and exempt from the provisions of s. 119.07(1) and
10372	s. 24(a), Art. I of the State Constitution, except as otherwise
10373	provided in s. 112.0455(11).
10374	h. Information relating to negotiations for financing,
10375	reinsurance, depopulation, or contractual services, until the
10376	conclusion of the negotiations.
10377	i. Minutes of closed meetings regarding underwriting
10378	files, and minutes of closed meetings regarding an open claims
10379	file until termination of all litigation and settlement of all
10380	claims with regard to that claim, except that information
10381	otherwise confidential or exempt by law will be redacted.
10382
10383
10384	When an authorized insurer is considering underwriting a risk
10385	insured by the corporation, relevant underwriting files and
10386	confidential claims files may be released to the insurer
10387	provided the insurer agrees in writing, notarized and under
10388	oath, to maintain the confidentiality of such files. When a
10389	file is transferred to an insurer that file is no longer a
10390	public record because it is not held by an agency subject to the
10391	provisions of the public records law. Underwriting files and
10392	confidential claims files may also be released to staff of and
10393	the board of governors of the market assistance plan established
10394	pursuant to s. 627.3515, who must retain the confidentiality of
10395	such files, except such files may be released to authorized
10396	insurers that are considering assuming the risks to which the
10397	files apply, provided the insurer agrees in writing, notarized
10398	and under oath, to maintain the confidentiality of such files.
10399	Finally, the corporation or the board or staff of the market
10400	assistance plan may make the following information obtained from
10401	underwriting files and confidential claims files available to
10402	licensed general lines insurance agents: name, address, and
10403	telephone number of the residential property owner or insured;
10404	location of the risk; rating information; loss history; and
10405	policy type. The receiving licensed general lines insurance
10406	agent must retain the confidentiality of the information
10407	received.
10408	2. Portions of meetings of the corporation are exempt from
10409	the provisions of s. 286.011 and s. 24(b), Art. I of the State
10410	Constitution wherein confidential underwriting files or
10411	confidential open claims files are discussed. All portions of
10412	corporation meetings which are closed to the public shall be
10413	recorded by a court reporter. The court reporter shall record
10414	the times of commencement and termination of the meeting, all
10415	discussion and proceedings, the names of all persons present at
10416	any time, and the names of all persons speaking. No portion of
10417	any closed meeting shall be off the record. Subject to the
10418	provisions hereof and s. 119.07(2)(a), the court reporter's
10419	notes of any closed meeting shall be retained by the corporation
10420	for a minimum of 5 years. A copy of the transcript, less any
10421	exempt matters, of any closed meeting wherein claims are
10422	discussed shall become public as to individual claims after
10423	settlement of the claim.
10424	(o) It is the intent of the Legislature that the
10425	amendments to this subsection enacted in 2002 should, over time,
10426	reduce the probable maximum windstorm losses in the residual
10427	markets and should reduce the potential assessments to be levied
10428	on property insurers and policyholders statewide. In
10429	furtherance of this intent:
10430	1. The board shall, on or before February 1 of each year,
10431	provide a report to the President of the Senate and the Speaker
10432	of the House of Representatives showing the reduction or
10433	increase in the 100-year probable maximum loss attributable to
10434	wind-only coverages and the quota share program under this
10435	subsection combined, as compared to the benchmark 100-year
10436	probable maximum loss of the Florida Windstorm Underwriting
10437	Association. For purposes of this paragraph, the benchmark 100-
10438	year probable maximum loss of the Florida Windstorm Underwriting
10439	Association shall be the calculation dated February 2001 and
10440	based on November 30, 2000, exposures. In order to ensure
10441	comparability of data, the board shall use the same methods for
10442	calculating its probable maximum loss as were used to calculate
10443	the benchmark probable maximum loss.
10444	2. Beginning February 1, 2007, if the report under
10445	subparagraph 1. for any year indicates that the 100-year
10446	probable maximum loss attributable to wind-only coverages and
10447	the quota share program combined does not reflect a reduction of
10448	at least 25 percent from the benchmark, the board shall reduce
10449	the boundaries of the high-risk area eligible for wind-only
10450	coverages under this subsection in a manner calculated to reduce
10451	such probable maximum loss to an amount at least 25 percent
10452	below the benchmark.
10453	3. Beginning February 1, 2012, if the report under
10454	subparagraph 1. for any year indicates that the 100-year
10455	probable maximum loss attributable to wind-only coverages and
10456	the quota share program combined does not reflect a reduction of
10457	at least 50 percent from the benchmark, the boundaries of the
10458	high-risk area eligible for wind-only coverages under this
10459	subsection shall be reduced by the elimination of any area that
10460	is not seaward of a line 1,000 feet inland from the Intracoastal
10461	Waterway.
10462	(p) In enacting the provisions of this section, the
10463	Legislature recognizes that both the Florida Windstorm
10464	Underwriting Association and the Residential Property and
10465	Casualty Joint Underwriting Association have entered into
10466	financing arrangements that obligate each entity to service its
10467	debts and maintain the capacity to repay funds secured under
10468	these financing arrangements. It is the intent of the
10469	Legislature that nothing in this section be construed to
10470	compromise, diminish, or interfere with the rights of creditors
10471	under such financing arrangements. It is further the intent of
10472	the Legislature to preserve the obligations of the Florida
10473	Windstorm Underwriting Association and Residential Property and
10474	Casualty Joint Underwriting Association with regard to
10475	outstanding financing arrangements, with such obligations
10476	passing entirely and unchanged to the corporation and,
10477	specifically, to the applicable account of the corporation. So
10478	long as any bonds, notes, indebtedness, or other financing
10479	obligations of the Florida Windstorm Underwriting Association or
10480	the Residential Property and Casualty Joint Underwriting
10481	Association are outstanding, under the terms of the financing
10482	documents pertaining to them, the governing board of the
10483	corporation shall have and shall exercise the authority to levy,
10484	charge, collect, and receive all premiums, assessments,
10485	surcharges, charges, revenues, and receipts that the
10486	associations had authority to levy, charge, collect, or receive
10487	under the provisions of subsection (2) and this subsection,
10488	respectively, as they existed on January 1, 2002, to provide
10489	moneys, without exercise of the authority provided by this
10490	subsection, in at least the amounts, and by the times, as would
10491	be provided under those former provisions of subsection (2) or
10492	this subsection, respectively, so that the value, amount, and
10493	collectability of any assets, revenues, or revenue source
10494	pledged or committed to, or any lien thereon securing such
10495	outstanding bonds, notes, indebtedness, or other financing
10496	obligations will not be diminished, impaired, or adversely
10497	affected by the amendments made by this act and to permit
10498	compliance with all provisions of financing documents pertaining
10499	to such bonds, notes, indebtedness, or other financing
10500	obligations, or the security or credit enhancement for them, and
10501	any reference in this subsection to bonds, notes, indebtedness,
10502	financing obligations, or similar obligations, of the
10503	corporation shall include like instruments or contracts of the
10504	Florida Windstorm Underwriting Association and the Residential
10505	Property and Casualty Joint Underwriting Association to the
10506	extent not inconsistent with the provisions of the financing
10507	documents pertaining to them.
10508	(q) Effective January 7, 2003, any reference in this
10509	subsection to the Treasurer shall be deemed to be a reference to
10510	the Chief Financial Officer and any reference to the Department
10511	of Insurance shall be deemed to be a reference to the Department
10512	of Insurance and Financial Services or other successor to the
10513	Department of Insurance specified by law.
10514	(q)(r)The corporation shall not require the securing of
10515	flood insurance as a condition of coverage if the insured or
10516	applicant executes a form approved by the officedepartment
10517	affirming that flood insurance is not provided by the
10518	corporation and that if flood insurance is not secured by the
10519	applicant or insured in addition to coverage by the corporation,
10520	the risk will not be covered for flood damage. A corporation
10521	policyholder electing not to secure flood insurance and
10522	executing a form as provided herein making a claim for water
10523	damage against the corporation shall have the burden of proving
10524	the damage was not caused by flooding. Notwithstanding other
10525	provisions of this subsection, the corporation may deny coverage
10526	to an applicant or insured who refuses to execute the form
10527	described herein.
10528	Section 200. Section 627.3511, Florida Statutes, is
10529	amended to read:
10530	627.3511 Depopulation of Citizens Property Insurance
10531	CorporationResidential Property and Casualty Joint Underwriting
10532	Association.--
10533	(1) LEGISLATIVE INTENT.--The Legislature finds that the
10534	public policy of this state requires the maintenance of a
10535	residual market for residential property insurance. It is the
10536	intent of the Legislature to provide a variety of financial
10537	incentives to encourage the replacement of the highest possible
10538	number of Citizens Property Insurance CorporationResidential
10539	Property and Casualty Joint Underwriting Associationpolicies
10540	with policies written by admitted insurers at approved rates.
10541	(2) TAKE-OUT BONUS.--The Citizens Property Insurance
10542	CorporationResidential Property and Casualty Joint Underwriting
10543	Associationshall pay the sum of up to $100 to an insurer for
10544	each risk that the insurer removes from the corporation
10545	association, either by issuance of a policy upon expiration or
10546	cancellation of the corporationassociationpolicy or by
10547	assumption of the corporation'sassociation'sobligations with
10548	respect to an in-force policy. Such payment is subject to
10549	approval of the corporationassociationboard. In order to
10550	qualify for the bonus under this subsection, the take-out plan
10551	must include a minimum of 25,000 policies. Within 30 days after
10552	approval by the board, the officedepartmentmay reject the
10553	insurer's take-out plan and disqualify the insurer from the
10554	bonus, based on the following criteria:
10555	(a) The capacity of the insurer to absorb the policies
10556	proposed to be taken out of the corporationassociationand the
10557	concentration of risks of those policies.
10558	(b) Whether the geographic and risk characteristics of
10559	policies in the proposed take-out plan serve to reduce the
10560	exposure of the corporationassociationsufficiently to justify
10561	the bonus.
10562	(c) Whether coverage for risks to be taken out otherwise
10563	exists in the admitted voluntary market.
10564	(d) The degree to which the take-out bonus is promoting
10565	new capital being allocated by the insurer to Florida
10566	residential property coverage.
10567	(3) EXEMPTION FROM DEFICIT ASSESSMENTS.--
10568	(a) The calculation of an insurer's assessment liability
10569	under s. 627.351(6)(b)3.a. or b. shall, for an insurer that in
10570	any calendar year removes 50,000 or more risks from the Citizens
10571	Property Insurance CorporationResidential Property and Casualty
10572	Joint Underwriting Association, either by issuance of a policy
10573	upon expiration or cancellation of the corporationassociation
10574	policy or by assumption of the corporation'sassociation's
10575	obligations with respect to in-force policies, exclude such
10576	removed policies for the succeeding 3 years, as follows:
10577	1. In the first year following removal of the risks, the
10578	risks are excluded from the calculation to the extent of 100
10579	percent.
10580	2. In the second year following removal of the risks, the
10581	risks are excluded from the calculation to the extent of 75
10582	percent.
10583	3. In the third year following removal of the risks, the
10584	risks are excluded from the calculation to the extent of 50
10585	percent.
10586
10587
10588	If the removal of risks is accomplished through assumption of
10589	obligations with respect to in-force policies, the corporation
10590	associationshall pay to the assuming insurer all unearned
10591	premium with respect to such policies less any policy
10592	acquisition costs agreed to by the corporationassociationand
10593	assuming insurer. The term "policy acquisition costs" is defined
10594	as costs of issuance of the policy by the corporation
10595	associationwhich includes agent commissions, servicing company
10596	fees, and premium tax. This paragraph does not apply to an
10597	insurer that, at any time within 5 years before removing the
10598	risks, had a market share in excess of 0.1 percent of the
10599	statewide aggregate gross direct written premium for any line of
10600	property insurance, or to an affiliate of such an insurer. This
10601	paragraph does not apply unless either at least 40 percent of
10602	the risks removed from the corporationassociationare located
10603	in Dade, Broward, and Palm Beach Counties, or at least 30
10604	percent of the risks removed from the corporationassociation
10605	are located in such counties and an additional 50 percent of the
10606	risks removed from the corporationassociationare located in
10607	other coastal counties.
10608	(b) An insurer that first wrote personal lines residential
10609	property coverage in this state on or after July 1, 1994, is
10610	exempt from regular deficit assessments imposed pursuant to s.
10611	627.351(6)(b)3.a. and b., but not emergency assessments
10612	collected from policyholders pursuant to s. 627.351(6)(b)3.d.,
10613	of the Citizens Property Insurance CorporationResidential
10614	Property and Casualty Joint Underwriting Associationuntil the
10615	earlier of the following:
10616	1. The end of the calendar year in which it first wrote
10617	0.5 percent or more of the statewide aggregate direct written
10618	premium for any line of residential property coverage; or
10619	2. December 31, 1997, or December 31 of the third year in
10620	which it wrote such coverage in this state, whichever is later.
10621	(c) Other than an insurer that is exempt under paragraph
10622	(b), an insurer that in any calendar year increases its total
10623	structure exposure subject to wind coverage by 25 percent or
10624	more over its exposure for the preceding calendar year is, with
10625	respect to that year, exempt from deficit assessments imposed
10626	pursuant to s. 627.351(6)(b)3.a. and b., but not emergency
10627	assessments collected from policyholders pursuant to s.
10628	627.351(6)(b)3.d., of the Citizens Property Insurance
10629	CorporationResidential Property and Casualty Joint Underwriting
10630	Associationattributable to such increase in exposure.
10631	(d) Any exemption or credit from regular assessments
10632	authorized by this section shall last no longer than 3 years
10633	following the cancellation or expiration of the policy by the
10634	corporationassociation. With the approval of the office
10635	department, the board may extend such credits for an additional
10636	year if the insurer guarantees an additional year of
10637	renewability for all policies removed from the corporation
10638	association, or for 2 additional years if the insurer guarantees
10639	2 additional years of renewability for all policies so removed.
10640	(4) AGENT BONUS.--When the corporationResidential
10641	Property and Casualty Joint Underwriting Associationenters into
10642	a contractual agreement for a take-out plan that provides a
10643	bonus to the insurer, the producing agent of record of the
10644	corporationassociationpolicy is entitled to retain any
10645	unearned commission on such policy, and the insurer shall
10646	either:
10647	(a) Pay to the producing agent of record of the
10648	association policy, for the first year, an amount that is the
10649	greater of the insurer's usual and customary commission for the
10650	type of policy written or a fee equal to the usual and customary
10651	commission of the corporationassociation; or
10652	(b) Offer to allow the producing agent of record of the
10653	corporationassociationpolicy to continue servicing the policy
10654	for a period of not less than 1 year and offer to pay the agent
10655	the greater of the insurer's or the corporation'sassociation's
10656	usual and customary commission for the type of policy written.
10657
10658
10659	If the producing agent is unwilling or unable to accept
10660	appointment, the new insurer shall pay the agent in accordance
10661	with paragraph (a). The requirement of this subsection that the
10662	producing agent of record is entitled to retain the unearned
10663	commission on an association policy does not apply to a policy
10664	for which coverage has been provided in the association for 30
10665	days or less or for which a cancellation notice has been issued
10666	pursuant to s. 627.351(6)(c)11. during the first 30 days of
10667	coverage.
10668	(5) APPLICABILITY.--
10669	(a) The take-out bonus provided by subsection (2) and the
10670	exemption from assessment provided by paragraph (3)(a) apply
10671	only if the corporationassociationpolicy is replaced by either
10672	a standard policy including wind coverage or, if consistent with
10673	the insurer's underwriting rules as filed with the office
10674	department, a basic policy including wind coverage; however,
10675	with respect to risks located in areas where coverage through
10676	the high-risk account of the corporationFlorida Windstorm
10677	Underwriting Associationis available, the replacement policy
10678	need not provide wind coverage. The insurer must renew the
10679	replacement policy at approved rates on substantially similar
10680	terms for two additional 1-year terms, unless canceled by the
10681	insurer for a lawful reason other than reduction of hurricane
10682	exposure. If an insurer assumes the corporation'sassociation's
10683	obligations for a policy, it must issue a replacement policy for
10684	a 1-year term upon expiration of the corporationassociation
10685	policy and must renew the replacement policy at approved rates
10686	on substantially similar terms for two additional 1-year terms,
10687	unless canceled by the insurer for a lawful reason other than
10688	reduction of hurricane exposure. For each replacement policy
10689	canceled or nonrenewed by the insurer for any reason during the
10690	3-year coverage period required by this paragraph, the insurer
10691	must remove from the corporationassociationone additional
10692	policy covering a risk similar to the risk covered by the
10693	canceled or nonrenewed policy. In addition to these
10694	requirements, the corporationassociationmust place the bonus
10695	moneys in escrow for a period of 3 years; such moneys may be
10696	released from escrow only to pay claims. A take-out bonus
10697	provided by subsection (2) or subsection (6) shall not be
10698	considered premium income for purposes of taxes and assessments
10699	under the Florida Insurance Code and shall remain the property
10700	of the corporationResidential Property and Casualty Joint
10701	Underwriting Association, subject to the prior security interest
10702	of the insurer under the escrow agreement until it is released
10703	from escrow, and after it is released from escrow it shall be
10704	considered an asset of the insurer and credited to the insurer's
10705	capital and surplus.
10706	(b) It is the intent of the Legislature that an insurer
10707	eligible for the exemption under paragraph (3)(a) establish a
10708	preference in appointment of agents for those agents who lose a
10709	substantial amount of business as a result of risks being
10710	removed from the corporationassociation.
10711	(6) COMMERCIAL RESIDENTIAL TAKE-OUT PLANS.--
10712	(a) The corporationResidential Property and Casualty
10713	Joint Underwriting Associationshall pay a bonus to an insurer
10714	for each commercial residential policy that the insurer removes
10715	from the corporationassociationpursuant to an approved take-
10716	out plan, either by issuance of a new policy upon expiration of
10717	the corporationassociation policy or by assumption of the
10718	corporation'sassociation'sobligations with respect to an in-
10719	force policy. The corporationassociationboard shall determine
10720	the amount of the bonus based on such factors as the coverage
10721	provided, relative hurricane risk, the length of time that the
10722	property has been covered by the corporationassociation, and
10723	the criteria specified in paragraphs (b) and (c). The amount of
10724	the bonus with respect to a particular policy may not exceed 25
10725	percent of the corporation'sassociation's1-year premium for
10726	the policy. Such payment is subject to approval of the
10727	corporationassociationboard. In order to qualify for the bonus
10728	under this subsection, the take-out plan must include policies
10729	reflecting at least $100 million in structure exposure.
10730	(b) In order for a plan to qualify for approval:
10731	1. At least 40 percent of the policies removed from the
10732	corporationassociationunder the plan must be located in Dade,
10733	Broward, and Palm Beach Counties, or at least 30 percent of the
10734	policies removed from the corporationassociationunder the plan
10735	must be located in such counties and an additional 50 percent of
10736	the policies removed from the corporationassociationmust be
10737	located in other coastal counties.
10738	2. The insurer must renew the replacement policy at
10739	approved rates on substantially similar terms for two additional
10740	1-year terms, unless canceled or nonrenewed by the insurer for a
10741	lawful reason other than reduction of hurricane exposure. If an
10742	insurer assumes the corporation'sassociation'sobligations for
10743	a policy, it must issue a replacement policy for a 1-year term
10744	upon expiration of the corporationassociationpolicy and must
10745	renew the replacement policy at approved rates on substantially
10746	similar terms for two additional 1-year terms, unless canceled
10747	by the insurer for a lawful reason other than reduction of
10748	hurricane exposure. For each replacement policy canceled or
10749	nonrenewed by the insurer for any reason during the 3-year
10750	coverage period required by this subparagraph, the insurer must
10751	remove from the corporationassociationone additional policy
10752	covering a risk similar to the risk covered by the canceled or
10753	nonrenewed policy.
10754	(c) A take-out plan is deemed approved unless the office
10755	department, within 120 days after the board votes to recommend
10756	the plan, disapproves the plan based on:
10757	1. The capacity of the insurer to absorb the policies
10758	proposed to be taken out of the corporationassociationand the
10759	concentration of risks of those policies.
10760	2. Whether the geographic and risk characteristics of
10761	policies in the proposed take-out plan serve to reduce the
10762	exposure of the corporationassociationsufficiently to justify
10763	the bonus.
10764	3. Whether coverage for risks to be taken out otherwise
10765	exists in the admitted voluntary market.
10766	4. The degree to which the take-out bonus is promoting new
10767	capital being allocated by the insurer to residential property
10768	coverage in this state.
10769	(d) The calculation of an insurer's regular assessment
10770	liability under s. 627.351(b)3.a. and b., but not emergency
10771	assessments collected from policyholders pursuant to s.
10772	627.351(6)(b)3.d., shall, with respect to commercial residential
10773	policies removed from the corporationassociationunder an
10774	approved take-out plan, exclude such removed policies for the
10775	succeeding 3 years, as follows:
10776	1. In the first year following removal of the policies,
10777	the policies are excluded from the calculation to the extent of
10778	100 percent.
10779	2. In the second year following removal of the policies,
10780	the policies are excluded from the calculation to the extent of
10781	75 percent.
10782	3. In the third year following removal of the policies,
10783	the policies are excluded from the calculation to the extent of
10784	50 percent.
10785	(e) An insurer that first wrote commercial residential
10786	property coverage in this state on or after June 1, 1996, is
10787	exempt from regular assessments under s. 627.351(6)(b)3.a. and
10788	b., but not emergency assessments collected from policyholders
10789	pursuant to s. 627.351(6)(b)3.d., with respect to commercial
10790	residential policies until the earlier of:
10791	1. The end of the calendar year in which such insurer
10792	first wrote 0.5 percent or more of the statewide aggregate
10793	direct written premium for commercial residential property
10794	coverage; or
10795	2. December 31 of the third year in which such insurer
10796	wrote commercial residential property coverage in this state.
10797	(f) An insurer that is not otherwise exempt from regular
10798	assessments under s. 627.351(6)(b)3.a. and b. with respect to
10799	commercial residential policies is, for any calendar year in
10800	which such insurer increased its total commercial residential
10801	hurricane exposure by 25 percent or more over its exposure for
10802	the preceding calendar year, exempt from regular assessments
10803	under s. 627.351(6)(b)3.a. and b., but not emergency assessments
10804	collected from policyholders pursuant to s. 627.351(6)(b)3.d.,
10805	attributable to such increased exposure.
10806	(7) A minority business, which is at least 51 percent
10807	owned by minority persons as described in s. 288.703(3),
10808	desiring to operate or become licensed as a property and
10809	casualty insurer may exempt up to $50 of the escrow requirements
10810	of the take-out bonus, as described in this section. Such
10811	minority business, which has applied for a certificate of
10812	authority to engage in business as a property and casualty
10813	insurer, may simultaneously file the business' proposed take-out
10814	plan, as described in this section, with the corporationto the
10815	Residential Property and Casualty Joint Underwriting
10816	Association.
10817	Section 201. Section 627.3513, Florida Statutes, is
10818	amended to read:
10819	627.3513 Standards for sale of bonds by Citizens Property
10820	Insurance Corporationunderwriting associations.--
10821	(1)(a) The purpose of this section is to provide standards
10822	for the sale of bonds pursuant to s. 627.351(2) and (6).
10823	(b) The term "corporation," as used in this section, means
10824	the Citizens Property Insurance Corporation."Association" or
10825	"associations," for purposes of this section, means the Florida
10826	Windstorm Underwriting Association and the Residential Property
10827	and Casualty Joint Underwriting Association as established
10828	pursuant to s. 627.351(2) and (6), and any corporation or other
10829	entity established pursuant to those subsections.
10830	(2) The plan of operation of the corporationeach
10831	associationshall provide for the selection of financial
10832	services providers and underwriters. Such provisions shall
10833	include the method for publicizing or otherwise providing
10834	reasonable notice to potential financial services providers,
10835	underwriters, and other interested parties, which may include
10836	expedited procedures and methods for emergency situations. The
10837	corporationassociationsshall not engage the services of any
10838	person or firm as a securities broker or bond underwriter that
10839	is not eligible to be engaged by the state under the provisions
10840	of s. 215.684. The corporationassociationsshall make all
10841	selections of financial service providers and managing
10842	underwriters at a noticed public meeting.
10843	(3) The plan of operation of the corporationeach
10844	associationshall provide for any managing underwriter or
10845	financial adviser to provide to the corporationassociationa
10846	disclosure statement containing at least the following
10847	information:
10848	(a) An itemized list setting forth the nature and
10849	estimated amounts of expenses to be incurred by the managing
10850	underwriter in connection with the issuance of such bonds.
10851	Notwithstanding the foregoing, any such list may include an item
10852	for miscellaneous expenses, provided such item includes only
10853	minor items of expense which cannot be easily categorized
10854	elsewhere in the statement.
10855	(b) The names, addresses, and estimated amounts of
10856	compensation of any finders connected with the issuance of the
10857	bonds.
10858	(c) The amount of underwriting spread expected to be
10859	realized and the amount of fees and expenses expected to be paid
10860	to the financial adviser.
10861	(d) Any management fee charged by the managing
10862	underwriter.
10863	(e) Any other fee, bonus, or compensation estimated to be
10864	paid by the managing underwriter in connection with the bond
10865	issue to any person not regularly employed or retained by it.
10866	(f) The name and address of each financial adviser or
10867	managing underwriter, if any, connected with the bond issue.
10868	(g) Any other disclosure which the corporationassociation
10869	may require.
10870	(4)(a) No underwriter, commercial bank, investment banker,
10871	or financial consultant or adviser shall pay any finder any
10872	bonus, fee, or gratuity in connection with the sale of bonds
10873	issued by the corporationassociationunless full disclosure is
10874	made in writing to the corporationassociationprior to or
10875	concurrently with the submission of a purchase proposal for
10876	bonds by the underwriter, commercial bank, investment banker, or
10877	financial consultant or adviser, providing the name and address
10878	of any finder and the amount of bonus, fee, or gratuity paid to
10879	such finder. A violation of this subsection shall not affect the
10880	validity of the bond issue.
10881	(b) As used in this subsection, the term "finder" means a
10882	person who is neither regularly employed by, nor a partner or
10883	officer of, an underwriter, bank, banker, or financial
10884	consultant or adviser and who enters into an understanding with
10885	either the issuer or the managing underwriter, or both, for any
10886	paid or promised compensation or valuable consideration,
10887	directly or indirectly, expressed or implied, to act solely as
10888	an intermediary between such issuer and managing underwriter for
10889	the purpose of influencing any transaction in the purpose of
10890	such bonds.
10891	(5) This section is not intended to restrict or prohibit
10892	the employment of professional services relating to bonds issued
10893	under s. 627.351(6)s. 627.351(2) or (6)or the issuance of
10894	bonds by the corporationassociations.
10895	(6) The failure of the corporationassociationto comply
10896	with one or more provisions of this section shall not affect the
10897	validity of the bond issue; however, the failure of the
10898	corporationeither associationto comply in good faith both with
10899	this section and with the plan as amended shall be a violation
10900	of its plan of operation and a violation of the insurance code.
10901	Section 202. Section 627.3515, Florida Statutes, is
10902	amended to read:
10903	627.3515 Market assistance plan; property and casualty
10904	risks.--
10905	(1) The officedepartmentshall adopt a market assistance
10906	plan to assist in the placement of risks of applicants who are
10907	unable to procure property insurance as defined in s. 624.604 or
10908	casualty insurance as defined in s. 624.605(1)(b), (e), (f),
10909	(g), or (h) from authorized insurers when such insurance is
10910	otherwise generally available from insurers authorized to
10911	transact and actually writing that kind and class of insurance
10912	in this state. Through such measures as are found appropriate by
10913	the board of governors, the market assistance plan shall take
10914	affirmative steps to assist in the removal from the Citizens
10915	Property Insurance CorporationResidential Property and Casualty
10916	Joint Underwriting Associationany risk that can be placed in
10917	the voluntary market. All property and casualty insurers
10918	licensed in this state shall participate in the plan.
10919	(2)(a) Each person serving as a member of the board of
10920	governors of the Citizens Property Insurance Corporation
10921	Residential Property and Casualty Joint Underwriting Association
10922	shall also serve as a member of the board of governors of the
10923	market assistance plan.
10924	(b) The plan shall be funded through payments from the
10925	Citizens Property Insurance CorporationResidential Property and
10926	Casualty Joint Underwriting Associationand annual assessments
10927	of residential property insurers in the amount of $450.
10928	(c) The plan is not required to assist in the placement of
10929	any workers' compensation, employer's liability, malpractice, or
10930	motor vehicle insurance coverage.
10931	Section 203. Subsections (2), (4), and (6), paragraphs (c)
10932	and (h) of subsection (7), and subsection (8) of section
10933	627.357, Florida Statutes, are amended to read:
10934	627.357 Medical malpractice self-insurance.--
10935	(2) A group or association of health care providers
10936	composed of any number of members, is authorized to self-insure
10937	against claims arising out of the rendering of, or failure to
10938	render, medical care or services, or against claims for injury
10939	or death to the insured's patients arising out of the insured's
10940	activities, upon obtaining approval from the officedepartment
10941	and upon complying with the following conditions:
10942	(a) Establishment of a Medical Malpractice Risk Management
10943	Trust Fund to provide coverage against professional medical
10944	malpractice liability.
10945	(b) Employment of professional consultants for loss
10946	prevention and claims management coordination under a risk
10947	management program.
10948	(4) The fund is subject to regulation and investigation by
10949	the officedepartment. The fund is subject to rules of the
10950	commissiondepartmentand to part IX of chapter 626, relating to
10951	trade practices and frauds.
10952	(6) The commissiondepartmentshall adopt rules to
10953	implement this section, including rules that ensure that a trust
10954	fund maintains a sufficient reserve to cover contingent
10955	liabilities under subsection (7) in the event of its
10956	dissolution.
10957	(7)
10958	(c) The trust fund may from time to time assess members of
10959	the fund liable therefor under the terms of their policies and
10960	pursuant to this section. The officedepartmentmay assess the
10961	members in the event of liquidation of the fund.
10962	(h) If the trust fund fails to make an assessment as
10963	required by paragraph(g), the officedepartmentshall order the
10964	fund to do so. If the deficiency is not sufficiently made up
10965	within 60 days after the date of the order, the fund is deemed
10966	insolvent and grounds exist to proceed against the fund as
10967	provided for in part I of chapter 631.
10968	(8) The expense factors associated with rates used by a
10969	fund shall be filed with the officedepartmentat least 30 days
10970	prior to use and may not be used until approved by the office
10971	department. The officedepartmentshall disapprove the rates
10972	unless the filed expense factors associated therewith are
10973	justified and reasonable for the benefits and services provided.
10974	Section 204. Paragraph (a) of subsection (3) of section
10975	627.4236, Florida Statutes, is amended to read:
10976	627.4236 Coverage for bone marrow transplant procedures.--
10977	(3)(a) The Agency for Health Care Administration shall
10978	adopt rules specifying the bone marrow transplant procedures
10979	that are accepted within the appropriate oncological specialty
10980	and are not experimental for purposes of this section. The rules
10981	must be based upon recommendations of an advisory panel
10982	appointed by the secretary of the agency, composed of:
10983	1. One adult oncologist, selected from a list of three
10984	names recommended by the Florida Medical Association;
10985	2. One pediatric oncologist, selected from a list of three
10986	names recommended by the Florida Pediatric Society;
10987	3. One representative of the J. Hillis Miller Health
10988	Center at the University of Florida;
10989	4. One representative of the H. Lee Moffitt Cancer Center
10990	and Research Institute, Inc.;
10991	5. One consumer representative, selected from a list of
10992	three names recommended by the Chief Financial OfficerInsurance
10993	Commissioner;
10994	6. One representative of the Health Insurance Association
10995	of America;
10996	7. Two representatives of health insurers, one of whom
10997	represents the insurer with the largest Florida health insurance
10998	premium volume and one of whom represents the insurer with the
10999	second largest Florida health insurance premium volume; and
11000	8. One representative of the insurer with the largest
11001	Florida small group health insurance premium volume.
11002	Section 205. Paragraphs (a) and (e) of subsection (2),
11003	subsection (3), paragraphs (e), (j), and (k) of subsection (4),
11004	and subsection (6) of section 627.6488, Florida Statutes, are
11005	amended to read:
11006	627.6488 Florida Comprehensive Health Association.--
11007	(2)(a) The association shall operate subject to the
11008	supervision and approval of a three-member board of directors.
11009	The board of directors shall be appointed by the Chief Financial
11010	OfficerInsurance Commissioneras follows:
11011	1. The chair of the board shall be the Chief Financial
11012	OfficerInsurance Commissioneror his or her designee.
11013	2. One representative of policyholders who is not
11014	associated with the medical profession, a hospital, or an
11015	insurer.
11016	3. One representative of insurers.
11017
11018
11019	The administrator or his or her affiliate shall not be a member
11020	of the board. Any board member appointed by the Chief Financial
11021	Officercommissionermay be removed and replaced by him or her
11022	at any time without cause.
11023	(e) There shall be no liability on the part of, and no
11024	cause of action of any nature shall arise against, any member
11025	insurer, or its agents or employees, agents or employees of the
11026	association, members of the board of directors of the
11027	association, or the Chief Financial Officer'sdepartmental
11028	representatives for any act or omission taken by them in the
11029	performance of their powers and duties under this act, unless
11030	such act or omission by such person is in intentional disregard
11031	of the rights of the claimant.
11032	(3) The association shall adopt a plan pursuant to this
11033	act and submit its articles, bylaws, and operating rules to the
11034	officedepartmentfor approval. If the association fails to
11035	adopt such plan and suitable articles, bylaws, and operating
11036	rules within 180 days after the appointment of the board, the
11037	commissiondepartmentshall adopt rules to effectuate the
11038	provisions of this act; and such rules shall remain in effect
11039	until superseded by a plan and articles, bylaws, and operating
11040	rules submitted by the association and approved by the office
11041	department.
11042	(4) The association shall:
11043	(e) Require that all policy forms issued by the
11044	association conform to standard forms developed by the
11045	association. The forms shall be approved by the office
11046	department.
11047	(j) Make a report to the Governor, the officeInsurance
11048	Commissioner, the President of the Senate, the Speaker of the
11049	House of Representatives, and the Minority Leaders of the Senate
11050	and House of Representatives, not later than 45 days after the
11051	close of each calendar quarter, which includes, for the prior
11052	quarter, current data and estimates of net written and earned
11053	premiums, the expenses of administration, and the paid and
11054	incurred losses. The report shall identify any statutorily
11055	mandated program that has not been fully implemented by the
11056	board.
11057	(k) To facilitate preparation of assessments and for other
11058	purposes, the board shall direct preparation of annual audited
11059	financial statements for each calendar year as soon as feasible
11060	following the conclusion of that calendar year, and shall,
11061	within 30 days after rendition of such statements, file with the
11062	officedepartmentthe annual report containing such information
11063	as required by the officedepartmentto be filed on March 1 of
11064	each year.
11065	(6) The officedepartmentshall examine and investigate
11066	the association in the manner provided in part II of chapter
11067	624.
11068	Section 206. Paragraph (a) of subsection (3), paragraphs
11069	(c), (d), (e), and (i) of subsection (5), paragraphs (a) and (b)
11070	of subsection (6), paragraphs (b), (c), and (d) of subsection
11071	(8), paragraphs (a) and (b) of subsection (9), subsection (10),
11072	paragraphs (b), (c), (d), (e), (g), (h), (j), and (m) of
11073	subsection (11), subsection (12), paragraph (i) of subsection
11074	(13), paragraph(a) of subsection (15), and subsection (16) of
11075	section 627.6699, Florida Statutes, are amended to read:
11076	627.6699 Employee Health Care Access Act.--
11077	(3) DEFINITIONS.--As used in this section, the term:
11078	(a) "Actuarial certification" means a written statement,
11079	by a member of the American Academy of Actuaries or another
11080	person acceptable to the officedepartment, that a small
11081	employer carrier is in compliance with subsection (6), based
11082	upon the person's examination, including a review of the
11083	appropriate records and of the actuarial assumptions and methods
11084	used by the carrier in establishing premium rates for applicable
11085	health benefit plans.
11086	(5) AVAILABILITY OF COVERAGE.--
11087	(c) Every small employer carrier must, as a condition of
11088	transacting business in this state:
11089	1. Beginning July 1, 2000,Offer and issue all small
11090	employer health benefit plans on a guaranteed-issue basis to
11091	every eligible small employer, with 2 to 50 eligible employees,
11092	that elects to be covered under such plan, agrees to make the
11093	required premium payments, and satisfies the other provisions of
11094	the plan. A rider for additional or increased benefits may be
11095	medically underwritten and may only be added to the standard
11096	health benefit plan. The increased rate charged for the
11097	additional or increased benefit must be rated in accordance with
11098	this section.
11099	2. Beginning July 1, 2000, and until July 31, 2001, offer
11100	and issue basic and standard small employer health benefit plans
11101	on a guaranteed-issue basis to every eligible small employer
11102	which is eligible for guaranteed renewal, has less than two
11103	eligible employees, is not formed primarily for the purpose of
11104	buying health insurance, elects to be covered under such plan,
11105	agrees to make the required premium payments, and satisfies the
11106	other provisions of the plan. A rider for additional or
11107	increased benefits may be medically underwritten and may be
11108	added only to the standard benefit plan. The increased rate
11109	charged for the additional or increased benefit must be rated in
11110	accordance with this section. For purposes of this subparagraph,
11111	a person, his or her spouse, and his or her dependent children
11112	shall constitute a single eligible employee if that person and
11113	spouse are employed by the same small employer and either one
11114	has a normal work week of less than 25 hours.
11115	2.3. Beginning August 1, 2001,Offer and issue basic and
11116	standard small employer health benefit plans on a guaranteed-
11117	issue basis, during a 31-day open enrollment period of August 1
11118	through August 31 of each year, to every eligible small
11119	employer, with fewer than two eligible employees, which small
11120	employer is not formed primarily for the purpose of buying
11121	health insurance and which elects to be covered under such plan,
11122	agrees to make the required premium payments, and satisfies the
11123	other provisions of the plan. Coverage provided under this
11124	subparagraph shall begin on October 1 of the same year as the
11125	date of enrollment, unless the small employer carrier and the
11126	small employer agree to a different date. A rider for additional
11127	or increased benefits may be medically underwritten and may only
11128	be added to the standard health benefit plan. The increased
11129	rate charged for the additional or increased benefit must be
11130	rated in accordance with this section. For purposes of this
11131	subparagraph, a person, his or her spouse, and his or her
11132	dependent children constitute a single eligible employee if that
11133	person and spouse are employed by the same small employer and
11134	either that person or his or her spouse has a normal work week
11135	of less than 25 hours.
11136	3.4.This paragraph does not limit a carrier's ability to
11137	offer other health benefit plans to small employers if the
11138	standard and basic health benefit plans are offered and
11139	rejected.
11140	(d) A small employer carrier must file with the office
11141	department, in a format and manner prescribed by the committee,
11142	a standard health care plan and a basic health care plan to be
11143	used by the carrier.
11144	(e) The officedepartmentat any time may, after providing
11145	notice and an opportunity for a hearing, disapprove the
11146	continued use by the small employer carrier of the standard or
11147	basic health benefit plan on the grounds that such plan does not
11148	meet the requirements of this section.
11149	(i)1. A small employer carrier need not offer coverage or
11150	accept applications pursuant to paragraph (a):
11151	a. To a small employer if the small employer is not
11152	physically located in an established geographic service area of
11153	the small employer carrier, provided such geographic service
11154	area shall not be less than a county;
11155	b. To an employee if the employee does not work or reside
11156	within an established geographic service area of the small
11157	employer carrier; or
11158	c. To a small employer group within an area in which the
11159	small employer carrier reasonably anticipates, and demonstrates
11160	to the satisfaction of the officedepartment, that it cannot,
11161	within its network of providers, deliver service adequately to
11162	the members of such groups because of obligations to existing
11163	group contract holders and enrollees.
11164	2. A small employer carrier that cannot offer coverage
11165	pursuant to sub-subparagraph 1.c. may not offer coverage in the
11166	applicable area to new cases of employer groups having more than
11167	50 eligible employees or small employer groups until the later
11168	of 180 days following each such refusal or the date on which the
11169	carrier notifies the officedepartmentthat it has regained its
11170	ability to deliver services to small employer groups.
11171	3.a. A small employer carrier may deny health insurance
11172	coverage in the small-group market if the carrier has
11173	demonstrated to the officedepartmentthat:
11174	(I) It does not have the financial reserves necessary to
11175	underwrite additional coverage; and
11176	(II) It is applying this sub-subparagraph uniformly to all
11177	employers in the small-group market in this state consistent
11178	with this section and without regard to the claims experience of
11179	those employers and their employees and their dependents or any
11180	health-status-related factor that relates to such employees and
11181	dependents.
11182	b. A small employer carrier, upon denying health insurance
11183	coverage in connection with health benefit plans in accordance
11184	with sub-subparagraph a., may not offer coverage in connection
11185	with group health benefit plans in the small-group market in
11186	this state for a period of 180 days after the date such coverage
11187	is denied or until the insurer has demonstrated to the office
11188	departmentthat the insurer has sufficient financial reserves to
11189	underwrite additional coverage, whichever is later. The office
11190	departmentmay provide for the application of this sub-
11191	subparagraph on a service-area-specific basis.
11192	4. Beginning in 1994, The commissiondepartmentshall, by
11193	rule, require each small employer carrier to report, on or
11194	before March 1 of each year, its gross annual premiums for all
11195	health benefit plans issued to small employers during the
11196	previous calendar year, and also to report its gross annual
11197	premiums for new, but not renewal, standard and basic health
11198	benefit plans subject to this section issued during the previous
11199	calendar year. No later than May 1 of each year, the office
11200	departmentshall calculate each carrier's percentage of all
11201	small employer group health premiums for the previous calendar
11202	year and shall calculate the aggregate gross annual premiums for
11203	new, but not renewal, standard and basic health benefit plans
11204	for the previous calendar year.
11205	(6) RESTRICTIONS RELATING TO PREMIUM RATES.--
11206	(a) The commissiondepartmentmay, by rule, establish
11207	regulations to administer this section and to assure that rating
11208	practices used by small employer carriers are consistent with
11209	the purpose of this section, including assuring that differences
11210	in rates charged for health benefit plans by small employer
11211	carriers are reasonable and reflect objective differences in
11212	plan design, not including differences due to the nature of the
11213	groups assumed to select particular health benefit plans.
11214	(b) For all small employer health benefit plans that are
11215	subject to this section and are issued by small employer
11216	carriers on or after January 1, 1994, premium rates for health
11217	benefit plans subject to this section are subject to the
11218	following:
11219	1. Small employer carriers must use a modified community
11220	rating methodology in which the premium for each small employer
11221	must be determined solely on the basis of the eligible
11222	employee's and eligible dependent's gender, age, family
11223	composition, tobacco use, or geographic area as determined under
11224	paragraph (5)(j) and in which the premium may be adjusted as
11225	permitted by this paragraph.
11226	2. Rating factors related to age, gender, family
11227	composition, tobacco use, or geographic location may be
11228	developed by each carrier to reflect the carrier's experience.
11229	The factors used by carriers are subject to officedepartment
11230	review and approval.
11231	3. Small employer carriers may not modify the rate for a
11232	small employer for 12 months from the initial issue date or
11233	renewal date, unless the composition of the group changes or
11234	benefits are changed. However, a small employer carrier may
11235	modify the rate one time prior to 12 months after the initial
11236	issue date for a small employer who enrolls under a previously
11237	issued group policy that has a common anniversary date for all
11238	employers covered under the policy if:
11239	a. The carrier discloses to the employer in a clear and
11240	conspicuous manner the date of the first renewal and the fact
11241	that the premium may increase on or after that date.
11242	b. The insurer demonstrates to the officedepartmentthat
11243	efficiencies in administration are achieved and reflected in the
11244	rates charged to small employers covered under the policy.
11245	4. A carrier may issue a group health insurance policy to
11246	a small employer health alliance or other group association with
11247	rates that reflect a premium credit for expense savings
11248	attributable to administrative activities being performed by the
11249	alliance or group association if such expense savings are
11250	specifically documented in the insurer's rate filing and are
11251	approved by the officedepartment. Any such credit may not be
11252	based on different morbidity assumptions or on any other factor
11253	related to the health status or claims experience of any person
11254	covered under the policy. Nothing in this subparagraph exempts
11255	an alliance or group association from licensure for any
11256	activities that require licensure under the insurance code. A
11257	carrier issuing a group health insurance policy to a small
11258	employer health alliance or other group association shall allow
11259	any properly licensed and appointed agent of that carrier to
11260	market and sell the small employer health alliance or other
11261	group association policy. Such agent shall be paid the usual and
11262	customary commission paid to any agent selling the policy.
11263	5. Any adjustments in rates for claims experience, health
11264	status, or duration of coverage may not be charged to individual
11265	employees or dependents. For a small employer's policy, such
11266	adjustments may not result in a rate for the small employer
11267	which deviates more than 15 percent from the carrier's approved
11268	rate. Any such adjustment must be applied uniformly to the rates
11269	charged for all employees and dependents of the small employer.
11270	A small employer carrier may make an adjustment to a small
11271	employer's renewal premium, not to exceed 10 percent annually,
11272	due to the claims experience, health status, or duration of
11273	coverage of the employees or dependents of the small employer.
11274	Semiannually, small group carriers shall report information on
11275	forms adopted by rule by the commissiondepartment, to enable
11276	the officedepartmentto monitor the relationship of aggregate
11277	adjusted premiums actually charged policyholders by each carrier
11278	to the premiums that would have been charged by application of
11279	the carrier's approved modified community rates. If the
11280	aggregate resulting from the application of such adjustment
11281	exceeds the premium that would have been charged by application
11282	of the approved modified community rate by 5 percent for the
11283	current reporting period, the carrier shall limit the
11284	application of such adjustments only to minus adjustments
11285	beginning not more than 60 days after the report is sent to the
11286	officedepartment. For any subsequent reporting period, if the
11287	total aggregate adjusted premium actually charged does not
11288	exceed the premium that would have been charged by application
11289	of the approved modified community rate by 5 percent, the
11290	carrier may apply both plus and minus adjustments. A small
11291	employer carrier may provide a credit to a small employer's
11292	premium based on administrative and acquisition expense
11293	differences resulting from the size of the group. Group size
11294	administrative and acquisition expense factors may be developed
11295	by each carrier to reflect the carrier's experience and are
11296	subject to officedepartmentreview and approval.
11297	6. A small employer carrier rating methodology may include
11298	separate rating categories for one dependent child, for two
11299	dependent children, and for three or more dependent children for
11300	family coverage of employees having a spouse and dependent
11301	children or employees having dependent children only. A small
11302	employer carrier may have fewer, but not greater, numbers of
11303	categories for dependent children than those specified in this
11304	subparagraph.
11305	7. Small employer carriers may not use a composite rating
11306	methodology to rate a small employer with fewer than 10
11307	employees. For the purposes of this subparagraph, a "composite
11308	rating methodology" means a rating methodology that averages the
11309	impact of the rating factors for age and gender in the premiums
11310	charged to all of the employees of a small employer.
11311	8.a. A carrier may separate the experience of small
11312	employer groups with less than 2 eligible employees from the
11313	experience of small employer groups with 2-50 eligible employees
11314	for purposes of determining an alternative modified community
11315	rating.
11316	b. If a carrier separates the experience of small employer
11317	groups as provided in sub-subparagraph a., the rate to be
11318	charged to small employer groups of less than 2 eligible
11319	employees may not exceed 150 percent of the rate determined for
11320	small employer groups of 2-50 eligible employees. However, the
11321	carrier may charge excess losses of the experience pool
11322	consisting of small employer groups with less than 2 eligible
11323	employees to the experience pool consisting of small employer
11324	groups with 2-50 eligible employees so that all losses are
11325	allocated and the 150-percent rate limit on the experience pool
11326	consisting of small employer groups with less than 2 eligible
11327	employees is maintained. Notwithstanding s. 627.411(1), the rate
11328	to be charged to a small employer group of fewer than 2 eligible
11329	employees, insured as of July 1, 2002, may be up to 125 percent
11330	of the rate determined for small employer groups of 2-50
11331	eligible employees for the first annual renewal and 150 percent
11332	for subsequent annual renewals.
11333	(8) MAINTENANCE OF RECORDS.--
11334	(b) Each small employer carrier must file with the office
11335	departmenton or before March 15 of each year an actuarial
11336	certification that the carrier is in compliance with this
11337	section and that the rating methods of the carrier are
11338	actuarially sound. The certification must be in a form and
11339	manner and contain the information prescribed by the commission
11340	department. The carrier must retain a copy of the certification
11341	at its principal place of business.
11342	(c) A small employer carrier must make the information and
11343	documentation described in paragraph (a) available to the office
11344	departmentupon request. The information constitutes
11345	proprietary and trade secret information and may not be
11346	disclosed by the officedepartment to persons outside the office
11347	department, except as agreed to by the carrier or as ordered by
11348	a court of competent jurisdiction.
11349	(d) Each small employer carrier must file with the office
11350	department quarterly an enrollment report as directed by the
11351	officedepartment. Such report shall not constitute proprietary
11352	or trade secret information.
11353	(9) SMALL EMPLOYER CARRIER'S ELECTION TO BECOME A RISK-
11354	ASSUMING CARRIER OR A REINSURING CARRIER.--
11355	(a) A small employer carrier must elect to become either a
11356	risk-assuming carrier or a reinsuring carrier. Each small
11357	employer carrier must make an initial election, binding through
11358	January 1, 1994. The carrier's initial election must be made no
11359	later than October 31, 1992. By October 31, 1993, all small
11360	employer carriers must file a final election, which is binding
11361	for 2 years, from January 1, 1994, through December 31, 1995,
11362	after which an election shall be binding for a period of 5
11363	years. Any carrier that is not a small employer carrier on
11364	October 31, 1992, and intends to become a small employer carrier
11365	after October 31, 1992, must file its designation when it files
11366	the forms and rates it intends to use for small employer group
11367	health insurance; such designation shall be binding for 2 years
11368	after the date of approval of the forms and rates, and any
11369	subsequent designation is binding for 5 years. The office
11370	departmentmay permit a carrier to modify its election at any
11371	time for good cause shown, after a hearing.
11372	(b) The commissiondepartmentshall establish an
11373	application process for small employer carriers seeking to
11374	change their status under this subsection.
11375	(10) ELECTION PROCESS TO BECOME A RISK-ASSUMING CARRIER.--
11376	(a)1. A small employer carrier may become a risk-assuming
11377	carrier by filing with the officedepartmenta designation of
11378	election under subsection (9) in a format and manner prescribed
11379	by the commissiondepartment. The officedepartmentshall
11380	approve the election of a small employer carrier to become a
11381	risk-assuming carrier if the officedepartmentfinds that the
11382	carrier is capable of assuming that status pursuant to the
11383	criteria set forth in paragraph (b).
11384	2. The officedepartmentmust approve or disapprove any
11385	designation as a risk-assuming carrier within 60 days after
11386	filing.
11387	(b) In determining whether to approve an application by a
11388	small employer carrier to become a risk-assuming carrier, the
11389	officedepartmentshall consider:
11390	1. The carrier's financial ability to support the
11391	assumption of the risk of small employer groups.
11392	2. The carrier's history of rating and underwriting small
11393	employer groups.
11394	3. The carrier's commitment to market fairly to all small
11395	employers in the state or its service area, as applicable.
11396	4. The carrier's ability to assume and manage the risk of
11397	enrolling small employer groups without the protection of the
11398	reinsurance program provided in subsection (11).
11399	(c) A small employer carrier that becomes a risk-assuming
11400	carrier pursuant to this subsection is not subject to the
11401	assessment provisions of subsection(11).
11402	(d) The officedepartmentshall provide public notice of a
11403	small employer carrier's designation of election under
11404	subsection(9) to become a risk-assuming carrier and shall
11405	provide at least a 21-day period for public comment prior to
11406	making a decision on the election. The officedepartmentshall
11407	hold a hearing on the election at the request of the carrier.
11408	(e) The officedepartmentmay rescind the approval granted
11409	to a risk-assuming carrier under this subsection if the office
11410	departmentfinds that the carrier no longer meets the criteria
11411	of paragraph (b).
11412	(11) SMALL EMPLOYER HEALTH REINSURANCE PROGRAM.--
11413	(b)1. The program shall operate subject to the supervision
11414	and control of the board.
11415	2. Effective upon this act becoming a law, the board shall
11416	consist of the Chief Financial Officercommissioneror his or
11417	her designee, who shall serve as the chairperson, and 13
11418	additional members who are representatives of carriers and
11419	insurance agents and are appointed by the Chief Financial
11420	Officercommissionerand serve as follows:
11421	a. The Chief Financial Officercommissionershall include
11422	representatives of small employer carriers subject to assessment
11423	under this subsection. If two or more carriers elect to be
11424	risk-assuming carriers, the membership must include at least two
11425	representatives of risk-assuming carriers; if one carrier is
11426	risk-assuming, one member must be a representative of such
11427	carrier. At least one member must be a carrier who is subject
11428	to the assessments, but is not a small employer carrier.
11429	Subject to such restrictions, at least five members shall be
11430	selected from individuals recommended by small employer carriers
11431	pursuant to procedures provided by rule of the commission
11432	department. Three members shall be selected from a list of
11433	health insurance carriers that issue individual health insurance
11434	policies. At least two of the three members selected must be
11435	reinsuring carriers. Two members shall be selected from a list
11436	of insurance agents who are actively engaged in the sale of
11437	health insurance.
11438	b. A member appointed under this subparagraph shall serve
11439	a term of 4 years and shall continue in office until the
11440	member's successor takes office, except that, in order to
11441	provide for staggered terms, the Chief Financial Officer
11442	commissionershall designate two of the initial appointees under
11443	this subparagraph to serve terms of 2 years and shall designate
11444	three of the initial appointees under this subparagraph to serve
11445	terms of 3 years.
11446	3. The Chief Financial Officercommissionermay remove a
11447	member for cause.
11448	4. Vacancies on the board shall be filled in the same
11449	manner as the original appointment for the unexpired portion of
11450	the term.
11451	5. The Chief Financial Officercommissionermay require an
11452	entity that recommends persons for appointment to submit
11453	additional lists of recommended appointees.
11454	(c)1. No later than August 15, 1992,The board shall
11455	submit to the officedepartmenta plan of operation to assure
11456	the fair, reasonable, and equitable administration of the
11457	program. The board may at any time submit to the office
11458	departmentany amendments to the plan that the board finds to be
11459	necessary or suitable.
11460	2. No later than September 15, 1992, The officedepartment
11461	shall, after notice and hearing, approve the plan of operation
11462	if it determines that the plan submitted by the board is
11463	suitable to assure the fair, reasonable, and equitable
11464	administration of the program and provides for the sharing of
11465	program gains and losses equitably and proportionately in
11466	accordance with paragraph (j).
11467	3. The plan of operation, or any amendment thereto,
11468	becomes effective upon written approval of the office
11469	department.
11470	(d) The plan of operation must, among other things:
11471	1. Establish procedures for handling and accounting for
11472	program assets and moneys and for an annual fiscal reporting to
11473	the officedepartment.
11474	2. Establish procedures for selecting an administering
11475	carrier and set forth the powers and duties of the administering
11476	carrier.
11477	3. Establish procedures for reinsuring risks.
11478	4. Establish procedures for collecting assessments from
11479	participating carriers to provide for claims reinsured by the
11480	program and for administrative expenses, other than amounts
11481	payable to the administrative carrier, incurred or estimated to
11482	be incurred during the period for which the assessment is made.
11483	5. Provide for any additional matters at the discretion of
11484	the board.
11485	(e) The board shall recommend to the officedepartment
11486	market conduct requirements and other requirements for carriers
11487	and agents, including requirements relating to:
11488	1. Registration by each carrier with the officedepartment
11489	of its intention to be a small employer carrier under this
11490	section;
11491	2. Publication by the officedepartmentof a list of all
11492	small employer carriers, including a requirement applicable to
11493	agents and carriers that a health benefit plan may not be sold
11494	by a carrier that is not identified as a small employer carrier;
11495	3. The availability of a broadly publicized, toll-free
11496	telephone number for access by small employers to information
11497	concerning this section;
11498	4. Periodic reports by carriers and agents concerning
11499	health benefit plans issued; and
11500	5. Methods concerning periodic demonstration by small
11501	employer carriers and agents that they are marketing or issuing
11502	health benefit plans to small employers.
11503	(g) A reinsuring carrier may reinsure with the program
11504	coverage of an eligible employee of a small employer, or any
11505	dependent of such an employee, subject to each of the following
11506	provisions:
11507	1. With respect to a standard and basic health care plan,
11508	the program must reinsure the level of coverage provided; and,
11509	with respect to any other plan, the program must reinsure the
11510	coverage up to, but not exceeding, the level of coverage
11511	provided under the standard and basic health care plan.
11512	2. Except in the case of a late enrollee, a reinsuring
11513	carrier may reinsure an eligible employee or dependent within 60
11514	days after the commencement of the coverage of the small
11515	employer. A newly employed eligible employee or dependent of a
11516	small employer may be reinsured within 60 days after the
11517	commencement of his or her coverage.
11518	3. A small employer carrier may reinsure an entire
11519	employer group within 60 days after the commencement of the
11520	group's coverage under the plan. The carrier may choose to
11521	reinsure newly eligible employees and dependents of the
11522	reinsured group pursuant to subparagraph 1.
11523	4. The program may not reimburse a participating carrier
11524	with respect to the claims of a reinsured employee or dependent
11525	until the carrier has paid incurred claims of at least $5,000 in
11526	a calendar year for benefits covered by the program. In
11527	addition, the reinsuring carrier shall be responsible for 10
11528	percent of the next $50,000 and 5 percent of the next $100,000
11529	of incurred claims during a calendar year and the program shall
11530	reinsure the remainder.
11531	5. The board annually shall adjust the initial level of
11532	claims and the maximum limit to be retained by the carrier to
11533	reflect increases in costs and utilization within the standard
11534	market for health benefit plans within the state. The adjustment
11535	shall not be less than the annual change in the medical
11536	component of the "Consumer Price Index for All Urban Consumers"
11537	of the Bureau of Labor Statistics of the Department of Labor,
11538	unless the board proposes and the officedepartmentapproves a
11539	lower adjustment factor.
11540	6. A small employer carrier may terminate reinsurance for
11541	all reinsured employees or dependents on any plan anniversary.
11542	7. The premium rate charged for reinsurance by the program
11543	to a health maintenance organization that is approved by the
11544	Secretary of Health and Human Services as a federally qualified
11545	health maintenance organization pursuant to 42 U.S.C. s.
11546	300e(c)(2)(A) and that, as such, is subject to requirements that
11547	limit the amount of risk that may be ceded to the program, which
11548	requirements are more restrictive than subparagraph 4., shall be
11549	reduced by an amount equal to that portion of the risk, if any,
11550	which exceeds the amount set forth in subparagraph 4. which may
11551	not be ceded to the program.
11552	8. The board may consider adjustments to the premium rates
11553	charged for reinsurance by the program for carriers that use
11554	effective cost containment measures, including high-cost case
11555	management, as defined by the board.
11556	9. A reinsuring carrier shall apply its case-management
11557	and claims-handling techniques, including, but not limited to,
11558	utilization review, individual case management, preferred
11559	provider provisions, other managed care provisions or methods of
11560	operation, consistently with both reinsured business and
11561	nonreinsured business.
11562	(h)1. The board, as part of the plan of operation, shall
11563	establish a methodology for determining premium rates to be
11564	charged by the program for reinsuring small employers and
11565	individuals pursuant to this section. The methodology shall
11566	include a system for classification of small employers that
11567	reflects the types of case characteristics commonly used by
11568	small employer carriers in the state. The methodology shall
11569	provide for the development of basic reinsurance premium rates,
11570	which shall be multiplied by the factors set for them in this
11571	paragraph to determine the premium rates for the program. The
11572	basic reinsurance premium rates shall be established by the
11573	board, subject to the approval of the officedepartment, and
11574	shall be set at levels which reasonably approximate gross
11575	premiums charged to small employers by small employer carriers
11576	for health benefit plans with benefits similar to the standard
11577	and basic health benefit plan. The premium rates set by the
11578	board may vary by geographical area, as determined under this
11579	section, to reflect differences in cost. The multiplying
11580	factors must be established as follows:
11581	a. The entire group may be reinsured for a rate that is
11582	1.5 times the rate established by the board.
11583	b. An eligible employee or dependent may be reinsured for
11584	a rate that is 5 times the rate established by the board.
11585	2. The board periodically shall review the methodology
11586	established, including the system of classification and any
11587	rating factors, to assure that it reasonably reflects the claims
11588	experience of the program. The board may propose changes to the
11589	rates which shall be subject to the approval of the office
11590	department.
11591	(j)1. Before March 1 of each calendar year, the board
11592	shall determine and report to the officedepartmentthe program
11593	net loss for the previous year, including administrative
11594	expenses for that year, and the incurred losses for the year,
11595	taking into account investment income and other appropriate
11596	gains and losses.
11597	2. Any net loss for the year shall be recouped by
11598	assessment of the carriers, as follows:
11599	a. The operating losses of the program shall be assessed
11600	in the following order subject to the specified limitations.
11601	The first tier of assessments shall be made against reinsuring
11602	carriers in an amount which shall not exceed 5 percent of each
11603	reinsuring carrier's premiums from health benefit plans covering
11604	small employers. If such assessments have been collected and
11605	additional moneys are needed, the board shall make a second tier
11606	of assessments in an amount which shall not exceed 0.5 percent
11607	of each carrier's health benefit plan premiums. Except as
11608	provided in paragraph (n), risk-assuming carriers are exempt
11609	from all assessments authorized pursuant to this section. The
11610	amount paid by a reinsuring carrier for the first tier of
11611	assessments shall be credited against any additional assessments
11612	made.
11613	b. The board shall equitably assess carriers for operating
11614	losses of the plan based on market share. The board shall
11615	annually assess each carrier a portion of the operating losses
11616	of the plan. The first tier of assessments shall be determined
11617	by multiplying the operating losses by a fraction, the numerator
11618	of which equals the reinsuring carrier's earned premium
11619	pertaining to direct writings of small employer health benefit
11620	plans in the state during the calendar year for which the
11621	assessment is levied, and the denominator of which equals the
11622	total of all such premiums earned by reinsuring carriers in the
11623	state during that calendar year. The second tier of assessments
11624	shall be based on the premiums that all carriers, except risk-
11625	assuming carriers, earned on all health benefit plans written in
11626	this state. The board may levy interim assessments against
11627	carriers to ensure the financial ability of the plan to cover
11628	claims expenses and administrative expenses paid or estimated to
11629	be paid in the operation of the plan for the calendar year prior
11630	to the association's anticipated receipt of annual assessments
11631	for that calendar year. Any interim assessment is due and
11632	payable within 30 days after receipt by a carrier of the interim
11633	assessment notice. Interim assessment payments shall be credited
11634	against the carrier's annual assessment. Health benefit plan
11635	premiums and benefits paid by a carrier that are less than an
11636	amount determined by the board to justify the cost of collection
11637	may not be considered for purposes of determining assessments.
11638	c. Subject to the approval of the officedepartment, the
11639	board shall make an adjustment to the assessment formula for
11640	reinsuring carriers that are approved as federally qualified
11641	health maintenance organizations by the Secretary of Health and
11642	Human Services pursuant to 42 U.S.C. s. 300e(c)(2)(A) to the
11643	extent, if any, that restrictions are placed on them that are
11644	not imposed on other small employer carriers.
11645	3. Before March 1 of each year, the board shall determine
11646	and file with the officedepartmentan estimate of the
11647	assessments needed to fund the losses incurred by the program in
11648	the previous calendar year.
11649	4. If the board determines that the assessments needed to
11650	fund the losses incurred by the program in the previous calendar
11651	year will exceed the amount specified in subparagraph 2., the
11652	board shall evaluate the operation of the program and report its
11653	findings, including any recommendations for changes to the plan
11654	of operation, to the officedepartmentwithin 90 days following
11655	the end of the calendar year in which the losses were incurred.
11656	The evaluation shall include an estimate of future assessments,
11657	the administrative costs of the program, the appropriateness of
11658	the premiums charged and the level of carrier retention under
11659	the program, and the costs of coverage for small employers. If
11660	the board fails to file a report with the officedepartment
11661	within 90 days following the end of the applicable calendar
11662	year, the officedepartmentmay evaluate the operations of the
11663	program and implement such amendments to the plan of operation
11664	the officedepartmentdeems necessary to reduce future losses
11665	and assessments.
11666	5. If assessments exceed the amount of the actual losses
11667	and administrative expenses of the program, the excess shall be
11668	held as interest and used by the board to offset future losses
11669	or to reduce program premiums. As used in this paragraph, the
11670	term "future losses" includes reserves for incurred but not
11671	reported claims.
11672	6. Each carrier's proportion of the assessment shall be
11673	determined annually by the board, based on annual statements and
11674	other reports considered necessary by the board and filed by the
11675	carriers with the board.
11676	7. Provision shall be made in the plan of operation for
11677	the imposition of an interest penalty for late payment of an
11678	assessment.
11679	8. A carrier may seek, from the officecommissioner, a
11680	deferment, in whole or in part, from any assessment made by the
11681	board. The officedepartmentmay defer, in whole or in part,
11682	the assessment of a carrier if, in the opinion of the office
11683	department, the payment of the assessment would place the
11684	carrier in a financially impaired condition. If an assessment
11685	against a carrier is deferred, in whole or in part, the amount
11686	by which the assessment is deferred may be assessed against the
11687	other carriers in a manner consistent with the basis for
11688	assessment set forth in this section. The carrier receiving such
11689	deferment remains liable to the program for the amount deferred
11690	and is prohibited from reinsuring any individuals or groups in
11691	the program if it fails to pay assessments.
11692	(m) The board shall monitor compliance with this section,
11693	including the market conduct of small employer carriers, and
11694	shall report to the officedepartmentany unfair trade practices
11695	and misleading or unfair conduct by a small employer carrier
11696	that has been reported to the board by agents, consumers, or any
11697	other person. The officedepartmentshall investigate all
11698	reports and, upon a finding of noncompliance with this section
11699	or of unfair or misleading practices, shall take action against
11700	the small employer carrier as permitted under the insurance code
11701	or chapter 641. The board is not given investigatory or
11702	regulatory powers, but must forward all reports of cases or
11703	abuse or misrepresentation to the officedepartment.
11704	(12) STANDARD, BASIC, AND LIMITED HEALTH BENEFIT PLANS.--
11705	(a)1. By May 15, 1993, The Chief Financial Officer
11706	commissionershall appoint a health benefit plan committee
11707	composed of four representatives of carriers which shall include
11708	at least two representatives of HMOs, at least one of which is a
11709	staff model HMO, two representatives of agents, four
11710	representatives of small employers, and one employee of a small
11711	employer. The carrier members shall be selected from a list of
11712	individuals recommended by the board. The Chief Financial
11713	Officercommissionermay require the board to submit additional
11714	recommendations of individuals for appointment.
11715	2. The plans shall comply with all of the requirements of
11716	this subsection.
11717	3. The plans must be filed with and approved by the office
11718	departmentprior to issuance or delivery by any small employer
11719	carrier.
11720	4. After approval of the revised health benefit plans, if
11721	the officedepartmentdetermines that modifications to a plan
11722	might be appropriate, the Chief Financial Officercommissioner
11723	shall appoint a new health benefit plan committee in the manner
11724	provided in subparagraph 1. to submit recommended modifications
11725	to the officedepartmentfor approval.
11726	(b)1. Each small employer carrier issuing new health
11727	benefit plans shall offer to any small employer, upon request, a
11728	standard health benefit plan and a basic health benefit plan
11729	that meets the criteria set forth in this section.
11730	2. For purposes of this subsection, the terms "standard
11731	health benefit plan" and "basic health benefit plan" mean
11732	policies or contracts that a small employer carrier offers to
11733	eligible small employers that contain:
11734	a. An exclusion for services that are not medically
11735	necessary or that are not covered preventive health services;
11736	and
11737	b. A procedure for preauthorization by the small employer
11738	carrier, or its designees.
11739	3. A small employer carrier may include the following
11740	managed care provisions in the policy or contract to control
11741	costs:
11742	a. A preferred provider arrangement or exclusive provider
11743	organization or any combination thereof, in which a small
11744	employer carrier enters into a written agreement with the
11745	provider to provide services at specified levels of
11746	reimbursement or to provide reimbursement to specified
11747	providers. Any such written agreement between a provider and a
11748	small employer carrier must contain a provision under which the
11749	parties agree that the insured individual or covered member has
11750	no obligation to make payment for any medical service rendered
11751	by the provider which is determined not to be medically
11752	necessary. A carrier may use preferred provider arrangements or
11753	exclusive provider arrangements to the same extent as allowed in
11754	group products that are not issued to small employers.
11755	b. A procedure for utilization review by the small
11756	employer carrier or its designees.
11757
11758
11759	This subparagraph does not prohibit a small employer carrier
11760	from including in its policy or contract additional managed care
11761	and cost containment provisions, subject to the approval of the
11762	officedepartment, which have potential for controlling costs in
11763	a manner that does not result in inequitable treatment of
11764	insureds or subscribers. The carrier may use such provisions to
11765	the same extent as authorized for group products that are not
11766	issued to small employers.
11767	4. The standard health benefit plan shall include:
11768	a. Coverage for inpatient hospitalization;
11769	b. Coverage for outpatient services;
11770	c. Coverage for newborn children pursuant to s. 627.6575;
11771	d. Coverage for child care supervision services pursuant
11772	to s. 627.6579;
11773	e. Coverage for adopted children upon placement in the
11774	residence pursuant to s. 627.6578;
11775	f. Coverage for mammograms pursuant to s. 627.6613;
11776	g. Coverage for handicapped children pursuant to s.
11777	627.6615;
11778	h. Emergency or urgent care out of the geographic service
11779	area; and
11780	i. Coverage for services provided by a hospice licensed
11781	under s. 400.602 in cases where such coverage would be the most
11782	appropriate and the most cost-effective method for treating a
11783	covered illness.
11784	5. The standard health benefit plan and the basic health
11785	benefit plan may include a schedule of benefit limitations for
11786	specified services and procedures. If the committee develops
11787	such a schedule of benefits limitation for the standard health
11788	benefit plan or the basic health benefit plan, a small employer
11789	carrier offering the plan must offer the employer an option for
11790	increasing the benefit schedule amounts by 4 percent annually.
11791	6. The basic health benefit plan shall include all of the
11792	benefits specified in subparagraph 4.; however, the basic health
11793	benefit plan shall place additional restrictions on the benefits
11794	and utilization and may also impose additional cost containment
11795	measures.
11796	7. Sections 627.419(2), (3), and (4), 627.6574, 627.6612,
11797	627.66121, 627.66122, 627.6616, 627.6618, 627.668, and 627.66911
11798	apply to the standard health benefit plan and to the basic
11799	health benefit plan. However, notwithstanding said provisions,
11800	the plans may specify limits on the number of authorized
11801	treatments, if such limits are reasonable and do not
11802	discriminate against any type of provider.
11803	8. Each small employer carrier that provides for inpatient
11804	and outpatient services by allopathic hospitals may provide as
11805	an option of the insured similar inpatient and outpatient
11806	services by hospitals accredited by the American Osteopathic
11807	Association when such services are available and the osteopathic
11808	hospital agrees to provide the service.
11809	(c) If a small employer rejects, in writing, the standard
11810	health benefit plan and the basic health benefit plan, the small
11811	employer carrier may offer the small employer a limited benefit
11812	policy or contract.
11813	(d)1. Upon offering coverage under a standard health
11814	benefit plan, a basic health benefit plan, or a limited benefit
11815	policy or contract for any small employer, the small employer
11816	carrier shall provide such employer group with a written
11817	statement that contains, at a minimum:
11818	a. An explanation of those mandated benefits and providers
11819	that are not covered by the policy or contract;
11820	b. An explanation of the managed care and cost control
11821	features of the policy or contract, along with all appropriate
11822	mailing addresses and telephone numbers to be used by insureds
11823	in seeking information or authorization; and
11824	c. An explanation of the primary and preventive care
11825	features of the policy or contract.
11826
11827
11828	Such disclosure statement must be presented in a clear and
11829	understandable form and format and must be separate from the
11830	policy or certificate or evidence of coverage provided to the
11831	employer group.
11832	2. Before a small employer carrier issues a standard
11833	health benefit plan, a basic health benefit plan, or a limited
11834	benefit policy or contract, it must obtain from the prospective
11835	policyholder a signed written statement in which the prospective
11836	policyholder:
11837	a. Certifies as to eligibility for coverage under the
11838	standard health benefit plan, basic health benefit plan, or
11839	limited benefit policy or contract;
11840	b. Acknowledges the limited nature of the coverage and an
11841	understanding of the managed care and cost control features of
11842	the policy or contract;
11843	c. Acknowledges that if misrepresentations are made
11844	regarding eligibility for coverage under a standard health
11845	benefit plan, a basic health benefit plan, or a limited benefit
11846	policy or contract, the person making such misrepresentations
11847	forfeits coverage provided by the policy or contract; and
11848	d. If a limited plan is requested, acknowledges that the
11849	prospective policyholder had been offered, at the time of
11850	application for the insurance policy or contract, the
11851	opportunity to purchase any health benefit plan offered by the
11852	carrier and that the prospective policyholder had rejected that
11853	coverage.
11854
11855
11856	A copy of such written statement shall be provided to the
11857	prospective policyholder no later than at the time of delivery
11858	of the policy or contract, and the original of such written
11859	statement shall be retained in the files of the small employer
11860	carrier for the period of time that the policy or contract
11861	remains in effect or for 5 years, whichever period is longer.
11862	3. Any material statement made by an applicant for
11863	coverage under a health benefit plan which falsely certifies as
11864	to the applicant's eligibility for coverage serves as the basis
11865	for terminating coverage under the policy or contract.
11866	4. Each marketing communication that is intended to be
11867	used in the marketing of a health benefit plan in this state
11868	must be submitted for review by the officedepartmentprior to
11869	use and must contain the disclosures stated in this subsection.
11870	(e) A small employer carrier may not use any policy,
11871	contract, form, or rate under this section, including
11872	applications, enrollment forms, policies, contracts,
11873	certificates, evidences of coverage, riders, amendments,
11874	endorsements, and disclosure forms, until the insurer has filed
11875	it with the officedepartment and the officedepartmenthas
11876	approved it under ss. 627.410 and 627.411 and this section.
11877	(13) STANDARDS TO ASSURE FAIR MARKETING.--
11878	(i) The commissiondepartmentmay establish regulations
11879	setting forth additional standards to provide for the fair
11880	marketing and broad availability of health benefit plans to
11881	small employers in this state.
11882	(15) APPLICABILITY OF OTHER STATE LAWS.--
11883	(a) Except as expressly provided in this section, a law
11884	requiring coverage for a specific health care service or
11885	benefit, or a law requiring reimbursement, utilization, or
11886	consideration of a specific category of licensed health care
11887	practitioner, does not apply to a standard or basic health
11888	benefit plan policy or contract or a limited benefit policy or
11889	contract offered or delivered to a small employer unless that
11890	law is made expressly applicable to such policies or contracts.
11891	A law restricting or limiting deductibles, coinsurance,
11892	copayments, or annual or lifetime maximum payments does not
11893	apply to any health plan policy, including a standard or basic
11894	health benefit plan policy or contract, offered or delivered to
11895	a small employer unless such law is made expressly applicable to
11896	such policy or contract. However, every small employer carrier
11897	must offer to eligible small employers the standard benefit plan
11898	and the basic benefit plan, as required by subsection (5), as
11899	such plans have been approved by the officedepartmentpursuant
11900	to subsection (12).
11901	(16) RULEMAKING AUTHORITY.--The commissiondepartmentmay
11902	adopt rules to administer this section, including rules
11903	governing compliance by small employer carriers and small
11904	employers.
11905	Section 207. Section 627.7015, Florida Statutes, is
11906	amended to read:
11907	627.7015 Alternative procedure for resolution of disputed
11908	property insurance claims.--
11909	(1) PURPOSE AND SCOPE.--This section sets forth a
11910	nonadversarial alternative dispute resolution procedure for a
11911	mediated claim resolution conference prompted by the need for
11912	effective, fair, and timely handling of property insurance
11913	claims. There is a particular need for an informal,
11914	nonthreatening forum for helping parties who elect this
11915	procedure to resolve their claims disputes because most
11916	homeowner's insurance policies obligate insureds to participate
11917	in a potentially expensive and time-consuming adversarial
11918	appraisal process prior to litigation. The procedure set forth
11919	in this section is designed to bring the parties together for a
11920	mediated claims settlement conference without any of the
11921	trappings or drawbacks of an adversarial process. Before
11922	resorting to these procedures, insureds and insurers are
11923	encouraged to resolve claims as quickly and fairly as possible.
11924	This section is available with respect to claims under personal
11925	lines policies for all claimants and insurers prior to
11926	commencing the appraisal process, or commencing litigation. If
11927	requested by the insured, participation by legal counsel shall
11928	be permitted. Mediation under this section is also available to
11929	litigants referred to the department by a county court or
11930	circuit court. This section does not apply to commercial
11931	coverages, to private passenger motor vehicle insurance
11932	coverages, or to disputes relating to liability coverages in
11933	policies of property insurance.
11934	(2) At the time a first-party claim within the scope of
11935	this section is filed, the insurer shall notify all first-party
11936	claimants of their right to participate in the mediation program
11937	under this section. The department shall prepare a consumer
11938	information pamphlet for distribution to persons participating
11939	in mediation under this section.
11940	(3) The costs of mediation shall be reasonable, and the
11941	insurer shall bear all of the cost of conducting mediation
11942	conferences, except as otherwise provided in this section. If an
11943	insured fails to appear at the conference, the conference shall
11944	be rescheduled upon the insured's payment of the costs of a
11945	rescheduled conference. If the insurer fails to appear at the
11946	conference, the insurer shall pay the insured's actual cash
11947	expenses incurred in attending the conference if the insurer's
11948	failure to attend was not due to a good cause acceptable to the
11949	department. An insurer will be deemed to have failed to appear
11950	if the insurer's representative lacks authority to settle the
11951	full value of the claim. The insurer shall incur an additional
11952	fee for a rescheduled conference necessitated by the insurer's
11953	failure to appear at a scheduled conference. The fees assessed
11954	by the administrator shall include a charge necessary to defray
11955	the expenses of the department related to its duties under this
11956	section and shall be deposited in the Insurance Commissioner's
11957	Regulatory Trust Fund.
11958	(4) The department shall adopt by rule a property
11959	insurance mediation program to be administered by the department
11960	or its designee. The department may also adopt special rules
11961	which are applicable in cases of an emergency within the state.
11962	The rules shall be modeled after practices and procedures set
11963	forth in mediation rules of procedure adopted by the Supreme
11964	Court. The rules shall provide for:
11965	(a) Reasonable requirement for processing and scheduling
11966	of requests for mediation.
11967	(b) Qualifications of mediators as provided in s. 627.745
11968	and in the Florida Rules of Certified and Court Appointed
11969	Mediators, and for such other individuals as are qualified by
11970	education, training, or experience as the department determines
11971	to be appropriate.
11972	(c) Provisions governing who may attend mediation
11973	conferences.
11974	(d) Selection of mediators.
11975	(e) Criteria for the conduct of mediation conferences.
11976	(f) Right to legal counsel.
11977	(5) All statements made and documents produced at a
11978	mediation conference shall be deemed to be settlement
11979	negotiations in anticipation of litigation within the scope of
11980	s. 90.408. All parties to the mediation must negotiate in good
11981	faith and must have the authority to immediately settle the
11982	claim. Mediators are deemed to be agents of the department and
11983	shall have the immunity from suit provided in s. 44.107.
11984	(6) Mediation is nonbinding; however, if a written
11985	settlement is reached, the insured has 3 business days within
11986	which the insured may rescind the settlement unless the insured
11987	has cashed or deposited any check or draft disbursed to the
11988	insured for the disputed matters as a result of the conference.
11989	If a settlement agreement is reached and is not rescinded, it
11990	shall be binding and act as a release of all specific claims
11991	that were presented in that mediation conference.
11992	(7) If the insurer requests the mediation, and the
11993	mediation results are rejected by either party, the insured
11994	shall not be required to submit to or participate in any
11995	contractual loss appraisal process of the property loss damage
11996	as a precondition to legal action for breach of contract against
11997	the insurer for its failure to pay the policyholder's claims
11998	covered by the policy.
11999	(8) The department may designate an entity or person to
12000	serve as administrator to carry out any of the provisions of
12001	this section and may take this action by means of a written
12002	contract or agreement.
12003	Section 208. Section 627.745, Florida Statutes, is amended
12004	to read:
12005	627.745 Mediation of claims.--
12006	(1)(a) In any claim filed with an insurer for personal
12007	injury in an amount of $10,000 or less or any claim for property
12008	damage in any amount, arising out of the ownership, operation,
12009	use, or maintenance of a motor vehicle, either party may demand
12010	mediation of the claim prior to the institution of litigation.
12011	(b) A request for mediation shall be filed with the office
12012	department on a form approved by the officedepartment. The
12013	request for mediation shall state the reason for the request for
12014	mediation and the issues in dispute which are to be mediated.
12015	The filing of a request for mediation tolls the applicable time
12016	requirements for filing suit for a period of 60 days following
12017	the conclusion of the mediation process or the time prescribed
12018	in s. 95.11, whichever is later.
12019	(c) The insurance policy must specify in detail the terms
12020	and conditions for mediation of a first-party claim.
12021	(d) The mediation shall be conducted as an informal
12022	process in which formal rules of evidence and procedure need not
12023	be observed. Any party participating in a mediation must have
12024	the authority to make a binding decision. All parties must
12025	mediate in good faith.
12026	(e) The officedepartmentshall randomly select mediators.
12027	Each party may once reject the mediator selected, either
12028	originally or after the opposing side has exercised its option
12029	to reject a mediator.
12030	(f) Costs of mediation shall be borne equally by both
12031	parties unless the mediator determines that one party has not
12032	mediated in good faith.
12033	(g) Only one mediation may be requested for each claim,
12034	unless all parties agree to further mediation.
12035	(2) Upon receipt of a request for mediation, the office
12036	departmentshall refer the request to a mediator. The mediator
12037	shall notify the applicant and all interested parties, as
12038	identified by the applicant, and any other parties the mediator
12039	believes may have an interest in the mediation, of the date,
12040	time, and place of the mediation conference. The conference may
12041	be held by telephone, if feasible. The mediation conference
12042	shall be held within 45 days after the request for mediation.
12043	(3)(a) The officedepartmentshall approve mediators to
12044	conduct mediations pursuant to this section. All mediators must
12045	file an application under oath for approval as a mediator.
12046	(b) To qualify for approval as a mediator, a person must
12047	meet the following qualifications:
12048	1. Possess a masters or doctorate degree in psychology,
12049	counseling, business, accounting, or economics, be a member of
12050	The Florida Bar, be licensed as a certified public accountant,
12051	or demonstrate that the applicant for approval has been actively
12052	engaged as a qualified mediator for at least 4 years prior to
12053	July 1, 1990.
12054	2. Within 4 years immediately preceding the date the
12055	application for approval is filed with the officedepartment,
12056	have completed a minimum of a 40-hour training program approved
12057	by the officedepartmentand successfully passed a final
12058	examination included in the training program and approved by the
12059	officedepartment. The training program shall include and
12060	address all of the following:
12061	a. Mediation theory.
12062	b. Mediation process and techniques.
12063	c. Standards of conduct for mediators.
12064	d. Conflict management and intervention skills.
12065	e. Insurance nomenclature.
12066	(4) The commissiondepartmentmust adopt rules of
12067	procedure for claims mediation, taking into consideration a
12068	system which:
12069	(a) Is fair.
12070	(b) Promotes settlement.
12071	(c) Avoids delay.
12072	(d) Is nonadversarial.
12073	(e) Uses a framework for modern mediating technique.
12074	(f) Controls costs and expenses of mediation.
12075	(5) Disclosures and information divulged in the mediation
12076	process are not admissible in any subsequent action or
12077	proceeding relating to the claim or to the cause of action
12078	giving rise to the claim. A person demanding mediation under
12079	this section may not demand or request mediation after a suit is
12080	filed relating to the same facts already mediated.
12081	Section 209. Section 628.4615, Florida Statutes, is
12082	amended to read:
12083	628.4615 Specialty insurers; acquisition of controlling
12084	stock, ownership interest, assets, or control; merger or
12085	consolidation.--
12086	(1) For the purposes of this section, the term "specialty
12087	insurer" means any person holding a license or certificate of
12088	authority as:
12089	(a) A motor vehicle service agreement company authorized
12090	to issue motor vehicle service agreements as those terms are
12091	defined in s. 634.011(7)(8) and(8)(9);
12092	(b) A home warranty association authorized to issue "home
12093	warranties" as those terms are defined in s. 634.301(3)(4) and
12094	(4)(5);
12095	(c) A service warranty association authorized to issue
12096	"service warranties" as those terms are defined in s.
12097	634.401(13)(14) and (14)(15);
12098	(d) A prepaid limited health service organization
12099	authorized to issue prepaid limited health service contracts, as
12100	those terms are defined in chapter 636An optometric service
12101	plan corporation authorized to issue optometric service plan
12102	contracts as those terms are defined in s. 637.001(2) and (3);
12103	(e) A pharmaceutical service plan corporation authorized
12104	to issue pharmaceutical service plan contracts as those terms
12105	are defined in s. 637.1701(2) and (3);
12106	(f) A dental service plan corporation licensed to issue
12107	contracts for dental services pursuant to a dental service plan
12108	as that term is defined in s. 637.401(1);
12109	(g) An ambulance service association authorized to issue
12110	ambulance service contracts as those terms are defined in s.
12111	638.021(1) and (2);
12112	(e)(h)An authorized health maintenance organization
12113	operating pursuant to s. 641.21;
12114	(f)(i)An authorized prepaid health clinic operating
12115	pursuant to s. 641.405;
12116	(g)(j)A legal expense insurance corporation authorized to
12117	engage in a legal expense insurance business pursuant to s.
12118	642.021;
12119	(h)(k)A provider which is licensed to operate a facility
12120	which undertakes to provide continuing care as those terms are
12121	defined in s. 651.011(2), (4), (5), and (6), and (7);
12122	(i)(l)A multiple-employer welfare arrangement operating
12123	pursuant to ss. 624.436-624.446;
12124	(j)(m)A premium finance company authorized to finance
12125	insurance premiums pursuant to s. 627.828; or
12126	(k)(n)A corporation authorized to accept donor annuity
12127	agreements pursuant to s. 627.481.
12128	(2) No person shall, individually or in conjunction with
12129	any affiliated person of such person, directly or indirectly,
12130	conclude a tender offer or exchange offer for, enter into any
12131	agreement to exchange securities for, or otherwise finally
12132	acquire, 10 percent or more of the outstanding voting securities
12133	of a specialty insurer which is a stock corporation or of a
12134	controlling company of a specialty insurer which is a stock
12135	corporation; or conclude an acquisition of, or otherwise finally
12136	acquire, 10 percent or more of the ownership interest of a
12137	specialty insurer which is not a stock corporation or of a
12138	controlling company of a specialty insurer which is not a stock
12139	corporation, unless:
12140	(a) The person or affiliated person has filed with the
12141	officedepartmentand sent by registered mail to the principal
12142	office of the specialty insurer and controlling company an
12143	application, signed under oath and prepared on forms prescribed
12144	by the commissiondepartment, that contains the information
12145	specified in subsection(4) no later than 5 days after any form
12146	of tender offer or exchange offer is proposed, or no later than
12147	5 days after the acquisition of the securities or ownership
12148	interest if no tender offer or exchange offer is involved.
12149	(b) The officedepartmenthas approved the tender offer or
12150	exchange offer, or acquisition if no tender offer or exchange
12151	offer is involved.
12152	(3) This section does not apply to any acquisition of
12153	voting securities or ownership interest of a specialty insurer
12154	or of a controlling company by any person who, on July 9, 1986,
12155	is the owner of a majority of such voting securities or
12156	ownership interest or who, on or after July 9, 1986, becomes the
12157	owner of a majority of such voting securities or ownership
12158	interest with the approval of the officedepartmentpursuant to
12159	this section.
12160	(4) The application to be filed with the officedepartment
12161	and furnished to the specialty insurer and controlling company
12162	shall contain the following information and any additional
12163	information as the office deemsdepartment may deemnecessary to
12164	determine the character, experience, ability, and other
12165	qualifications of the person or affiliated person of such person
12166	for the protection of the insureds of the insurer and of the
12167	public:
12168	(a)1. The identity of, and the background information
12169	specified in subsection (5) on, each natural person by whom, or
12170	on whose behalf, the acquisition is to be made; and,
12171	2. If the acquisition is to be made by, or on behalf of, a
12172	person other than a natural person and as to any person who
12173	controls, either directly or indirectly, such other person, the
12174	identity of, and the background information specified in
12175	subsection (5) on:
12176	a. Each director, officer, or trustee, if a corporation,
12177	or
12178	b. Each partner, owner, manager, or joint venturer, or
12179	other person performing duties similar to those of persons in
12180	the aforementioned positions, if not a corporation,
12181
12182
12183	for the person.
12184	(b) The source and amount of the funds or other
12185	consideration used, or to be used, in making the acquisition.
12186	(c) Any plans or proposals which such persons may have
12187	made to liquidate the specialty insurer, to sell any of its
12188	assets or merge or consolidate it with any person, or to make
12189	any other major change in its business or corporate structure or
12190	management; and any plans or proposals which such persons may
12191	have made to liquidate any controlling company of the specialty
12192	insurer, to sell any of its assets or merge or consolidate it
12193	with any person, or to make any other major change in its
12194	business or corporate structure or management.
12195	(d) The nature and the extent of the controlling interest
12196	which the person or affiliated person of such person proposes to
12197	acquire, the terms of the proposed acquisition, and the manner
12198	in which the controlling interest is to be acquired of a
12199	specialty insurer or controlling company which is not a stock
12200	corporation.
12201	(e) The number of shares or other securities which the
12202	person or affiliated person of such person proposes to acquire,
12203	the terms of the proposed acquisition, and the manner in which
12204	the securities are to be acquired.
12205	(f) Information as to any contract, arrangement, or
12206	understanding with any party with respect to any of the
12207	securities of the specialty insurer or controlling company,
12208	including, but not limited to, information relating to the
12209	transfer of any of the securities, option arrangements, puts or
12210	calls, or the giving or withholding of proxies, which
12211	information names the party with whom the contract, arrangement,
12212	or understanding has been entered into and gives the details
12213	thereof.
12214	(5)(a) The information as to the background and identity
12215	of each natural person, which information is required to be
12216	furnished pursuant to paragraph(4)(a), shall include:
12217	1. The natural person's occupations, positions of
12218	employment, and offices held during the past 10 years.
12219	2. The principal business and address of any business,
12220	corporation, or organization in which each such office of the
12221	natural person was held, or in which each such occupation or
12222	position of employment was carried on.
12223	3. Whether the natural person was, at any time during such
12224	10-year period, convicted of any crime other than a traffic
12225	violation.
12226	4. Whether the natural person has been, during such 10-
12227	year period, the subject of any proceeding for the revocation of
12228	any license and, if so, the nature of the proceeding and the
12229	disposition of the proceeding.
12230	5. Whether, during the 10-year period, the natural person
12231	has been the subject of any proceeding under the federal
12232	Bankruptcy Act; or whether, during the 10-year period, any
12233	person or other business or organization in which the natural
12234	person was a director, officer, trustee, partner, owner,
12235	manager, or other official has been subject to any such
12236	proceeding, either during the time in which the natural person
12237	was a director, officer, or trustee, if a corporation, or a
12238	partner, owner, manager, joint venturer, or other official, if
12239	not a corporation, or within 12 months thereafter.
12240	6. Whether, during the 10-year period, the natural person
12241	has been enjoined, either temporarily or permanently, by a court
12242	of competent jurisdiction from violating any federal or state
12243	law regulating the business of insurance, securities, or
12244	banking, or from carrying out any particular practice or
12245	practices in the course of the business of insurance,
12246	securities, or banking, together with details as to any such
12247	event.
12248	7. Fingerprints of each person referred to in subsection
12249	(4).
12250	(b) Any person filing the statement required by this
12251	section shall give all required information that is within the
12252	knowledge of:
12253	1. The directors, officers, or trustees, if a corporation,
12254	or
12255	2. The partners, owners, managers, or joint venturers, or
12256	others performing functions similar to those of a director,
12257	officer, or trustee, if not a corporation,
12258
12259
12260	of the person making the filing and of any person controlling
12261	either directly or indirectly such person. If any material
12262	change occurs in the facts set forth in the application filed
12263	with the officedepartmentpursuant to this section, an
12264	amendment setting forth such changes shall be filed immediately
12265	with the officedepartment, and a copy of the amendment shall be
12266	sent by registered mail to the principal office of the specialty
12267	insurer and to the principal office of the controlling company.
12268	(6)(a) The acquisition application shall be reviewed in
12269	accordance with chapter 120. The officedepartmentmay on its
12270	own initiate, or, if requested to do so in writing by a
12271	substantially affected person, shall conduct, a proceeding to
12272	consider the appropriateness of the proposed filing. Time
12273	periods for purposes of chapter 120 shall be tolled during the
12274	pendency of the proceeding. Any written request for a proceeding
12275	must be filed with the officedepartmentwithin 10 days of the
12276	date notice of the filing is given. During the pendency of the
12277	proceeding or review period by the officedepartment, any person
12278	or affiliated person complying with the filing requirements of
12279	this section may proceed and take all steps necessary to
12280	conclude the acquisition so long as the acquisition becoming
12281	final is conditioned upon obtaining officedepartmental
12282	approval. The officedepartmentshall, however, at any time it
12283	finds an immediate danger to the public health, safety, and
12284	welfare of the insureds exists, immediately order, pursuant to
12285	s. 120.569(2)(n), the proposed acquisition disapproved and any
12286	further steps to conclude the acquisition ceased.
12287	(b) During the pendency of the office'sdepartment's
12288	review of any acquisition subject to the provisions of this
12289	section, the acquiring person shall not make any material change
12290	in the operation of the specialty insurer or controlling company
12291	unless the officedepartmenthas specifically approved the
12292	change nor shall the acquiring person make any material change
12293	in the management of the specialty insurer unless advance
12294	written notice of the change in management is furnished to the
12295	officedepartment. A material change in the operation of the
12296	specialty insurer is a transaction which disposes of or
12297	obligates 5 percent or more of the capital and surplus of the
12298	specialty insurer. A material change in the management of the
12299	specialty insurer is any change in management involving officers
12300	or directors of the specialty insurer or any person of the
12301	specialty insurer or controlling company having authority to
12302	dispose of or obligate 5 percent or more of the specialty
12303	insurer's capital or surplus. The officedepartmentshall
12304	approve a material change in operations if it finds the
12305	applicable provisions of subsection (8) have been met. The
12306	officedepartmentmay disapprove a material change in management
12307	if it finds that the applicable provisions of subsection (8)
12308	have not been met and in such case the specialty insurer shall
12309	promptly change management as acceptable to the office
12310	department.
12311	(c) If a request for a proceeding is filed, the proceeding
12312	shall be conducted within 60 days after the date the written
12313	request for a proceeding is received by the officedepartment. A
12314	recommended order shall be issued within 20 days of the date of
12315	the close of the proceedings. A final order shall be issued
12316	within 20 days of the date of the recommended order or, if
12317	exceptions to the recommended order are filed, within 20 days of
12318	the date the exceptions are filed.
12319	(7) The officedepartmentmay disapprove any acquisition
12320	subject to the provisions of this section by any person or any
12321	affiliated person of such person who:
12322	(a) Willfully violates this section;
12323	(b) In violation of an order of the officedepartment
12324	issued pursuant to subsection (11), fails to divest himself or
12325	herself of any stock or ownership interest obtained in violation
12326	of this section or fails to divest himself or herself of any
12327	direct or indirect control of such stock or ownership interest,
12328	within 25 days after such order; or
12329	(c) In violation of an order issued by the office
12330	departmentpursuant to subsection (11), acquires an additional
12331	stock or ownership interest in a specialty insurer or
12332	controlling company or direct or indirect control of such stock
12333	or ownership interest, without complying with this section.
12334	(8) The person or persons filing the application required
12335	by subsection(2) shall have the burden of proof. The office
12336	departmentshall approve any such acquisition if it finds, on
12337	the basis of the record made during any proceeding or on the
12338	basis of the filed application if no proceeding is conducted,
12339	that:
12340	(a) Upon completion of the acquisition, the specialty
12341	insurer will be able to satisfy the requirements for the
12342	issuance of a license or certificate to write the line of
12343	insurance for which it is presently licensed or certificated.
12344	(b) The financial condition of the acquiring person or
12345	persons will not jeopardize the financial stability of the
12346	specialty insurer or prejudice the interests of its insureds or
12347	the public.
12348	(c) Any plan or proposal which the acquiring person has,
12349	or acquiring persons have, made:
12350	1. To liquidate the specialty insurer, sell its assets, or
12351	merge or consolidate it with any person, or to make any other
12352	major change in its business or corporate structure or
12353	management, or
12354	2. To liquidate any controlling company, sell its assets,
12355	or merge or consolidate it with any person, or to make any major
12356	change in its business or corporate structure or management
12357	which would have an effect upon the specialty insurer,
12358
12359
12360	is fair and free of prejudice to the insureds of the specialty
12361	insurer or to the public.
12362	(d) The competence, experience, and integrity of those
12363	persons who will control directly or indirectly the operation of
12364	the specialty insurer indicate that the acquisition is in the
12365	best interest of the insureds of the insurer and in the public
12366	interest.
12367	(e) The natural persons for whom background information is
12368	required to be furnished pursuant to this section have such
12369	backgrounds as to indicate that it is in the best interests of
12370	the insureds of the specialty insurer and in the public interest
12371	to permit such persons to exercise control over the specialty
12372	insurer.
12373	(f) The directors and officers, if such specialty insurer
12374	or controlling company is a stock corporation, or the trustees,
12375	partners, owners, managers, or joint venturers or other persons
12376	performing duties similar to those of persons in the
12377	aforementioned positions, if such specialty insurer or
12378	controlling company is not a stock corporation, to be employed
12379	after the acquisition have sufficient insurance experience and
12380	ability to assure reasonable promise of successful operation.
12381	(g) The management of the specialty insurer after the
12382	acquisition will be competent and trustworthy, and will possess
12383	sufficient managerial experience so as to make the proposed
12384	operation of the specialty insurer not hazardous to the
12385	insurance-buying public.
12386	(h) The management of the specialty insurer after the
12387	acquisition shall not include any person who has directly or
12388	indirectly through ownership, control, reinsurance transactions,
12389	or other insurance or business relations unlawfully manipulated
12390	the assets, accounts, finances, or books of any insurer or
12391	otherwise acted in bad faith with respect thereto.
12392	(i) The acquisition is not likely to be hazardous or
12393	prejudicial to the insureds of the insurer or to the public.
12394	(j) The effect of the acquisition would not substantially
12395	lessen competition in the line of insurance for which the
12396	specialty insurer is licensed or certified in this state or
12397	would not tend to create a monopoly therein.
12398	(9) No vote by the stockholder of record, or by any other
12399	person, of any security acquired in contravention of the
12400	provisions of this section is valid. Any acquisition contrary
12401	to the provisions of this section is void. Upon the petition of
12402	the specialty insurer or the controlling company, the circuit
12403	court for the county in which the principal office of the
12404	specialty insurer is located may, without limiting the
12405	generality of its authority, order the issuance or entry of an
12406	injunction or other order to enforce the provisions of this
12407	section. There shall be a private right of action in favor of
12408	the specialty insurer or controlling company to enforce the
12409	provisions of this section. No demand upon the office
12410	departmentthat it perform its functions shall be required as a
12411	prerequisite to any suit by the specialty insurer or controlling
12412	company against any other person, and in no case shall the
12413	officedepartmentbe deemed a necessary party to any action by
12414	the specialty insurer or controlling company to enforce the
12415	provisions of this section. Any person who makes or proposes an
12416	acquisition requiring the filing of an application pursuant to
12417	this section, or who files such an application, shall be deemed
12418	to have thereby designated the Chief Financial OfficerInsurance
12419	Commissioner and Treasurer, or his or her assistant or deputy or
12420	another person in charge of his or her office, as such person's
12421	agent for service of process under this section and shall
12422	thereby be deemed to have submitted himself or herself to the
12423	administrative jurisdiction of the officedepartmentand to the
12424	jurisdiction of the circuit court.
12425	(10) Any approval by the officedepartmentunder this
12426	section does not constitute a recommendation by the office
12427	departmentof the tender offer or exchange offer, or
12428	acquisition, if no tender offer or exchange offer is involved.
12429	It is unlawful for a person to represent that the office's
12430	department'sapproval constitutes a recommendation. A person who
12431	violates the provisions of this subsection commits a felony of
12432	the third degree, punishable as provided in s. 775.082, s.
12433	775.083, or s. 775.084. The statute-of-limitations period for
12434	the prosecution of an offense committed under this subsection is
12435	5 years.
12436	(11) If the officedepartmentdetermines that any person
12437	or any affiliated person of such person has acquired 10 percent
12438	or more of the outstanding voting securities of a specialty
12439	insurer or controlling company which is a stock corporation, or
12440	10 percent or more of the ownership interest of a specialty
12441	insurer or controlling company which is not a stock corporation,
12442	without complying with the provisions of this section, the
12443	officedepartmentmay order that the person and any affiliated
12444	person of such person cease acquisition of the specialty insurer
12445	or controlling company and, if appropriate, divest itself of any
12446	stock or ownership interest acquired in violation of this
12447	section.
12448	(12)(a) The officedepartmentshall, if necessary to
12449	protect the public interest, suspend or revoke the certificate
12450	of authority of any specialty insurer or controlling company
12451	acquired in violation of this section.
12452	(b) If any specialty insurer is subject to suspension or
12453	revocation pursuant to paragraph (a), the specialty insurer
12454	shall be deemed to be in such condition, or to be using or to
12455	have been subject to such methods or practices in the conduct of
12456	its business, as to render its further transaction of insurance
12457	presently or prospectively hazardous to its insureds, creditors,
12458	or stockholders or to the public.
12459	(13)(a) For the purpose of this section, the term
12460	"acquisition" includes:
12461	1. A tender offer or exchange offer for securities,
12462	assets, or other ownership interest;
12463	2. An agreement to exchange securities for other
12464	securities, assets, or other ownership interest;
12465	3. A merger of a person or affiliated person into a
12466	specialty insurer or a merger of any person with a specialty
12467	insurer;
12468	4. A consolidation; or
12469	5. Any other form of change of control
12470
12471
12472	whereby any person or affiliated person acquires or attempts to
12473	acquire, directly or indirectly, 10 percent or more of the
12474	ownership interest or assets of a specialty insurer or of a
12475	controlling company. However, in the case of a health
12476	maintenance organization organized as a for-profit corporation,
12477	the provisions of s. 628.451 shall govern with respect to any
12478	merger or consolidation, and, in the case of a health
12479	maintenance organization organized as a not-for-profit
12480	corporation, the provisions of s. 628.471 shall govern with
12481	respect to any merger or consolidation.
12482	(b) For the purpose of this section, the term "affiliated
12483	person" of another person includes:
12484	1. The spouse of such other natural person;
12485	2. The parents of such other natural person and their
12486	lineal descendants and the parents of such other natural
12487	person's spouse and their lineal descendants;
12488	3. Any person who directly or indirectly owns or controls,
12489	or holds with power to vote, 10 percent or more of the
12490	outstanding voting securities of such other person;
12491	4. Any person who directly or indirectly owns 10 percent
12492	or more of the outstanding voting securities which are directly
12493	or indirectly owned or controlled, or held with power to vote,
12494	by such other person;
12495	5. Any person or group of persons who directly or
12496	indirectly control, are controlled by, or are under common
12497	control with such other person;
12498	6. Any director, officer, trustee, partner, owner,
12499	manager, joint venturer, or employee, or other person performing
12500	duties similar to those of persons in the aforementioned
12501	positions, of such other person;
12502	7. If such other person is an investment company, any
12503	investment adviser of such company or any member of an advisory
12504	board of such company;
12505	8. If such other person is an unincorporated investment
12506	company not having a board of directors, the depositor of such
12507	company; or
12508	9. Any person who has entered into an agreement, written
12509	or unwritten, to act in concert with such other person in
12510	acquiring, or limiting the disposition of, securities of a
12511	specialty insurer or controlling company which is a stock
12512	corporation or in acquiring, or limiting the disposition of, an
12513	ownership interest of a specialty insurer or controlling company
12514	which is not a stock corporation.
12515	(c) For the purposes of this section, the term
12516	"controlling company" means any corporation, trust, or
12517	association owning, directly or indirectly, 25 percent or more
12518	of the voting securities of one or more specialty insurance
12519	companies which are stock corporations, or 25 percent or more of
12520	the ownership interest of one or more specialty insurance
12521	companies which are not stock corporations.
12522	(d) For the purpose of this section, the term "natural
12523	person" means an individual.
12524	(e) For the purpose of this section, the term "person"
12525	includes a natural person, corporation, association, trust,
12526	general partnership, limited partnership, joint venture, firm,
12527	proprietorship, or any other entity which may hold a license or
12528	certificate as a specialty insurer.
12529	(14) The commission maydepartment is authorized toadopt,
12530	amend, or repeal rules that are necessary to implement the
12531	provisions of this section, pursuant to chapter 120.
12532	Section 210. Section 628.917, Florida Statutes, is amended
12533	to read:
12534	628.917 Insolvency and liquidation.--In the event that a
12535	captive insurer is insolvent as defined in chapter 631, the
12536	officedepartmentshall liquidate the captive insurer pursuant
12537	to the provisions of part I of chapter 631; except that the
12538	officedepartmentshall make no attempt to rehabilitate such
12539	insurer.
12540	Section 211. Subsection (3) of section 631.021, Florida
12541	Statutes, is amended to
12542	631.021 Jurisdiction of delinquency proceeding; venue;
12543	change of venue; exclusiveness of remedy; appeal.--
12544	(3) A delinquency proceeding pursuant to this chapter
12545	constitutes the sole and exclusive method of liquidating,
12546	rehabilitating, reorganizing, or conserving an insurer. No court
12547	shall entertain a petition for the commencement of such a
12548	proceeding unless the petition has been filed in the name of the
12549	state on the relation of the officedepartment. The Florida
12550	Insurance Guaranty Association, Incorporated, the Florida
12551	Workers' Compensation Insurance Guaranty Association,
12552	Incorporated, and the Florida Life and Health Guaranty
12553	Association, Incorporated, shall be given reasonable written
12554	notice by the officedepartmentof all hearings which pertain to
12555	an adjudication of insolvency of a member insurer.
12556	Section 212. Section 631.025, Florida Statutes, is amended
12557	to read:
12558	631.025 Persons subject to this part.--Delinquency
12559	proceedings authorized by this part may be initiated against any
12560	insurer, as defined in s. 631.011(15), if the statutory grounds
12561	are present as to that insurer, and the court may exercise
12562	jurisdiction over any person required to cooperate with the
12563	department and officepursuant to s. 631.391 and over all
12564	persons made subject to the court's jurisdiction by other
12565	provisions of law. Such persons include, but are not limited to:
12566	(1) A person transacting, or that has transacted,
12567	insurance business in or from this state and against whom claims
12568	arising from that business may exist now or in the future.
12569	(2) A person purporting to transact an insurance business
12570	in this state and any person who acts as an insurer, transacts
12571	insurance, or otherwise engages in insurance activities in or
12572	from this state, with or without a certificate of authority or
12573	proper authority from the officedepartment, against whom claims
12574	arising from that business may exist now or in the future.
12575	(3) An insurer with policyholders resident in this state.
12576	(4) All other persons organized or in the process of
12577	organizing with the intent to transact an insurance business in
12578	this state.
12579	Section 213. Section 631.031, Florida Statutes, is amended
12580	to read:
12581	631.031 Commencement of delinquency proceeding.--The
12582	officedepartmentmay commence any such proceeding by
12583	application to the court for an order directing the insurer to
12584	show cause why the officedepartmentshould not have the relief
12585	prayed for. On the return of such order to show cause, and after
12586	a full hearing, the court shall either deny the application or
12587	grant the application, together with such other relief as the
12588	nature of the case and the interests of the policyholders,
12589	creditors, stockholders, members, subscribers, or public may
12590	require. The officedepartmentmay also commence any such
12591	proceeding by application to the court by petition for the entry
12592	of a consent order of conservation, rehabilitation, or
12593	liquidation.
12594	Section 214. Subsections (2), (3), (4), and (5) of section
12595	631.041, Florida Statutes, are amended to read:
12596	631.041 Automatic stay; relief from stay; injunctions.--
12597	(2) Upon written request of a person or entity subject to
12598	the stay against obtaining or enforcing a judgment against an
12599	insurer or affiliate provided in paragraph (1)(b) the court,
12600	with notice to the office anddepartment and upon hearing, may
12601	grant relief from the stay provided the movant, who has the
12602	burden of proof, establishes by clear and convincing evidence
12603	that the judgment is not voidable or void by a receiver and that
12604	property from which the judgment would be satisfied does not
12605	constitute premium funds or another asset which belongs to the
12606	insurer.
12607	(3) Upon application by the office ordepartment pursuant
12608	to this part for an order to show cause or upon petition, or at
12609	any time thereafter, the court may without notice issue an
12610	injunction restraining the insurer and its officers, directors,
12611	stockholders, members, subscribers, and agents and all other
12612	persons from the transaction of its business or the waste or
12613	disposition of its property until the further order of the
12614	court.
12615	(4) The court may without notice at any time during a
12616	proceeding under this chapter issue such other injunctions or
12617	orders as may be deemed necessary to prevent interference with
12618	the office ordepartment or the proceeding; waste of the assets
12619	of the insurer; the commencement or prosecution of any actions;
12620	the obtaining of preferences, judgments, attachments, or other
12621	liens; or the making of any levy against the insurer or against
12622	its assets or any part thereof.
12623	(5) Notwithstanding any other provision of law, no bond
12624	shall be required of the office ordepartment as a prerequisite
12625	for the issuance of any injunction or restraining order pursuant
12626	to this section.
12627	Section 215. Subsections (1) and (4) of section 631.042,
12628	Florida Statutes, are amended to read:
12629	631.042 Extension of time.--
12630	(1) With respect to any action by or against an insurer,
12631	no statute of limitations or defense of laches shall run between
12632	the date the officedepartmentfiles a petition for a
12633	delinquency proceeding against an insurer and the date the court
12634	enters an order granting or denying that petition. If the
12635	petition is denied, any action against the insurer that might
12636	have been commenced when the petition was filed may be commenced
12637	no later than 60 days after the order denying such relief or the
12638	remaining unexpired time under the applicable statute of
12639	limitations or defense of laches that was available on the day
12640	the petition was filed, whichever is longer.
12641	(4) For actions not covered by subsection (2), if any
12642	unexpired time period is fixed by any agreement or in any
12643	proceeding for doing any act for the benefit of the estate, the
12644	receiver shall have 180 days, or for good cause shown more than
12645	180 days as allowed by the court, from the date the court enters
12646	the order granting the office'sdepartment'spetition for a
12647	delinquency proceeding.
12648	Section 216. Section 631.051, Florida Statutes, is amended
12649	to read:
12650	631.051 Grounds for rehabilitation; domestic
12651	insurers.--The officedepartmentmay petition for an order
12652	directing it to rehabilitate a domestic insurer or an alien
12653	insurer domiciled in this state on any one or more of the
12654	following grounds, that the insurer:
12655	(1) Is impaired or insolvent;
12656	(2) Has failed to comply with an order of the office
12657	departmentto make good an impairment of capital or surplus or
12658	both;
12659	(3) Is found by the officedepartmentto be in such
12660	condition or is using or has been subject to such methods or
12661	practices in the conduct of its business, as to render its
12662	further transaction of insurance presently or prospectively
12663	hazardous to its policyholders, creditors, stockholders, or the
12664	public;
12665	(4) Has failed, or its parent corporation, subsidiary, or
12666	affiliated person controlled by either the insurer or the parent
12667	corporation has failed, to submit its books, documents,
12668	accounts, records, and affairs pertaining to the insurer to the
12669	reasonable inspection or examination of the officedepartmentor
12670	its authorized representative; or any individual exercising any
12671	executive authority in the affairs of the insurer, or parent
12672	corporation, or subsidiary, or affiliated person has refused to
12673	be examined under oath by the officedepartmentor its
12674	authorized representative, whether within this state or
12675	otherwise, concerning the pertinent affairs of the insurer, or
12676	parent corporation or subsidiary or affiliated person; or if
12677	examined under oath refuses to divulge pertinent information
12678	reasonably known to her or him; or officers, directors, agents,
12679	employees, or other representatives of the insurer or parent
12680	corporation, subsidiary, or affiliated person have failed to
12681	comply promptly with the reasonable requests of the office
12682	departmentor its authorized representative for the purposes of,
12683	and during the conduct of, any such examination;
12684	(5) Has concealed or removed records or assets or
12685	otherwise violated s. 628.271 or s. 628.281;
12686	(6) Through its board of directors or governing body is
12687	deadlocked in the management of the insurer's affairs and that
12688	the members of a mutual, reciprocal, or any other type of
12689	organization or stockholders are unable to break the deadlock
12690	and that irreparable injury to the insurer, its creditors, its
12691	policyholders, its members or subscribers, or the public is
12692	threatened by reason thereof;
12693	(7) Has transferred or attempted to transfer substantially
12694	its entire property or business, or has entered into any
12695	transaction the effect of which is to merge substantially its
12696	entire property or business into that of any other insurer or
12697	entity without having first obtained the written approval of the
12698	officedepartmentunder the provisions of s. 628.451, s.
12699	628.461, or s. 628.4615, as the case may be;
12700	(8) Has willfully violated its charter or certificate of
12701	incorporation or any law of this state;
12702	(9) Is in such a position that control of it, whether by
12703	stock ownership or otherwise, and whether direct or indirect, is
12704	in one or more persons found by the officedepartmentafter
12705	notice and hearing to be dishonest or untrustworthy; or that the
12706	insurer has failed, upon order of the officedepartmentand
12707	expiration of such reasonable time for such removal as the
12708	officedepartmentshall specify in the order, to remove any
12709	person who in fact has executive authority, directly or
12710	indirectly, in the insurer, whether as an officer, director,
12711	manager, agent, employee, or otherwise, and if such person has
12712	been found by the officedepartmentafter notice and hearing, to
12713	be incompetent, dishonest, untrustworthy, or so lacking in
12714	insurance company managerial experience as to be hazardous to
12715	the insurance-buying public;
12716	(10) Has been or is the subject of an application for the
12717	appointment of a receiver, trustee, custodian, or sequestrator
12718	of the insurer or its property otherwise than pursuant to the
12719	provisions of this code, but only if such an appointment has
12720	been made or is imminent;
12721	(11) Has consented to such an order through a majority of
12722	its directors, stockholders, members, or subscribers;
12723	(12) Has failed to pay a final judgment rendered against
12724	it in this state upon any insurance contract issued or assumed
12725	by it, within 60 days after the judgment became final, within 60
12726	days after the time for taking an appeal has expired, or within
12727	30 days after dismissal of an appeal before final determination,
12728	whichever date is the later;
12729	(13) Has been the victim of embezzlement, wrongful
12730	sequestration, conversion, diversion, or encumbering of its
12731	assets; forgery or fraud affecting it; or other illegal conduct
12732	in, by, or with respect to it, which if established would
12733	threaten its solvency; or that the officedepartmenthas
12734	reasonable cause to so believe any of the foregoing has occurred
12735	or may occur;
12736	(14) Is engaging in a systematic practice of reaching
12737	settlements with and obtaining releases from policyholders or
12738	third-party claimants and then unreasonably delaying payment of,
12739	or failing to pay, the agreed-upon settlements; or
12740	(15) Within the previous 12 months has systematically
12741	attempted to compromise with creditors on the ground that it is
12742	financially unable to pay its claims in full.
12743	Section 217. Section 631.0515, Florida Statutes, is
12744	amended to read:
12745	631.0515 Appointment of receiver; insurance holding
12746	company.--A delinquency proceeding pursuant to this chapter
12747	constitutes the sole and exclusive method of dissolving,
12748	liquidating, rehabilitating, reorganizing, conserving, or
12749	appointing a receiver of a Florida corporation which is not
12750	insolvent as defined by s. 607.01401(16); which through its
12751	shareholders, board of directors, or governing body is
12752	deadlocked in the management of its affairs; and which directly
12753	or indirectly owns all of the stock of a Florida domestic
12754	insurer. The officedepartmentmay petition for an order
12755	directing the departmentitto rehabilitate such corporation if
12756	the interests of policyholders or the public will be harmed as a
12757	result of the deadlock. The department shall use due diligence
12758	to resolve the deadlock. Whether or not the officedepartment
12759	petitions for an order, the circuit court shall not have
12760	jurisdiction pursuant to s. 607.271, s. 607.274, or s. 607.277
12761	to dissolve, liquidate, or appoint receivers with respect to, a
12762	Florida corporation which directly or indirectly owns all of the
12763	stock of a Florida domestic insurer and which is not insolvent
12764	as defined by s. 607.01401(16).
12765	Section 218. Section 631.061, Florida Statutes, is amended
12766	to read:
12767	631.061 Grounds for liquidation.--The officedepartment
12768	may apply to the court for an order appointing the departmentit
12769	as receiver (if its appointment as receiver is not then in
12770	effect) and directing the departmentitto liquidate the
12771	business of a domestic insurer or of the United States branch of
12772	an alien insurer having trusteed assets in this state,
12773	regardless of whether or not there has been a prior order
12774	directing it to rehabilitate such insurer, upon any of the
12775	grounds specified in s. 631.051, or if such insurer:
12776	(1) Is or is about to become insolvent.
12777	(2) Is an insolvent insurer and has commenced or is
12778	attempting to commence voluntary liquidation or dissolution
12779	except under this code.
12780	(3) Has not completed its organization and obtained a
12781	certificate of authority as an insurer within the time allowed
12782	therefor under any applicable law.
12783	Section 219. Section 631.071, Florida Statutes, is amended
12784	to read:
12785	631.071 Grounds for conservation; foreign insurers.--The
12786	officedepartment may apply to the court for an order appointing
12787	the departmentitas receiver or ancillary receiver, and
12788	directing it to conserve the assets within this state, of a
12789	foreign insurer upon any of the following grounds:
12790	(1) Upon any of the grounds specified in s. 631.051 or s.
12791	631.061, or
12792	(2) Upon the ground that its property has been
12793	sequestrated in its domiciliary sovereignty or in any other
12794	sovereignty.
12795	Section 220. Section 631.081, Florida Statutes, is amended
12796	to read:
12797	631.081 Grounds for conservation; alien insurers.--The
12798	officedepartment may apply to the court for an order appointing
12799	the departmentitas receiver or ancillary receiver, and
12800	directing it to conserve the assets within this state, of any
12801	alien insurer upon any of the following grounds:
12802	(1) Upon any of the grounds specified in s. 631.051 or s.
12803	631.061;
12804	(2) Upon the ground that the insurer has failed to comply,
12805	within the time designated by the officedepartment, with an
12806	order made by it to make good an impairment of its trusteed
12807	funds; or
12808	(3) Upon the ground that the property of the insurer has
12809	been sequestrated in its domiciliary sovereignty or elsewhere.
12810	Section 221. Section 631.091, Florida Statutes, is amended
12811	to read:
12812	631.091 Grounds for ancillary liquidation; foreign
12813	insurers.--The officedepartmentmay apply to the circuit court
12814	for an order appointing the departmentitas ancillary receiver
12815	of, and directing it to liquidate the business and assets of, a
12816	foreign insurer which has assets, business, or claims in this
12817	state upon the appointment in the domiciliary state of such
12818	insurer of a receiver, liquidator, conservator, rehabilitator,
12819	or other officer by whatever name called for the purpose of
12820	liquidating the business of such insurer.
12821	Section 222. Subsection (3) of section 631.111, Florida
12822	Statutes, is amended to read:
12823	631.111 Order of liquidation; domestic insurers.--
12824	(3) The department or officemay apply for and secure an
12825	order dissolving the corporate existence of a domestic insurer
12826	upon theitsapplication for an order of liquidation of such
12827	insurer or at any time after such order has been granted.
12828	Section 223. Subsection (1) of section 631.152, Florida
12829	Statutes, is amended to read:
12830	631.152 Conduct of delinquency proceeding; foreign
12831	insurers.--
12832	(1) Whenever under this chapter an ancillary receiver is
12833	to be appointed in a delinquency proceeding for an insurer not
12834	domiciled in this state, the court shall appoint the department
12835	as ancillary receiver. The officedepartmentshall file a
12836	petition requesting the appointment on the grounds set forth in
12837	s. 631.091:
12838	(a) If it finds that there are sufficient assets of the
12839	insurer located in this state to justify the appointment of an
12840	ancillary receiver, or
12841	(b) If 10 or more persons resident in this state having
12842	claims against such insurer file a petition with the office
12843	departmentrequesting the appointment of such ancillary
12844	receiver.
12845	Section 224. Paragraph (d) of subsection (6) of section
12846	631.154, Florida Statutes, is amended to read:
12847	631.154 Funds, assets, or other property in the possession
12848	of third person.--
12849	(6) Should the receiver be successful in establishing its
12850	claim or any part thereof, the receiver shall be entitled to
12851	recover judgment for the following:
12852	(d) All costs, investigative and other expenses,
12853	including, but not limited to, those for department and office
12854	staff, incurred in the recovery of the property, assets, or
12855	funds, and reasonable attorney's fees. Department and office
12856	staff costs and expenses include staff salaries.
12857
12858
12859	It is the intent of this section that a person found to be
12860	holding receivership assets fully reimburse the receiver for any
12861	and all efforts made to recover those assets.
12862	Section 225. Section 631.221, Florida Statutes, is amended
12863	to read:
12864	631.221 Deposit of moneys collected.--The moneys collected
12865	by the department in a proceeding under this chapter shall be
12866	deposited in a qualified public depository as defined in s.
12867	280.02, which depository with regards to such funds shall
12868	conform to and be bound by all the provisions of chapter 280, or
12869	invested with the Chief Financial OfficerState Treasurer
12870	pursuant to chapter 18. For the purpose of accounting for the
12871	assets and transactions of the estate, the receiver shall use
12872	such accounting books, records, and systems as the court directs
12873	after it hears and considers the recommendations of the
12874	receiver.
12875	Section 226 Section 631.231, Florida Statutes, is amended
12876	to read:
12877	631.231 Exemption from fees.--The department or office
12878	shall not be required to pay any fee to any public officer in
12879	this state for filing, recording, issuing a transcript or
12880	certificate, or authenticating any paper or instrument
12881	pertaining to the exercise by the department or officeof any of
12882	the powers or duties conferred upon it under this chapter,
12883	whether or not such paper or instrument be executed by the
12884	department or office or theiritsemployees or attorneys of
12885	record and whether or not it is connected with the commencement
12886	of any action or proceeding by or against the department or
12887	office, or with the subsequent conduct of such action or
12888	proceeding.
12889	Section 227 Section 631.361, Florida Statutes, is amended
12890	to read:
12891	631.361 Seizure under court order.--
12892	(1) Upon filing by the officedepartmentin the circuit
12893	court in and for Leon County of its verified petition alleging
12894	any ground for a formal delinquency proceeding against an
12895	insurer under this chapter, alleging that the interests of the
12896	insurer's policyholders, claimants, or creditors or the public
12897	will be endangered or jeopardized by delay, and setting forth
12898	the order deemed necessary by the officedepartment, the court
12899	may, ex parte and without notice or hearing, issue forthwith the
12900	requested order. The requested order may:
12901	(a) Direct the department to take possession and control
12902	of all or part of the property, books, documents, accounts, and
12903	other records of the insurer and the premises occupied by it for
12904	transaction of its business and premium funds and other property
12905	of the insurer held by an affiliate; and
12906	(b) Until further order of court, enjoin the insurer and
12907	any affiliate and their officers, directors, managers, agents,
12908	and employees from removal, concealment, or other disposition of
12909	the insurer's property, books, records, or accounts and from
12910	transaction of the insurer's business except with the
12911	department's written consent.
12912	(2) The court's order shall be for such duration specified
12913	in the order as the court deems necessary to enable the office
12914	anddepartment to ascertain the insurer's condition. Upon motion
12915	of any party or affected person, or upon its own motion, the
12916	court may hold such hearings as it deems desirable, after such
12917	notice as it deems appropriate, and may extend, shorten, or
12918	modify the terms of the order. The court shall vacate the
12919	seizure order if the officedepartmentfails to commence a
12920	formal proceeding under this chapter after having had a
12921	reasonable opportunity to do so, and a seizure order is
12922	automatically vacated by issuance of the court's order pursuant
12923	to a formal delinquency proceeding under this chapter.
12924	(3) Entry of a seizure order under this section shall not
12925	constitute an anticipatory breach of any contract of the
12926	insurer.
12927	Section 228 Section 631.371, Florida Statutes, is amended
12928	to read:
12929	631.371 Seizure under order of the officedepartment.--
12930	(1) Upon the office'sdepartmentfiling a verified
12931	petition with any circuit judge of the proper judicial circuit
12932	as required by s. 631.021(2), which states that it believes that
12933	the interest of policyholders, the insurer, claimants,
12934	creditors, or the public will be endangered or jeopardized and
12935	that prima facie grounds exist for rehabilitation, liquidation,
12936	or conservation of an insurer under s. 631.051, s. 631.061, or
12937	s. 631.131, the officedepartmentmay request a seizure order
12938	and shall be entitled to an ex parte hearing forthwith and an
12939	appropriate seizure order from the judge or court in the
12940	interest of protecting the public and such insurer and its
12941	policyholders, claimants, or creditors. After a diligent effort
12942	is made to be heard by the judges of the circuit and such judges
12943	or the court fails or refuses to hear such petition for any
12944	reason, the officedepartmentshall then file a duplicate
12945	original of said petition and exhibits, if any, in the Circuit
12946	Court of Leon County along with an affidavit which shall state
12947	that a diligent effort was made to obtain such initial hearing
12948	in the judicial circuit where such hearing was sought and that
12949	the request to be heard was refused or that a hearing was not
12950	granted and the reasons therefor, if known. Upon compliance with
12951	the above and if said affidavit further states that the office
12952	departmentbelieves that irreparable harm will result to the
12953	public and the insurer and its policyholders, creditors, or
12954	claimants as a result of further delay, it may thereafter issue
12955	a seizure order on any ground that would justify court seizure
12956	under s. 631.361. Such seizure order may contain any or all the
12957	provisions of s. 631.361(1). The officedepartmentshall retain
12958	possession and control until the order is vacated or is replaced
12959	by an order of court pursuant to subsection (2) or subsection
12960	(3) or pursuant to a formal delinquency proceeding under this
12961	chapter.
12962	(2) The officedepartmentmay, at any time after seizure
12963	under its order, report its actions to the proper court; and, in
12964	the event that the insurer, for any reason, fails to avail
12965	itself of the judicial review provided for by law, then the
12966	officedepartmentshall forthwith report its actions to the
12967	proper court. The officedepartmentmay request the court to
12968	substitute its order for the office'sdepartment'sor it may
12969	seek any other order which it deems appropriate.
12970	(3) Every law enforcement officer of this state authorized
12971	by law shall assist the officedepartmentin making and
12972	enforcing any such seizure, and every such officer shall furnish
12973	it with such deputies, patrolmen, patrolwomen, or officers as
12974	are necessary to assist it in execution of its order.
12975	(4) Entry of a seizure order under this section shall not
12976	constitute an anticipatory breach of any contract of the
12977	insurer.
12978	Section 229 Section 631.391, Florida Statutes, is amended
12979	to read:
12980	631.391 Cooperation of officers and employees.--
12981	(1) Any officer, director, manager, trustee, agent,
12982	adjuster, employee, or independent contractor of any insurer or
12983	affiliate and any other person who possesses any executive
12984	authority over, or who exercises any control over, any segment
12985	of the affairs of the insurer or affiliate shall fully cooperate
12986	with the department and officein any proceeding under this
12987	chapter or any investigation preliminary or incidental to the
12988	proceeding. An order of rehabilitation or liquidation which
12989	results in the discharge or suspension of any of the persons
12990	listed above does not operate to release such person from the
12991	duty to cooperate with the department and officeas set out
12992	herein. To "cooperate" includes, but is not limited to, the
12993	following:
12994	(a) To reply promptly in writing to any inquiry from the
12995	department or officerequesting such a reply;
12996	(b) Promptly to make available and deliver to the
12997	department or officeany books, accounts, documents, other
12998	records, information, data processing software, or property of
12999	or pertaining to the insurer and in her or his possession,
13000	custody, or control; or
13001	(c) Promptly to provide access to all data processing
13002	records in hard copy and in electronic form and to data
13003	processing facilities and services.
13004	(2) No person shall obstruct or interfere with the
13005	department or officein the conduct of any delinquency
13006	proceeding or any investigation preliminary or incidental
13007	thereto.
13008	(3) This section does not prohibit any person from seeking
13009	legal relief from a court when aggrieved by the petition for
13010	liquidation or other delinquency proceeding or by other orders.
13011	(4) Any person referred to in subsection (1) who fails to
13012	cooperate with the department or office, or any other person who
13013	obstructs or interferes with the department or office, in the
13014	conduct of any delinquency proceeding or any investigation
13015	preliminary or incidental thereto, is guilty of a misdemeanor of
13016	the first degree, punishable as provided in s. 775.082 or by
13017	fine of not more than $10,000.
13018	(5) Refusal by any person referred to in subsection (1) to
13019	provide records upon the request of the department or officeis
13020	grounds for revocation of any insurance-related license,
13021	including, but not limited to, agent and third-party
13022	administrator licenses.
13023	Section 230. Section 631.392, Florida Statutes, is amended
13024	to read:
13025	631.392 Immunity.--There shall be no liability on the part
13026	of, and no cause of action of any nature shall arise against,
13027	the Chief Financial Officer,Insurance Commissioner orthe
13028	department, the office, or any of theiritsemployees or agents
13029	for any action taken by them in the performance of their powers
13030	and duties under this chapter.
13031	Section 231. Section 631.398, Florida Statutes, is amended
13032	to read:
13033	631.398 Prevention of insolvencies.--To aid in the
13034	detection and prevention of insurer insolvencies or impairments:
13035	(1) Any member insurer; agent, employee, or member of the
13036	board of directors; or representative of any insurance guaranty
13037	association may make reports and recommendations to the
13038	department or officeupon any matter germane to the solvency,
13039	liquidation, rehabilitation, or conservation of any member
13040	insurer or germane to the solvency of any company seeking to do
13041	an insurance business in this state. Such reports and
13042	recommendations are confidential and exempt from the provisions
13043	of s. 119.07(1) until the termination of a delinquency
13044	proceeding.
13045	(2) The officedepartmentshall:
13046	(a) Report to the board of directors of the appropriate
13047	insurance guaranty association when it has reasonable cause to
13048	believe from any examination, whether completed or in process,
13049	of any member insurer that such insurer may be an impaired or
13050	insolvent insurer.
13051	(b) Seek the advice and recommendations of the board of
13052	directors of the appropriate insurance guaranty association
13053	concerning any matter affecting the duties and responsibilities
13054	of the officedepartmentin relation to the financial condition
13055	of member companies and companies seeking admission to transact
13056	insurance business in this state.
13057	(3) The office and department jointlyshall, no later than
13058	the conclusion of any domestic insurer insolvency proceeding,
13059	prepare a summary report containing such information as is in
13060	theiritspossession relating to the history and causes of such
13061	insolvency, including a statement of the business practices of
13062	such insurer which led to such insolvency.
13063	Section 232. Section 631.54, Florida Statutes, is amended
13064	to read:
13065	631.54 Definitions.--As used in this part:
13066	(1) "Account" means any one of the three accounts created
13067	by s. 631.55.
13068	(2) "Association" means the Florida Insurance Guaranty
13069	Association, Incorporated.
13070	(3) "Covered claim" means an unpaid claim, including one
13071	of unearned premiums, which arises out of, and is within the
13072	coverage, and not in excess of, the applicable limits of an
13073	insurance policy to which this part applies, issued by an
13074	insurer, if such insurer becomes an insolvent insurer after
13075	October 1, 1970, and the claimant or insured is a resident of
13076	this state at the time of the insured event or the property from
13077	which the claim arises is permanently located in this state.
13078	"Covered claim" shall not include any amount due any reinsurer,
13079	insurer, insurance pool, or underwriting association, as
13080	subrogation, contribution, indemnification, or otherwise. Member
13081	insurers shall have no right of subrogation against the insured
13082	of any insolvent member.
13083	(4) "Department" means the Department of Insurance.
13084	(4)(5)"Expenses in handling claims" means allocated and
13085	unallocated expenses, including, but not limited to, general
13086	administrative expenses and those expenses which relate to the
13087	investigation, adjustment, defense, or settlement of specific
13088	claims under, or arising out of, a specific policy.
13089	(5)(6)"Insolvent insurer" means a member insurer
13090	authorized to transact insurance in this state, either at the
13091	time the policy was issued or when the insured event occurred,
13092	and against which an order of liquidation with a finding of
13093	insolvency has been entered by a court of competent jurisdiction
13094	if such order has become final by the exhaustion of appellate
13095	review.
13096	(6)(7)"Member insurer" means any person who writes any
13097	kind of insurance to which this part applies under s. 631.52,
13098	including the exchange of reciprocal or interinsurance
13099	contracts, and is licensed to transact insurance in this state.
13100	(7)(8)"Net direct written premiums" means direct gross
13101	premiums written in this state on insurance policies to which
13102	this part applies, less return premiums thereon and dividends
13103	paid or credited to policyholders on such direct business. "Net
13104	direct written premiums" does not include premiums on contracts
13105	between insurers or reinsurers.
13106	(8)(9)"Person" means individuals, children, firms,
13107	associations, joint ventures, partnerships, estates, trusts,
13108	business trusts, syndicates, fiduciaries, corporations, and all
13109	other groups or combinations.
13110	Section 233. Subsection (1) of section 631.55, Florida
13111	Statutes, is amended to read:
13112	631.55 Creation of the association.--
13113	(1) There is created a nonprofit corporation to be known
13114	as the "Florida Insurance Guaranty Association, Incorporated."
13115	All insurers defined as member insurers in s. 631.54(6)(7)shall
13116	be members of the association as a condition of their authority
13117	to transact insurance in this state, and, further, as a
13118	condition of such authority, an insurer shall agree to reimburse
13119	the association for all claim payments the association makes on
13120	said insurer's behalf if such insurer is subsequently
13121	rehabilitated. The association shall perform its functions under
13122	a plan of operation established and approved under s. 631.58 and
13123	shall exercise its powers through a board of directors
13124	established under s. 631.56. The corporation shall have all
13125	those powers granted or permitted nonprofit corporations, as
13126	provided in chapter 617.
13127	Section 234. Subsection (1) of section 631.56, Florida
13128	Statutes, is amended to read:
13129	631.56 Board of directors.--
13130	(1) The board of directors of the association shall
13131	consist of not less than five or more than nine persons serving
13132	terms as established in the plan of operation. The department
13133	shall approve and appoint to the board persons recommended by
13134	the member insurers. In the event the department finds that any
13135	recommended person does not meet the qualifications for service
13136	on the board, the department shall request the member insurers
13137	to recommend another person. Each member shall serve for a 4-
13138	year term and may be reappointed. Vacancies on the board shall
13139	be filled for the remaining period of the term in the same
13140	manner as initial appointments. If no members are selected by
13141	November 30, 1970, the department may appoint the initial
13142	members of the board of directors.
13143	Section 235. Paragraph (a) of subsection (1) and
13144	subsection (3) of section 631.57, Florida Statutes, are amended
13145	to read:
13146	631.57 Powers and duties of the association.--
13147	(1) The association shall:
13148	(a)1. Be obligated to the extent of the covered claims
13149	existing:
13150	a. Prior to adjudication of insolvency and arising within
13151	30 days after the determination of insolvency;
13152	b. Before the policy expiration date if less than 30 days
13153	after the determination; or
13154	c. Before the insured replaces the policy or causes its
13155	cancellation, if she or he does so within 30 days of the
13156	determination.
13157	2. The obligation under subparagraph 1. shall include only
13158	that amount of each covered claim which is in excess of $100 and
13159	is less than $300,000, except with respect to policies covering
13160	condominium associations or homeowners' associations, which
13161	associations have a responsibility to provide insurance coverage
13162	on residential units within the association, the obligation
13163	shall include that amount of each covered property insurance
13164	claim which is less than $100,000 multiplied by the number of
13165	condominium units or other residential units; however, as to
13166	homeowners' associations, this subparagraph applies only to
13167	claims for damage or loss to residential units and structures
13168	attached to residential units.
13169	3. In no event shall the association be obligated to a
13170	policyholder or claimant in an amount in excess of the
13171	obligation of the insolvent insurer under the policy from which
13172	the claim arises.
13173
13174	The foregoing notwithstanding, the association shall have no
13175	obligation to pay covered claims to be paid from the proceeds of
13176	bonds issued under s. 166.111(2). However, the association shall
13177	cause assessments to be made under paragraph (3)(e) for such
13178	covered claims, and such assessments shall be assigned and
13179	pledged under paragraph (3)(e) to or on behalf of the issuer of
13180	such bonds for the benefit of the holders of such bonds. The
13181	association shall administer any such covered claims and present
13182	valid covered claims for payment in accordance with the
13183	provisions of the assistance program in connection with which
13184	such bonds have been issued.
13185	(3)(a) To the extent necessary to secure the funds for the
13186	respective accounts for the payment of covered claims and also
13187	to pay the reasonable costs to administer the same, the office
13188	department, upon certification of the board of directors, shall
13189	levy assessments in the proportion that each insurer's net
13190	direct written premiums in this state in the classes protected
13191	by the account bears to the total of said net direct written
13192	premiums received in this state by all such insurers for the
13193	preceding calendar year for the kinds of insurance included
13194	within such account. Assessments shall be remitted to and
13195	administered by the board of directors in the manner specified
13196	by the approved plan. Each insurer so assessed shall have at
13197	least 30 days' written notice as to the date the assessment is
13198	due and payable. Every assessment shall be made as a uniform
13199	percentage applicable to the net direct written premiums of each
13200	insurer in the kinds of insurance included within the account in
13201	which the assessment is made. The assessments levied against
13202	any insurer shall not exceed in any one year more than 2 percent
13203	of that insurer's net direct written premiums in this state for
13204	the kinds of insurance included within such account during the
13205	calendar year next preceding the date of such assessments.
13206	(b) If sufficient funds from such assessments, together
13207	with funds previously raised, are not available in any one year
13208	in the respective account to make all the payments or
13209	reimbursements then owing to insurers, the funds available shall
13210	be prorated and the unpaid portion shall be paid as soon
13211	thereafter as funds become available.
13212	(c) Assessments shall be included as an appropriate factor
13213	in the making of rates.
13214	(d) No state funds of any kind shall be allocated or paid
13215	to said association or any of its accounts.
13216	(e)1.a. In addition to assessments otherwise authorized in
13217	paragraph (a), as a temporary measure related to insolvencies
13218	caused by Hurricane Andrew, and to the extent necessary to
13219	secure the funds for the account specified in s. 631.55(2)(c),
13220	or to retire indebtedness, including, without limitation, the
13221	principal, redemption premium, if any, and interest on, and
13222	related costs of issuance of, bonds issued under s. 166.111(2),
13223	and the funding of any reserves and other payments required
13224	under the bond resolution or trust indenture pursuant to which
13225	such bonds have been issued, the department, upon certification
13226	of the board of directors, shall levy assessments upon insurers
13227	holding a certificate of authority as follows:
13228	(I) Except as provided in sub-sub-subparagraph (II), the
13229	assessments payable under this paragraph by any insurer shall
13230	not exceed in any 1 year more than 2 percent of that insurer's
13231	direct written premiums, net of refunds, in this state during
13232	the preceding calendar year for the kinds of insurance within
13233	the account specified in s. 631.55(2)(c).
13234	(II) If the amount levied under sub-sub-subparagraph (I)
13235	is less than 2 percent of the insurer's direct written premiums,
13236	net of refunds, in this state during calendar year 1991 for the
13237	kinds of insurance within the account specified in s.
13238	631.55(2)(c), in addition to and separate from such assessment,
13239	the assessment shall also include the difference between the
13240	amount calculated based on calendar year 1991 and the amount
13241	determined under sub-sub-subparagraph (I). If this sub-sub-
13242	subparagraph is held invalid, the invalidity shall not affect
13243	other provisions of this section, and to this end the provisions
13244	of this section are declared severable.
13245	(III) In addition to any other insurers subject to this
13246	subparagraph, this subparagraph also applies to any insurer that
13247	held a certificate of authority on August 24, 1992. If this
13248	sub-sub-subparagraph is held invalid, the invalidity shall not
13249	affect other provisions of this section, and to this end the
13250	provisions of this section are declared severable.
13251	b. Any assessments authorized under this paragraph shall
13252	be levied by the department upon insurers referred to in sub-
13253	subparagraph a., upon certification as to the need therefor by
13254	the board of directors, in 1992 and in each year that bonds
13255	issued under s. 166.111(2) are outstanding, in such amounts up
13256	to such 2 percent limit as required in order to provide for the
13257	full and timely payment of the principal of, redemption premium,
13258	if any, and interest on, and related costs of, issuance of bonds
13259	issued under s. 166.111(2). The assessments provided for in
13260	this paragraph are hereby assigned and pledged to a municipality
13261	issuing bonds under s. 166.111(2)(b), for the benefit of the
13262	holders of such bonds, in order to enable such municipality to
13263	provide for the payment of the principal of, redemption premium,
13264	if any, and interest on such bonds, the cost of issuance of such
13265	bonds, and the funding of any reserves and other payments
13266	required under the bond resolution or trust indenture pursuant
13267	to which such bonds have been issued, without the necessity of
13268	any further action by the association, the department, or any
13269	other party. To the extent that bonds are issued under s.
13270	166.111(2), the proceeds of assessments levied under this
13271	paragraph shall be remitted directly to and administered by the
13272	trustee appointed for such bonds.
13273	c. Assessments under this paragraph shall be payable in 12
13274	monthly installments with the first installment being due and
13275	payable at the end of the month after an assessment is levied,
13276	and subsequent installments being due not later than the end of
13277	each succeeding month.
13278	d. The association shall issue a monthly report on the
13279	status of the use of the bond proceeds as related to
13280	insolvencies caused by Hurricane Andrew. The report must contain
13281	the number of claims paid and the amount of claims paid. The
13282	association shall also include an analysis of the revenue
13283	generated from the additional assessment levied under this
13284	subsection. The report must be sent to the Legislature and the
13285	Insurance Commissioner monthly.
13286	2. In order to assure that insurers paying assessments
13287	levied under this paragraph continue to charge rates that are
13288	neither inadequate nor excessive, within 90 days after being
13289	notified of such assessments, each insurer that is to be
13290	assessed pursuant to this paragraph shall make a rate filing for
13291	coverage included within the account specified in s.
13292	631.55(2)(c) and for which rates are required to be filed under
13293	s. 627.062. If the filing reflects a rate change that, as a
13294	percentage, is equal to the difference between the rate of such
13295	assessment and the rate of the previous year's assessment under
13296	this paragraph, the filing shall consist of a certification so
13297	stating and shall be deemed approved when made, subject to the
13298	department's continuing authority to require actuarial
13299	justification as to the adequacy of any rate at any time. Any
13300	rate change of a different percentage shall be subject to the
13301	standards and procedures of s. 627.062.
13302
13303	Section 236. Section 631.59, Florida Statutes, is amended
13304	to read:
13305	631.59 Duties and powers of department and officeof
13306	Insurance.--
13307	(1) The department shall:
13308	(a) Notify the association of the existence of an
13309	insolvent insurer not later than 3 days after it receives notice
13310	of the determination of the insolvency; and
13311	(b) Upon request of the board of directors, provide the
13312	association with a statement of the net direct written premiums
13313	of each member insurer.
13314	(2) The department may:
13315	(a)require that the association notify the insureds of
13316	the insolvent insurer and any other interested parties of the
13317	determination of insolvency and of their rights under this part.
13318	Such notification shall be by mail at their last known
13319	addresses, when available, but if sufficient information for
13320	notification by mail is not available, notice by publication in
13321	a newspaper of general circulation shall be sufficient.
13322	(3)(b)The office may:
13323	(a)Suspend or revoke the certificate of authority to
13324	transact insurance in this state of any member insurer which
13325	fails to pay an assessment when due or fails to comply with the
13326	plan of operation. As an alternative, the officedepartmentmay
13327	levy a fine on any member insurer which fails to pay an
13328	assessment when due. Such fine may not exceed 5 percent of the
13329	unpaid assessment per month, except that no fine shall be less
13330	than $100 per month.
13331	(b)(c)Revoke the designation of any servicing facility if
13332	it finds claims are being handled unsatisfactorily.
13333	Section 237. Section 631.62, Florida Statutes, is amended
13334	to read:
13335	631.62 Prevention of insolvencies.--To aid in the
13336	detection and prevention of insurer insolvencies:
13337	(1) It shall be the duty of the board of directors, upon
13338	majority vote, to notify the officedepartmentof any
13339	information indicating any member insurer may be insolvent or in
13340	a financial condition hazardous to the policyholders or the
13341	public.
13342	(2) The board of directors may, upon majority vote,
13343	request that the officedepartmentorder an examination of any
13344	member insurer which the board in good faith believes may be in
13345	a financial condition hazardous to the policyholders or the
13346	public. Within 30 days of the receipt of such request, the
13347	officedepartmentshall begin such examination. The examination
13348	may be conducted as a National Association of Insurance
13349	Commissioners examination or may be conducted by such persons as
13350	the officedepartmentdesignates. The cost of such examination
13351	shall be paid by the association and the examination report
13352	shall be treated as are other examination reports pursuant to s.
13353	624.319. In no event shall such examination report be released
13354	to the board of directors prior to its release to the public.
13355	The officedepartmentshall notify the board of directors when
13356	the examination is completed. The request for an examination
13357	shall be kept on file by the officedepartment; such request is
13358	confidential and exempt from the provisions of s. 119.07(1)
13359	until the examination report is released to the public.
13360	(3) The board of directors may, upon majority vote, make
13361	reports and recommendations to the department or officeupon any
13362	matter germane to the solvency, liquidation, rehabilitation, or
13363	conservation of any member insurer. Such reports and
13364	recommendations are confidential and exempt from the provisions
13365	of s. 119.07(1) until the termination of a delinquency
13366	proceeding.
13367	(4) The board of directors may, upon majority vote, make
13368	recommendations to the officedepartmentfor the detection and
13369	prevention of insurer insolvencies.
13370	Section 238. Section 631.66, Florida Statutes, is amended
13371	to read:
13372	631.66 Immunity.--There shall be no liability on the part
13373	of, and no cause of action of any nature shall arise against,
13374	any member insurer, the association or its agents or employees,
13375	the board of directors, or the department or office or theirits
13376	representatives for any action taken by them in the performance
13377	of their powers and duties under this part. Such immunity shall
13378	extend to the participation in any organization of one or more
13379	other state associations of similar purposes and to any such
13380	organization and its agents or employees.
13381	Section 239. Section 631.714, Florida Statutes, is amended
13382	to read:
13383	631.714 Definitions.--As used in this part, the term:
13384	(1) "Account" means any of the three accounts created in
13385	s. 631.715.
13386	(2) "Association" means the Florida Life and Health
13387	Insurance Guaranty Association created in s. 631.715.
13388	(3) "Contractual obligation" means any obligation under
13389	covered policies.
13390	(4) "Covered policy" means any policy or contract set out
13391	in s. 631.713 and reduced to written, printed, or other tangible
13392	form.
13393	(5) "Department" means the Department of Insurance.
13394	(5)(6)"Impaired insurer" means a member insurer deemed by
13395	the department to be potentially unable to fulfill its
13396	contractual obligations and not an insolvent insurer.
13397	(6)(7)"Insolvent insurer" means a member insurer
13398	authorized to transact insurance in this state, either at the
13399	time the policy was issued or when the insured event occurred,
13400	and against which an order of liquidation with a finding of
13401	insolvency has been entered by a court of competent
13402	jurisdiction, if such order has become final by the exhaustion
13403	of appellate review.
13404	(7)(8)"Member insurer" means any person licensed to
13405	transact in this state any kind of insurance as set out in s.
13406	631.713.
13407	(8)(9)"Premium" means any direct gross insurance premium
13408	and any annuity consideration written on covered policies, less
13409	return premium and consideration thereon and dividends paid or
13410	credited to policyholders on such direct business. "Premium"
13411	does not include premium and consideration on contracts between
13412	insurers and reinsurers.
13413	(9)(10)"Person" means any individual, corporation,
13414	partnership, association, or voluntary organization.
13415	(10)(11)"Resident" means any person who resides in this
13416	state at the time a member insurer is determined to be an
13417	impaired or insolvent insurer and to whom contractual
13418	obligations are owed by such impaired or insolvent member
13419	insurer.
13420	Section 240. Subsections (2) and (3) of section 631.72,
13421	Florida Statutes, are amended to read:
13422	631.72 Premium or income tax credits for assessments
13423	paid.--
13424	(2) If a member insurer ceases doing business in this
13425	state and surrenders to the officedepartmentits certificate of
13426	authority to transact insurance in this state, all uncredited
13427	assessments may be credited as provided in this section against
13428	either its premium or corporate income tax liabilities imposed
13429	pursuant to ss. 624.509 and 220.11 for the year it ceases doing
13430	business.
13431	(3) Any sums acquired by refund pursuant to s. 631.718(6)
13432	from the association which have theretofore been written off by
13433	contributing insurers and offset against premium or corporate
13434	income taxes as provided in subsection(1) and which are not
13435	needed for purposes of this part shall be paid by the insurer to
13436	the Department of Revenue for deposit with the Chief Financial
13437	OfficerTreasurerto the credit of the General Revenue Fund.
13438	Section 241. Section 631.722, Florida Statutes, is amended
13439	to read:
13440	631.722 Powers and duties of department and office.--
13441	(1) The officedepartmentshall:
13442	(a) Upon request of the board of directors, provide the
13443	association with a statement of the premiums in each of the
13444	appropriate states for each member insurer.
13445	(b) When an impairment is declared and the amount of the
13446	impairment is determined, serve a demand upon the impaired
13447	insurer to make good the impairment within a reasonable time.
13448	Notice to the impaired insurer shall constitute notice to its
13449	shareholders, if any. The failure of the insurer to promptly
13450	comply with such demand shall not excuse the association from
13451	the performance of its powers and duties under this part.
13452	(2)(c)The department shall,in any liquidation or
13453	rehabilitation proceeding involving a domestic insurer, be
13454	appointed as the liquidator or rehabilitator. If a foreign or
13455	alien member insurer is subject to a liquidation proceeding in
13456	its domiciliary jurisdiction or state of entry, the department
13457	shall be appointed conservator.
13458	(3)(2) The officedepartmentmay suspend or revoke, after
13459	notice and hearing, the certificate of authority to transact
13460	insurance in this state of any member insurer that fails to pay
13461	an assessment when due or fails to comply with the approved plan
13462	of operation of the association. As an alternative, the office
13463	departmentmay levy a forfeiture on any member insurer that
13464	fails to pay an assessment when due. Such forfeiture shall not
13465	exceed 5 percent of the unpaid assessment per month, but no
13466	forfeiture shall be less than $100 per month.
13467	(4)(3)Any action of the board of directors or of the
13468	association may be appealed to the officedepartmentby any
13469	member insurer if such appeal is taken within 30 days of the
13470	action being appealed. If a member company is appealing an
13471	assessment, the amount assessed shall be paid to the association
13472	and available to meet association obligations during the
13473	pendency of the appeal. If the appeal on the assessment is
13474	upheld, the amount paid in error or excess shall be returned to
13475	the member company. Any final action or order of the office
13476	departmentshall be subject to judicial review in a court of
13477	competent jurisdiction.
13478	(5)(4)The liquidator, rehabilitator, or conservator of
13479	any impaired insurer may notify all interested persons of the
13480	effect of this part.
13481	Section 242. Section 631.723, Florida Statutes, is amended
13482	to read:
13483	631.723 Prevention of insolvencies.--To aid in the
13484	detection and prevention of insurer insolvencies or impairments:
13485	(1) The board of directors may, upon majority vote, make
13486	reports and recommendations to the department or officeupon any
13487	matter germane to the solvency, liquidation, rehabilitation, or
13488	conservation of any member insurer or germane to the solvency of
13489	any company seeking to do an insurance business in this state.
13490	Such reports and recommendations are confidential and exempt
13491	from the provisions of s. 119.07(1) until the termination of a
13492	delinquency proceeding.
13493	(2) It is the duty of the board of directors, upon a
13494	majority vote, to notify the officedepartmentof any
13495	information indicating that any member insurer may be an
13496	impaired or insolvent insurer.
13497	(3) The board of directors may, upon majority vote,
13498	request that the officedepartmentorder an examination of any
13499	member insurer which the board in good faith believes may be an
13500	impaired or insolvent insurer. Within 30 days of the receipt of
13501	such a request, the officedepartmentshall begin such an
13502	examination. The examination may be conducted as a National
13503	Association of Insurance Commissioners examination or may be
13504	conducted by such persons as the officeInsurance Commissioner
13505	designates. The cost of such examination shall be paid by the
13506	association, and the examination report shall be treated in a
13507	manner similar to other examination reports pursuant to s.
13508	624.319. In no event may such examination report be released to
13509	the board of directors before its release to the public, but
13510	this does not preclude the officedepartmentfrom complying with
13511	s. 631.398(2). The officedepartmentshall notify the board of
13512	directors when the examination is completed. The request for an
13513	examination shall be kept on file by the officedepartment; such
13514	request is confidential and exempt from the provisions of s.
13515	119.07(1) until the examination report is released to the
13516	public.
13517	(4) The board of directors may, upon majority vote, make
13518	recommendations to the officedepartmentfor the detection and
13519	prevention of insurer insolvencies.
13520	Section 243. Section 631.727, Florida Statutes, is amended
13521	to read:
13522	631.727 Immunity.--There shall be no liability on the part
13523	of, and no cause of action of any nature shall arise against,
13524	any member insurer or its agents or employees, the association
13525	or its agents or employees, members of the board of directors,
13526	or the department or office or theiritsrepresentatives for any
13527	action taken by them in the performance of their powers and
13528	duties under this part. Such immunity shall extend to the
13529	participation in any organization of one or more other state
13530	associations of similar purposes and to any such organization
13531	and its agents or employees.
13532	Section 244. Section 631.813, Florida Statutes, is amended
13533	to read:
13534	631.813 Application of part.--This part shall apply to HMO
13535	contractual obligations to residents of Florida by HMOs
13536	possessing a valid certificate of authority issued by the
13537	Florida Department of Insuranceas provided by part I of chapter
13538	641. The provisions of this part shall not apply to persons
13539	participating in medical assistance programs under the Medicaid
13540	program.
13541	Section 245. Section 631.814, Florida Statutes, is amended
13542	to read:
13543	631.814 Definitions.--As used in this part, the term:
13544	(1) "Plan" means the Florida Health Maintenance
13545	Organization Consumer Assistance Plan created by this part.
13546	(2) "Board" means the board of directors of the plan.
13547	(3) "Contractual obligations" means any obligation under
13548	covered health care policies.
13549	(4) "Covered policy" means any policy or contract issued
13550	by an HMO for health care services.
13551	(5) "Date of insolvency" means the effective date of an
13552	order of liquidation entered by a court of competent
13553	jurisdiction.
13554	(6) "Department" means the Florida Department of
13555	Insurance.
13556	(6)(7)"Health care services" means comprehensive health
13557	care services as defined in s. 641.19.
13558	(7)(8)"HMO" means a health maintenance organization
13559	possessing a valid certificate of authority issued by the
13560	department pursuant to part I of chapter 641.
13561	(8)(9)"Insolvent HMO" means an HMO against which an order
13562	of rehabilitation or liquidation has been entered by a court of
13563	competent jurisdiction, with the department appointed as
13564	receiver, even if such order has not become final by the
13565	exhaustion of appellate reviews.
13566	(9)(10)"Person" means any individual, corporation,
13567	partnership, association, or voluntary organization.
13568	(10)(11)"Subscriber" means any resident of this state who
13569	is enrolled for benefits provided by an HMO and who makes
13570	premium payments or for whom premium payments are made.
13571	Section 246. Section 631.821, Florida Statutes, is amended
13572	to read:
13573	631.821 Powers and duties of the department and office.--
13574	(1) The officedepartmentmay suspend or revoke, after
13575	notice and hearing, the certificate of authority of a member HMO
13576	that fails to pay an assessment when due, fails to comply with
13577	the approved plan of operation of the plan, or fails either to
13578	timely comply with or to timely appeal pursuant to subsection
13579	(2) its appointment under s. 631.818(2).
13580	(2) Any action of the board of directors of the plan may
13581	be appealed to the department by any member HMO if such appeal
13582	is taken within 21 days of the action being appealed; however,
13583	the HMO must comply with such action pending exhaustion of
13584	appeal under s. 631.818(2). Any appeal shall be promptly
13585	determined by the department, and final action or order of the
13586	department shall be subject to judicial review in a court of
13587	competent jurisdiction.
13588	(3) The department may:
13589	(a)require that the plan notify the subscriber of the
13590	insolvent HMO and any other interested parties of the
13591	determination of insolvency and of their rights under this part.
13592	Such notification shall be by mail at their last known
13593	addresses, when available, but if sufficient information for
13594	notification by mail is not available, notice by publication in
13595	a newspaper of general circulation shall be sufficient.
13596	(4)(b)The office mayrevoke the designation of any
13597	servicing facility or administrator if it finds claims are being
13598	handled unsatisfactorily.
13599	Section 247. Section 631.825, Florida Statutes, is amended
13600	to read:
13601	631.825 Immunity.--There shall be no liability on the part
13602	of, and no cause of action of any nature shall arise against,
13603	any member HMO or its agents or employees, the plan or its
13604	agents or employees, members of the board of directors, or the
13605	department or office or theiritsrepresentatives for any action
13606	taken by them in the performance of their powers and duties
13607	under this part.
13608	Section 248. Section 631.904, Florida Statutes, is amended
13609	to read:
13610	631.904 Definitions.--As used in this part, the term:
13611	(1) "Corporation" means the Florida Workers' Compensation
13612	Insurance Guaranty Association, Incorporated.
13613	(2) "Covered claim" means an unpaid claim, including a
13614	claim for return of unearned premiums, which arises out of, is
13615	within the coverage of, and is not in excess of the applicable
13616	limits of, an insurance policy to which this part applies, which
13617	policy was issued by an insurer and which claim is made on
13618	behalf of a claimant or insured who was a resident of this state
13619	at the time of the injury. The term "covered claim" does not
13620	include any amount sought as a return of premium under any
13621	retrospective rating plan; any amount due any reinsurer,
13622	insurer, insurance pool, or underwriting association, as
13623	subrogation recoveries or otherwise; or any return of premium
13624	resulting from a policy that was not in force on the date of the
13625	final order of liquidation. Member insurers have no right of
13626	subrogation against the insured of any insolvent insurer. This
13627	provision shall be applied retroactively to cover claims of an
13628	insolvent self-insurance fund resulting from accidents or losses
13629	incurred prior to January 1, 1994, regardless of the date the
13630	Department of Insurance filed a petition in circuit court was
13631	filedalleging insolvency and the date the court entered an
13632	order appointing a receiver.
13633	(3) "Department" means the Department of Insurance.
13634	(3)(4)"Insolvency" means that condition in which all of
13635	the assets of the insurer, if made immediately available, would
13636	not be sufficient to discharge all of its liabilities or that
13637	condition in which the insurer is unable to pay its debts as
13638	they become due in the usual course of business. When the
13639	context of any provision of this part so indicates, insolvency
13640	also includes impairment of surplus or impairment of capital.
13641	(4)(5)"Insolvent insurer" means an insurer that was
13642	authorized to transact insurance in this state, either at the
13643	time the policy was issued or when the insured event occurred,
13644	and against which an order of liquidation with a finding of
13645	insolvency has been entered by a court of competent jurisdiction
13646	if such order has become final by the exhaustion of appellate
13647	review.
13648	(5)(6)"Insurer" means an insurance carrier or self-
13649	insurance fund authorized to insure under chapter 440. For
13650	purposes of this act, "insurer" does not include a qualified
13651	local government self-insurance fund, as defined in s. 624.4622,
13652	or an individual self-insurer as defined in s. 440.385.
13653	(6)(7)"Self-insurance fund" means a group self-insurance
13654	fund authorized under s. 624.4621, a commercial self-insurance
13655	fund writing workers' compensation insurance authorized under s.
13656	624.462, or an assessable mutual insurer authorized under s.
13657	628.6011. For purposes of this act, "self-insurance fund" does
13658	not include a qualified local government self-insurance fund, as
13659	defined in s. 624.4622, or an individual self-insurer as defined
13660	in s. 440.385.
13661	Section 249. Subsection (1) of section 631.911, Florida
13662	Statutes, is amended to read:
13663	631.911 Creation of the Florida Workers' Compensation
13664	Insurance Guaranty Association, Incorporated; merger; effect of
13665	merger.--
13666	(1)(a) The Florida Self-Insurance Fund Guaranty
13667	Association established in former part V of chapter 631 and the
13668	workers' compensation insurance account, which includes excess
13669	workers' compensation insurance, established in former s.
13670	631.55(2)(a) shall be merged, effective October 1, 1997, or as
13671	provided in paragraph (b),in accordance with the plan of
13672	operation adopted by the interim board of directors. The
13673	successor nonprofit corporation shall be known as the "Florida
13674	Workers' Compensation Insurance Guaranty Association,
13675	Incorporated."
13676	(b) The merger may be effected prior to October 1, 1997,
13677	if:
13678	1. The interim board of directors of the Workers'
13679	Compensation Insurance Guaranty Association provides the
13680	Department of Insurance with written notice of its intent to
13681	effectuate the merger as of a date certain and its functional
13682	readiness to initiate operations, such notice setting forth the
13683	plan or summary thereof for effecting the merger; and,
13684	2. The department, upon review of the plan or summary
13685	thereof, determines the Workers' Compensation Insurance Guaranty
13686	Association is functionally ready to initiate operations and so
13687	certifies to the interim board of directors.
13688	(c) Prior to the effective date of the merger, the Florida
13689	Self-Insurance Fund Guaranty Association shall be the entity
13690	responsible for the claims of insolvent self-insurance funds
13691	resulting from accidents or losses incurred prior to January 1,
13692	1994, regardless of the date the Department of Insurance filed a
13693	petition in circuit court alleging insolvency and the date the
13694	court entered an order appointing a receiver.
13695	(b)(d)Upon the effective date of the merger:
13696	1. The Florida Self-Insurance Fund Guaranty Association
13697	and the workers' compensation insurance account within the
13698	Florida Insurance Guaranty Association cease to exist and are
13699	succeeded by the Florida Workers' Compensation Insurance
13700	Guaranty Association.
13701	2. Title to all assets of any description, all real estate
13702	and other property, or any interest therein, owned by each party
13703	to the merger is vested in the successor corporation without
13704	reversion or impairment.
13705	3. The successor corporation shall be responsible and
13706	liable for all the liabilities and obligations of each party to
13707	the merger.
13708	4. Any claim existing or action or proceeding pending by
13709	or against any party to the merger may be continued as if the
13710	merger did not occur or the successor corporation may be
13711	substituted in the proceeding for the corporation or account
13712	which ceased existence.
13713	5. Neither the rights of creditors nor any liens upon the
13714	property of any party to the merger shall be impaired by such
13715	merger.
13716	6. Outstanding assessments levied by the Florida Self-
13717	Insurance Guaranty Association or the Florida Insurance Guaranty
13718	Association on behalf of the workers' compensation insurance
13719	account remain in full force and effect and shall be paid when
13720	due.
13721	Section 250. Subsections (1) and (3) of section 631.912,
13722	Florida Statutes, are amended to read:
13723	631.912 Board of directors.--
13724	(1) The board of directors of the corporation shall
13725	consist of 11 persons, 1 of whom is the insurance consumer
13726	advocate appointed under s. 627.0613 or designee and 1 of whom
13727	is designated by the Chief Financial OfficerInsurance
13728	Commissioner. The department shall appoint to the board 6
13729	persons selected by private carriers from among the 20 workers'
13730	compensation insurers with the largest amount of net direct
13731	written premium as determined by the department, and 3 persons
13732	selected by the self-insurance funds. At least two of the
13733	private carriers shall be foreign carriers authorized to do
13734	business in this state. The board shall elect a chairperson from
13735	among its members. The Chief Financial Officercommissionermay
13736	remove any board member for cause. Each board member shall
13737	serve for a 4-year term and may be reappointed, except that four
13738	members of the initial board shall have 2-year terms so as to
13739	stagger the periods of service. A vacancy on the board shall be
13740	filled for the remaining period of the term in the same manner
13741	by which the original appointment was made.
13742	(3) Effective upon this act becoming a law, the persons on
13743	the board of directors created pursuant to s. 627.311(4)(a) who
13744	evidence a willingness to serve in writing, shall serve as an
13745	interim board of directors of the corporation until the initial
13746	board of directors has been appointed for the corporation in
13747	accordance with the provisions of subsection (1). The interim
13748	board of directors shall serve for a period not to exceed 6
13749	months. The initial meeting shall be called by the commissioner
13750	within 30 days after this act becomes a law. The interim board
13751	of directors shall establish a process for the selection of
13752	persons to serve on the board of the Florida Workers'
13753	Compensation Insurance Guaranty Association in accordance with
13754	the terms of subsection (1). The board of directors shall adopt
13755	an interim plan of operation to effect the merger in s. 631.911
13756	and avoid any interruption of benefit payments to injured
13757	workers. When necessary and upon approval of the chairs of
13758	their respective board of directors, the Florida Self-Insurance
13759	Fund Guaranty Association and the Florida Insurance Guaranty
13760	Association shall provide staff support to the interim board of
13761	directors. The board shall submit the interim plan to the
13762	commissioner, who shall approve or disapprove the plan within 30
13763	days after receipt.
13764	Section 251. Section 631.917, Florida Statutes, is amended
13765	to read:
13766	631.917 Prevention of insolvencies.--To aid in the
13767	detection and prevention of insolvencies or impairments:
13768	(1)(a) The board may make reasonable and lawful
13769	investigation into the practices of any third-party
13770	administrator or service company for a self-insurance fund
13771	declared insolvent by the court.
13772	(b) If the results of an investigation reasonably lead to
13773	a finding that certain actions taken or not taken by those
13774	handling, processing, or preparing covered claims for payment or
13775	other benefit pursuant to any workers' compensation insurance
13776	policy contributed to the insolvency of an insurer, such
13777	information may, in the discretion of the board, be provided to
13778	the department or officein an expedited manner.
13779	(2) The board of directors may make reports and
13780	recommendations to the department or officeupon any matter
13781	germane to the solvency, liquidation, rehabilitation, or
13782	conservation of any member insurer or germane to the solvency of
13783	any insurer seeking to do insurance business in this state.
13784	(3) The board of directors, in its discretion, may notify
13785	the officedepartmentof any information indicating that any
13786	member insurer may be an impaired or insolvent insurer.
13787	(4) The board of directors, in its discretion, may request
13788	that the officedepartmentorder an examination of any member
13789	insurer which the board in good faith believes may be an
13790	impaired or insolvent insurer. Within 30 days after receipt of
13791	such a request, the officedepartmentshall begin such an
13792	examination. The examination may be conducted as a National
13793	Association of Insurance Commissioners examination or may be
13794	conducted by such persons as the officeInsurance Commissioner
13795	designates. The cost of such examination shall be paid by the
13796	corporation, and the examination report shall be treated in a
13797	manner similar to other examination reports pursuant to s.
13798	624.319. In no event may such examination report be released to
13799	the board of directors before its release to the public, but
13800	this requirement does not preclude the officedepartmentfrom
13801	complying with s. 631.398(2). The officedepartmentshall
13802	notify the board of directors when the examination is completed.
13803	The request for an examination shall be kept on file by the
13804	officedepartment.
13805	(5) The board is authorized to assist and aid the
13806	department or office, in any manner consistent with existing
13807	laws and this chapter, in the department's or office's
13808	investigation or referral for prosecution of those whose action
13809	or inaction may have contributed to the impairment or insolvency
13810	of the insurer.
13811	(6) The board may make recommendations to the office
13812	departmentfor the detection and prevention of insurer
13813	insolvencies.
13814	Section 252. Section 631.918, Florida Statutes, is amended
13815	to read:
13816	631.918 Immunity.--There is no liability on the part of,
13817	and a cause of action may not arise against, the corporation,
13818	its agents or employees, or members of its board of directors,
13819	or the department or office or theiritsagents or employees,
13820	for any action taken by them in the performance of their powers
13821	and duties under this section, unless such action is found to be
13822	a violation of antitrust laws, was in bad faith, or was
13823	undertaken with malicious purpose or in a manner exhibiting
13824	wanton and willful disregard of human rights, safety, or
13825	property.
13826	Section 253. Section 631.931, Florida Statutes, is amended
13827	to read:
13828	631.931 Reports and recommendations by board; public
13829	records exemption.--Reports and recommendations made by the
13830	Board of Directors of the Florida Workers' Compensation
13831	Insurance Guaranty Association to the Department of Insurance
13832	under s. 631.917 upon any matter germane to the solvency,
13833	liquidation, rehabilitation, or conservation of any member
13834	insurer are confidential and exempt from the provisions of s.
13835	119.07(1) and s. 24(a), Art. I of the State Constitution until
13836	the termination of a delinquency proceeding.
13837	Section 254. Subsections (3) and (4) of section 634.3284,
13838	Florida Statutes, are amended to read:
13839	634.3284 Civil remedy.--
13840	(3) As a condition precedent to bringing an action under
13841	this section, the officedepartmentand the insurer shall be
13842	given written notice of the violation. The notice shall state
13843	with specificity the facts which allegedly constitute the
13844	violation and the law upon which the plaintiff is relying and
13845	shall state that such notice is given in order to perfect the
13846	right to pursue the civil remedy authorized by this section. No
13847	action will lie if, within 30 days thereafter, the damages are
13848	paid or the circumstances giving rise to the violation are
13849	corrected.
13850	(4) This section shall not be construed to authorize a
13851	class action suit against a home warranty association or a civil
13852	action against the department or office or their, its employees,
13853	or the Chief Financial OfficerInsurance Commissioner.
13854	Section 255. Subsection (2) of section 634.430, Florida
13855	Statutes, is amended to read:
13856	634.430 Dissolution or liquidation.--
13857	(2) The department and officeshall be notified of the
13858	commencement of voluntary dissolution proceedings of a
13859	manufacturer licensed under this part. As to the warranty
13860	operations of a manufacturer in this state, the department shall
13861	supervise the voluntary dissolution and shall require protection
13862	of the interests of the department, office,and consumers who
13863	have been issued service warranties by the manufacturer by the
13864	continuation of deposits or bonds as required by this part until
13865	that time as all warranties issued by the manufacturer are no
13866	longer in effect or all outstanding warranties have been
13867	assigned to another association approved by the department and
13868	office. The notification as provided herein shall be made by the
13869	manufacturer within 30 days of the commencement of any legal
13870	action for dissolution.
13871	Section 256. Subsections (3) and (4) of section 634.433,
13872	Florida Statutes, are amended to read:
13873	634.433 Civil remedy.--
13874	(3) As a condition precedent to bringing an action under
13875	this section, the officedepartmentand the insurer shall be
13876	given written notice of the violation. The notice shall state
13877	with specificity the facts which allegedly constitute the
13878	violation and the law upon which the plaintiff is relying and
13879	shall state that such notice is given in order to perfect the
13880	right to pursue the civil remedy authorized by this section. No
13881	action will lie if, within 30 days thereafter, the damages are
13882	paid or the circumstances giving rise to the violation are
13883	corrected.
13884	(4) This section shall not be construed to authorize a
13885	class action suit against a service warranty association or a
13886	civil action against the department, the office, theirits
13887	employees, or the Chief Financial OfficerInsurance
13888	Commissioner.
13889	Section 257. Section 636.067, Florida Statutes, is amended
13890	to read:
13891	636.067 Rules.--The commission maydepartment has
13892	authority toadopt rules pursuant to ss. 120.536(1) and 120.54
13893	to implement the provisions of this act. A violation of any
13894	such rule subjects the violator to the provisions of s. 636.048.
13895	Section 258. Section 641.183, Florida Statutes, is amended
13896	to read:
13897	641.183 Statutory accounting procedures; transition
13898	provisions.--All health maintenance organizations, authorized to
13899	do business under this chapter on January 1, 2001, shall elect a
13900	transition method for compliance with statutory accounting
13901	principles as follows:
13902	(1) Report assets acquired prior to June 30, 2001, in
13903	accordance with s. 641.35, Florida Statutes (2000), through
13904	December 31, 2005. Assets acquired on or after June 30, 2001,
13905	shall be accounted for in accordance with the National
13906	Association of Insurance Commissioners Accounting Practices and
13907	Procedures Manual as of 2002effective January 1, 2001. A health
13908	maintenance organization electing to report assets pursuant to
13909	this subsection shall maintain complete and detailed records
13910	reflecting such accounting treatment; or
13911	(2) Report all assets in accordance with the NAIC
13912	Accounting Practices and Procedures Manual as of 2002effective
13913	January 1, 2001.
13914	Section 259. Section 641.185, Florida Statutes, is amended
13915	to read:
13916	641.185 Health maintenance organization subscriber
13917	protections.--
13918	(1) With respect to the provisions of this part and part
13919	III, the principles expressed in the following statements shall
13920	serve as standards to be followed by the commission, the office,
13921	the department,of Insuranceand the Agency for Health Care
13922	Administration in exercising their powers and duties, in
13923	exercising administrative discretion, in administrative
13924	interpretations of the law, in enforcing its provisions, and in
13925	adopting rules:
13926	(a) A health maintenance organization shall ensure that
13927	the health care services provided to its subscribers shall be
13928	rendered under reasonable standards of quality of care which are
13929	at a minimum consistent with the prevailing standards of medical
13930	practice in the community pursuant to ss. 641.495(1) and 641.51.
13931	(b) A health maintenance organization subscriber should
13932	receive quality health care from a broad panel of providers,
13933	including referrals, preventive care pursuant to s. 641.402(1),
13934	emergency screening and services pursuant to ss. 641.31(12) and
13935	641.513, and second opinions pursuant to s. 641.51.
13936	(c) A health maintenance organization subscriber should
13937	receive assurance that the health maintenance organization has
13938	been independently accredited by a national review organization
13939	pursuant to s. 641.512, and is financially secure as determined
13940	by the state pursuant to ss. 641.221, 641.225, and 641.228.
13941	(d) A health maintenance organization subscriber should
13942	receive continuity of health care, even after the provider is no
13943	longer with the health maintenance organization pursuant to s.
13944	641.51(8).
13945	(e) A health maintenance organization subscriber should
13946	receive timely, concise information regarding the health
13947	maintenance organization's reimbursement to providers and
13948	services pursuant to ss. 641.31 and 641.31015 and should receive
13949	prompt payment from the organization pursuant to s. 641.3155.
13950	(f) A health maintenance organization subscriber should
13951	receive the flexibility to transfer to another Florida health
13952	maintenance organization, regardless of health status, pursuant
13953	to ss. 641.228, 641.3104, 641.3107, 641.3111, 641.3921, and
13954	641.3922.
13955	(g) A health maintenance organization subscriber should be
13956	eligible for coverage without discrimination against individual
13957	participants and beneficiaries of group plans based on health
13958	status pursuant to s. 641.31073.
13959	(h) A health maintenance organization that issues a group
13960	health contract must: provide coverage for preexisting
13961	conditions pursuant to s. 641.31071; guarantee renewability of
13962	coverage pursuant to s. 641.31074; provide notice of
13963	cancellation pursuant to s. 641.3108; provide extension of
13964	benefits pursuant to s. 641.3111; provide for conversion on
13965	termination of eligibility pursuant to s. 641.3921; and provide
13966	for conversion contracts and conditions pursuant to s. 641.3922.
13967	(i) A health maintenance organization subscriber should
13968	receive timely and, if necessary, urgent grievances and appeals
13969	within the health maintenance organization pursuant to ss.
13970	641.228, 641.31(5), 641.47, and 641.511.
13971	(j) A health maintenance organization should receive
13972	timely and, if necessary, urgent review by an independent state
13973	external review organization for unresolved grievances and
13974	appeals pursuant to s. 408.7056.
13975	(k) A health maintenance organization subscriber shall be
13976	given written notice at least 30 days in advance of a rate
13977	change pursuant to s. 641.31(3)(b). In the case of a group
13978	member, there may be a contractual agreement with the health
13979	maintenance organization to have the employer provide the
13980	required notice to the individual members of the group pursuant
13981	to s. 641.31(3)(b).
13982	(l) A health maintenance organization subscriber shall be
13983	given a copy of the applicable health maintenance contract,
13984	certificate, or member handbook specifying: all the provisions,
13985	disclosure, and limitations required pursuant to s. 641.31(1)
13986	and (4); the covered services, including those services, medical
13987	conditions, and provider types specified in ss. 641.31,
13988	641.31094, 641.31095, 641.31096, 641.51(11), and 641.513; and
13989	where and in what manner services may be obtained pursuant to s.
13990	641.31(4).
13991	(2) This section shall not be construed as creating a
13992	civil cause of action by any subscriber or provider against any
13993	health maintenance organization.
13994	Section 260. Section 641.19, Florida Statutes, is amended
13995	to read:
13996	641.19 Definitions.--As used in this part, the term:
13997	(1) "Affiliate" means any entity thatwhichexercises
13998	control over or is controlled by the health maintenance
13999	organization, directly or indirectly, through:
14000	(a) Equity ownership of voting securities;
14001	(b) Common managerial control; or
14002	(c) Collusive participation by the management of the
14003	health maintenance organization and affiliate in the management
14004	of the health maintenance organization or the affiliate.
14005	(2) "Agency" means the Agency for Health Care
14006	Administration.
14007	(3) "Capitation" means the fixed amount paid by an HMO to
14008	a health care provider under contract with the health
14009	maintenance organization in exchange for the rendering of
14010	covered medical services.
14011	(4) "Comprehensive health care services" means services,
14012	medical equipment, and supplies furnished by a provider, which
14013	may include, but which are not limited to, medical, surgical,
14014	and dental care; psychological, optometric, optic, chiropractic,
14015	podiatric, nursing, physical therapy, and pharmaceutical
14016	services; health education, preventive medical, rehabilitative,
14017	and home health services; inpatient and outpatient hospital
14018	services; extended care; nursing home care; convalescent
14019	institutional care; technical and professional clinical
14020	pathology laboratory services; laboratory and ambulance
14021	services; appliances, drugs, medicines, and supplies; and any
14022	other care, service, or treatment of disease, or correction of
14023	defects for human beings.
14024	(5) "Copayment" means a specific dollar amount, except as
14025	otherwise provided for by statute, that the subscriber must pay
14026	upon receipt of covered health care services. Copayments may
14027	not be established in an amount that will prevent a person from
14028	receiving a covered service or benefit as specified in the
14029	subscriber contract approved by the officedepartment.
14030	(6) "Department" means the Department of Insurance.
14031	(6)(7)"Emergency medical condition" means:
14032	(a) A medical condition manifesting itself by acute
14033	symptoms of sufficient severity, which may include severe pain
14034	or other acute symptoms, such that the absence of immediate
14035	medical attention could reasonably be expected to result in any
14036	of the following:
14037	1. Serious jeopardy to the health of a patient, including
14038	a pregnant woman or a fetus.
14039	2. Serious impairment to bodily functions.
14040	3. Serious dysfunction of any bodily organ or part.
14041	(b) With respect to a pregnant woman:
14042	1. That there is inadequate time to effect safe transfer
14043	to another hospital prior to delivery;
14044	2. That a transfer may pose a threat to the health and
14045	safety of the patient or fetus; or
14046	3. That there is evidence of the onset and persistence of
14047	uterine contractions or rupture of the membranes.
14048	(7)(8)"Emergency services and care" means medical
14049	screening, examination, and evaluation by a physician, or, to
14050	the extent permitted by applicable law, by other appropriate
14051	personnel under the supervision of a physician, to determine if
14052	an emergency medical condition exists and, if it does, the care,
14053	treatment, or surgery for a covered service by a physician
14054	necessary to relieve or eliminate the emergency medical
14055	condition, within the service capability of a hospital.
14056	(8)(9)"Entity" means any legal entity with continuing
14057	existence, including, but not limited to, a corporation,
14058	association, trust, or partnership.
14059	(9)(10)"Geographic area" means the county or counties, or
14060	any portion of a county or counties, within which the health
14061	maintenance organization provides or arranges for comprehensive
14062	health care services to be available to its subscribers.
14063	(10)(11) "Guaranteeing organization" is an organization
14064	thatwhich is domiciled in the United States; thatwhichhas
14065	authorized service of process against it; and thatwhichhas
14066	appointed the Chief Financial OfficerInsurance Commissioner and
14067	Treasureras its agent for service of process issuing upon any
14068	cause of action arising in this state, based upon any guarantee
14069	entered into under this part.
14070	(11)(12)"Health maintenance contract" means any contract
14071	entered into by a health maintenance organization with a
14072	subscriber or group of subscribers to provide comprehensive
14073	health care services in exchange for a prepaid per capita or
14074	prepaid aggregate fixed sum.
14075	(12)(13)"Health maintenance organization" means any
14076	organization authorized under this part which:
14077	(a) Provides emergency care, inpatient hospital services,
14078	physician care including care provided by physicians licensed
14079	under chapters 458, 459, 460, and 461, ambulatory diagnostic
14080	treatment, and preventive health care services;
14081	(b) Provides, either directly or through arrangements with
14082	other persons, health care services to persons enrolled with
14083	such organization, on a prepaid per capita or prepaid aggregate
14084	fixed-sum basis;
14085	(c) Provides, either directly or through arrangements with
14086	other persons, comprehensive health care services which
14087	subscribers are entitled to receive pursuant to a contract;
14088	(d) Provides physician services, by physicians licensed
14089	under chapters 458, 459, 460, and 461, directly through
14090	physicians who are either employees or partners of such
14091	organization or under arrangements with a physician or any group
14092	of physicians; and
14093	(e) If offering services through a managed care system,
14094	then the managed care system must be a system in which a primary
14095	physician licensed under chapter 458 or chapter 459 and chapters
14096	460 and 461 is designated for each subscriber upon request of a
14097	subscriber requesting service by a physician licensed under any
14098	of those chapters, and is responsible for coordinating the
14099	health care of the subscriber of the respectively requested
14100	service and for referring the subscriber to other providers of
14101	the same discipline when necessary. Each female subscriber may
14102	select as her primary physician an obstetrician/gynecologist who
14103	has agreed to serve as a primary physician and is in the health
14104	maintenance organization's provider network.
14105	(13)(14)"Insolvent" or "insolvency" means that all the
14106	statutory assets of the health maintenance organization, if made
14107	immediately available, would not be sufficient to discharge all
14108	of its liabilities or that the health maintenance organization
14109	is unable to pay its debts as they become due in the usual
14110	course of business. In the event that all the assets of the
14111	health maintenance organization, if made immediately available,
14112	would not be sufficient to discharge all of its liabilities, but
14113	the organization has a written guarantee of the type and subject
14114	to the same provisions as outlined in s. 641.225, the
14115	organization shall not be considered insolvent unless it is
14116	unable to pay its debts as they become due in the usual course
14117	of business.
14118	(14)(15)"Provider" means any physician, hospital, or
14119	other institution, organization, or person that furnishes health
14120	care services and is licensed or otherwise authorized to
14121	practice in the state.
14122	(15)(16)"Reporting period" means the annual calendar year
14123	accounting period or any part thereof.
14124	(16)(17)"Statutory accounting principles" means
14125	accounting principles as defined in the National Association of
14126	Insurance Commissioners Accounting Practices and Procedures
14127	Manual as of 2002effective January 1, 2001.
14128	(17((18)"Subscriber" means an entity or individual who
14129	has contracted, or on whose behalf a contract has been entered
14130	into, with a health maintenance organization for health care
14131	services or other persons who also receive health care services
14132	as a result of the contract.
14133	(18)(19)"Surplus" means total statutory assets in excess
14134	of total liabilities, except that assets pledged to secure debts
14135	not reflected on the books of the health maintenance
14136	organization shall not be included in surplus. Surplus includes
14137	capital stock, capital in excess of par, other contributed
14138	capital, retained earnings, and surplus notes.
14139	(19)(20)"Uncovered expenditures" means the cost of health
14140	care services that are covered by a health maintenance
14141	organization, for which a subscriber would also be liable in the
14142	event of the insolvency of the organization.
14143	(20)(21)"Health care risk contract" means a contract
14144	under which an individual or entity receives consideration or
14145	other compensation in an amount greater than 1 percent of the
14146	health maintenance organization's annual gross written premium
14147	in exchange for providing to the health maintenance organization
14148	a provider network or other services, which may include
14149	administrative services. The 1-percent threshold shall be
14150	calculated on a contract-by-contract basis for each such
14151	individual or entity and not in the aggregate for all health
14152	care risk contracts.
14153	Section 261. Section 641.2017, Florida Statutes, is
14154	amended to read:
14155	641.2017 Insurance business not authorized.--Nothing in
14156	the Florida Insurance Code or this part shall be deemed to
14157	authorize any health maintenance organization to transact any
14158	insurance business other than that of health maintenance
14159	organization type insurance or otherwise to engage in any other
14160	type of insurance unless it is authorized under a certificate of
14161	authority issued by the officedepartmentunder the provisions
14162	of the Florida Insurance Code. However, a health maintenance
14163	organization may by contract:
14164	(1) Enter into arrangements whereby the expected cost of
14165	health care services provided directly or through arrangements
14166	with other persons by the health maintenance organization is
14167	self-funded by the person contracting with the health
14168	maintenance organization, but the health maintenance
14169	organization assumes the risks that costs will exceed that
14170	amount on a prepaid per capita or prepaid aggregate fixed-sum
14171	basis; or
14172	(2) Enter into arrangements whereby the cost of health
14173	care services provided directly or through arrangements with
14174	other persons by the health maintenance organization is self-
14175	funded by the person contracting with the health maintenance
14176	organization.
14177	Section 262. Subsections (1) and (2) of section 641.2018,
14178	Florida Statutes, are amended to read:
14179	641.2018 Limited coverage for home health care
14180	authorized.--
14181	(1) Notwithstanding other provisions of this chapter, a
14182	health maintenance organization may issue a contract that limits
14183	coverage to home health care services only. The organization and
14184	the contract shall be subject to all of the requirements of this
14185	part that do not require or otherwise apply to specific benefits
14186	other than home care services. To this extent, all of the
14187	requirements of this part apply to any organization or contract
14188	that limits coverage to home care services, except the
14189	requirements for providing comprehensive health care services as
14190	provided in ss. 641.19(4), (11), and (12), and (13),and
14191	641.31(1), except ss. 641.31(9), (12), (17), (18), (19), (20),
14192	(21), and (24) and 641.31095.
14193	(2) Notwithstanding the other provisions of this chapter,
14194	a health maintenance organization may apply for and obtain a
14195	certificate of authority from the officedepartmentpursuant to
14196	this part and a health care provider certificate pursuant to
14197	part III, which certificate limits the authority of the
14198	organization to the issuance of contracts that limit coverage to
14199	home health care services pursuant to subsection (1). In
14200	addition to all applicable requirements of this part, as
14201	specified in subsection (1), all of the requirements of part III
14202	apply to an organization applying for such a limited
14203	certificate, except to the extent that such requirements
14204	directly conflict with the limited nature of the coverage
14205	provided.
14206	Section 263. Subsections (1) and (2) of section 641.21,
14207	Florida Statutes, are amended to read:
14208	641.21 Application for certificate.--
14209	(1) Before any entity may operate a health maintenance
14210	organization, it shall obtain a certificate of authority from
14211	the officedepartment. The officedepartmentshall accept and
14212	shall begin its review of an application for a certificate of
14213	authority anytime after an organization has filed an application
14214	for a health care provider certificate pursuant to part III of
14215	this chapter. However, the office maydepartment shallnot
14216	issue a certificate of authority to any applicant which does not
14217	possess a valid health care provider certificate issued by the
14218	agency. Each application for a certificate shall be on such form
14219	as the commissiondepartmentshall prescribe, shall be verified
14220	by the oath of two officers of the corporation and properly
14221	notarized, and shall be accompanied by the following:
14222	(a) A copy of the articles of incorporation and all
14223	amendments thereto;
14224	(b) A copy of the bylaws, rules and regulations, or
14225	similar form of document, if any, regulating the conduct of the
14226	affairs of the applicant;
14227	(c) A list of the names, addresses, and official
14228	capacities with the organization of the persons who are to be
14229	responsible for the conduct of the affairs of the health
14230	maintenance organization, including all officers, directors, and
14231	owners of in excess of 5 percent of the common stock of the
14232	corporation. Such persons shall fully disclose to the office
14233	departmentand the directors of the health maintenance
14234	organization the extent and nature of any contracts or
14235	arrangements between them and the health maintenance
14236	organization, including any possible conflicts of interest;
14237	(d) A complete biographical statement on forms prescribed
14238	by the commissiondepartment, and an independent investigation
14239	report and fingerprints obtained pursuant to chapter 624, of all
14240	of the individuals referred to in paragraph (c);
14241	(e) A statement generally describing the health
14242	maintenance organization, its operations, and its grievance
14243	procedures;
14244	(f) Forms of all health maintenance contracts,
14245	certificates, and member handbooks the applicant proposes to
14246	offer the subscribers, showing the benefits to which they are
14247	entitled, together with a table of the rates charged, or
14248	proposed to be charged, for each form of such contract. A
14249	certified actuary shall:
14250	1. Certify that the rates are neither inadequate nor
14251	excessive nor unfairly discriminatory;
14252	2. Certify that the rates are appropriate for the classes
14253	of risks for which they have been computed; and
14254	3. File an adequate description of the rating methodology
14255	showing that such methodology follows consistent and equitable
14256	actuarial principles;
14257	(g) A statement describing with reasonable certainty the
14258	geographic area or areas to be served by the health maintenance
14259	organization;
14260	(h) As to any applicant whose business plan indicates that
14261	it will receive Medicaid funds, a list of all contracts and
14262	agreements and any information relative to any payment or
14263	agreement to pay, directly or indirectly, a consultant fee, a
14264	broker fee, a commission, or other fee or charge related in any
14265	way to the application for a certificate of authority or the
14266	issuance of a certificate of authority, including, but not
14267	limited to, the name of the person or entity paying the fee; the
14268	name of the person or entity receiving the fee; the date of
14269	payment; and a brief description of the work performed. The
14270	contract, agreement, and related information shall, if
14271	requested, be provided to the officedepartment.
14272	(i) An audited financial statement prepared on the basis
14273	of statutory accounting principles and certified by an
14274	independent certified public accountant, except that surplus
14275	notes acceptable to the officedepartmentand meeting the
14276	requirements of this act shall be included in the calculation of
14277	surplus; and
14278	(j) Such additional reasonable data, financial statements,
14279	and other pertinent information as the commissioner or office
14280	requiresdepartment may requirewith respect to the
14281	determination that the applicant can provide the services to be
14282	offered.
14283	(2) After submission of the application for a certificate
14284	of authority, the entity may engage in initial group marketing
14285	activities solely with respect to employers, representatives of
14286	labor unions, professional associations, and trade associations,
14287	so long as it does not enter into, issue, deliver, or otherwise
14288	effectuate health maintenance contracts, effectuate or bind
14289	coverage or benefits, provide health care services, or collect
14290	premiums or charges until it has been issued a certificate of
14291	authority by the officedepartment. Any such activities, oral
14292	or written, shall include a statement that the entity does not
14293	possess a valid certificate of authority and cannot enter into
14294	health maintenance contracts until such time as it has been
14295	issued a certificate of authority by the officedepartment.
14296	Section 264. Section 641.215, Florida Statutes, is amended
14297	to read:
14298	641.215 Conditions precedent to issuance or maintenance of
14299	certificate of authority; effect of bankruptcy proceedings.--
14300	(1) As a condition precedent to the issuance or
14301	maintenance of a certificate of authority, a health maintenance
14302	organization insurer must file or have on file with the office
14303	department:
14304	(a) An acknowledgment that a delinquency proceeding
14305	pursuant to part I of chapter 631, or supervision by the office
14306	department pursuant to ss. 624.80-624.87,constitutes the sole
14307	and exclusive method for the liquidation, rehabilitation,
14308	reorganization, or conservation of a health maintenance
14309	organization.
14310	(b) A waiver of any right to file or be subject to a
14311	bankruptcy proceeding.
14312	(2) The commencement of a bankruptcy proceeding either by
14313	or against a health maintenance organization shall, by operation
14314	of law:
14315	(a) Terminate the health maintenance organization's
14316	certificate of authority.
14317	(b) Vest in the officedepartmentfor the use and benefit
14318	of the subscribers of the health maintenance organization the
14319	title to any deposits of the insurer held by the department.
14320
14321
14322	If the proceeding is initiated by a party other than the health
14323	maintenance organization, the operation of subsection (2) shall
14324	be stayed for a period of 60 days following the date of
14325	commencement of the proceeding.
14326	Section 265. Section 641.22, Florida Statutes, is amended
14327	to read:
14328	641.22 Issuance of certificate of authority.--The office
14329	departmentshall issue a certificate of authority to any entity
14330	filing a completed application in conformity with s. 641.21,
14331	upon payment of the prescribed fees and upon the office's
14332	department'sbeing satisfied that:
14333	(1) As a condition precedent to the issuance of any
14334	certificate, the entity has obtained a health care provider
14335	certificate from the Agency for Health Care Administration
14336	pursuant to part III of this chapter.
14337	(2) The health maintenance organization is actuarially
14338	sound.
14339	(3) The entity has met the applicable requirements
14340	specified in s. 641.225.
14341	(4) The procedures for offering comprehensive health care
14342	services and offering and terminating contracts to subscribers
14343	will not unfairly discriminate on the basis of age, sex, race,
14344	health, or economic status. However, this section does not
14345	prohibit reasonable underwriting classifications for the
14346	purposes of establishing contract rates, nor does it prohibit
14347	experience rating.
14348	(5) The entity furnishes evidence of adequate insurance
14349	coverage or an adequate plan for self-insurance to respond to
14350	claims for injuries arising out of the furnishing of
14351	comprehensive health care.
14352	(6) The ownership, control, and management of the entity
14353	is competent and trustworthy and possesses managerial experience
14354	that would make the proposed health maintenance organization
14355	operation beneficial to the subscribers. The officedepartment
14356	shall not grant or continue authority to transact the business
14357	of a health maintenance organization in this state at any time
14358	during which the officedepartmenthas good reason to believe
14359	that:
14360	(a) The ownership, control, or management of the
14361	organization includes any person:
14362	1. Who is incompetent or untrustworthy;
14363	2. Who is so lacking in health maintenance organization
14364	expertise as to make the operation of the health maintenance
14365	organization hazardous to potential and existing subscribers;
14366	3. Who is so lacking in health maintenance organization
14367	experience, ability, and standing as to jeopardize the
14368	reasonable promise of successful operation;
14369	4. Who is affiliated, directly or indirectly, through
14370	ownership, control, reinsurance transactions, or other business
14371	relations, with any person whose business operations are or have
14372	been marked by business practices or conduct that is to the
14373	detriment of the public, stockholders, investors, or creditors;
14374	or
14375	5. Whose business operations are or have been marked by
14376	business practices or conduct that is to the detriment of the
14377	public, stockholders, investors, or creditors;
14378	(b) Any person, including any stock subscriber,
14379	stockholder, or incorporator, who exercises or has the ability
14380	to exercise effective control of the organization, or who
14381	influences or has the ability to influence the transaction of
14382	the business of the health maintenance organization, does not
14383	possess the financial standing and business experience for the
14384	successful operation of the health maintenance organization;
14385	(c) Any person, including any stock subscriber,
14386	stockholder, or incorporator, who exercises or has the ability
14387	to exercise effective control of the organization, or who
14388	influences or has the ability to influence the transaction of
14389	the business of the health maintenance organization, has been
14390	found guilty of, or has pled guilty or no contest to, any felony
14391	or crime punishable by imprisonment of 1 year or more under the
14392	laws of the United States or any state thereof or under the laws
14393	of any other country, which involves moral turpitude, without
14394	regard to whether a judgment or conviction has been entered by
14395	the court having jurisdiction in such case. However, in the case
14396	of a health maintenance organization operating under a
14397	subsisting certificate of authority, the health maintenance
14398	organization shall remove any such person immediately upon
14399	discovery of the conditions set forth in this paragraph when
14400	applicable to such person or under the order of the office
14401	department, and the failure to so act by the organization is
14402	grounds for revocation or suspension of the health maintenance
14403	organization's certificate of authority; or
14404	(d) Any person, including any stock subscriber,
14405	stockholder, or incorporator, who exercises or has the ability
14406	to exercise effective control of the organization, or who
14407	influences or has the ability to influence the transaction of
14408	the business of the health maintenance organization, is now or
14409	was in the past affiliated, directly or indirectly, through
14410	ownership interest of 10 percent or more, control, or
14411	reinsurance transactions, with any business, corporation, or
14412	other entity that has been found guilty of or has pleaded guilty
14413	or nolo contendere to any felony or crime punishable by
14414	imprisonment for 1 year or more under the laws of the United
14415	States, any state, or any other country, regardless of
14416	adjudication. In the case of a health maintenance organization
14417	operating under a subsisting certificate of authority, the
14418	health maintenance organization shall immediately remove such
14419	person or immediately notify the officedepartmentof such
14420	person upon discovery of the conditions set forth in this
14421	paragraph, either when applicable to such person or upon order
14422	of the officedepartment. The failure to remove such person,
14423	provide such notice, or comply with such order constitutes
14424	grounds for suspension or revocation of the health maintenance
14425	organization's certificate of authority.
14426	(7) The entity has a blanket fidelity bond in the amount
14427	of $100,000, issued by a licensed insurance carrier in this
14428	state, that will reimburse the entity in the event that anyone
14429	handling the funds of the entity either misappropriates or
14430	absconds with the funds. All employees handling the funds shall
14431	be covered by the blanket fidelity bond. An agent licensed
14432	under the provisions of the Florida Insurance Code may either
14433	directly or indirectly represent the health maintenance
14434	organization in the solicitation, negotiation, effectuation,
14435	procurement, receipt, delivery, or forwarding of any health
14436	maintenance organization subscriber's contract or collect or
14437	forward any consideration paid by the subscriber to the health
14438	maintenance organization; and the licensed agent shall not be
14439	required to post the bond required by this subsection.
14440	(8) The entity has filed with the officedepartment, and
14441	obtained approval from the officedepartmentof, all reinsurance
14442	contracts as provided in s. 641.285.
14443	(9) The health maintenance organization has a grievance
14444	procedure that will facilitate the resolution of subscriber
14445	grievances and that includes both formal and informal steps
14446	available within the organization.
14447	Section 266. Subsections (2) and (4), and paragraphs (b)
14448	and (d) of subsection (6) of section 641.225, Florida Statutes,
14449	are amended to read:
14450	641.225 Surplus requirements.--
14451	(2) The officedepartmentshall not issue a certificate of
14452	authority, except as provided in subsection (3), unless the
14453	health maintenance organization has a minimum surplus in an
14454	amount which is the greater of:
14455	(a) Ten percent of their total liabilities based on their
14456	startup projection as set forth in this part;
14457	(b) Two percent of their total projected premiums based on
14458	their startup projection as set forth in this part; or
14459	(c) $1,500,000, plus all startup losses, excluding
14460	profits, projected to be incurred on their startup projection
14461	until the projection reflects statutory net profits for 12
14462	consecutive months.
14463	(4) The commissiondepartmentmay adopt rules to set
14464	uniform standards and criteria for the early warning that the
14465	continued operation of any health maintenance organization might
14466	be hazardous to its subscribers, creditors, or the general
14467	public, and to set standards for evaluating the financial
14468	condition of any health maintenance organization.
14469	(6) In lieu of having any minimum surplus, the health
14470	maintenance organization may provide a written guarantee to
14471	assure payment of covered subscriber claims and all other
14472	liabilities of the health maintenance organization, provided
14473	that the written guarantee is made by a guaranteeing
14474	organization which:
14475	(b) Submits a guarantee that is approved by the office
14476	departmentas meeting the requirements of this part, provided
14477	that the written guarantee contains a provision which requires
14478	that the guarantee be irrevocable unless the guaranteeing
14479	organization can demonstrate to the officedepartmentthat the
14480	cancellation of the guarantee will not result in the insolvency
14481	of the health maintenance organization and the officedepartment
14482	approves cancellation of the guarantee.
14483	(d) Submits annually, within 3 months after the end of its
14484	fiscal year, an audited financial statement certified by an
14485	independent certified public accountant, prepared in accordance
14486	with generally accepted accounting principles. The office
14487	departmentmay, as it deems necessary, require quarterly
14488	financial statements from the guaranteeing organization.
14489	Section 267. Subsection (1) of section 641.227, Florida
14490	Statutes, is amended to read:
14491	641.227 Rehabilitation Administrative Expense Fund.--
14492	(1) The officedepartmentshall not issue or permit to
14493	exist a certificate of authority to operate a health maintenance
14494	organization in this state unless the organization has deposited
14495	with the department $10,000 in cash for use in the
14496	Rehabilitation Administrative Expense Fund as established in
14497	subsection (2).
14498	Section 268. Subsections (1) and (3) of section 641.228,
14499	Florida Statutes, are amended to read:
14500	641.228 Florida Health Maintenance Organization Consumer
14501	Assistance Plan.--
14502	(1) The officedepartmentshall not issue a certificate to
14503	any health maintenance organization after July 1, 1989, until
14504	the applicant health maintenance organization has paid in full
14505	its special assessment as set forth in s. 631.819(2)(a).
14506	(3) The officedepartmentmay suspend or revoke the
14507	certificate of authority of any health maintenance organization
14508	which does not timely pay its assessment to the Florida Health
14509	Maintenance Organization Consumer Assistance Plan.
14510	Section 269. Section 641.23, Florida Statutes, is amended
14511	to read:
14512	641.23 Revocation or cancellation of certificate of
14513	authority; suspension of enrollment of new subscribers; terms of
14514	suspension.--
14515	(1) The maintenance of a valid and current health care
14516	provider certificate issued pursuant to part III of this chapter
14517	is a condition of the maintenance of a valid and current
14518	certificate of authority issued by the officedepartmentto
14519	operate a health maintenance organization. Denial or revocation
14520	of a health care provider certificate shall be deemed to be an
14521	automatic and immediate cancellation of a health maintenance
14522	organization's certificate of authority. At the discretion of
14523	the officeDepartment of Insurance, nonrenewal of a health care
14524	provider certificate may be deemed to be an automatic and
14525	immediate cancellation of a health maintenance organization's
14526	certificate of authority if the Agency for Health Care
14527	Administration notifies the officeDepartment of Insurance, in
14528	writing, that the health care provider certificate will not be
14529	renewed.
14530	(2) The officedepartmentmay suspend the authority of a
14531	health maintenance organization to enroll new subscribers or
14532	revoke any certificate issued to a health maintenance
14533	organization, or order compliance within 30 days, if it finds
14534	that any of the following conditions exists:
14535	(a) The organization is not operating in compliance with
14536	this part;
14537	(b) The plan is no longer actuarially sound or the
14538	organization does not have the minimum surplus as required by
14539	this part;
14540	(c) The existing contract rates are excessive, inadequate,
14541	or unfairly discriminatory;
14542	(d) The organization has advertised, merchandised, or
14543	attempted to merchandise its services in such a manner as to
14544	misrepresent its services or capacity for service or has engaged
14545	in deceptive, misleading, or unfair practices with respect to
14546	advertising or merchandising; or
14547	(e) The organization is insolvent.
14548	(3) Whenever the financial condition of the health
14549	maintenance organization is such that, if not modified or
14550	corrected, its continued operation would result in impairment or
14551	insolvency, the officedepartmentmay order the health
14552	maintenance organization to file with the officedepartmentand
14553	implement a corrective action plan designed to do one or more of
14554	the following:
14555	(a) Reduce the total amount of present potential liability
14556	for benefits by reinsurance or other means.
14557	(b) Reduce the volume of new business being accepted.
14558	(c) Reduce the expenses of the health maintenance
14559	organization by specified methods.
14560	(d) Suspend or limit the writing of new business for a
14561	period of time.
14562	(e) Require an increase in the health maintenance
14563	organization's net worth.
14564
14565
14566	If the health maintenance organization fails to submit a plan
14567	within 30 days of the office'sdepartment'sorder or submits a
14568	plan which is insufficient to correct the health maintenance
14569	organization's financial condition, the officedepartmentmay
14570	order the health maintenance organization to implement one or
14571	more of the corrective actions listed in this subsection.
14572	(4) The officedepartmentshall, in its order suspending
14573	the authority of a health maintenance organization to enroll new
14574	subscribers, specify the period during which the suspension is
14575	to be in effect and the conditions, if any, which must be met by
14576	the health maintenance organization prior to reinstatement of
14577	its authority to enroll new subscribers. The order of
14578	suspension is subject to rescission or modification by further
14579	order of the officedepartmentprior to the expiration of the
14580	suspension period. Reinstatement shall not be made unless
14581	requested by the health maintenance organization; however, the
14582	officedepartmentshall not grant reinstatement if it finds that
14583	the circumstances for which the suspension occurred still exist
14584	or are likely to recur.
14585	(5) The commissiondepartment shall adoptpromulgaterules
14586	establishing an actuarially sound medical loss ratio for
14587	Medicaid. In determining the appropriate medical loss ratio,
14588	the commissiondepartmentshall consider factors, including but
14589	not limited to, plan age, plan structure, geographic service
14590	area, product mix, provider network, medical inflation, provider
14591	services, other professional services, out of network referrals
14592	and expenditures, in and out of network emergency room
14593	expenditures, inpatient expenditures, other medical
14594	expenditures, incentive pool adjustments, copayments,
14595	coordination of benefits, subrogation, and any other expenses
14596	associated with the delivery of medical benefits. The
14597	commissiondepartmentshall utilize assistance from the Agency
14598	for Health Care Administration, the State University System, an
14599	independent actuary, and representatives from health maintenance
14600	organizations in developing the rule for appropriate medical
14601	loss ratios.
14602	(6) The officedepartmentshall calculate and publish at
14603	least annually the medical loss ratios of all licensed health
14604	maintenance organizations. The publication shall include an
14605	explanation of what the medical loss ratio means and shall
14606	disclose that the medical loss ratio is not a direct reflection
14607	of quality, but must be looked at along with patient
14608	satisfaction and other standards that define quality.
14609	Section 270. Subsections (1), (2), and (3) of section
14610	641.234, Florida Statutes, are amended to read:
14611	641.234 Administrative, provider, and management
14612	contracts.--
14613	(1) The officedepartmentmay require a health maintenance
14614	organization to submit any contract for administrative services,
14615	contract with a provider other than an individual physician,
14616	contract for management services, and contract with an
14617	affiliated entity to the officedepartment.
14618	(2) After review of a contract the officedepartmentmay
14619	order the health maintenance organization to cancel the contract
14620	in accordance with the terms of the contract and applicable law
14621	if it determines:
14622	(a) That the fees to be paid by the health maintenance
14623	organization under the contract are so unreasonably high as
14624	compared with similar contracts entered into by the health
14625	maintenance organization or as compared with similar contracts
14626	entered into by other health maintenance organizations in
14627	similar circumstances that the contract is detrimental to the
14628	subscribers, stockholders, investors, or creditors of the health
14629	maintenance organization; or
14630	(b) That the contract is with an entity that is not
14631	licensed under state statutes, if such license is required, or
14632	is not in good standing with the applicable regulatory agency.
14633	(3) All contracts for administrative services, management
14634	services, provider services other than individual physician
14635	contracts, and with affiliated entities entered into or renewed
14636	by a health maintenance organization on or after October 1,
14637	1988, shall contain a provision that the contract shall be
14638	canceled upon issuance of an order by the officedepartment
14639	pursuant to this section.
14640	Section 271. Section 641.2342, Florida Statutes, is
14641	amended to read:
14642	641.2342 Contract providers.--Each health maintenance
14643	organization shall file, upon the request of the office
14644	department, financial statements for all contract providers of
14645	comprehensive health care services who have assumed, through
14646	capitation or other means, more than 10 percent of the health
14647	care risks of the health maintenance organization. However,
14648	this provision shall not apply to any individual physician.
14649	Section 272. Section 641.25, Florida Statutes, is amended
14650	to read:
14651	641.25 Administrative penalty in lieu of suspension or
14652	revocation.--If the officedepartmentfinds that one or more
14653	grounds exist for the revocation or suspension of a certificate
14654	issued under this part, the officedepartmentmay, in lieu of
14655	revocation or suspension, impose a fine upon the health
14656	maintenance organization. With respect to any nonwillful
14657	violation, the fine must not exceed $2,500 per violation. Such
14658	fines may not exceed an aggregate amount of $25,000 for all
14659	nonwillful violations arising out of the same action. With
14660	respect to any knowing and willful violation of a lawful order
14661	or rule of the office or commissiondepartmentor a provision of
14662	this part, the officedepartmentmay impose upon the
14663	organization a fine in an amount not to exceed $20,000 for each
14664	such violation. Such fines may not exceed an aggregate amount
14665	of $250,000 for all knowing and willful violations arising out
14666	of the same action. The commissiondepartmentmust adopt by
14667	rule by January 1, 1997,penalty categories that specify varying
14668	ranges of monetary fines for willful violations and for
14669	nonwillful violations.
14670	Section 273. Subsection (2) of section 641.255, Florida
14671	Statutes, is amended to read:
14672	641.255 Acquisition, merger, or consolidation.--
14673	(2) In addition to the requirements set forth in ss.
14674	628.451, 628.4615, and 628.471, each party to any transaction
14675	involving any licensee which, as indicated in its most recent
14676	quarterly or annual statement, derives income from Medicaid
14677	funds shall in the filing made with the officedepartment
14678	identify:
14679	(a) Any person who has received any payment from either
14680	party or any person on that party's behalf; or
14681	(b) The existence of any agreement entered into by either
14682	party or by any person on that party's behalf to pay a
14683	consultant fee, a broker fee, a commission, or other fee or
14684	charge,
14685
14686
14687	which in any way relates to the acquisition, merger, or
14688	consolidation. The commissiondepartmentmay adopt a form to be
14689	made part of the application which is to be sworn to by an
14690	officer of the entity which made or will make the payment. The
14691	form shall include the name of the person or entity paying the
14692	fee; the name of the person or entity receiving the fee; the
14693	date of payment; and a brief description of the work performed.
14694	Section 274. Section 641.26, Florida Statutes, is amended
14695	to read:
14696	641.26 Annual and quarterly reports.--
14697	(1) Every health maintenance organization shall, annually
14698	within 3 months after the end of its fiscal year, or within an
14699	extension of time therefor as the officedepartment, for good
14700	cause, may grant, in a form prescribed by the commission
14701	department, file a report with the officedepartment, verified
14702	by the oath of two officers of the organization or, if not a
14703	corporation, of two persons who are principal managing directors
14704	of the affairs of the organization, properly notarized, showing
14705	its condition on the last day of the immediately preceding
14706	reporting period. Such report shall include:
14707	(a) A financial statement of the health maintenance
14708	organization filed on a computer diskette using a format
14709	acceptable to the officedepartment.
14710	(b) A financial statement of the health maintenance
14711	organization filed on forms acceptable to the officedepartment.
14712	(c) An audited financial statement of the health
14713	maintenance organization, including its balance sheet and a
14714	statement of operations for the preceding year certified by an
14715	independent certified public accountant, prepared in accordance
14716	with statutory accounting principles.
14717	(d) The number of health maintenance contracts issued and
14718	outstanding and the number of health maintenance contracts
14719	terminated.
14720	(e) The number and amount of damage claims for medical
14721	injury initiated against the health maintenance organization and
14722	any of the providers engaged by it during the reporting year,
14723	broken down into claims with and without formal legal process,
14724	and the disposition, if any, of each such claim.
14725	(f) An actuarial certification that:
14726	1. The health maintenance organization is actuarially
14727	sound, which certification shall consider the rates, benefits,
14728	and expenses of, and any other funds available for the payment
14729	of obligations of, the organization.
14730	2. The rates being charged or to be charged are
14731	actuarially adequate to the end of the period for which rates
14732	have been guaranteed.
14733	3. Incurred but not reported claims and claims reported
14734	but not fully paid have been adequately provided for.
14735	4. The health maintenance organization has adequately
14736	provided for all obligations required by s. 641.35(3)(a).
14737	(g) A report prepared by the certified public accountant
14738	and filed with the officedepartmentdescribing material
14739	weaknesses in the health maintenance organization's internal
14740	control structure as noted by the certified public accountant
14741	during the audit. The report must be filed with the annual
14742	audited financial report as required in paragraph (c). The
14743	health maintenance organization shall provide a description of
14744	remedial actions taken or proposed to correct material
14745	weaknesses, if the actions are not described in the independent
14746	certified public accountant's report.
14747	(h) Such other information relating to the performance of
14748	health maintenance organizations as is required by the
14749	commission or officedepartment.
14750	(2) The officedepartmentmay require updates of the
14751	actuarial certification as to a particular health maintenance
14752	organization if the officedepartmenthas reasonable cause to
14753	believe that such reserves are understated to the extent of
14754	materially misstating the financial position of the health
14755	maintenance organization. Workpapers in support of the
14756	statement of the updated actuarial certification must be
14757	provided to the officedepartmentupon request.
14758	(3) Every health maintenance organization shall file
14759	quarterly, for the first three calendar quarters of each year,
14760	an unaudited financial statement of the organization as
14761	described in paragraphs (1)(a) and (b). The statement for the
14762	quarter ending March 31 shall be filed on or before May 15, the
14763	statement for the quarter ending June 30 shall be filed on or
14764	before August 15, and the statement for the quarter ending
14765	September 30 shall be filed on or before November 15. The
14766	quarterly report shall be verified by the oath of two officers
14767	of the organization, properly notarized.
14768	(4) Any health maintenance organization that neglects to
14769	file an annual report or quarterly report in the form and within
14770	the time required by this section shall forfeit up to $1,000 for
14771	each day for the first 10 days during which the neglect
14772	continues and shall forfeit up to $2,000 for each day after the
14773	first 10 days during which the neglect continues; and, upon
14774	notice by the officedepartmentto that effect, the
14775	organization's authority to enroll new subscribers or to do
14776	business in this state shall cease while such default continues.
14777	The officedepartmentshall deposit all sums collected by it
14778	under this section to the credit of the Insurance Commissioner's
14779	Regulatory Trust Fund. The officedepartmentshall not collect
14780	more than $100,000 for each report.
14781	(5) Each authorized health maintenance organization shall
14782	retain an independent certified public accountant, referred to
14783	in this section as "CPA," who agrees by written contract with
14784	the health maintenance organization to comply with the
14785	provisions of this part.
14786	(a) The CPA shall provide to the HMO audited financial
14787	statements consistent with this part.
14788	(b) Any determination by the CPA that the health
14789	maintenance organization does not meet minimum surplus
14790	requirements as set forth in this part shall be stated by the
14791	CPA, in writing, in the audited financial statement.
14792	(c) The completed work papers and any written
14793	communications between the CPA firm and the health maintenance
14794	organization relating to the audit of the health maintenance
14795	organization shall be made available for review on a visual-
14796	inspection-only basis by the officedepartmentat the offices of
14797	the health maintenance organization, at the officedepartment,
14798	or at any other reasonable place as mutually agreed between the
14799	officedepartmentand the health maintenance organization. The
14800	CPA must retain for review the work papers and written
14801	communications for a period of not less than 6 years.
14802	(d) The CPA shall provide to the officedepartmenta
14803	written report describing material weaknesses in the health
14804	maintenance organization's internal control structure as noted
14805	during the audit.
14806	(6) To facilitate uniformity in financial statements and
14807	to facilitate officedepartment analysis, the commission
14808	departmentmay by rule adopt the form for financial statements
14809	of a health maintenance organization, including supplements as
14810	approved by the National Association of Insurance Commissioners
14811	in 1995, and may adopt subsequent amendments thereto if the
14812	methodology remains substantially consistent, and may by rule
14813	require each health maintenance organization to submit to the
14814	officedepartmentall or part of the information contained in
14815	the annual statement in a computer-readable form compatible with
14816	the electronic data processing system specified by the office
14817	department.
14818	(7) In addition to information called for and furnished in
14819	connection with its annual or quarterly statements, the health
14820	maintenance organization shall furnish to the officedepartment
14821	as soon as reasonably possible such information as to its
14822	material transactions which, in the office'sdepartment's
14823	opinion, may have a material adverse effect on the health
14824	maintenance organization's financial condition, as the office
14825	requestsdepartment may requestin writing. All such information
14826	furnished pursuant to the office'sdepartment'srequest must be
14827	verified by the oath of two executive officers of the health
14828	maintenance organization.
14829	(8) Each health maintenance organization shall file one
14830	copy of its annual statement convention blank in electronic
14831	form, along with such additional filings as prescribed by the
14832	commissiondepartmentfor the preceding calendar year or
14833	quarter, with the National Association of Insurance
14834	Commissioners. Each health maintenance organization shall pay
14835	fees assessed by the National Association of Insurance
14836	Commissioners to cover costs associated with the filing and
14837	analysis of the documents by the National Association of
14838	Insurance Commissioners.
14839	Section 275. Section 641.27, Florida Statutes, is amended
14840	to read:
14841	641.27 Examination by the department.--
14842	(1) The officedepartmentshall examine the affairs,
14843	transactions, accounts, business records, and assets of any
14844	health maintenance organization as often as it deems it
14845	expedient for the protection of the people of this state, but
14846	not less frequently than once every 3 years. In lieu of making
14847	its own financial examination, the officedepartmentmay accept
14848	an independent certified public accountant's audit report
14849	prepared on a statutory accounting basis consistent with this
14850	part. However, except when the medical records are requested
14851	and copies furnished pursuant to s. 456.057, medical records of
14852	individuals and records of physicians providing service under
14853	contract to the health maintenance organization shall not be
14854	subject to audit, although they may be subject to subpoena by
14855	court order upon a showing of good cause. For the purpose of
14856	examinations, the officedepartmentmay administer oaths to and
14857	examine the officers and agents of a health maintenance
14858	organization concerning its business and affairs. The
14859	examination of each health maintenance organization by the
14860	officedepartmentshall be subject to the same terms and
14861	conditions as apply to insurers under chapter 624. In no event
14862	shall expenses of all examinations exceed a maximum of $20,000
14863	for any 1-year period. Any rehabilitation, liquidation,
14864	conservation, or dissolution of a health maintenance
14865	organization shall be conducted under the supervision of the
14866	department, which shall have all power with respect thereto
14867	granted to it under the laws governing the rehabilitation,
14868	liquidation, reorganization, conservation, or dissolution of
14869	life insurance companies.
14870	(2) The officedepartmentmay contract, at reasonable fees
14871	for work performed, with qualified, impartial outside sources to
14872	perform audits or examinations or portions thereof pertaining to
14873	the qualification of an entity for issuance of a certificate of
14874	authority or to determine continued compliance with the
14875	requirements of this part, in which case the payment must be
14876	made directly to the contracted examiner by the health
14877	maintenance organization examined, in accordance with the rates
14878	and terms agreed to by the officedepartmentand the examiner.
14879	Any contracted assistance shall be under the direct supervision
14880	of the officedepartment. The results of any contracted
14881	assistance shall be subject to the review of, and approval,
14882	disapproval, or modification by, the officedepartment.
14883	Section 276. Section 641.28, Florida Statutes, is amended
14884	to read:
14885	641.28 Civil remedy.--In any civil action brought to
14886	enforce the terms and conditions of a health maintenance
14887	organization contract, the prevailing party is entitled to
14888	recover reasonable attorney's fees and court costs. This section
14889	shall not be construed to authorize a civil action against the
14890	commission, office, or department, theirits employees, or the
14891	Chief Financial OfficerInsurance Commissioneror against the
14892	Agency for Health Care Administration, its employees, or the
14893	director of the agency.
14894	Section 277. Section 641.281, Florida Statutes, is amended
14895	to read:
14896	641.281 Injunction.--In addition to the penalties and
14897	other enforcement provisions of this part, the office and
14898	department, within the scope of their regulatory jurisdictions,
14899	areisvested with the power to seek both temporary and
14900	permanent injunctive relief when:
14901	(1) A health maintenance organization is being operated by
14902	any person or entity without a subsisting certificate of
14903	authority.
14904	(2) Any person, entity, or health maintenance organization
14905	has engaged in any activity prohibited by this part or any rule
14906	adopted pursuant thereto.
14907	(3) Any health maintenance organization, person, or entity
14908	is renewing, issuing, or delivering a health maintenance
14909	contract or contracts without a subsisting certificate of
14910	authority.
14911
14912
14913	The office's anddepartment's authority to seek injunctive
14914	relief shall not be conditioned on having conducted any
14915	proceeding pursuant to chapter 120.
14916	Section 278. Section 641.284, Florida Statutes, is amended
14917	to read:
14918	641.284 Liquidation, rehabilitation, reorganization, and
14919	conservation; exclusive methods of remedy.--A delinquency
14920	proceeding under part I of chapter 631, or supervision by the
14921	officedepartment under ss. 624.80-624.87,constitute the sole
14922	and exclusive means of liquidating, reorganizing,
14923	rehabilitating, or conserving a health maintenance organization.
14924	Section 279. Subsections (1), (2), and (3) of section
14925	641.285, Florida Statutes, are amended to read:
14926	641.285 Insolvency protection.--
14927	(1) Each health maintenance organization shall deposit
14928	with the department cash or securities of the type eligible
14929	under s. 625.52, which shall have at all times a market value in
14930	the amount set forth in this subsection. The amount of the
14931	deposit shall be reviewed annually, or more often, as the office
14932	departmentdeems necessary. The market value of the deposit
14933	shall be a minimum of $300,000.
14934	(2) If securities or assets deposited by a health
14935	maintenance organization under this part are subject to material
14936	fluctuations in market value, the officedepartmentmay, in its
14937	discretion, require the organization to deposit and maintain on
14938	deposit additional securities or assets in an amount as may be
14939	reasonably necessary to assure that the deposit will at all
14940	times have a market value of not less than the amount specified
14941	under this section. If for any reason the market value of assets
14942	and securities of a health maintenance organization held on
14943	deposit in this state under this code falls below the amount
14944	required, the organization shall promptly deposit other or
14945	additional assets or securities eligible for deposit sufficient
14946	to cure the deficiency. If the health maintenance organization
14947	has failed to cure the deficiency within 30 days after receipt
14948	of notice thereof by registered or certified mail from the
14949	officedepartment, the officedepartmentmay revoke the
14950	certificate of authority of the health maintenance organization.
14951	(3) Whenever the officedepartmentdetermines that the
14952	financial condition of a health maintenance organization has
14953	deteriorated to the point that the policyholders' or
14954	subscribers' best interests are not being preserved by the
14955	activities of a health maintenance organization, the office
14956	departmentmay require such health maintenance organization to
14957	deposit and maintain deposited in trust with the department for
14958	the protection of the health maintenance organization's
14959	policyholders, subscribers, and creditors, for such time as the
14960	officedepartmentdeems necessary, securities eligible for such
14961	deposit under s. 625.52 having a market value of not less than
14962	the amount that the officedepartmentdetermines is necessary,
14963	which amount must not be less than $100,000 or greater than $2
14964	million. The deposit required under this subsection is in
14965	addition to any other deposits required of a health maintenance
14966	organization pursuant to subsections (1) and (2).
14967	Section 280. Section 641.29, Florida Statutes, is amended
14968	to read:
14969	641.29 Fees.--Every health maintenance organization shall
14970	pay to the officedepartmentthe following fees:
14971	(1) For filing a copy of its application for a certificate
14972	of authority or amendment thereto, a nonrefundable fee in the
14973	amount of $1,000.
14974	(2) For filing each annual report, which must be filed on
14975	computer diskettes, $150.
14976	Section 281. Paragraph (b) of subsection (4) of section
14977	641.3007, Florida Statutes, is amended to read:
14978	641.3007 HIV infection and AIDS for contract
14979	(4) UTILIZATION OF MEDICAL TESTS.--
14980	(b) Prior to testing, the health maintenance organization
14981	must disclose its intent to test the person for the HIV
14982	infection or for a specific sickness or medical condition
14983	derived therefrom and must obtain the person's written informed
14984	consent to administer the test. Written informed consent shall
14985	include a fair explanation of the test, including its purpose,
14986	potential uses, and limitations, and the meaning of its results
14987	and the right to confidential treatment of information. Use of
14988	a form approved by the officedepartmentshall raise a
14989	conclusive presumption of informed consent.
14990	Section 282. Section 641.305, Florida Statutes, is amended
14991	to read:
14992	641.305 Language used in contracts and advertisements;
14993	translations.--
14994	(1)(a) All health maintenance contracts or forms shall be
14995	printed in English.
14996	(b) If the negotiations by a health maintenance
14997	organization with a member leading up to the effectuation of a
14998	health maintenance contract are conducted in a language other
14999	than English, the health maintenance organization shall supply
15000	to the member a written translation of the contract, which
15001	translation accurately reflects the substance of the contract
15002	and is in the language used to negotiate the contract. The
15003	written translation shall be affixed to and shall become a part
15004	of the contract or form. Any such translation shall be
15005	furnished to the officedepartmentas part of the filing of the
15006	health maintenance contract form. No translation of a health
15007	maintenance contract form shall be approved by the department
15008	unless the translation accurately reflects the substance of the
15009	health maintenance contract form in translation.
15010	(2) The text of all advertisements by a health maintenance
15011	organization, if printed or broadcast in a language other than
15012	English, also shall be available in English and shall be
15013	furnished to the officedepartmentupon request. As used in
15014	this subsection, the term "advertisement" means any
15015	advertisement, circular, pamphlet, brochure, or other printed
15016	material disclosing or disseminating advertising material or
15017	information by a health maintenance organization to prospective
15018	or existing subscribers and includes any radio or television
15019	transmittal of an advertisement or information.
15020	Section 283. Subsections (2), (3), (5), and (12) and
15021	paragraphs (c) and (e) of subsection (38) of section 641.31,
15022	Florida Statutes, are amended to read:
15023	641.31 Health maintenance contracts.--
15024	(2) The rates charged by any health maintenance
15025	organization to its subscribers shall not be excessive,
15026	inadequate, or unfairly discriminatory or follow a rating
15027	methodology that is inconsistent, indeterminate, or ambiguous or
15028	encourages misrepresentation or misunderstanding. The
15029	commissiondepartment, in accordance with generally accepted
15030	actuarial practice as applied to health maintenance
15031	organizations, may define by rule what constitutes excessive,
15032	inadequate, or unfairly discriminatory rates and may require
15033	whatever information it deems necessary to determine that a rate
15034	or proposed rate meets the requirements of this subsection.
15035	(3)(a) If a health maintenance organization desires to
15036	amend any contract with its subscribers or any certificate or
15037	member handbook, or desires to change any basic health
15038	maintenance contract, certificate, grievance procedure, or
15039	member handbook form, or application form where written
15040	application is required and is to be made a part of the
15041	contract, or printed amendment, addendum, rider, or endorsement
15042	form or form of renewal certificate, it may do so, upon filing
15043	with the officedepartmentthe proposed change or amendment.
15044	Any proposed change shall be effective immediately, subject to
15045	disapproval by the officedepartment. Following receipt of
15046	notice of such disapproval or withdrawal of approval, no health
15047	maintenance organization shall issue or use any form disapproved
15048	by the officedepartment or as to which the officedepartment
15049	has withdrawn approval.
15050	(b) Any change in the rate is subject to paragraph (d) and
15051	requires at least 30 days' advance written notice to the
15052	subscriber. In the case of a group member, there may be a
15053	contractual agreement with the health maintenance organization
15054	to have the employer provide the required notice to the
15055	individual members of the group.
15056	(c) The officedepartmentshall disapprove any form filed
15057	under this subsection, or withdraw any previous approval
15058	thereof, if the form:
15059	1. Is in any respect in violation of, or does not comply
15060	with, any provision of this part or rule adopted thereunder.
15061	2. Contains or incorporates by reference, where such
15062	incorporation is otherwise permissible, any inconsistent,
15063	ambiguous, or misleading clauses or exceptions and conditions
15064	which deceptively affect the risk purported to be assumed in the
15065	general coverage of the contract.
15066	3. Has any title, heading, or other indication of its
15067	provisions which is misleading.
15068	4. Is printed or otherwise reproduced in such a manner as
15069	to render any material provision of the form substantially
15070	illegible.
15071	5. Contains provisions which are unfair, inequitable, or
15072	contrary to the public policy of this state or which encourage
15073	misrepresentation.
15074	6. Excludes coverage for human immunodeficiency virus
15075	infection or acquired immune deficiency syndrome or contains
15076	limitations in the benefits payable, or in the terms or
15077	conditions of such contract, for human immunodeficiency virus
15078	infection or acquired immune deficiency syndrome which are
15079	different than those which apply to any other sickness or
15080	medical condition.
15081	(d) Any change in rates charged for the contract must be
15082	filed with the officedepartmentnot less than 30 days in
15083	advance of the effective date. At the expiration of such 30
15084	days, the rate filing shall be deemed approved unless prior to
15085	such time the filing has been affirmatively approved or
15086	disapproved by order of the officedepartment. The approval of
15087	the filing by the officedepartmentconstitutes a waiver of any
15088	unexpired portion of such waiting period. The officedepartment
15089	may extend by not more than an additional 15 days the period
15090	within which it may so affirmatively approve or disapprove any
15091	such filing, by giving notice of such extension before
15092	expiration of the initial 30-day period. At the expiration of
15093	any such period as so extended, and in the absence of such prior
15094	affirmative approval or disapproval, any such filing shall be
15095	deemed approved.
15096	(e) It is not the intent of this subsection to restrict
15097	unduly the right to modify rates in the exercise of reasonable
15098	business judgment.
15099	(5) Every subscriber shall receive a clear and
15100	understandable description of the method of the health
15101	maintenance organization for resolving subscriber grievances,
15102	and the method shall be set forth in the contract, certificate,
15103	and member handbook. The organization shall also furnish, at
15104	the time of initial enrollment and when necessary due to
15105	substantial changes to the grievance process a separate and
15106	additional communication prepared or approved by the office
15107	departmentnotifying the contract holder of a group contract or
15108	subscriber of an individual contract of their rights and
15109	responsibilities under the grievance process.
15110	(12) Each health maintenance contract, certificate, or
15111	member handbook shall state that emergency services and care
15112	shall be provided to subscribers in emergency situations not
15113	permitting treatment through the health maintenance
15114	organization's providers, without prior notification to and
15115	approval of the organization. Not less than 75 percent of the
15116	reasonable charges for covered services and supplies shall be
15117	paid by the organization, up to the subscriber contract benefit
15118	limits. Payment also may be subject to additional applicable
15119	copayment provisions, not to exceed $100 per claim. The health
15120	maintenance contract, certificate, or member handbook shall
15121	contain the definitions of "emergency services and care" and
15122	"emergency medical condition" as specified in s. 641.19(6)(7)
15123	and (7)(8), shall describe procedures for determination by the
15124	health maintenance organization of whether the services qualify
15125	for reimbursement as emergency services and care, and shall
15126	contain specific examples of what does constitute an emergency.
15127	In providing for emergency services and care as a covered
15128	service, a health maintenance organization shall be governed by
15129	s. 641.513.
15130	(38)
15131	(c) Premiums paid in for the point-of-service riders may
15132	not exceed 15 percent of total premiums for all health plan
15133	products sold by the health maintenance organization offering
15134	the rider. If the premiums paid for point-of-service riders
15135	exceed 15 percent, the health maintenance organization must
15136	notify the officedepartmentand, once this fact is known, must
15137	immediately cease offering such a rider until it is in
15138	compliance with the rider premium cap.
15139	(e) The term "point of service" may not be used by a
15140	health maintenance organization except with riders permitted
15141	under this section or with forms approved by the office
15142	departmentin which a point-of-service product is offered with
15143	an indemnity carrier.
15144	Section 284. Subsection (2) of section 641.3105, Florida
15145	Statutes, is amended to read:
15146	641.3105 Validity of noncomplying contracts.--
15147	(2) Any health maintenance contract delivered or issued
15148	for delivery in this state covering a subscriber, which
15149	subscriber, pursuant to the provisions of this part, the
15150	organization may not lawfully cover under the contract, shall be
15151	cancelable at any time by the organization, any provision of the
15152	contract to the contrary notwithstanding; and the organization
15153	shall promptly cancel the contract in accordance with the
15154	request of the officedepartmenttherefor. No such illegality
15155	or cancellation shall be deemed to relieve the organization of
15156	any liability incurred by it under the contract while in force
15157	or to prohibit the organization from retaining the pro rata
15158	earned premium or rate thereon. This provision does not relieve
15159	the organization from any penalty otherwise incurred by the
15160	organization under this part on account of any such violation.
15161	Section 285. Subsection (5), paragraph (b) of subsection
15162	(7), paragraphs (a) and (e) of subsection (8), paragraph (c) of
15163	subsection (9), and paragraph (b) of subsection (10) of section
15164	641.31071, Florida Statutes, are amended to read:
15165	641.31071 Preexisting conditions.--
15166	(5)(a) The term "creditable coverage" means, with respect
15167	to an individual, coverage of the individual under any of the
15168	following:
15169	1. A group health plan, as defined in s. 2791 of the
15170	Public Health Service Act.
15171	2. Health insurance coverage consisting of medical care,
15172	provided directly, through insurance or reimbursement or
15173	otherwise, and including terms and services paid for as medical
15174	care, under any hospital or medical service policy or
15175	certificate, hospital or medical service plan contract, or
15176	health maintenance contract offered by a health insurance
15177	issuer.
15178	3. Part A or part B of Title XVIII of the Social Security
15179	Act.
15180	4. Title XIX of the Social Security Act, other than
15181	coverage consisting solely of benefits under s. 1928.
15182	5. Chapter 55 of Title 10, United States Code.
15183	6. A medical care program of the Indian Health Service or
15184	of a tribal organization.
15185	7. The Florida Comprehensive Health Association or another
15186	state health benefit risk pool.
15187	8. A health plan offered under chapter 89 of Title 5,
15188	United States Code.
15189	9. A public health plan as defined by rule of the
15190	commissiondepartment. To the greatest extent possible, such
15191	rules must be consistent with regulations adopted by the United
15192	States Department of Health and Human Services.
15193	10. A health benefit plan under s. 5(e) of the Peace Corps
15194	Act (22 U.S.C. s. 2504(e)).
15195	(b) Creditable coverage does not include coverage that
15196	consists solely of one or more or any combination thereof of the
15197	following excepted benefits:
15198	1. Coverage only for accident, or disability income
15199	insurance, or any combination thereof.
15200	2. Coverage issued as a supplement to liability insurance.
15201	3. Liability insurance, including general liability
15202	insurance and automobile liability insurance.
15203	4. Workers' compensation or similar insurance.
15204	5. Automobile medical payment insurance.
15205	6. Credit-only insurance.
15206	7. Coverage for onsite medical clinics.
15207	8. Other similar insurance coverage, specified in rules
15208	adopted by the commissiondepartment, under which benefits for
15209	medical care are secondary or incidental to other insurance
15210	benefits. To the greatest extent possible, such rules must be
15211	consistent with regulations adopted by the United States
15212	Department of Health and Human Services.
15213	(c) The following benefits are not subject to the
15214	creditable coverage requirements, if offered separately;
15215	1. Limited scope dental or vision benefits.
15216	2. Benefits or long-term care, nursing home care, home
15217	health care, community-based care, or any combination of these.
15218	3. Such other similar, limited benefits as are specified
15219	in rules adopted by the commissiondepartment. To the greatest
15220	extent possible, such rules must be consistent with regulations
15221	adopted by the United States Department of Health and Human
15222	Services.
15223	(d) The following benefits are not subject to creditable
15224	coverage requirements if offered as independent, noncoordinated
15225	benefits:
15226	1. Coverage only for a specified disease or illness.
15227	2. Hospital indemnity or other fixed indemnity insurance.
15228	(e) Benefits provided through Medicare supplemental health
15229	insurance, as defined under s. 1882(g)(1) of the Social Security
15230	Act, coverage supplemental to the coverage provided under
15231	chapter 55 of Title 10, United States Code, and similar
15232	supplemental coverage provided to coverage under a group health
15233	plan are not considered creditable coverage if offered as a
15234	separate insurance policy.
15235	(7)
15236	(b) A health maintenance organization may elect to count
15237	as creditable coverage, coverage of benefits within each of
15238	several classes or categories of benefits specified in rules
15239	adopted by the commissiondepartmentrather than as provided
15240	under paragraph (a). Such election shall be made on a uniform
15241	basis for all participants and beneficiaries. Under such
15242	election, a health maintenance organization shall count a period
15243	of creditable coverage with respect to any class or category of
15244	benefits if any level of benefits is covered within such class
15245	or category.
15246	(8)(a) Periods of creditable coverage with respect to an
15247	individual shall be established through presentation of
15248	certifications described in this subsection or in such other
15249	manner as may be specified in rules adopted by the commission
15250	department.
15251	(e) The commissiondepartmentshall adopt rules to prevent
15252	an insurer's or health maintenance organization's failure to
15253	provide information under this subsection with respect to
15254	previous coverage of an individual from adversely affecting any
15255	subsequent coverage of the individual under another group health
15256	plan or health maintenance organization coverage.
15257	(9)
15258	(c) As an alternative to the method authorized by
15259	paragraph (a), a health maintenance organization may address
15260	adverse selection in a method approved by the officedepartment.
15261	(10)
15262	(b) The commissiondepartmentshall adopt rules that
15263	provide a process whereby individuals who need to establish
15264	creditable coverage for periods before July 1, 1996, and who
15265	would have such coverage credited but for paragraph (a), may be
15266	given credit for creditable coverage for such periods through
15267	the presentation of documents or other means.
15268	Section 286. Paragraph (b) of subsection (3) of section
15269	641.31074, Florida Statutes, is amended to read:
15270	641.31074 Guaranteed renewability of coverage.--
15271	(3)
15272	(b)1. In any case in which a health maintenance
15273	organization elects to discontinue offering all coverage in the
15274	small group market or the large group market, or both, in this
15275	state, coverage may be discontinued by the insurer only if:
15276	a. The health maintenance organization provides notice to
15277	the officedepartmentand to each contract holder, and
15278	participants and beneficiaries covered under such coverage, of
15279	such discontinuation at least 180 days prior to the date of the
15280	nonrenewal of such coverage; and
15281	b. All health insurance issued or delivered for issuance
15282	in this state in such market is discontinued and coverage under
15283	such health insurance coverage in such market is not renewed.
15284	2. In the case of a discontinuation under subparagraph 1.
15285	in a market, the health maintenance organization may not provide
15286	for the issuance of any health maintenance organization contract
15287	coverage in the market in this state during the 5-year period
15288	beginning on the date of the discontinuation of the last
15289	insurance contract not renewed.
15290	Section 287. Subsection (2) of section 641.315, Florida
15291	Statutes, is amended to read:
15292	641.315 Provider contracts.--
15293	(2)(a) For all provider contracts executed after October
15294	1, 1991, and within 180 days after October 1, 1991, for
15295	contracts in existence as of October 1, 1991:
15296	1. The contracts must require the provider to give 60
15297	days' advance written notice to the health maintenance
15298	organization and the officedepartmentbefore canceling the
15299	contract with the health maintenance organization for any
15300	reason; and
15301	2. The contract must also provide that nonpayment for
15302	goods or services rendered by the provider to the health
15303	maintenance organization is not a valid reason for avoiding the
15304	60-day advance notice of cancellation.
15305	(b) All provider contracts must provide that the health
15306	maintenance organization will provide 60 days' advance written
15307	notice to the provider and the officedepartmentbefore
15308	canceling, without cause, the contract with the provider, except
15309	in a case in which a patient's health is subject to imminent
15310	danger or a physician's ability to practice medicine is
15311	effectively impaired by an action by the Board of Medicine or
15312	other governmental agency.
15313	Section 288. Subsections (4) and (5) of section 641.3154,
15314	Florida Statutes, are amended to read:
15315	641.3154 Organization liability; provider billing
15316	prohibited.--
15317	(4) A provider or any representative of a provider,
15318	regardless of whether the provider is under contract with the
15319	health maintenance organization, may not collect or attempt to
15320	collect money from, maintain any action at law against, or
15321	report to a credit agency a subscriber of an organization for
15322	payment of services for which the organization is liable, if the
15323	provider in good faith knows or should know that the
15324	organization is liable. This prohibition applies during the
15325	pendency of any claim for payment made by the provider to the
15326	organization for payment of the services and any legal
15327	proceedings or dispute resolution process to determine whether
15328	the organization is liable for the services if the provider is
15329	informed that such proceedings are taking place. It is presumed
15330	that a provider does not know and should not know that an
15331	organization is liable unless:
15332	(a) The provider is informed by the organization that it
15333	accepts liability;
15334	(b) A court of competent jurisdiction determines that the
15335	organization is liable;
15336	(c) The officedepartmentor agency makes a final
15337	determination that the organization is required to pay for such
15338	services subsequent to a recommendation made by the Statewide
15339	Provider and Subscriber Assistance Panel pursuant to s.
15340	408.7056; or
15341	(d) The agency issues a final order that the organization
15342	is required to pay for such services subsequent to a
15343	recommendation made by a resolution organization pursuant to s.
15344	408.7057.
15345	(5) An organization, the office,and the department shall
15346	report any suspected violation of this section by a health care
15347	practitioner to the Department of Health and by a facility to
15348	the agency, which shall take such action as authorized by law.
15349	Section 289. Subsection (12) of section 641.3155, Florida
15350	Statutes, is amended to read:
15351	641.3155 Prompt payment of claims.--
15352	(12) A permissible error ratio of 5 percent is established
15353	for health maintenance organizations' claims payment violations
15354	of paragraphs (3)(a),(b), (c), and (e) and (4)(a), (b), (c), and
15355	(e). If the error ratio of a particular insurer does not exceed
15356	the permissible error ratio of 5 percent for an audit period, no
15357	fine shall be assessed for the noted claims violations for the
15358	audit period. The error ratio shall be determined by dividing
15359	the number of claims with violations found on a statistically
15360	valid sample of claims for the audit period by the total number
15361	of claims in the sample. If the error ratio exceeds the
15362	permissible error ratio of 5 percent, a fine may be assessed
15363	according to s. 624.4211 for those claims payment violations
15364	which exceed the error ratio. Notwithstanding the provisions of
15365	this section, the officedepartmentmay fine a health
15366	maintenance organization for claims payment violations of
15367	paragraphs (3)(e) and (4)(e) which create an uncontestable
15368	obligation to pay the claim. The officedepartmentshall not
15369	fine organizations for violations which the officedepartment
15370	determines were due to circumstances beyond the organization's
15371	control.
15372	Section 290. Subsection (4), (6), and (7) of section
15373	641.316, Florida Statutes, are amended to read:
15374	641.316 Fiscal intermediary services.--
15375	(4) A fiscal intermediary services organization, as
15376	described in subsection (3), shall secure and maintain a surety
15377	bond on file with the officedepartment, naming the intermediary
15378	as principal. The bond must be obtained from a company
15379	authorized to write surety insurance in the state, and the
15380	officedepartmentshall be obligee on behalf of itself and third
15381	parties. The penal sum of the bond may not be less than 5
15382	percent of the funds handled by the intermediary in connection
15383	with its fiscal and fiduciary services during the prior year or
15384	$250,000, whichever is less. The minimum bond amount must be
15385	$10,000. The condition of the bond must be that the intermediary
15386	shall register with the officedepartmentand shall not
15387	misappropriate funds within its control or custody as a fiscal
15388	intermediary or fiduciary. The aggregate liability of the surety
15389	for any and all breaches of the conditions of the bond may not
15390	exceed the penal sum of the bond. The bond must be continuous in
15391	form, must be renewed annually by a continuation certificate,
15392	and may be terminated by the surety upon its giving 30 days'
15393	written notice of termination to the officedepartment.
15394	(6) Any fiscal intermediary services organization, other
15395	than a fiscal intermediary services organization owned,
15396	operated, or controlled by a hospital licensed under chapter
15397	395, an insurer licensed under chapter 624, a third-party
15398	administrator licensed under chapter 626, a prepaid limited
15399	health service organization licensed under chapter 636, a health
15400	maintenance organization licensed under this chapter, or
15401	physician group practices as defined in s. 456.053(3)(h), must
15402	register with the officedepartmentand meet the requirements of
15403	this section. In order to register as a fiscal intermediary
15404	services organization, the organization must comply with ss.
15405	641.21(1)(c) and (d) and 641.22(6). Should the officedepartment
15406	determine that the fiscal intermediary services organization
15407	does not meet the requirements of this section, the registration
15408	shall be denied. In the event that the registrant fails to
15409	maintain compliance with the provisions of this section, the
15410	officedepartmentmay revoke or suspend the registration. In
15411	lieu of revocation or suspension of the registration, the office
15412	departmentmay levy an administrative penalty in accordance with
15413	s. 641.25.
15414	(7) The commissiondepartmentshall adopt rules necessary
15415	to administer this section.
15416	Section 291. Subsections (1), (2), (3), and (4), paragraph
15417	(b) of subsection (6), subsection (8), paragraph (c) of
15418	subsection (10), subsections (11) and (12), paragraph (a) of
15419	subsection (14), and subsections (15), (16), and (17) of section
15420	641.35, Florida Statutes, are amended to read:
15421	641.35 Assets, liabilities, and investments.--
15422	(1) ASSETS.--In any determination of the financial
15423	condition of a health maintenance organization, there shall be
15424	allowed as "assets" only those assets that are owned by the
15425	health maintenance organization and that consist of:
15426	(a) Cash or cash equivalents in the possession of the
15427	health maintenance organization, or in transit under its
15428	control, including the true balance of any deposit in a solvent
15429	bank, savings and loan association, or trust company which is
15430	domiciled in the United States. Cash equivalents are short-term,
15431	highly liquid investments, with original maturities of 3 months
15432	or less, which are both readily convertible to known amounts of
15433	cash and so near their maturity that they present insignificant
15434	risk of changes in value because of changes in interest rates.
15435	(b) Investments, securities, properties, and loans
15436	acquired or held in accordance with this part, and in connection
15437	therewith the following items:
15438	1. Interest due or accrued on any bond or evidence of
15439	indebtedness which is not in default and which is not valued on
15440	a basis including accrued interest.
15441	2. Declared and unpaid dividends on stock and shares,
15442	unless the amount of the dividends has otherwise been allowed as
15443	an asset.
15444	3. Interest due or accrued upon a collateral loan which is
15445	not in default in an amount not to exceed 1 year's interest
15446	thereon.
15447	4. Interest due or accrued on deposits or certificates of
15448	deposit in solvent banks, savings and loan associations, and
15449	trust companies domiciled in the United States, and interest due
15450	or accrued on other assets, if such interest is in the judgment
15451	of the officedepartmenta collectible asset.
15452	5. Interest due or accrued on current mortgage loans, in
15453	an amount not exceeding in any event the amount, if any, of the
15454	excess of the value of the property less delinquent taxes
15455	thereon over the unpaid principal; but in no event shall
15456	interest accrued for a period in excess of 90 days be allowed as
15457	an asset.
15458	(c) Premiums in the course of collection, not more than 3
15459	months past due, less commissions payable thereon. The
15460	foregoing limitation shall not apply to premiums payable
15461	directly or indirectly by any governmental body in the United
15462	States or by any of their instrumentalities.
15463	(d) The full amount of reinsurance recoverable from a
15464	solvent reinsurer, which reinsurance is authorized under s.
15465	624.610.
15466	(e) Pharmaceutical and medical supply inventories.
15467	(f) Goodwill created by acquisitions and mergers occurring
15468	on or after January 1, 2001.
15469	(g) Loans or advances by a health maintenance organization
15470	to its parent or principal owner if approved by the office
15471	department.
15472	(h) Other assets, not inconsistent with the provisions of
15473	this section, deemed by the officedepartmentto be available
15474	for the payment of losses and claims, at values to be determined
15475	by it.
15476
15477
15478	The officedepartment, upon determining that a health
15479	maintenance organization's asset has not been evaluated
15480	according to applicable law or that it does not qualify as an
15481	asset, shall require the health maintenance organization to
15482	properly reevaluate the asset or replace the asset with an asset
15483	suitable to the officedepartmentwithin 30 days of receipt of
15484	written notification by the officedepartmentof this
15485	determination, if the removal of the asset from the
15486	organization's assets would impair the organization's solvency.
15487	(2) ASSETS NOT ALLOWED.--In addition to assets impliedly
15488	excluded by the provisions of subsection (1), the following
15489	assets expressly shall not be allowed as assets in any
15490	determination of the financial condition of a health maintenance
15491	organization:
15492	(a) Subscriber lists, patents, trade names, agreements not
15493	to compete, and other like intangible assets.
15494	(b) Any note or account receivable from or advances to
15495	officers, directors, or controlling stockholders, whether
15496	secured or not, and advances to employees, agents, or other
15497	persons on personal security only, other than those transactions
15498	authorized under paragraph (1)(g).
15499	(c) Stock of the health maintenance organization owned by
15500	it directly or owned by it through any entity in which the
15501	organization owns or controls, directly or indirectly, more than
15502	25 percent of the ownership interest.
15503	(d) Leasehold improvements, nonmedical libraries,
15504	stationery, literature, and nonmedical supply inventories,
15505	except that leasehold improvements made prior to October 1,
15506	1985, shall be allowed as an asset and shall be amortized over
15507	the shortest of the following periods:
15508	1. The life of the lease.
15509	2. The useful life of the improvements.
15510	3. The 3-year period following October 1, 1985.
15511	(e) Furniture, fixtures, furnishings, vehicles, medical
15512	libraries, and equipment.
15513	(f) Notes or other evidences of indebtedness which are
15514	secured by mortgages or deeds of trust which are in default and
15515	beyond the express period specified in the instrument for curing
15516	the default.
15517	(g) Bonds in default for more than 60 days.
15518	(h) Prepaid and deferred expenses.
15519	(i) Any note, account receivable, advance, or other
15520	evidence of indebtedness, or investment in:
15521	1. The parent of the health maintenance organization;
15522	2. Any entity directly or indirectly controlled by the
15523	health maintenance organization parent; or
15524	3. An affiliate of the parent or the health maintenance
15525	organization,
15526
15527
15528	except as allowed in subsections (1), (11), and (12). The
15529	officedepartmentmay, however, allow all or a portion of such
15530	asset, at values to be determined by the officedepartment, if
15531	deemed by the officedepartmentto be available for the payment
15532	of losses and claims.
15533	(3) LIABILITIES.--In any determination of the financial
15534	condition of a health maintenance organization, liabilities to
15535	be charged against its assets shall include:
15536	(a) The amount, estimated consistently with the provisions
15537	of this part, necessary to pay all of its unpaid losses and
15538	claims incurred for or on behalf of a subscriber, on or prior to
15539	the end of the reporting period, whether reported or unreported,
15540	including contract and premium deficiency reserves. If a health
15541	maintenance organization, through a health care risk contract,
15542	transfers to any entity the obligation to pay any provider for
15543	any claim arising from services provided to or for the benefit
15544	of any subscriber, the liabilities of the health maintenance
15545	organization under this section shall include the amount of
15546	those losses and claims to the extent that the provider has not
15547	received payment. No liability need be established if the entity
15548	has provided to the health maintenance organization a financial
15549	instrument acceptable to the officedepartmentsecuring the
15550	obligations under the contract or if the health maintenance
15551	organization has in place an escrow or withhold agreement
15552	approved by the officedepartmentwhich assures full payment of
15553	those claims. Financial instruments may include irrevocable,
15554	clean, and evergreen letters of credit. As used in this
15555	paragraph, the term "entity" does not include this state, the
15556	United States, or an agency thereof or an insurer or health
15557	maintenance organization authorized in this state.
15558	(b) The amount equal to the unearned portions of the gross
15559	premiums charged on health maintenance contracts in force.
15560	(c) Taxes, expenses, and other obligations due or accrued
15561	at the date of the statement.
15562
15563
15564	The officedepartment, upon determining that a health
15565	maintenance organization has failed to report liabilities that
15566	should have been reported, shall require a corrected report
15567	which reflects the proper liabilities to be submitted by the
15568	organization to the officedepartmentwithin 10 working days of
15569	receipt of written notification.
15570	(4) INVESTMENTS GENERALLY.--Health maintenance
15571	organizations may invest their funds only in accordance with the
15572	provisions of this part. Notwithstanding the provisions of this
15573	part, however, the officedepartmentmay, after notice and
15574	hearing, order a health maintenance organization to limit or
15575	withdraw from certain investments or to discontinue certain
15576	investment practices, to the extent that the officedepartment
15577	finds the investment practices hazardous to the financial
15578	condition of the organization. At any such hearing, the office
15579	departmentshall have the burden of presenting a prima facie
15580	case that the investment or investment practices are hazardous
15581	to the financial condition of the organization. If the office
15582	departmentpresents such a prima facie case, then it shall be
15583	the organization's burden to demonstrate that the investment or
15584	investment practices are not hazardous to the financial
15585	condition of the organization.
15586	(6) GENERAL QUALIFICATIONS.--
15587	(b) No security or investment shall be eligible for
15588	purchase at a price above its market value unless it is approved
15589	by the officedepartment.
15590	(8) EXCESSIVE COMMISSIONS AND CERTAIN INTERESTS
15591	PROHIBITED.--
15592	(a) No health maintenance organization shall pay any
15593	commission or brokerage for the purchase or sale of property,
15594	whether real or personal, in excess of that usual and customary
15595	at the time and in the locality where the purchases or sales are
15596	made. Information regarding payments of commissions and
15597	brokerage shall be maintained from the date of the most recent
15598	examination by the officedepartmentpursuant to s. 641.27 until
15599	the date of completion of the following examination.
15600	(b) No health maintenance organization shall knowingly
15601	invest in or loan upon any property, directly or indirectly,
15602	whether real or personal, in which any officer or director of
15603	the organization has a financial interest, nor shall any
15604	organization make a loan of any kind to any officer or director
15605	of the organization, except that:
15606	1. This paragraph shall not apply to loans in
15607	circumstances in which the financial interest of the officer or
15608	director is only nominal, trifling, or so remote as not to give
15609	rise to a conflict of interest; and
15610	2. In any case, the officedepartmentmay approve a
15611	transaction between an organization and its officers or
15612	directors under this paragraph if it is satisfied that:
15613	a. The transaction is entered into in good faith for the
15614	advantage and benefit of the organization,
15615	b. The amount of the proposed investment or loan does not
15616	violate any other provision of this part or exceed the
15617	reasonable, normal value of the property or the interest which
15618	the company proposed to acquire,
15619	c. The transaction is otherwise fair and reasonable, and
15620	d. The transaction will not adversely affect, to any
15621	substantial degree, the liquidity of the organization's
15622	investments or its ability thereafter to comply with
15623	requirements of this part or the payment of its claims and
15624	obligations.
15625	(10) PROPERTY USED IN THE HEALTH MAINTENANCE
15626	ORGANIZATION'S BUSINESS.--Real estate, including leasehold
15627	estates, for the convenient accommodation of the organization's
15628	business operations, including home office, branch
15629	administrative offices, hospitals, medical clinics, medical
15630	professional buildings, and any other facility to be used in the
15631	provision of health care services, or real estate for rental to
15632	any health care provider under contract with the organization to
15633	provide health care services which shall be used in the
15634	provision of health care services to members of the organization
15635	by that provider, is acceptable as an investment on the
15636	following conditions:
15637	(c) The greater of the admitted value of the asset, as
15638	determined by statutory accounting principles, or, if approved
15639	by the officedepartment, the health maintenance organization's
15640	equity in the real estate plus all encumbrances on the real
15641	estate owned by the organization under this subsection, when
15642	added to the value of all personal and mixed property used in
15643	the organization's business, shall not exceed 75 percent of its
15644	admitted assets unless, with the permission of the office
15645	department, it finds that the percentage of its admitted assets
15646	is insufficient to provide convenient accommodation for the
15647	organization's business and the operations of the organization
15648	would not otherwise be impaired.
15649	(11) INVESTMENTS IN ADMINISTRATIVE AND MANAGEMENT SERVICE
15650	ENTITIES AND OTHER HEALTH CARE PROVIDERS.--A health maintenance
15651	organization may invest directly or indirectly in real estate,
15652	common and preferred stocks, bonds or debentures, including
15653	convertible debentures, or other evidences of debts of or equity
15654	in an entity if the entity is owned by or, with the approval of
15655	the officedepartment, under contract to the organization to
15656	provide management services, administrative services, or health
15657	care services for the organization, on the following conditions:
15658	(a) Investments authorized under this subsection shall not
15659	exceed 50 percent of admitted assets, and these investments
15660	shall be included in the calculation of the overall limitation
15661	in paragraph (10)(c) relating to all real and personal property.
15662	(b) Investments may qualify under this section only
15663	insofar as a provider of management, administrative, or health
15664	care service relationship as defined herein exists. Upon
15665	cessation of such relationship, each investment shall be subject
15666	to the rules applicable to an investment of that type and must
15667	qualify under the appropriate limitation or, failing that,
15668	become ineligible and subject to disposal under subsection (17).
15669	(12) EXCHANGES OF FACILITIES OR ASSETS.--Health care or
15670	administrative service entities, if subsidiaries of or under
15671	contract to the health maintenance organization to provide
15672	administrative or health care services to the organization's
15673	members, may exchange facilities or similar assets to be used in
15674	the organization's business for stock of the organization.
15675	However, any exchange involving an entity under contract with
15676	the health maintenance organization must have the approval of
15677	the officedepartmentprior to the exchange. These facilities
15678	or assets shall be valued in accordance with statutory
15679	accounting principles.
15680	(14) SPECIAL LIMITATION INVESTMENTS.--
15681	(a) After satisfying the requirements of this part, any
15682	funds of the health maintenance organization may be invested in
15683	the following investments, subject to a cost limitation of 10
15684	percent of its admitted assets in each category of investment:
15685	1. Anticipation obligations of political subdivisions of a
15686	state.--Anticipation obligations of any political subdivision of
15687	any state of the United States, including, but not limited to,
15688	bond anticipation notes, tax anticipation notes, preliminary
15689	loan anticipation notes, revenue anticipation notes, and
15690	construction anticipation notes, for the payment of money within
15691	12 months from the issuance of the obligation, on the following
15692	conditions:
15693	a. The anticipation notes are a direct obligation of the
15694	issuer under conditions set forth in subsection (9).
15695	b. The political subdivision is not in default in the
15696	payment of the principal or interest on any of its direct
15697	general obligations or any obligation guaranteed by such
15698	political subdivision.
15699	c. The anticipated funds are specifically pledged to
15700	secure the obligations.
15701	2. Revenue obligations of state or municipal public
15702	utilities.--Obligations of any state of the United States, a
15703	political subdivision thereof, or a public instrumentality of
15704	any one or more of the foregoing for the payment of money, on
15705	the following conditions:
15706	a. The obligations are payable from revenues or earnings
15707	of a public utility of such state, political subdivision, or
15708	public instrumentality which are specifically pledged therefor.
15709	b. The law under which the obligations are issued requires
15710	that such rates for service shall be charged and collected at
15711	all times so as to produce sufficient revenue or earning,
15712	together with any other revenues or moneys pledged, to pay all
15713	operating and maintenance charges of the public utility and all
15714	principal and interest on such charges.
15715	c. No prior or parity obligations payable from the
15716	revenues or earnings of that public utility are in default at
15717	the date of such investment.
15718	3. Other revenue obligations.--Obligations of any state of
15719	the United States, a political subdivision thereof, or a public
15720	instrumentality of any of the foregoing for the payment of
15721	money, on the following conditions:
15722	a. The obligations are payable from revenues or earnings,
15723	excluding revenues or earnings from public utilities,
15724	specifically pledged therefor by such state, political
15725	subdivision, or public instrumentality.
15726	b. No prior or parity obligation of the same issuer
15727	payable from revenues or earnings from the same source has been
15728	in default as to principal or interest during the 5 years next
15729	preceding the date of the investment, but the issuer need not
15730	have been in existence for that period, and obligations acquired
15731	under this paragraph may be newly issued.
15732	4. Corporate stocks.--Stocks, common or preferred, of any
15733	corporation created or existing under the laws of the United
15734	States or any state thereof. The organization may invest in
15735	stocks, common or preferred, of any corporation created or
15736	existing under the laws of any foreign country if such stocks
15737	are listed and traded on a national securities exchange in the
15738	United States or, in the alternative, if such investment in
15739	stocks of any corporation created or existing under the laws of
15740	any foreign country are first approved by the officedepartment.
15741	Investment in common stock of any one corporation shall not
15742	exceed 3 percent of the health maintenance organization's
15743	admitted assets.
15744	(15) INVESTMENT OF EXCESS FUNDS.--
15745	(a) After satisfying the requirements of this part, any
15746	funds of a health maintenance organization in excess of its
15747	statutorily required reserves and surplus may be invested:
15748	1. Without limitation in any investments otherwise
15749	authorized by this part; or
15750	2. In such other investments not specifically authorized
15751	by this part, provided such investments do not exceed the lesser
15752	of 5 percent of the health maintenance organization's admitted
15753	assets or 25 percent of the amount by which a health maintenance
15754	organization's surplus exceeds its statutorily required minimum
15755	surplus. A health maintenance organization may exceed the
15756	limitations of this subparagraph only with the prior written
15757	approval of the officedepartment.
15758	(b) Nothing in this section authorizes a health
15759	maintenance organization to:
15760	1. Invest any funds in excess of the amount by which its
15761	actual surplus exceeds its statutorily required minimum surplus;
15762	or
15763	2. Make any investment prohibited by this code.
15764	(16) PROHIBITED INVESTMENTS AND INVESTMENT UNDERWRITING.--
15765	(a) In addition to investments excluded pursuant to other
15766	provisions of this act, a health maintenance organization shall
15767	not directly or indirectly invest in or lend its funds upon the
15768	security of:
15769	1. Issued shares of its own capital stock, except in
15770	connection with a plan approved by the officedepartmentfor
15771	purchase of the shares by the organization's officers,
15772	employees, or agents. However, no such stock shall constitute an
15773	asset of the organization in any determination of its financial
15774	condition.
15775	2. Except with the consent of the officedepartment,
15776	securities issued by any corporation or enterprise the
15777	controlling interest of which is, or will after such acquisition
15778	by the organization be, held directly or indirectly by the
15779	organization or any combination of the organization and its
15780	directors, officers, parent corporation, subsidiaries, or
15781	controlling stockholders. Investments in health care providers
15782	under subsections (11) and(12) shall not be subject to this
15783	provision.
15784	3. Any note or other evidence of indebtedness of any
15785	director, officer, or controlling stockholder of the health
15786	maintenance organization.
15787	(b) No health maintenance organization shall underwrite or
15788	participate in the underwriting of an offering of securities or
15789	property by any other person.
15790	(17) TIME LIMIT FOR DISPOSAL OF INELIGIBLE PROPERTY AND
15791	SECURITIES; EFFECT OF FAILURE TO DISPOSE.--
15792	(a) Any property or securities lawfully acquired by a
15793	health maintenance organization which it could not otherwise
15794	have invested in or loaned its funds upon at the time of such
15795	acquisition shall be disposed of within 6 months from the date
15796	of acquisition, unless within such period the security has
15797	attained to the standard of eligibility; except that any
15798	security or property acquired under any agreement of merger or
15799	consolidation may be retained for a longer period if so provided
15800	in the plan for such merger or consolidation, as approved by the
15801	officedepartment. Upon application by the organization and
15802	proof to the officedepartmentthat forced sale of any such
15803	property or security would materially injure the interests of
15804	the health maintenance organization, the officedepartmentshall
15805	extend the disposal period for an additional reasonable time.
15806	(b) Notwithstanding the provisions of paragraph (a), any
15807	ineligible property or securities shall not be allowed as an
15808	asset of the organization.
15809	Section 292. Section 641.36, Florida Statutes, is amended
15810	to read:
15811	641.36 Adoption of rules; penalty for violation.--The
15812	commissiondepartmentshall adopt rules necessary to carry out
15813	the provisions of this part. The officedepartmentshall
15814	collect and make available all health maintenance organization
15815	rules adopted by the commissiondepartment. Any violation of a
15816	rule adopted under this section shall subject the violating
15817	entity to the provisions of s. 641.23.
15818	Section 293. Subsections (1), (2), and (5) of section
15819	641.365, Florida Statutes, are amended to read:
15820	641.365 Dividends.--
15821	(1)(a) A health maintenance organization shall not pay any
15822	dividend or distribute cash or other property to stockholders
15823	except out of that part of its available and accumulated surplus
15824	funds which is derived from realized net operating profits on
15825	its business and net realized capital gains.
15826	(b) Unless prior written approval is obtained from the
15827	officedepartment, a health maintenance organization may not pay
15828	or declare any dividend or distribute cash or other property to
15829	or on behalf of any stockholder if, immediately before or after
15830	such distribution, the health maintenance organization's
15831	available and accumulated surplus funds, which are derived from
15832	realized net operating profits on its business and net realized
15833	gains, are or would be less than zero.
15834	(c) A health maintenance organization may make dividend
15835	payments or distributions to stockholders without the prior
15836	written approval of the officedepartmentwhen:
15837	1. The dividend is equal to or less than the greater of:
15838	a. Ten percent of the health maintenance organization's
15839	accumulated surplus funds which are derived from realized net
15840	operating profits on its business and net realized capital gains
15841	as of the immediate preceding calendar year; or
15842	b. The health maintenance organization's entire net
15843	operating profit and realized net capital gains derived during
15844	the immediately preceding calendar year.
15845	2. The health maintenance organization will have surplus
15846	equal to or exceeding 115 percent of the minimum required
15847	statutory surplus after the dividend or distribution is made.
15848	3. The health maintenance organization has filed a notice
15849	with the officedepartmentat least 30 days prior to the
15850	dividend payment or distribution, or such shorter period of time
15851	as approved by the officedepartmenton a case-by-case basis.
15852	4. The notice includes a certification by an officer of
15853	the health maintenance organization attesting that after payment
15854	of the dividend or distribution the health maintenance
15855	organization will have at least 115 percent of required
15856	statutory surplus.
15857	5. The health maintenance organization has negative
15858	retained earnings, statutory surplus in excess of $50 million,
15859	and statutory surplus greater than or equal to 150 percent of
15860	its required statutory surplus before and after the dividend
15861	distribution is made based upon the health maintenance
15862	organization's most recently filed annual financial statement.
15863	(2) The officedepartmentshall not approve a dividend or
15864	distribution in excess of the maximum amount allowed in
15865	subsection(1) unless it determines that the distribution or
15866	dividend would not jeopardize the financial condition of the
15867	health maintenance organization, considering:
15868	(a) The liquidity, quality, and diversification of the
15869	health maintenance organization's assets and the effect on its
15870	ability to meet its obligations.
15871	(b) Any reduction of investment portfolio and investment
15872	income.
15873	(c) History of capital contributions.
15874	(d) Prior dividend distributions of the health maintenance
15875	organization.
15876	(e) Whether the dividend is only a pass-through dividend
15877	from a subsidiary of the health maintenance organization.
15878	(5) The officedepartmentmay revoke or suspend the
15879	certificate of authority of a health maintenance organization
15880	which has declared or paid such an illegal dividend.
15881	Section 294. Section 641.385, Florida Statutes, is amended
15882	to read:
15883	641.385 Order to discontinue certain advertising.--If in
15884	the opinion of the officedepartmentany advertisement by a
15885	health maintenance organization violates any of the provisions
15886	of this part, the department may enter an immediate order
15887	requiring that the use of the advertisement be discontinued. If
15888	requested by the health maintenance organization, the office
15889	departmentshall conduct a hearing within 10 days of the entry
15890	of such order. If, after the hearing or by agreement with the
15891	health maintenance organization, a final determination is made
15892	that the advertising was in fact violative of any provision of
15893	this part, the officedepartmentmay, in lieu of revocation of
15894	the certificate of authority, require the publication of a
15895	corrective advertisement; impose an administrative penalty of up
15896	to $10,000; and, in the case of an initial solicitation, require
15897	that the health maintenance organization, prior to accepting any
15898	application received in response to the advertisement, provide
15899	an acceptable clarification of the advertisement to each
15900	individual applicant.
15901	Section 295. Subsection (1) of section 641.39001, Florida
15902	Statutes, is amended to read:
15903	641.39001 Soliciting or accepting new or renewal health
15904	maintenance contracts by insolvent or impaired health
15905	maintenance organization prohibited; penalty.--
15906	(1) Whether or not delinquency proceedings as to a health
15907	maintenance organization have been or are to be initiated, a
15908	director or officer of a health maintenance organization, except
15909	with the written permission of the officeDepartment of
15910	Insurance, may not authorize or permit the health maintenance
15911	organization to solicit or accept new or renewal health
15912	maintenance contracts or provider contracts in this state after
15913	the director or officer knew, or reasonably should have known,
15914	that the health maintenance organization was insolvent or
15915	impaired. As used in this section, the term "impaired" means
15916	that the health maintenance organization does not meet the
15917	requirements of s. 641.225.
15918	Section 296. Subsections (6) and (10) of section 641.3903,
15919	Florida Statutes, are amended to read:
15920	641.3903 Unfair methods of competition and unfair or
15921	deceptive acts or practices defined.--The following are defined
15922	as unfair methods of competition and unfair or deceptive acts or
15923	practices:
15924	(6) FAILURE TO MAINTAIN COMPLAINT-HANDLING
15925	PROCEDURES.--Failure of any person to maintain a complete record
15926	of all the complaints received since the date of the most recent
15927	examination of the health maintenance organization by the office
15928	department. For the purposes of this subsection, the term
15929	"complaint" means any written communication primarily expressing
15930	a grievance and requesting a remedy to the grievance.
15931	(10) ILLEGAL DEALINGS IN PREMIUMS; EXCESS OR REDUCED
15932	CHARGES FOR HEALTH MAINTENANCE COVERAGE.--
15933	(a) Knowingly collecting any sum as a premium or charge
15934	for health maintenance coverage which is not then provided or is
15935	not in due course to be provided, subject to acceptance of the
15936	risk by the health maintenance organization, by a health
15937	maintenance contract issued by a health maintenance organization
15938	as permitted by this part.
15939	(b) Knowingly collecting as a premium or charge for health
15940	maintenance coverage any sum in excess of or less than the
15941	premium or charge applicable to health maintenance coverage, in
15942	accordance with the applicable classifications and rates as
15943	filed with the officedepartment, and as specified in the health
15944	maintenance contract.
15945	Section 297. Section 641.3905, Florida Statutes, is
15946	amended to read:
15947	641.3905 General powers and duties of the department and
15948	office.--In addition to the powers and duties set forth in s.
15949	624.307, the department and office shall each have the power
15950	within its respective regulatory jurisdictionto examine and
15951	investigate the affairs of every person, entity, or health
15952	maintenance organization in order to determine whether the
15953	person, entity, or health maintenance organization is operating
15954	in accordance with the provisions of this part or has been or is
15955	engaged in any unfair method of competition or in any unfair or
15956	deceptive act or practice prohibited by s. 641.3901, and each
15957	shall have the powers and duties specified in ss. 641.3907-
15958	641.3913 in connection therewith.
15959	Section 298. Section 641.3907, Florida Statutes, is
15960	amended to read:
15961	641.3907 Defined unfair practices; hearings, witnesses,
15962	appearances, production of books, and service of process.--
15963	(1) Whenever the department or officehas reason to
15964	believe that any person, entity, or health maintenance
15965	organization has engaged, or is engaging, in this state in any
15966	unfair method of competition or any unfair or deceptive act or
15967	practice as defined in s. 641.3903 or is operating a health
15968	maintenance organization without a certificate of authority as
15969	required by this part and that a proceeding by it in respect
15970	thereto would be to the interest of the public, the department
15971	or officeshall conduct or cause to have conducted a hearing in
15972	accordance with chapter 120.
15973	(2) The department or office, a duly empowered hearing
15974	officer, or an administrative law judge shall, during the
15975	conduct of such hearing, have those powers enumerated in s.
15976	120.569; however, the penalties for failure to comply with a
15977	subpoena or with an order directing discovery shall be limited
15978	to a fine not to exceed $1,000 per violation.
15979	(3) Statements of charges, notices, and orders under this
15980	part may be served by anyone duly authorized by the department
15981	or office, either in the manner provided by law for service of
15982	process in civil actions or by certifying and mailing a copy
15983	thereof to the person, entity, or health maintenance
15984	organization affected by the statement, notice, order, or other
15985	process at her or his or its residence or principal office or
15986	place of business. The verified return by the person so serving
15987	such statement, notice, order, or other process, setting forth
15988	the manner of the service, shall be proof of the same, and the
15989	return postcard receipt for such statement, notice, order, or
15990	other process, certified and mailed as aforesaid, shall be proof
15991	of service of the same.
15992	Section 299. Section 641.3909, Florida Statutes, is
15993	amended to read:
15994	641.3909 Cease and desist and penalty orders.--After the
15995	hearing provided in s. 641.3907, the department or officeshall
15996	enter a final order in accordance with s. 120.569. If it is
15997	determined that the person, entity, or health maintenance
15998	organization charged has engaged in an unfair or deceptive act
15999	or practice or the unlawful operation of a health maintenance
16000	organization without a subsisting certificate of authority, the
16001	department or officeshall also issue an order requiring the
16002	violator to cease and desist from engaging in such method of
16003	competition, act, or practice or unlawful operation of a health
16004	maintenance organization. Further, if the act or practice
16005	constitutes a violation of s. 641.3155, s. 641.3901, or s.
16006	641.3903, the department or officemay, at its discretion, order
16007	any one or more of the following:
16008	(1) Suspension or revocation of the health maintenance
16009	organization's certificate of authority if it knew, or
16010	reasonably should have known, it was in violation of this part.
16011	(2) If it is determined that the person or entity charged
16012	has engaged in the business of operating a health maintenance
16013	organization without a certificate of authority, an
16014	administrative penalty not to exceed $1,000 for each health
16015	maintenance contract offered or effectuated.
16016	Section 300. Section 641.3911, Florida Statutes, is
16017	amended to read:
16018	641.3911 Appeals from the department or office.--Any
16019	person, entity, or health maintenance organization subject to an
16020	order of the department or officeunder s. 641.3909 or s.
16021	641.3913 may obtain a review of the order by filing an appeal
16022	therefrom in accordance with the provisions and procedures for
16023	appeal under s. 120.68.
16024	Section 301. Section 641.3913, Florida Statutes, is
16025	amended to read:
16026	641.3913 Penalty for violation of cease and desist
16027	orders.--Any person, entity, or health maintenance organization
16028	which violates a cease and desist order of the department or
16029	officeunder s. 641.3909 while such order is in effect, after
16030	notice and hearing as provided in s. 641.3907, shall be subject,
16031	at the discretion of the department or office, to any one or
16032	more of the following:
16033	(1) A monetary penalty of not more than $200,000 as to all
16034	matters determined in such hearing.
16035	(2) Suspension or revocation of the health maintenance
16036	organization's certificate of authority.
16037	Section 302. Section 641.3917, Florida Statutes, is
16038	amended to read:
16039	641.3917 Civil liability.--The provisions of this part are
16040	cumulative to rights under the general civil and common law, and
16041	no action of the department or officeshall abrogate such rights
16042	to damage or other relief in any court.
16043	Section 303. Subsections (3), (10), and (14) of section
16044	641.3922, Florida Statutes, are amended to read:
16045	641.3922 Conversion contracts; conditions.--Issuance of a
16046	converted contract shall be subject to the following conditions:
16047	(3) CONVERSION PREMIUM.--The premium for the converted
16048	contract shall be determined in accordance with premium rates
16049	applicable to the age and class of risk of each person to be
16050	covered under the converted contract and to the type and amount
16051	of coverage provided. However, the premium for the converted
16052	contract may not exceed 200 percent of the standard risk rate,
16053	as established by the officedepartmentunder s. 627.6675(3).
16054	The mode of payment for the converted contract shall be
16055	quarterly or more frequently at the option of the organization,
16056	unless otherwise mutually agreed upon between the subscriber and
16057	the organization.
16058	(10) ALTERNATE PLANS.--The health maintenance organization
16059	shall offer a standard health benefit plan as established
16060	pursuant to s. 627.6699(12). The health maintenance organization
16061	may, at its option, also offer alternative plans for group
16062	health conversion in addition to those required by this section,
16063	provided any alternative plan is approved by the office
16064	departmentor is a converted policy, approved under s. 627.6675
16065	and issued by an insurance company authorized to transact
16066	insurance in this state. Approval by the officedepartmentof an
16067	alternative plan shall be based on compliance by the alternative
16068	plan with the provisions of this part and the rules promulgated
16069	thereunder, applicable provisions of the Florida Insurance Code
16070	and rules promulgated thereunder, and any other applicable law.
16071	(14) NOTIFICATION.--A notification of the conversion
16072	privilege shall be included in each health maintenance contract
16073	and in any certificate or member's handbook. The organization
16074	shall mail an election and premium notice form, including an
16075	outline of coverage, on a form approved by the office
16076	department, within 14 days after any individual who is eligible
16077	for a converted health maintenance contract gives notice to the
16078	organization that the individual is considering applying for the
16079	converted contract or otherwise requests such information. The
16080	outline of coverage must contain a description of the principal
16081	benefits and coverage provided by the contract and its principal
16082	exclusions and limitations, including, but not limited to,
16083	deductibles and coinsurance.
16084	Section 304. Section 641.402, Florida Statutes, is amended
16085	to read:
16086	641.402 Definitions.--As used in this part, the term:
16087	(1) "Basic services" includes any of the following:
16088	emergency care, physician care other than hospital inpatient
16089	physician services, ambulatory diagnostic treatment, and
16090	preventive health care services.
16091	(2) "Department" means the Department of Insurance.
16092	(2)(3) "Guaranteeing organization" means an organization
16093	thatwhich is domiciled in the United States; thatwhichhas
16094	authorized service of process against it; and thatwhichhas
16095	appointed the Chief Financial OfficerInsurance Commissioner and
16096	Treasureras its agent for service of process in connection with
16097	any cause of action arising in this state, based upon any
16098	guarantee entered into under this part.
16099	(3)(4)"Insolvent" or "insolvency" means the inability of
16100	a prepaid health clinic to discharge its liabilities as they
16101	become due in the normal course of business.
16102	(4)(5)"Prepaid health clinic" means any organization
16103	authorized under this part which provides, either directly or
16104	through arrangements with other persons, basic services to
16105	persons enrolled with such organization, on a prepaid per capita
16106	or prepaid aggregate fixed-sum basis, including those basic
16107	services which subscribers might reasonably require to maintain
16108	good health. However, no clinic thatwhichprovides or contracts
16109	for, either directly or indirectly, inpatient hospital services,
16110	hospital inpatient physician services, or indemnity against the
16111	cost of such services shall be a prepaid health clinic.
16112	(5)(6)"Prepaid health clinic contract" means any contract
16113	entered into by a prepaid health clinic with a subscriber or
16114	group of subscribers to provide any of the basic services in
16115	exchange for a prepaid per capita or prepaid aggregate fixed
16116	sum.
16117	(6)(7)"Provider" means any physician or person other than
16118	a hospital that furnishes health care services and is licensed
16119	or authorized to practice in this state.
16120	(7)(8)"Reporting period" means the particular span of
16121	time by or for which accounts are redeemed on an annualized
16122	basis.
16123	(8)(9)"Subscriber" means an individual who has
16124	contracted, or on whose behalf a contract has been entered into,
16125	with a prepaid health clinic for health care services.
16126	(9)(10)"Surplus" means total unencumbered assets in
16127	excess of total liabilities. Surplus includes capital stock,
16128	capital in excess of par, and retained earnings and may include
16129	surplus notes.
16130	(10)(11) "Surplus notes" means debt thatwhichhas been
16131	guaranteed by the United States Government or its agencies or
16132	debt thatwhichhas been subordinated to all claims of
16133	subscribers and general creditors of the prepaid health clinic.
16134	Section 305. Section 641.403, Florida Statutes, is amended
16135	to read:
16136	641.403 Rulemaking authority.--The commission may
16137	Department of Insurance has authority toadopt rules pursuant to
16138	ss. 120.536(1) and 120.54 to implement the provisions of this
16139	part.
16140	Section 306. Section 641.405, Florida Statutes, is amended
16141	to read:
16142	641.405 Application for certificate of authority to
16143	operate prepaid health clinic.--
16144	(1) No person may operate a prepaid health clinic without
16145	first obtaining a certificate of authority from the office
16146	department. The officedepartmentshall not issue a certificate
16147	of authority to any applicant which does not possess a valid
16148	Health Care Provider Certificate issued by the Agency for Health
16149	Care Administration.
16150	(2) Each application for a certificate of authority shall
16151	be on such form as the commissiondepartmentprescribes, and
16152	such application shall be accompanied by:
16153	(a) A copy of the basic organizational document of the
16154	applicant, if any, such as the articles of incorporation,
16155	articles of association, partnership agreement, trust agreement,
16156	or other applicable document, and all amendments to such
16157	document.
16158	(b) A copy of the constitution, bylaws, rules and
16159	regulations, or similar form of document, if any, regulating the
16160	conduct of the affairs of the applicant.
16161	(c) A list of the names, addresses, and official
16162	capacities with the applicant of the persons who are to be
16163	responsible for the conduct of the affairs of the clinic,
16164	including all members of the governing body, the officers and
16165	directors in the case of a corporation, and the partners or
16166	associates in the case of a partnership or association. Such
16167	persons shall fully disclose to the officedepartmentand the
16168	governing body of the clinic the extent and nature of any
16169	contracts or arrangements between them and the clinic, including
16170	any possible conflicts of interest.
16171	(d) A statement generally describing the clinic and its
16172	operations.
16173	(e) Each form of prepaid health clinic contract that the
16174	applicant proposes to offer the subscribers, showing for each
16175	form of contract the benefits to which the subscribers are
16176	entitled, together with a table of the rates charged, or
16177	proposed to be charged.
16178	(f) A copy of the applicant's Health Care Provider
16179	Certificate from the Agency for Health Care Administration,
16180	issued pursuant to part III of this chapter.
16181	(g) A financial statement prepared on the basis of
16182	generally accepted accounting principles, except that surplus
16183	notes acceptable to the officedepartmentmay be included in the
16184	calculation of surplus.
16185	Section 307. Section 641.406, Florida Statutes, is amended
16186	to read:
16187	641.406 Issuance of certificate of authority.--The office
16188	departmentshall issue a certificate of authority for a prepaid
16189	health clinic to any applicant filing a properly completed
16190	application in conformity with s. 641.405, upon payment of the
16191	prescribed fees and upon the office'sdepartment'sbeing
16192	satisfied that:
16193	(1) As a condition precedent to the issuance of any
16194	certificate, the applicant has obtained a Health Care Provider
16195	Certificate from the Agency for Health Care Administration
16196	pursuant to part III of this chapter.
16197	(2) The proposed rates are actuarially sound for the
16198	benefits provided, including administrative costs.
16199	(3) The applicant has met the minimum surplus requirements
16200	of s. 641.407.
16201	(4) The procedures for offering basic services and
16202	offering and terminating contracts to subscribers will not
16203	unfairly discriminate on the basis of age, health, or economic
16204	status. However, this subsection does not prohibit reasonable
16205	underwriting classifications for the purposes of establishing
16206	contract rates, nor does it prohibit experience rating.
16207	(5) The procedures for offering basic services and
16208	offering and terminating contracts to subscribers will not
16209	discriminate on the basis of sex, race, or national origin.
16210	(6) The applicant furnishes evidence of adequate insurance
16211	coverage or an adequate plan for self-insurance to respond to
16212	claims for injuries arising out of the furnishing of basic
16213	services.
16214	(7) The ownership, control, or management of the applicant
16215	is competent and trustworthy and possesses managerial experience
16216	that would make the proposed clinic operation beneficial to the
16217	subscribers. The officedepartmentshall not grant or continue
16218	authority to transact the business of a prepaid health clinic in
16219	this state at any time during which the officedepartmenthas
16220	good reason to believe that the ownership, control, or
16221	management of the clinic is under the control of any person
16222	whose business operations are or have been marked by business
16223	practices or conduct that is to the detriment of the public,
16224	stockholders, investors, or creditors; by the improper
16225	manipulation of assets or of accounts; or by bad faith.
16226	(8) The application and the applicant are in conformity
16227	with all requirements of this part.
16228	Section 308. Section 641.4065, Florida Statutes, is
16229	amended to read:
16230	641.4065 Insurance business not authorized.--Nothing in
16231	the Florida Insurance Code or this part shall be deemed to
16232	authorize any prepaid health clinic to transact any insurance
16233	business other than that issuing prepaid health clinic contracts
16234	or otherwise to engage in any other type of insurance unless it
16235	is authorized under a certificate of authority issued by the
16236	officedepartmentunder the provisions of the Florida Insurance
16237	Code.
16238	Section 309. Subsection (2) of section 641.407, Florida
16239	Statutes, is amended to read:
16240	641.407 Minimum surplus.--
16241	(2) In lieu of having any minimum surplus, the prepaid
16242	health clinic may provide a written guaranty to assure payment
16243	of covered subscriber claims if the guaranteeing organization
16244	has been in operation for at least 3 years and has a surplus,
16245	not including land, buildings, and equipment, equal to the
16246	product of 2 times the amount of the required statutory surplus.
16247	Such guaranteeing organization and such written guaranty must be
16248	acceptable to, and approved by, the officedepartment. The
16249	officedepartmentshall consider the likelihood of the payment
16250	of subscriber claims in granting or withholding such approval.
16251	Section 310. Section 641.409, Florida Statutes, is amended
16252	to read:
16253	641.409 Insolvency protection.--
16254	(1) Every prepaid health clinic shall comply with one of
16255	the following paragraphs:
16256	(a) The prepaid health clinic shall secure insurance to
16257	the satisfaction of the officedepartmentto protect subscribers
16258	in the event the prepaid health clinic is unable to meet its
16259	obligations to subscribers under the terms of any prepaid health
16260	clinic contract issued to a subscriber.
16261	(b) The prepaid health clinic shall file with the office
16262	departmenta surety bond issued by an authorized surety insurer.
16263	The bond shall be for the same purpose as the insurance in lieu
16264	of which the bond is filed. The officedepartmentshall not
16265	approve any bond under the terms of which the protection
16266	afforded against insolvency is not equivalent to the protection
16267	afforded by such insurance. The bond shall guarantee that the
16268	prepaid health clinic will faithfully and truly perform all the
16269	conditions of any prepaid health clinic contract. No such bond
16270	shall be canceled or subject to cancellation unless at least 60
16271	days' notice of the cancellation, in writing, is filed with the
16272	officedepartment. In the event that the notice of termination
16273	of the bond is filed with the officedepartment, the prepaid
16274	health clinic insured under the bond shall, within 30 days of
16275	the filing of the notice of termination, provide the office
16276	departmentwith a replacement bond meeting the requirements of
16277	this part or secure insurance as required by paragraph (a). The
16278	cancellation of a bond does not relieve the obligation of the
16279	issuer of the bond for claims arising out of contracts issued
16280	prior to the cancellation of the bond unless a replacement bond
16281	or insurance is secured. In no event shall the issuer's
16282	aggregate liability under the bond exceed the face amount of the
16283	bond. If, within 30 days of filing the notice of termination, a
16284	replacement bond or insurance has not been secured and filed
16285	with the officedepartment, the officedepartmentshall suspend
16286	the certificate of the prepaid health clinic until the deposit
16287	requirements are satisfied. Whenever the prepaid health clinic
16288	ceases to do business in this state and furnishes to the office
16289	departmentsatisfactory proof that it has discharged or
16290	otherwise adequately provided for all of its obligations to its
16291	subscribers, the officedepartmentshall release any bond filed
16292	by the prepaid health clinic.
16293	(2) In determining the sufficiency of the insurance
16294	required under paragraph (1)(a) or the surety bond required
16295	under paragraph (1)(b), the officedepartmentmay consider the
16296	number of subscribers, the basic services included in subscriber
16297	contracts, and the cost of providing such basic services to
16298	subscribers in the geographic area served.
16299	(3) Every prepaid health clinic shall deposit with the
16300	department a cash deposit in the amount of $30,000 to guarantee
16301	that the obligations to the subscribers will be performed.
16302	Section 311. Section 641.41, Florida Statutes, is amended
16303	to read:
16304	641.41 Annual report of prepaid health clinic;
16305	administrative penalty.--
16306	(1) Each prepaid health clinic shall file a report with
16307	the officedepartment, annually on or before March 1, or within
16308	3 months of the end of the reporting period of the clinic, or
16309	within such extension of time for the filing of the report as
16310	the officedepartment, for good cause, may grant. The report of
16311	the prepaid health clinic must be filed on forms prescribed by
16312	the commissiondepartmentand must be verified under oath by two
16313	executive officers of the clinic or, if the clinic is not a
16314	corporation, verified under oath by two persons who are
16315	principal managing directors of the affairs of the clinic. The
16316	report of the clinic shall show the condition of the clinic on
16317	the last day of the immediately preceding reporting period.
16318	Such report shall include:
16319	(a) A financial statement of the clinic, including its
16320	balance sheet and a statement of operations for the preceding
16321	year;
16322	(b) A list of the name and residence address of every
16323	person responsible for the conduct of the affairs of the clinic,
16324	together with a disclosure of the extent and nature of any
16325	contract or arrangement between such person and the clinic,
16326	including any possible conflicts of interest;
16327	(c) The number of prepaid health clinic contracts issued
16328	and outstanding, and the number of prepaid health clinic
16329	contracts terminated and a compilation of the reasons for such
16330	terminations;
16331	(d) Such statistical information as is requested by the
16332	commission or officedepartment, which information shows the
16333	rates of the clinic for all basic services provided under
16334	prepaid health clinic contracts;
16335	(e) The number and amount of damage claims for medical
16336	injury initiated against the clinic and any of the providers
16337	engaged by it during the reporting year, broken down into claims
16338	with and without formal legal process, and the disposition, if
16339	any, of each such claim; and
16340	(f) Such other information relating to the performance of
16341	the clinic as is required by the commission or office
16342	department.
16343	(2) Any clinic which neglects to file the annual report in
16344	the form and within the time required by this section is subject
16345	to an administrative penalty, not to exceed $100 for each day
16346	during which the neglect continues; and, upon notice by the
16347	officedepartmentto that effect, the authority of the clinic to
16348	do business in this state shall cease while such default
16349	continues.
16350	Section 312. Section 641.412, Florida Statutes, is amended
16351	to read:
16352	641.412 Fees.--
16353	(1) Every prepaid health clinic shall pay to the office
16354	departmentthe following fees:
16355	(a) For filing a copy of its application for a certificate
16356	of authority or an amendment to such certificate, a
16357	nonrefundable fee in the amount of $150.
16358	(b) For filing each annual report, a fee in the amount of
16359	$150.
16360	(2) The fees charged under this section shall be
16361	distributed as follows:
16362	(a) One-third of the total amount of fees shall be
16363	distributed to the Agency for Health Care Administration; and
16364	(b) Two-thirds of the total amount of fees shall be
16365	distributed to the officeDepartment of Insurance.
16366	Section 313. Section 641.418, Florida Statutes, is amended
16367	to read:
16368	641.418 Examination of prepaid health clinic by the office
16369	department.--The officedepartmentshall examine the affairs,
16370	transactions, accounts, business records, and assets of any
16371	prepaid health clinic as often as the officedepartmentdeems it
16372	expedient for the protection of the people of this state. Every
16373	clinic shall submit its books and records and take other
16374	appropriate action as may be necessary to facilitate an
16375	examination. However, medical records of individuals and
16376	records of physicians providing services under contracts to the
16377	clinic are not subject to audit, although such records may be
16378	subject to subpoena by court order upon a showing of good cause.
16379	For the purpose of examinations, the officedepartmentmay
16380	administer oaths to and examine the officers and agents of a
16381	clinic concerning its business and affairs. The expenses for
16382	the examination of each clinic by the officedepartmentare
16383	subject to the same terms and conditions that apply to insurers
16384	under part II of chapter 624. In no event shall the expenses of
16385	all examinations exceed the maximum amount of $15,000 per year.
16386	Section 314. Subsections (2), (3), (5), and (7) of section
16387	641.42, Florida Statutes, is amended to read:
16388	641.42 Prepaid health clinic contracts.--
16389	(2) The rates charged by any clinic to its subscribers
16390	shall not be excessive, inadequate, or unfairly discriminatory.
16391	The commissiondepartment, in accordance with generally accepted
16392	actuarial practice, may define by rule what constitutes
16393	excessive, inadequate, or unfairly discriminatory rates and may
16394	require whatever information the commissiondepartmentdeems
16395	necessary to determine that a rate or proposed rate meets the
16396	requirements of this subsection.
16397	(3) No clinic shall issue or agree to issue any prepaid
16398	health clinic contract to a subscriber unless the contract has
16399	first been filed with, and approved by, the officedepartment.
16400	(5) Every subscriber shall receive a clear and
16401	understandable description of the method of the clinic for
16402	resolving subscriber grievances; such method shall be set forth
16403	in the contract and shall be approved by the officedepartment
16404	on the basis of its underlying fairness.
16405	(7)(a) If a clinic desires to amend any contract with any
16406	of its subscribers or desires to change any rate charged for the
16407	contract, the clinic may do so, upon filing with the office
16408	departmentthe proposed amendment or change in rates.
16409	(b) No prepaid health clinic contract form or application
16410	form when written application is required and is to be made a
16411	part of the policy or contract, or no printed amendment,
16412	addendum, rider, or endorsement form or form of renewal
16413	certificate, shall be delivered or issued for delivery in this
16414	state, unless the form has been filed with the officedepartment
16415	at its offices in Tallahasseeby or in behalf of the clinic
16416	which proposes to use such form and has been approved by the
16417	officedepartment. Every such filing shall be made not less than
16418	30 days in advance of any such use or delivery. At the
16419	expiration of such 30 days, the form so filed shall be deemed
16420	approved unless prior to the end of the 30 days the form has
16421	been affirmatively approved or disapproved by the office
16422	department. The approval of any such form by the office
16423	departmentconstitutes a waiver of any unexpired portion of such
16424	waiting period. The officedepartmentmay extend by not more
16425	than an additional 15 days the period within which the office
16426	departmentmay so affirmatively approve or disapprove any such
16427	form, by giving notice of such extension before the expiration
16428	of the initial 30-day period. At the expiration of any such
16429	period as so extended, and in the absence of such prior
16430	affirmative approval or disapproval, such form shall be deemed
16431	approved. The officedepartmentmay, for cause, withdraw a
16432	previous approval. No clinic shall issue or use any form which
16433	has been disapproved by the officedepartmentor any form for
16434	which the officedepartmenthas withdrawn approval.
16435	(c) The officedepartmentshall disapprove any form filed
16436	under this subsection, or withdraw any previous approval of the
16437	form, only if the form:
16438	1. Is in any respect in violation of, or does not comply
16439	with, any provision of this part or rule adopted under this
16440	part.
16441	2. Contains or incorporates by reference, where such
16442	incorporation is otherwise permissible, any inconsistent,
16443	ambiguous, or misleading clauses, or exceptions and conditions
16444	which deceptively affect the risk purported to be assumed in the
16445	general coverage of the contract.
16446	3. Has a misleading title, misleading heading, or other
16447	indication of the provisions of the form which is misleading.
16448	4. Is printed or otherwise reproduced in such manner as to
16449	render any material provision of the form substantially
16450	illegible.
16451	5. Provides benefits which are unreasonable in relation to
16452	the rate charged or contains provisions which are unfair,
16453	inequitable, or contrary to the public policy of this state or
16454	encourage misrepresentation.
16455	(d) In determining whether the benefits are reasonable in
16456	relation to the rate charged, the officedepartment, in
16457	accordance with reasonable actuarial techniques, shall consider:
16458	1. Past loss experience and prospective loss experience.
16459	2. Allocation of expenses.
16460	3. Risk and contingency margins, along with justification
16461	of such margins.
16462	4. Acquisition costs.
16463	5. Other factors deemed appropriate by the office
16464	department, based on sound actuarial techniques.
16465	Section 315. Section 641.421, Florida Statutes, is amended
16466	to read:
16467	641.421 Language used in contracts and advertisements;
16468	translations.--
16469	(1)(a) All prepaid health clinic contracts or forms shall
16470	be printed in English.
16471	(b) If the negotiations by a prepaid health clinic with a
16472	subscriber leading up to the effectuation of a prepaid health
16473	clinic contract are conducted in a language other than English,
16474	the prepaid health clinic shall supply to the subscriber a
16475	written translation of the contract, which translation
16476	accurately reflects the substance of the contract and is in the
16477	language used to negotiate the contract. Any such translation
16478	shall be furnished to the officedepartmentas part of the
16479	filing of the prepaid health clinic contract form and shall be
16480	approved by the officedepartmentprior to use. No translation
16481	of a prepaid health clinic contract form shall be approved by
16482	the officedepartmentunless the translation accurately reflects
16483	the substance of the prepaid health clinic contract form in
16484	translation. When a translation of a prepaid health clinic
16485	contract is used, the translation shall clearly and
16486	conspicuously state on its face and in the language of the
16487	translation:
16488	READ THIS FIRST
16489	This is a translation of the document that you are about
16490	to sign.
16491
16492	(2) All advertisements by a prepaid health clinic, if
16493	printed or broadcast in a language other than English, also
16494	shall be available in English and shall be furnished to the
16495	officedepartmentupon request. As used in this subsection, the
16496	term "advertisement" means any advertisement, circular,
16497	pamphlet, brochure, or other printed material disclosing or
16498	disseminating advertising material or information by a clinic to
16499	prospective or existing subscribers and includes any radio or
16500	television transmittal of an advertisement or information.
16501	Section 316. Subsection (2) of section 641.424, Florida
16502	Statutes, is amended to read:
16503	641.424 Validity of noncomplying contracts.--
16504	(2) Any contract delivered or issued for delivery in this
16505	state covering a subscriber resident, located, or to be
16506	performed in this state, which subscriber, pursuant to the
16507	provisions of this part, the clinic may not lawfully provide
16508	under such a contract, is cancelable at any time by the clinic,
16509	any provision of the contract to the contrary notwithstanding;
16510	and the clinic shall promptly cancel the contract in accordance
16511	with the request of the officedepartmentfor such cancellation.
16512	No such illegality or cancellation shall be deemed to relieve
16513	the clinic of any liability incurred by the clinic under the
16514	contract while the contract was in force or to prohibit the
16515	clinic from retaining the pro rata earned premium on the
16516	contract. This provision does not relieve the clinic from any
16517	penalty otherwise incurred by the clinic under this part on
16518	account of any such violation.
16519	Section 317. Section 641.437, Florida Statutes, is amended
16520	to read:
16521	641.437 Investigatory power of officedepartment.--The
16522	officedepartmenthas the power to examine and investigate the
16523	affairs of every person, entity, or prepaid health clinic in
16524	order to determine whether the person, entity, or prepaid health
16525	clinic is operating in accordance with the provisions of this
16526	part or has been or is engaged in any unfair method of
16527	competition or any unfair or deceptive act or practice
16528	prohibited by s. 641.44.
16529	Section 318. Section 641.443, Florida Statutes, is amended
16530	to read:
16531	641.443 Temporary restraining orders.--
16532	(1) The officedepartmentis vested with the power to seek
16533	a temporary restraining order:
16534	(a) On behalf of the officedepartmentor on behalf of a
16535	subscriber or subscribers of a prepaid health clinic that is
16536	being operated by a person or entity without a subsisting
16537	certificate of authority; or
16538	(b) On behalf of the officedepartmentor on behalf of a
16539	subscriber or subscribers to whom a prepaid health clinic,
16540	person, or entity is issuing, delivering, or renewing prepaid
16541	health clinic contracts without an existing certificate of
16542	authority.
16543	(2) The officedepartmentand the Agency for Health Care
16544	Administration are each vested with the power to seek a
16545	temporary restraining order on their behalf or on behalf of a
16546	subscriber or subscribers of a prepaid health clinic that is
16547	being operated in violation of any provision of this part or any
16548	rule promulgated under this part, or any other applicable law or
16549	rule.
16550	Section 319. Section 641.444, Florida Statutes, is amended
16551	to read:
16552	641.444 Injunction.--In addition to the penalties and
16553	other enforcement provisions of this part, if a person, entity,
16554	or prepaid health clinic has engaged in any activity prohibited
16555	by this part or any rule adopted pursuant to this part, the
16556	officedepartmentmay resort to a proceeding for injunction in
16557	the circuit court of the county where such person, entity, or
16558	prepaid health clinic is located or has her or his or its
16559	principal place of business; and the officedepartmentmay apply
16560	in such court for such temporary and permanent orders as the
16561	officedepartmentmay deem necessary to restrain the person,
16562	entity, or prepaid health clinic from engaging in any such
16563	activity, until the person, entity, or prepaid health clinic
16564	complies with the provisions and rules.
16565	Section 320. Section 641.445, Florida Statutes, is amended
16566	to read:
16567	641.445 Defined practices; hearings, witnesses,
16568	appearances, production of books, and service of process.--
16569	(1) Whenever the officedepartmenthas reason to believe
16570	that a person, entity, or prepaid health clinic has engaged, or
16571	is engaging, in this state in any unfair method of competition
16572	or any unfair or deceptive act or practice as defined in s.
16573	641.441, or is operating a prepaid health clinic without a
16574	certificate of authority as required by this part or otherwise
16575	operating in violation of any provision of this part or rule
16576	adopted pursuant to this part, and that a proceeding by the
16577	officedepartmentin respect thereto would be in the interest of
16578	the public, the officedepartmentshall conduct, or cause to
16579	have conducted, a hearing in accordance with chapter 120.
16580	(2) The officedepartment, a duly empowered hearing
16581	officer, or an administrative law judge shall, during the
16582	conduct of such hearing, have those powers enumerated in s.
16583	120.569; however, the penalty for the failure to comply with a
16584	subpoena or with an order directing discovery is limited to a
16585	fine not to exceed $1,000 per violation.
16586	(3) A statement of charges, notice, or order under this
16587	part may be served by anyone duly authorized by the office
16588	department, either in the manner provided by law for service of
16589	process in civil actions or by certifying and mailing a copy of
16590	the statement of charges, notice, or order to the person,
16591	entity, or prepaid health clinic affected by the statement,
16592	notice, or order or other process at his or her or its residence
16593	or principal office or place of business. The verified return
16594	by the person so serving such statement, notice, or order or
16595	other process, setting forth the manner of the service, is proof
16596	of such service; and the return postcard receipt for such
16597	statement, notice, or order or other process, certified and
16598	mailed as provided in this subsection, is proof of the service
16599	of the statement, notice, or order or other process.
16600	Section 321. Section 641.446, Florida Statutes, is amended
16601	to read:
16602	641.446 Cease and desist and penalty orders.--After the
16603	hearing provided in s. 641.445, the officedepartmentshall
16604	enter a final order in accordance with s. 120.569. If it is
16605	determined that the person, entity, or prepaid health clinic
16606	charged has engaged in an unfair or deceptive act or practice or
16607	the unlawful operation of a prepaid health clinic, the office
16608	departmentalso shall issue an order requiring the violator to
16609	cease and desist from engaging in such method of competition,
16610	act, or practice or unlawful operation of a prepaid health
16611	clinic. Furthermore, the officedepartmentmay, at its
16612	discretion, order any one or more of the following:
16613	(1) The suspension or revocation of the certificate of
16614	authority of the prepaid health clinic if it knew, or reasonably
16615	should have known, that it was in violation of this part.
16616	(2) If it is determined that the person or entity charged
16617	has engaged in the business of operating a prepaid health clinic
16618	without a certificate of authority, an administrative penalty
16619	not to exceed $1,000 for each prepaid health clinic contract
16620	offered or effectuated.
16621	Section 322. Section 641.447, Florida Statutes, is amended
16622	to read:
16623	641.447 Appeal from departmentalorder.--Any person,
16624	entity, or prepaid health clinic that is subject to an order of
16625	the officedepartmentunder s. 641.446 may obtain a review of
16626	the order by filing an appeal from the order in accordance with
16627	the provisions and procedures for appeal under s. 120.68.
16628	Section 323. Section 641.448, Florida Statutes, is amended
16629	to read:
16630	641.448 Penalty for violation of cease and desist
16631	order.--Any person, entity, or prepaid health clinic that
16632	violates a cease and desist order of the officedepartmentunder
16633	s. 641.446 while such order is in effect, after notice and
16634	hearing as provided in s. 641.445, is subject, at the discretion
16635	of the officedepartment, to any one or more of the following:
16636	(1) A monetary penalty of not more than $50,000 as to all
16637	matters determined in such hearing.
16638	(2) The suspension or revocation of the certificate of
16639	authority of the prepaid health clinic.
16640	Section 324. Section 641.45, Florida Statutes, is amended
16641	to read:
16642	641.45 Revocation or cancellation of certificate of
16643	authority; suspension of authority to enroll new subscribers;
16644	terms of suspension.--
16645	(1) The maintenance of a valid and current Health Care
16646	Provider Certificate issued pursuant to part III of this chapter
16647	is a condition of the maintenance of a valid and current
16648	certificate of authority issued by the officedepartmentto
16649	operate a prepaid health clinic. Revocation or nonrenewal of a
16650	Health Care Provider Certificate shall be deemed to be an
16651	automatic and immediate cancellation of a prepaid health
16652	clinic's certificate of authority.
16653	(2) The officedepartmentmay suspend the authority of a
16654	clinic to enroll new subscribers or revoke any certificate of
16655	authority issued to a prepaid health clinic, or order compliance
16656	within 60 days, if the officedepartmentfinds that any of the
16657	following conditions exist:
16658	(a) The clinic is not operating in compliance with this
16659	part or any rule promulgated under this part.
16660	(b) The plan is no longer actuarially sound or the clinic
16661	does not have the minimum surplus as required by this part.
16662	(c) The existing contract rates are excessive, inadequate,
16663	or unfairly discriminatory.
16664	(d) The clinic has advertised, merchandised, or attempted
16665	to merchandise its services in such a manner as to misrepresent
16666	its services or capacity for services or has engaged in
16667	deceptive, misleading, or unfair practices with respect to
16668	advertising or merchandising.
16669	(e) The organization is insolvent.
16670	(f) The clinic has not complied with the grievance
16671	procedures for subscribers that are set forth in any prepaid
16672	health clinic contract.
16673	(g) The clinic has not fully satisfied a judgment against
16674	the clinic within 10 days of the entry of the judgment by any
16675	court in the state or, in the case of an appeal from such
16676	judgment, has not fully satisfied the judgment within 60 days
16677	after affirmance of the judgment by the appellate court.
16678	(3) The officedepartmentshall, in its order suspending
16679	the authority of a clinic to enroll new subscribers, specify the
16680	period during which the suspension is to be in effect and the
16681	conditions, if any, which must be met by the clinic prior to
16682	reinstatement of its authority to enroll new subscribers. The
16683	order of suspension is subject to rescission or modification by
16684	further order of the officedepartmentprior to the expiration
16685	of the suspension period. Reinstatement shall not be made unless
16686	requested by the clinic; however, the officedepartmentshall
16687	not grant reinstatement if it finds that the circumstances for
16688	which the suspension occurred still exist or are likely to
16689	recur.
16690	Section 325. Section 641.452, Florida Statutes, is amended
16691	to read:
16692	641.452 Administrative penalty in lieu of suspension or
16693	revocation of certificate of authority.--The officedepartment
16694	may, in lieu of suspension or revocation of a certificate of
16695	authority, levy an administrative penalty in an amount not more
16696	than $10,000 for each violation by a prepaid health clinic. In
16697	levying such fine, the officedepartmentshall consider the
16698	number of members and total revenues of the clinic and whether
16699	the violation was committed knowingly and willfully.
16700	Section 326. Section 641.453, Florida Statutes, is amended
16701	to read:
16702	641.453 Civil liability.--The provisions of this part are
16703	cumulative to the rights under the general civil law and common
16704	law, and no action of the officedepartmentshall abrogate such
16705	rights to damages or other relief in any court.
16706	Section 327. Section 641.454, Florida Statutes, is amended
16707	to read:
16708	641.454 Civil action to enforce prepaid health clinic
16709	contract; attorney's fees; court costs.--In any civil action
16710	brought to enforce the terms and conditions of a prepaid health
16711	clinic contract, the prevailing party is entitled to recover
16712	reasonable attorney's fees and court costs. This section shall
16713	not be construed to authorize a civil action against the
16714	commission or officedepartment, or theirits employees, or the
16715	Insurance Commissioner and Treasureror against the Agency for
16716	Health Care Administration, the employees of the Agency for
16717	Health Care Administration, or the Secretary of Health Care
16718	Administration.
16719	Section 328. Section 641.455, Florida Statutes, is amended
16720	to read:
16721	641.455 Disposition of moneys collected under this
16722	part.--Fees, administrative penalties, examination expenses, and
16723	other sums collected by the officedepartmentunder this part
16724	shall be deposited to the credit of the Insurance Commissioner's
16725	Regulatory Trust Fund; however, fees, examination expenses, and
16726	other sums collected by, or allocated to, the Agency for Health
16727	Care Administration under this part shall be deposited to the
16728	credit of the General Revenue Fund.
16729	Section 329. Section 641.457, Florida Statutes, is amended
16730	to read:
16731	641.457 Exemption for certain operational prepaid health
16732	clinics.--The provisions of this part do not apply to those
16733	prepaid health clinics providing the services defined in ss.
16734	641.40 through 641.459, which clinics have been continuously
16735	engaged in providing such services since January 1, 1947,
16736	provided that any prepaid health clinic claiming an exemption
16737	under this section notifiednotifies the former Department of
16738	Insuranceof its claim on or before January 1, 1985. This
16739	exemption will terminate upon a change in controlling ownership
16740	of the organization.
16741	Section 330. Section 641.48, Florida Statutes, is amended
16742	to read:
16743	641.48 Purpose and application of part.--The purpose of
16744	this part is to ensure that health maintenance organizations and
16745	prepaid health clinics deliver high-quality health care to their
16746	subscribers. To achieve this purpose, this part requires all
16747	such organizations to obtain a health care provider certificate
16748	from the agency as a condition precedent to obtaining a
16749	certificate of authority to do business in Florida from the
16750	officeDepartment of Insurance, under part I or part II of this
16751	chapter.
16752	Section 331. Subsection (2) of section 641.49, Florida
16753	Statutes, is amended to read:
16754	641.49 Certification of health maintenance organization
16755	and prepaid health clinic as health care providers; application
16756	procedure.--
16757	(2) The officeDepartment of Insuranceshall not issue a
16758	certificate of authority under part I or part II of this chapter
16759	to any applicant which does not possess a valid health care
16760	provider certificate issued by the agency under this part.
16761	Section 332. Subsection (4) of section 641.495, Florida
16762	Statutes, is amended to read:
16763	641.495 Requirements for issuance and maintenance of
16764	certificate.--
16765	(4) The organization shall ensure that the health care
16766	services it provides to subscribers, including physician
16767	services as required by s. 641.19(12)(13)(d) and (e), are
16768	accessible to the subscribers, with reasonable promptness, with
16769	respect to geographic location, hours of operation, provision of
16770	after-hours service, and staffing patterns within generally
16771	accepted industry norms for meeting the projected subscriber
16772	needs. The health maintenance organization must provide
16773	treatment authorization 24 hours a day, 7 days a week. Requests
16774	for treatment authorization may not be held pending unless the
16775	requesting provider contractually agrees to take a pending or
16776	tracking number.
16777	Section 333. Subsections (7), (8), and (11) of section
16778	641.511, Florida Statutes, are amended to read:
16779	641.511 Subscriber grievance reporting and resolution
16780	requirements.--
16781	(7) Each organization shall send to the agency a copy of
16782	its quarterly grievance reports submitted to the office
16783	Department of Insurancepursuant to s. 408.7056(12).
16784	(8) The agency shall investigate all reports of unresolved
16785	quality of care grievances received from:
16786	(a) Annual and quarterly grievance reports submitted by
16787	the organization to the officeDepartment of Insurance.
16788	(b) Review requests of subscribers whose grievances remain
16789	unresolved after the subscriber has followed the full grievance
16790	procedure of the organization.
16791	(11) Each organization, as part of its contract with any
16792	provider, must require the provider to post a consumer
16793	assistance notice prominently displayed in the reception area of
16794	the provider and clearly noticeable by all patients. The
16795	consumer assistance notice must state the addresses and toll-
16796	free telephone numbers of the Agency for Health Care
16797	Administration, the Statewide Provider and Subscriber Assistance
16798	Program, and the Department of Financial ServicesInsurance. The
16799	consumer assistance notice must also clearly state that the
16800	address and toll-free telephone number of the organization's
16801	grievance department shall be provided upon request. The agency
16802	may adoptis authorized to promulgaterules to implement this
16803	section.
16804	Section 334. Subsections (1), (3), and (6) of section
16805	641.512, Florida Statutes, are amended to read:
16806	641.512 Accreditation and external quality assurance
16807	assessment.--
16808	(1)(a) To promote the quality of health care services
16809	provided by health maintenance organizations and prepaid health
16810	clinics in this state, the officedepartmentshall require each
16811	health maintenance organization and prepaid health clinic to be
16812	accredited within 1 year of the organization's receipt of its
16813	certificate of authority and to maintain accreditation by an
16814	accreditation organization approved by the officedepartment, as
16815	a condition of doing business in the state.
16816	(b) In the event that no accreditation organization can be
16817	approved by the officedepartment, the officedepartmentshall
16818	require each health maintenance organization and prepaid health
16819	clinic to have an external quality assurance assessment
16820	performed by a review organization approved by the office
16821	department, as a condition of doing business in the state. The
16822	assessment shall be conducted within 1 year of the
16823	organization's receipt of its certificate of authority and every
16824	2 years thereafter, or when the officedepartmentdeems
16825	additional assessments necessary.
16826	(3) A representative of the officedepartmentshall
16827	accompany the accreditation or review organization throughout
16828	the accreditation or assessment process, but shall not
16829	participate in the final accreditation or assessment
16830	determination. The accreditation or review organization shall
16831	monitor and evaluate the quality and appropriateness of patient
16832	care, the organization's pursuance of opportunities to improve
16833	patient care and resolve identified problems, and the
16834	effectiveness of the internal quality assurance program required
16835	for health maintenance organization and prepaid health clinic
16836	certification pursuant to s. 641.49(3)(p).
16837	(6) The accreditation or review organization shall issue a
16838	written report of its findings to the health maintenance
16839	organization's or prepaid health clinic's board of directors. A
16840	copy of the report shall be submitted to the officedepartment
16841	by the organization within 30 business days of its receipt by
16842	the health maintenance organization or prepaid health clinic.
16843	Section 335. Section 641.52, Florida Statutes, is amended
16844	to read:
16845	641.52 Revocation of certificate; suspension of new
16846	enrollment; suspension of the health care provider certificate;
16847	administrative fine; notice of action to the officeDepartment
16848	of Insurance; penalty for use of unlicensed providers.--
16849	(1) The agency may suspend the authority of an
16850	organization to enroll new subscribers or revoke the health care
16851	provider certificate of any organization, or order compliance
16852	within a time certain, if it finds that any of the following
16853	conditions exist:
16854	(a) The organization is in substantial violation of its
16855	contracts.
16856	(b) The organization is unable to fulfill its obligations
16857	under outstanding contracts entered into with its subscribers.
16858	(c) The organization knowingly utilizes a provider who is
16859	furnishing or has furnished health care services and who does
16860	not have a subsisting license or other authority to practice or
16861	furnish health care services in this state.
16862	(d) The organization no longer meets the requirements for
16863	the certificate as originally issued.
16864	(e) The organization has violated any lawful rule or order
16865	of the agency or any provision of this part.
16866	(f) The organization has refused to be examined or to
16867	produce its accounts, records, and files for examination or to
16868	perform any other legal obligation as to such examination, when
16869	required by the agency.
16870	(g) The organization has not, after given reasonable
16871	notice, maintained accreditation or received favorable external
16872	quality assurance reviews under s. 641.512 or, following an
16873	investigation under s. 641.515, has been determined to not
16874	materially meet requirements under this part.
16875	(2) Revocation of an organization's certificate shall be
16876	for a period of 2 years. After 2 years, the organization may
16877	apply for a new certificate by compliance with all application
16878	requirements applicable to first-time applicants.
16879	(3) Suspension of an organization's authority to enroll
16880	new subscribers shall be for such period, not to exceed 1 year,
16881	as is fixed by the agency. The agency shall, in its order
16882	suspending the authority of an organization to enroll new
16883	subscribers, specify the period during which the suspension is
16884	to be in effect and the conditions, if any, which must be met by
16885	the organization prior to reinstatement of its authority to
16886	enroll new subscribers. The order of suspension is subject to
16887	rescission or modification by further order of the agency prior
16888	to the expiration of the suspension period. Authority to enroll
16889	new subscribers shall not be reinstated unless requested by the
16890	organization; however, the agency may not grant reinstatement if
16891	it finds that the circumstances for which the suspension of
16892	authority to enroll new subscribers occurred still exist or are
16893	likely to recur.
16894	(4) The agency may suspend the health care provider
16895	certificate issued to an organization. The agency shall, in its
16896	order suspending the health care provider certificate, specify
16897	the period during which the suspension is to be in effect and
16898	the conditions, if any, which must be met by the organization
16899	for reinstatement. Upon expiration of the suspension period, the
16900	organization's certificate automatically reinstates unless the
16901	agency finds that the causes of the suspension have not been
16902	removed or that the organization is otherwise not in compliance
16903	with this part. If the agency makes such a finding, the health
16904	care provider certificate shall not be reinstated and is
16905	considered to have expired as of the end of the suspension
16906	period.
16907	(5) If the agency finds that one or more grounds exist for
16908	the revocation or suspension of a certificate issued under this
16909	part, the agency may, in lieu of such revocation or suspension,
16910	impose a fine upon the organization. With respect to any
16911	nonwillful violation, the fine may not exceed $2,500 per
16912	violation. Such fines may not exceed an aggregate amount of
16913	$25,000 for all nonwillful violations arising out of the same
16914	action. With respect to any knowing and willful violation of a
16915	lawful order or rule of the agency or a provision of this part,
16916	the agency may impose a fine upon the organization in an amount
16917	not to exceed $20,000 for each such violation. Such fines may
16918	not exceed an aggregate amount of $250,000 for all knowing and
16919	willful violations arising out of the same action. The agency
16920	shall, by January 1, 1997, adopt by rule penalty categories that
16921	specify varying ranges of fines for willful violations and for
16922	nonwillful violations.
16923	(6) The agency shall immediately notify the office
16924	Department of Insurancewhenever it issues an administrative
16925	complaint or an order or otherwise initiates legal proceedings
16926	resulting in or which may result in suspension or revocation of
16927	an organization's health care provider certificate or suspension
16928	of new enrollment.
16929	(7) Any organization that knowingly utilizes the services
16930	of a provider who is not licensed or otherwise authorized by law
16931	to provide such services is guilty of a felony of the third
16932	degree, punishable as provided in s. 775.082, s. 775.083, or s.
16933	775.084.
16934	Section 336. Subsection (2) of section 641.54, Florida
16935	Statutes, is amended to read:
16936	641.54 Information disclosure.--
16937	(2) The list shall be made available, upon request, to the
16938	officedepartment. The list shall also be made available, upon
16939	request:
16940	(a) With respect to negotiation, application, or
16941	effectuation of a group health maintenance contract, to the
16942	employer or other person who will hold the contract on behalf of
16943	the subscriber group. The list may be restricted to include
16944	only physicians and hospitals in the group's geographic area.
16945	(b) With respect to an individual health maintenance
16946	contract or any contract offered to a person who is entitled to
16947	have payments for health care costs made under Medicare, to the
16948	person considering or making application to, or under contract
16949	with, the health maintenance organization. The list may be
16950	restricted to include only physicians and hospitals in the
16951	person's geographic area.
16952	Section 337. Subsection (4) of section 641.55, Florida
16953	Statutes, is amended to read:
16954	641.55 Internal risk management program.--
16955	(4) The Agency for Health Care Administration shall adopt
16956	rules necessary to carry out the provisions of this section,
16957	including rules governing the establishment of required internal
16958	risk management programs to meet the needs of individual
16959	organizations and each specific organization type governed by
16960	this part. The officeDepartment of Insuranceshall assist the
16961	agency in preparing these rules. Each internal risk management
16962	program shall include the use of incident reports to be filed
16963	with the risk manager. The risk manager shall have free access
16964	to all organization or provider medical records. The incident
16965	reports shall be considered to be a part of the workpapers of
16966	the attorney defending the organization in litigation relating
16967	thereto and shall be subject to discovery, but not be admissible
16968	as evidence in court, nor shall any person filing an incident
16969	report be subject to civil suit by virtue of the incident report
16970	and the matters it contains. As a part of each internal risk
16971	management program, the incident reports shall be utilized to
16972	develop categories of incidents which identify problem areas.
16973	Once identified, procedures must be adjusted to correct these
16974	problem areas.
16975
16976
16977	The gross data compiled under this section or s. 395.0197 shall
16978	be furnished by the agency upon request to organizations to be
16979	utilized for risk management purposes. The agency shall adopt
16980	rules necessary to carry out the provisions of this section.
16981	Section 338. Subsection (2) of section 641.58, Florida
16982	Statutes, is amended to read:
16983	641.58 Regulatory assessment; levy and amount; use of
16984	funds; tax returns; penalty for failure to pay.--
16985	(2) The officeDepartment of Insuranceshall determine the
16986	amount of gross premiums for the purposes of the regulatory
16987	assessment, and then the agency shall determine on or before
16988	December 1 of each year the regulatory assessment percentage
16989	necessary to be imposed for that calendar year, payable on or
16990	before the following April 1, as herein prescribed, to provide
16991	the funds appropriated to the agency to carry out the provisions
16992	of subsection (4).
16993	Section 339. Subsections (3) and (4) of section 642.0475,
16994	Florida Statutes, are amended to read:
16995	642.0475 Civil remedy.--
16996	(3) As a condition precedent to bringing an action under
16997	this section, the officedepartmentand the person against whom
16998	the action is to be brought shall be given notice of the
16999	violation. The notice shall state with specificity the facts
17000	which allegedly constitute the violation and the law which the
17001	plaintiff is relying upon. No action shall lie if, within 30
17002	days thereafter, the damages are paid or the circumstances
17003	giving rise to the violation are corrected.
17004	(4) This section shall not be construed to authorize a
17005	class action suit against a legal expense insurance corporation
17006	or a civil action against the department, commission, or office
17007	or theirits employees, or the Insurance Commissioner.
17008	Section 340. Section 651.119, Florida Statutes, is amended
17009	to read:
17010	651.119 Assistance to persons affected by closure due to
17011	liquidation or pending liquidation.--
17012	(1) If a facility closes and ceases to operate as a result
17013	of liquidation or pending liquidation and residents are forced
17014	to relocate, the department shall become a creditor of the
17015	facility for the purpose of providing moving expenses for
17016	displaced residents and such other care or services as is made
17017	possible by the unencumbered assets of the facility. To the
17018	extent that another provider provides, as approved by the office
17019	department, direct assistance to such residents, the cost of
17020	such direct assistance shall be offset against reserves pursuant
17021	to subsection (4). The department shall provide proportional
17022	reimbursements of such costs to the respective providers from
17023	such unencumbered assets.
17024	(2) If the moneys and direct assistance made available
17025	under subsection(1) are not sufficient to cover moving costs,
17026	the officedepartmentmay seek voluntary contributions from the
17027	reserves maintained by providers under s. 651.035 in amounts
17028	approved by the officedepartmentto provide for the moving
17029	expenses of the residents in moving to another residence within
17030	the state.
17031	(3) If the moneys and direct assistance provided under
17032	subsections (1) and(2) are not sufficient to provide for the
17033	moving expenses of displaced residents in moving to other
17034	residences within the state, the officedepartmentmay levy pro
17035	rata assessments on the reserves of providers maintained under
17036	s. 651.035 for such moving expenses of any displaced resident
17037	who lacks sufficient assets to pay for such moving expenses. The
17038	assessments for such moving expenses on any particular provider
17039	may not exceed for any 12-month period an aggregate of 1 percent
17040	of the unencumbered portion of the reserves maintained by the
17041	provider under s. 651.035. If the officedepartmentdetermines
17042	that payment of an assessment under this subsection would impair
17043	the financial standing of a facility or its residents, the
17044	officedepartmentmay waive or temporarily defer all or part of
17045	the assessment with respect to that provider. The office
17046	departmentshall apply any moneys voluntarily paid by a provider
17047	under subsection (1) or subsection (2) to satisfaction of
17048	assessments under this subsection.
17049	(4) The officedepartmentshall permanently reduce the
17050	reserves required of a provider under s. 651.035 to the extent
17051	of the provider's costs under subsection (1), voluntary
17052	contributions under subsection (2), and assessments under
17053	subsection (3). However, the officedepartmentshall thereafter
17054	raise the reserve requirements of a provider to the extent of
17055	reimbursements paid to the provider under subsection (1) unless
17056	such increase would raise the reserve requirement above the
17057	amount required under s. 651.035.
17058	(5) No payment, contribution, or assessment may be paid by
17059	a provider under this section if the release of funds from the
17060	reserves of the provider would violate a bond or lending
17061	commitment or covenant.
17062	(6) Moneys received under this section for the support of
17063	residents shall be kept in a separate fund maintained and
17064	administered by the department. The Continuing Care Advisory
17065	Council shall monitor the collection and use of such funds and
17066	shall advise the office ordepartment on plans for resident
17067	relocation. The council shall seek the assistance of providers
17068	licensed under this chapter and other service providers in
17069	locating alternative housing and care arrangements.
17070	(7) For the purposes of this section, "moving expenses"
17071	means transportation expenses and the cost of packing and
17072	relocating personal belongings.
17073	Section 341. Section 252.62, Florida Statutes, is amended
17074	to read:
17075	252.62 Director of Office of Financial Institutions and
17076	Securities RegulationComptroller'spowers in a state of
17077	emergency.--
17078	(1) It is the purpose and intent of this section to
17079	provide the Director of the Office of Financial Institutions and
17080	Securities Regulation of the Financial Services Commission
17081	Comptroller, as head of the Department of Banking and Finance,
17082	the authority to make temporary modifications to or suspensions
17083	of the financial institutions codes in order to expedite the
17084	recovery of communities affected by a disaster or other
17085	emergency and in order to encourage financial institutions to
17086	meet the credit, deposit, and other financial needs of such
17087	communities.
17088	(2)(a) When the Governor declares a state of emergency
17089	pursuant to s. 252.36, the Director of the Office of Financial
17090	Institutions and Securities RegulationComptrollermay issue:
17091	1. One or more general orders applicable to all financial
17092	institutions that are subject to the financial institutions
17093	codes and that serve any portion of the area of the state under
17094	the state of emergency; or
17095	2. One or more specific orders to particular financial
17096	institutions that are subject to the financial institution codes
17097	and that normally derive more than 60 percent of their deposits
17098	from persons in the area of the state under the state of
17099	emergency,
17100
17101	which orders may modify or suspend, as to those institutions,
17102	all or any part of the financial institutions codes, as defined
17103	in s. 655.005, or any applicable rule, consistent with the
17104	stated purposes of the financial institutions codes and with
17105	maintaining the safety and soundness of the financial
17106	institutions system in this state.
17107	(b) An order issued by the directorComptrollerunder this
17108	section becomes effective upon issuance and continues for 120
17109	days unless it is terminated by the directorComptroller. The
17110	directorComptrollermay extend an order for one additional
17111	period of 120 days if he or shethe Comptrollerdetermines that
17112	the emergency conditions that gave rise to the Comptroller's
17113	initial order still exist. The Legislature, by concurrent
17114	resolution, may terminate any order issued under this section.
17115	(3) The directorComptrollershall publish, in the next
17116	available publication of the Florida Administrative Weekly, a
17117	copy of the text of any order issued under this section,
17118	together with a statement describing the modification or
17119	suspension and explaining how the modification or suspension
17120	will facilitate recovery from the emergency and maintain the
17121	safety and soundness of financial institutions in this state.
17122	Section 342. Section 288.778, Florida Statutes, is amended
17123	to read:
17124	288.778 Office of Financial Institutions and Securities
17125	RegulationDepartment of Banking and Finance.--The Office of
17126	Financial Institutions and Securities RegulationDepartment of
17127	Banking and Financeshall review the corporation's activities
17128	once every 24 months to determine compliance with this part and
17129	other related laws and rules and to evaluate the corporation's
17130	operations. The officedepartmentshall prepare a report based
17131	on its review and evaluation with recommendation for any
17132	corrective action. The president shall submit to the office
17133	departmentregular reports on the corporation's activities. The
17134	content and frequency of such reports shall be determined by the
17135	officedepartment. The officedepartmentshall charge a fee for
17136	conducting the review and evaluation and preparing the related
17137	report, which fee shall not be in excess of the examination fee
17138	paid by financial institutions chartered or licensed under the
17139	financial institutions code of this state.
17140	Section 343. Paragraphs (c) and (e) through (p) of
17141	subsection (3), paragraphs (a), (b),(c), (d), (g), and (h) of
17142	subsection (4), paragraph (b) of subsection (5), subsection (7),
17143	paragraphs (a) and (c) of subsection (8), paragraph (b) of
17144	subsection (9), paragraphs (a) through (e), (h), and (j) of
17145	subsection (10), subsections (12), (13), and (14), paragraphs
17146	(a), (c), (d), (e), and (g) of subsection (15), and subsection
17147	(17) of section 288.99, Florida Statutes, are amended to read:
17148	288.99 Certified Capital Company Act.--
17149	(3) DEFINITIONS.--As used in this section, the term:
17150	(c) "Certified capital company" means a corporation,
17151	partnership, or limited liability company which:
17152	1. Is certified by the officedepartmentin accordance
17153	with this act.
17154	2. Receives investments of certified capital from two or
17155	more unaffiliated certified investors.
17156	3. Makes qualified investments as its primary activity.
17157	(e) "Commission" means the Financial Services Commission
17158	"Department" means the Department of Banking and Finance.
17159	(f) "Director" means the director of the Office of
17160	Tourism, Trade, and Economic Development.
17161	(f)(g)"Early stage technology business" means a qualified
17162	business that is:
17163	1. Involved, at the time of the certified capital
17164	company's initial investment in such business, in activities
17165	related to developing initial product or service offerings, such
17166	as prototype development or the establishment of initial
17167	production or service processes;
17168	2. Less than 2 years old and has, together with its
17169	affiliates, less than $3 million in annual revenues for the
17170	fiscal year immediately preceding the initial investment by the
17171	certified capital company on a consolidated basis, as determined
17172	in accordance with generally accepted accounting principles;
17173	3. The Florida Black Business Investment Board;
17174	4. Any entity that is majority owned by the Florida Black
17175	Business Investment Board; or
17176	5. Any entity in which the Florida Black Business
17177	Investment Board holds a majority voting interest on the board
17178	of directors.
17179	(g)(h) "Office" means the Office of Financial Institutions
17180	and Securities Regulation of the commissionTourism, Trade, and
17181	Economic Development.
17182	(h)(i)"Premium tax liability" means any liability
17183	incurred by an insurance company under the provisions of ss.
17184	624.509 and 624.5091.
17185	(i)(j)"Principal" means an executive officer of a
17186	corporation, partner of a partnership, manager of a limited
17187	liability company, or any other person with equivalent executive
17188	functions.
17189	(j)(k)"Qualified business" means the Digital Divide Trust
17190	Fund established under the State of Florida Technology Office or
17191	a business that meets the following conditions as evidenced by
17192	documentation required by commissiondepartmentrule:
17193	1. The business is headquartered in this state and its
17194	principal business operations are located in this state or at
17195	least 75 percent of the employees are employed in the state.
17196	2. At the time a certified capital company makes an
17197	initial investment in a business, the business would qualify for
17198	investment under 13 C.F.R. s. 121.301(c), which is involved in
17199	manufacturing, processing or assembling products, conducting
17200	research and development, or providing services.
17201	3. At the time a certified capital company makes an
17202	initial investment in a business, the business certifies in an
17203	affidavit that:
17204	a. The business is unable to obtain conventional
17205	financing, which means that the business has failed in an
17206	attempt to obtain funding for a loan from a bank or other
17207	commercial lender or that the business cannot reasonably be
17208	expected to qualify for such financing under the standards of
17209	commercial lending;
17210	b. The business plan for the business projects that the
17211	business is reasonably expected to achieve in excess of $25
17212	million in sales revenue within 5 years after the initial
17213	investment, or the business is located in a designated Front
17214	Porch community, enterprise zone, urban high crime area, rural
17215	job tax credit county, or nationally recognized historic
17216	district;
17217	c. The business will maintain its headquarters in this
17218	state for the next 10 years and any new manufacturing facility
17219	financed by a qualified investment will remain in this state for
17220	the next 10 years, or the business is located in a designated
17221	Front Porch community, enterprise zone, urban high crime area,
17222	rural job tax credit county, or nationally recognized historic
17223	district; and
17224	d. The business has fewer than 200 employees and at least
17225	75 percent of the employees are employed in this state. For
17226	purposes of this subsection, the term also includes the Florida
17227	Black Business Investment Board, any entity majority owned by
17228	the Florida Black Business Investment Board, or any entity in
17229	which the Florida Black Business Investment Board holds a
17230	majority voting interest on the board of directors.
17231	4. The term does not include:
17232	a. Any business predominantly engaged in retail sales,
17233	real estate development, insurance, banking, lending, or oil and
17234	gas exploration.
17235	b. Any business predominantly engaged in professional
17236	services provided by accountants, lawyers, or physicians.
17237	c. Any company that has no historical revenues and either
17238	has no specific business plan or purpose or has indicated that
17239	its business plan is solely to engage in a merger or acquisition
17240	with any unidentified company or other entity.
17241	d. Any company that has a strategic plan to grow through
17242	the acquisition of firms with substantially similar business
17243	which would result in the planned net loss of Florida-based jobs
17244	over a 12-month period after the acquisition as determined by
17245	the officedepartment.
17246	(k)(l)"Qualified debt instrument" means a debt
17247	instrument, or a hybrid of a debt instrument, issued by a
17248	certified capital company, at par value or a premium, with an
17249	original maturity date of at least 5 years after the date of
17250	issuance, a repayment schedule which is no faster than a level
17251	principal amortization over a 5-year period, and interest,
17252	distribution, or payment features which are not related to the
17253	profitability of the certified capital company or the
17254	performance of the certified capital company's investment
17255	portfolio.
17256	(l)(m)"Qualified distribution" means any distribution or
17257	payment by a certified capital company for:
17258	1. Reasonable costs and expenses, including, but not
17259	limited to, professional fees, of forming and syndicating the
17260	certified capital company, if no such costs or expenses are paid
17261	to a certified investor, except as provided in subparagraph
17262	(4)(f)2., and the total cash, cash equivalents, and other
17263	current assets permitted by sub-subparagraph (5)(b)3.g. that can
17264	be converted into cash within 5 business days available to the
17265	certified capital company at the time of receipt of certified
17266	capital from certified investors, after deducting the costs and
17267	expenses of forming and syndicating the certified capital
17268	company, including any payments made over time for obligations
17269	incurred at the time of receipt of certified capital but
17270	excluding other future qualified distributions and payments made
17271	under paragraph (9)(a), are an amount equal to or greater than
17272	50 percent of the total certified capital allocated to the
17273	certified capital pursuant to subsection (7);
17274	2. Reasonable costs of managing and operating the
17275	certified capital company, not exceeding 5 percent of the
17276	certified capital in any single year, including an annual
17277	management fee in an amount that does not exceed 2.5 percent of
17278	the certified capital of the certified capital company;
17279	3. Reasonable and necessary fees in accordance with
17280	industry custom for professional services, including, but not
17281	limited to, legal and accounting services, related to the
17282	operation of the certified capital company; or
17283	4. Any projected increase in federal or state taxes,
17284	including penalties and interest related to state and federal
17285	income taxes, of the equity owners of a certified capital
17286	company resulting from the earnings or other tax liability of
17287	the certified capital company to the extent that the increase is
17288	related to the ownership, management, or operation of a
17289	certified capital company.
17290	(m)(n)1. "Qualified investment" means the investment of
17291	cash by a certified capital company in a qualified business for
17292	the purchase of any debt, equity, or hybrid security, including
17293	a debt instrument or security that has the characteristics of
17294	debt but which provides for conversion into equity or equity
17295	participation instruments such as options or warrants.
17296	2. The term does not include:
17297	a. Any investment made after the effective date of this
17298	act the contractual terms of which require the repayment of any
17299	portion of the principal in instances, other than default as
17300	determined by commissiondepartmentrule, within 12 months
17301	following the initial investment by the certified capital
17302	company unless such investment has a repayment schedule no
17303	faster than a level principal amortization of at least 2 years;
17304	b. Any "follow-on" or "add-on" investment except for the
17305	amount by which the new investment is in addition to the amount
17306	of the certified capital company's initial investment returned
17307	to it other than in the form of interest, dividends, or other
17308	types of profit participation or distributions; or
17309	c. Any investment in a qualified business or affiliate of
17310	a qualified business that exceeds 15 percent of certified
17311	capital.
17312	(n)(o)"Program One" means the $150 million in premium tax
17313	credits issued under this section in 1999, the allocation of
17314	such credits under this section, and the regulation of certified
17315	capital companies and investments made by them hereunder.
17316	(o)(p)"Program Two" means the $150 million in premium tax
17317	credits to be issued under subsection (17), the allocation of
17318	such credits under this section, and the regulation of certified
17319	capital companies and investments made by them hereunder.
17320	(4) CERTIFICATION; GROUNDS FOR DENIAL OR
17321	DECERTIFICATION.--
17322	(a) To operate as a certified capital company, a
17323	corporation, partnership, or limited liability company must be
17324	certified by the Department of Banking and Finance or the office
17325	pursuant to this act.
17326	(b) An applicant for certification as a certified capital
17327	company must file a verified application with the Department of
17328	Banking and Financeon or before December 1, 1998, a date
17329	determined in rules adopted pursuant to subsection (17) in the
17330	case of applicants for Program Two, in a form which the
17331	commissiondepartmentmay prescribe by rule. The applicant shall
17332	submit a nonrefundable application fee of $7,500 to the office
17333	department. The applicant shall provide:
17334	1. The name of the applicant and the address of its
17335	principal office and each office in this state.
17336	2. The applicant's form and place of organization and the
17337	relevant organizational documents, bylaws, and amendments or
17338	restatements of such documents, bylaws, or amendments.
17339	3. Evidence from the Department of State that the
17340	applicant is registered with the Department of State as required
17341	by law, maintains an active status with the Department of State,
17342	and has not been dissolved or had its registration revoked,
17343	canceled, or withdrawn.
17344	4. The applicant's proposed method of doing business.
17345	5. The applicant's financial condition and history,
17346	including an audit report on the financial statements prepared
17347	in accordance with generally accepted accounting principles. The
17348	applicant must have, at the time of application for
17349	certification, an equity capitalization of at least $500,000 in
17350	the form of cash or cash equivalents. The applicant must
17351	maintain this equity capitalization until the applicant receives
17352	an allocation of certified capital pursuant to this act. If the
17353	date of the application is more than 90 days after preparation
17354	of the applicant's fiscal year-end financial statements, the
17355	applicant may file financial statements reviewed by an
17356	independent certified public accountant for the period
17357	subsequent to the audit report, together with the audited
17358	financial statement for the most recent fiscal year. If the
17359	applicant has been in business less than 12 months, and has not
17360	prepared an audited financial statement, the applicant may file
17361	a financial statement reviewed by an independent certified
17362	public accountant.
17363	6. Copies of any offering materials used or proposed to be
17364	used by the applicant in soliciting investments of certified
17365	capital from certified investors.
17366	(c) Within 60 days after receipt of a verified
17367	application, the officedepartmentshall grant or deny
17368	certification as a certified capital company. If the office
17369	departmentdenies certification within the time period
17370	specified, the officedepartmentshall inform the applicant of
17371	the grounds for the denial. If the officedepartmenthas not
17372	granted or denied certification within the time specified, the
17373	application shall be deemed approved. The officedepartment
17374	shall approve the application if the officedepartmentfinds
17375	that:
17376	1. The applicant satisfies the requirements of paragraph
17377	(b).
17378	2. No evidence exists that the applicant has committed any
17379	act specified in paragraph (d).
17380	3. At least two of the principals have a minimum of 5
17381	years of experience making venture capital investments out of
17382	private equity funds, with not less than $20 million being
17383	provided by third-party investors for investment in the early
17384	stage of operating businesses. At least one full-time manager or
17385	principal of the certified capital company who has such
17386	experience must be primarily located in an office of the
17387	certified capital company which is based in this state.
17388	4. The applicant's proposed method of doing business and
17389	raising certified capital as described in its offering materials
17390	and other materials submitted to the officedepartmentconforms
17391	with the requirements of this section.
17392	(d) The officedepartmentmay deny certification or
17393	decertify a certified capital company if the grounds for
17394	decertification are not removed or corrected within 90 days
17395	after the notice of such grounds is received by the certified
17396	capital company. The officedepartmentmay deny certification or
17397	decertify a certified capital company if the certified capital
17398	company fails to maintain common stock or paid-in capital of at
17399	least $500,000, or if the officedepartmentdetermines that the
17400	applicant, or any principal or director of the certified capital
17401	company, has:
17402	1. Violated any provision of this section;
17403	2. Made a material misrepresentation or false statement or
17404	concealed any essential or material fact from any person during
17405	the application process or with respect to information and
17406	reports required of certified capital companies under this
17407	section;
17408	3. Been convicted of, or entered a plea of guilty or nolo
17409	contendere to, a crime against the laws of this state or any
17410	other state or of the United States or any other country or
17411	government, including a fraudulent act in connection with the
17412	operation of a certified capital company, or in connection with
17413	the performance of fiduciary duties in another capacity;
17414	4. Been adjudicated liable in a civil action on grounds of
17415	fraud, embezzlement, misrepresentation, or deceit; or
17416	5.a. Been the subject of any decision, finding,
17417	injunction, suspension, prohibition, revocation, denial,
17418	judgment, or administrative order by any court of competent
17419	jurisdiction, administrative law judge, or any state or federal
17420	agency, national securities, commodities, or option exchange, or
17421	national securities, commodities, or option association,
17422	involving a material violation of any federal or state
17423	securities or commodities law or any rule or regulation adopted
17424	under such law, or any rule or regulation of any national
17425	securities, commodities, or options exchange, or national
17426	securities, commodities, or options association; or
17427	b. Been the subject of any injunction or adverse
17428	administrative order by a state or federal agency regulating
17429	banking, insurance, finance or small loan companies, real
17430	estate, mortgage brokers, or other related or similar
17431	industries.
17432	(g) On or before December 31 of each year, each certified
17433	capital company shall pay to the officedepartmentan annual,
17434	nonrefundable renewal certification fee of $5,000. If a
17435	certified capital company fails to pay its renewal fee by the
17436	specified deadline, the company must pay a late fee of $5,000 in
17437	addition to the renewal fee on or by January 31 of each year in
17438	order to continue its certification in the program. On or before
17439	April 30 of each year, each certified capital company shall file
17440	audited financial statements with the officedepartment. No
17441	renewal fees shall be required within 6 months after the date of
17442	initial certification.
17443	(h) The commission and officedepartmentshall administer
17444	and provide for the enforcement of certification requirements
17445	for certified capital companies as provided in this act. The
17446	commissiondepartmentmay adopt any rules necessary to carry out
17447	its duties, obligations, and powers related to certification,
17448	renewal of certification, or decertification of certified
17449	capital companies and the commission and officemay perform any
17450	other acts necessary for the proper administration and
17451	enforcement of such duties, obligations, and powers.
17452	(5) INVESTMENTS BY CERTIFIED CAPITAL COMPANIES.--
17453	(b) All capital not invested in qualified investments by
17454	the certified capital company:
17455	1. Must be held in a financial institution as defined by
17456	s. 655.005(1)(h) or held by a broker-dealer registered under s.
17457	517.12, except as set forth in sub-subparagraph 3.g.
17458	2. Must not be invested in a certified investor of the
17459	certified capital company or any affiliate of the certified
17460	investor of the certified capital company, except for an
17461	investment permitted by sub-subparagraph 3.g., provided
17462	repayment terms do not permit the obligor to directly or
17463	indirectly manage or control the investment decisions of the
17464	certified capital company.
17465	3. Must be invested only in:
17466	a. Any United States Treasury obligations;
17467	b. Certificates of deposit or other obligations, maturing
17468	within 3 years after acquisition of such certificates or
17469	obligations, issued by any financial institution or trust
17470	company incorporated under the laws of the United States;
17471	c. Marketable obligations, maturing within 10 years or
17472	less after the acquisition of such obligations, which are rated
17473	"A" or better by any nationally recognized credit rating agency;
17474	d. Mortgage-backed securities, with an average life of 5
17475	years or less, after the acquisition of such securities, which
17476	are rated "A" or better by any nationally recognized credit
17477	rating agency;
17478	e. Collateralized mortgage obligations and real estate
17479	mortgage investment conduits that are direct obligations of an
17480	agency of the United States Government; are not private-label
17481	issues; are in book-entry form; and do not include the classes
17482	of interest only, principal only, residual, or zero;
17483	f. Interests in money market funds, the portfolio of which
17484	is limited to cash and obligations described in sub-
17485	subparagraphs a.-d.; or
17486	g. Obligations that are issued by an insurance company
17487	that is not a certified investor of the certified capital
17488	company making the investment, that has provided a guarantee
17489	indemnity bond, insurance policy, or other payment undertaking
17490	in favor of the certified capital company's certified investors
17491	as permitted by subparagraph (3)(l)(m)1. or an affiliate of such
17492	insurance company as defined by subparagraph (3)(a)3. that is
17493	not a certified investor of the certified capital company making
17494	the investment, provided that such obligations are:
17495	(I) Issued or guaranteed as to principal by an entity
17496	whose senior debt is rated "AA" or better by Standard & Poor's
17497	Ratings Group or such other nationally recognized credit rating
17498	agency as the commissiondepartmentmay by rule determine.
17499	(II) Not subordinated to other unsecured indebtedness of
17500	the issuer or the guarantor.
17501	(III) Invested by such issuing entity in accordance with
17502	sub-subparagraphs 3.a.-f.
17503	(IV) Readily convertible into cash within 5 business days
17504	for the purpose of making a qualified investment unless such
17505	obligations are held to provide a guarantee, indemnity bond,
17506	insurance policy, or other payment undertaking in favor of the
17507	certified capital company's certified investors as permitted by
17508	subparagraph (3)(l)(m)1.
17509	(7) ANNUAL TAX CREDIT; MAXIMUM AMOUNT; ALLOCATION
17510	PROCESS.--
17511	(a) The total amount of tax credits which may be allocated
17512	by the Office of Tourism, Trade, and Economic Developmentshall
17513	not exceed $150 million with respect to Program One and $150
17514	million with respect to Program Two. The total amount of tax
17515	credits which may be used by certified investors under this act
17516	shall not exceed $15 million annually with respect to credits
17517	earned under Program One and $15 million annually with respect
17518	to credits earned under Program Two.
17519	(b) The Office of Tourism, Trade, and Economic Development
17520	shall be responsible for allocating premium tax credits as
17521	provided for in this act to certified capital companies.
17522	(c) Each certified capital company must apply to the
17523	Office of Tourism, Trade, and Economic Developmentfor an
17524	allocation of premium tax credits for potential certified
17525	investors on a form developed by the Office of Tourism, Trade,
17526	and Economic Developmentwith the cooperation of the Department
17527	of Revenue. The form shall be accompanied by an affidavit from
17528	each potential certified investor confirming that the potential
17529	certified investor has agreed to make an investment of certified
17530	capital in a certified capital company up to a specified amount,
17531	subject only to the receipt of a premium tax credit allocation
17532	pursuant to this subsection. No certified capital company shall
17533	submit premium tax allocation claims on behalf of certified
17534	investors that in the aggregate would exceed the total dollar
17535	amount appropriated by the Legislature for the specific program.
17536	No allocation shall be made to the potential investors of a
17537	certified capital company under Program Two unless such
17538	certified capital company has filed premium tax allocation
17539	claims of not less than $15 million in the aggregate.
17540	(d) The Office of Tourism, Trade, and Economic Development
17541	shall inform each certified capital company of its share of
17542	total premium tax credits available for allocation to each of
17543	its potential investors.
17544	(e) If a certified capital company does not receive
17545	certified capital equaling the amount of premium tax credits
17546	allocated to a potential certified investor for which the
17547	investor filed a premium tax allocation claim within 10 business
17548	days after the investor received a notice of allocation, the
17549	certified capital company shall notify the Office of Tourism,
17550	Trade, and Economic Developmentby overnight common carrier
17551	delivery service of the company's failure to receive the
17552	capital. That portion of the premium tax credits allocated to
17553	the certified capital company shall be forfeited. If the Office
17554	of Tourism, Trade, and Economic Developmentmust make a pro rata
17555	allocation under paragraph (f), thattheoffice shall reallocate
17556	such available credits among the other certified capital
17557	companies on the same pro rata basis as the initial allocation.
17558	(f) If the total amount of capital committed by all
17559	certified investors to certified capital companies in premium
17560	tax allocation claims under Program Two exceeds the aggregate
17561	cap on the amount of credits that may be awarded under Program
17562	Two, the premium tax credits that may be allowed to any one
17563	certified investor under Program Two shall be allocated using
17564	the following ratio:
17565	A/B = X/>$150,000,000
17566
17567
17568	where the letter "A" represents the total amount of certified
17569	capital certified investors have agreed to invest in any one
17570	certified capital company under Program Two, the letter "B"
17571	represents the aggregate amount of certified capital that all
17572	certified investors have agreed to invest in all certified
17573	capital companies under Program Two, the letter "X" is the
17574	numerator and represents the total amount of premium tax credits
17575	and certified capital that may be allocated to a certified
17576	capital company on a date determined by rule adopted by the
17577	commissiondepartmentpursuant to subsection (17), and $150
17578	million is the denominator and represents the total amount of
17579	premium tax credits and certified capital that may be allocated
17580	to all certified investors under Program Two. Any such premium
17581	tax credits are not first available for utilization until annual
17582	filings are made in 2001 for calendar year 2000 in the case of
17583	Program One, and the tax credits may be used at a rate not to
17584	exceed 10 percent annually per program.
17585	(g) The maximum amount of certified capital for which
17586	premium tax allocation claims may be filed on behalf of any
17587	certified investor and its affiliates by one or more certified
17588	capital companies may not exceed $15 million for Program One and
17589	$22.5 million for Program Two.
17590	(h) To the extent that less than $150 million in certified
17591	capital is raised in connection with the procedure set forth in
17592	paragraphs (c)-(g), the commissiondepartmentmay adopt rules to
17593	allow a subsequent allocation of the remaining premium tax
17594	credits authorized under this section.
17595	(i) The Office of Tourism, Trade, and Economic Development
17596	shall issue a certification letter for each certified investor,
17597	showing the amount invested in the certified capital company
17598	under each program. The applicable certified capital company
17599	shall attest to the validity of the certification letter.
17600	(8) ANNUAL TAX CREDIT; CLAIM PROCESS.--
17601	(a) On an annual basis, on or before January 31, each
17602	certified capital company shall file with the officedepartment
17603	and the Office of Tourism, Trade, and Economic Development, in
17604	consultation with the officedepartment, on a form prescribed by
17605	the Office of Tourism, Trade, and Economic Development, for each
17606	calendar year:
17607	1. The total dollar amount the certified capital company
17608	received from certified investors, the identity of the certified
17609	investors, and the amount received from each certified investor
17610	during the immediately preceding calendar year.
17611	2. The total dollar amount the certified capital company
17612	invested and the amount invested in qualified businesses,
17613	together with the identity and location of those businesses and
17614	the amount invested in each qualified business during the
17615	immediately preceding calendar year.
17616	3. For informational purposes only, the total number of
17617	permanent, full-time jobs either created or retained by the
17618	qualified business during the immediately preceding calendar
17619	year, the average wage of the jobs created or retained, the
17620	industry sectors in which the qualified businesses operate, and
17621	any additional capital invested in qualified businesses from
17622	sources other than certified capital companies.
17623	(c) The Office of Tourism, Trade, and Economic Development
17624	shall review the form, and any supplemental documentation,
17625	submitted by each certified capital company for the purpose of
17626	verifying:
17627	1. That the businesses in which certified capital has been
17628	invested by the certified capital company are in fact qualified
17629	businesses, and that the amount of certified capital invested by
17630	the certified capital company is as represented in the form.
17631	2. The amount of certified capital invested in the
17632	certified capital company by the certified investors.
17633	3. The amount of premium tax credit available to certified
17634	investors.
17635	(9) REQUIREMENT FOR 100 PERCENT INVESTMENT; STATE
17636	PARTICIPATION.--
17637	(b) Cumulative distributions from a certified capital
17638	company from funds related to a particular program to its
17639	certified investors and equity holders under such program, other
17640	than qualified distributions, in excess of the certified capital
17641	company's original certified capital raised under such program
17642	and any additional capital contributions to the certified
17643	capital company with respect to such program may be audited by a
17644	nationally recognized certified public accounting firm
17645	acceptable to the officedepartment, at the expense of the
17646	certified capital company, if the officedepartmentdirects such
17647	audit be conducted. The audit shall determine whether aggregate
17648	cumulative distributions from the funds related to a particular
17649	program made by the certified capital company to all certified
17650	investors and equity holders under such program, other than
17651	qualified distributions, have equaled the sum of the certified
17652	capital company's original certified capital raised under such
17653	program and any additional capital contributions to the
17654	certified capital company with respect to such program. If at
17655	the time of any such distribution made by the certified capital
17656	company, such distribution taken together with all other such
17657	distributions from the funds related to such program made by the
17658	certified capital company, other than qualified distributions,
17659	exceeds in the aggregate the sum of the certified capital
17660	company's original certified capital raised under such program
17661	and any additional capital contributions to the certified
17662	capital company with respect to such program, as determined by
17663	the audit, the certified capital company shall pay to the
17664	Department of Revenue 10 percent of the portion of such
17665	distribution in excess of such amount. Payments to the
17666	Department of Revenue by a certified capital company pursuant to
17667	this paragraph shall not exceed the aggregate amount of tax
17668	credits used by all certified investors in such certified
17669	capital company for such program.
17670	(10) DECERTIFICATION.--
17671	(a) The officedepartmentshall conduct an annual review
17672	of each certified capital company to determine if the certified
17673	capital company is abiding by the requirements of certification,
17674	to advise the certified capital company as to the eligibility
17675	status of its qualified investments, and to ensure that no
17676	investment has been made in violation of this act. The cost of
17677	the annual review shall be paid by each certified capital
17678	company.
17679	(b) Nothing contained in this subsection shall be
17680	construed to limit the Chief Financial Officer's or the office's
17681	Comptroller'sauthority to conduct audits of certified capital
17682	companies as deemed appropriate and necessary.
17683	(c) Any material violation of this section, or a finding
17684	that the certified capital company or any principal or director
17685	thereof has committed any act specified in paragraph (4)(d),
17686	shall be grounds for decertification of the certified capital
17687	company. If the officedepartmentdetermines that a certified
17688	capital company is no longer in compliance with the
17689	certification requirements of this act, the officedepartment
17690	shall, by written notice, inform the officers of such company
17691	that the company may be subject to decertification 90 days after
17692	the date of mailing of the notice, unless the deficiencies are
17693	corrected and such company is again found to be in compliance
17694	with all certification requirements.
17695	(d) At the end of the 90-day grace period, if the
17696	certified capital company is still not in compliance with the
17697	certification requirements, the officedepartmentmay issue a
17698	notice to revoke or suspend the certification or to impose an
17699	administrative fine. The officedepartmentshall advise each
17700	respondent of the right to an administrative hearing under
17701	chapter 120 prior to final action by the officedepartment.
17702	(e) If the officedepartmentrevokes a certification, such
17703	revocation shall also deny, suspend, or revoke the
17704	certifications of all affiliates of the certified capital
17705	company.
17706	(h) The Office of Tourism, Trade, and Economic Development
17707	shall send written notice to the address of each certified
17708	investor whose premium tax credit has been subject to recapture
17709	or forfeiture, using the address last shown on the last premium
17710	tax filing.
17711	(j) The certified investor shall file with the Department
17712	of Revenue an amended return or such other report as the
17713	commissiondepartment may prescribe by ruleregulationand pay
17714	any required tax, not later than 60 days after such
17715	decertification has been agreed to or finally determined,
17716	whichever shall first occur.
17717	(12) REPORTING REQUIREMENTS.--The Office of Tourism,
17718	Trade, and Economic Developmentshall report on an annual basis
17719	to the Governor, the President of the Senate, and the Speaker of
17720	the House of Representatives on or before April 1:
17721	(a) The total dollar amount each certified capital company
17722	received from all certified investors and any other investor,
17723	the identity of the certified investors, and the total amount of
17724	premium tax credit used by each certified investor for the
17725	previous calendar year.
17726	(b) The total dollar amount invested by each certified
17727	capital company and that portion invested in qualified
17728	businesses, the identity and location of those businesses, the
17729	amount invested in each qualified business, and the total number
17730	of permanent, full-time jobs created or retained by each
17731	qualified business.
17732	(c) The return for the state as a result of the certified
17733	capital company investments, including the extent to which:
17734	1. Certified capital company investments have contributed
17735	to employment growth.
17736	2. The wage level of businesses in which certified capital
17737	companies have invested exceed the average wage for the county
17738	in which the jobs are located.
17739	3. The investments of the certified capital companies in
17740	qualified businesses have contributed to expanding or
17741	diversifying the economic base of the state.
17742	(13) FEES.--All fees and charges of any nature collected
17743	by the officedepartmentpursuant to this act shall be paid into
17744	the State Treasury and credited to the General Revenue Fund.
17745	(14) RULEMAKING AUTHORITY.--
17746	(a) The Department of Revenue may by rule prescribe forms
17747	and procedures for the tax credit filings, audits, and
17748	forfeiture of premium tax credits described in this section, and
17749	for certified capital company payments under paragraph (9)(b).
17750	(b) The commission and the Office of Tourism, Trade, and
17751	Economic Development may adopt any rules necessary to carry out
17752	their respectiveitsduties, obligations, and powers related to
17753	the administration, review, and reporting provisions of this
17754	section and may perform any other acts necessary for the proper
17755	administration and enforcement of such duties, obligations, and
17756	powers.
17757	(15)(a) CONFIDENTIALITY OF INVESTIGATION AND REVIEW
17758	INFORMATION.--Except as otherwise provided by this section, any
17759	information relating to an investigation or officedepartment
17760	review of a certified capital company, including any consumer
17761	complaint, is confidential and exempt from the provisions of s.
17762	119.07(1) and s. 24(a), Art. I of the State Constitution until
17763	the investigation or review is complete or ceases to be active.
17764	Such information shall remain confidential and exempt from the
17765	provisions of s. 119.07(1) and s. 24(a), Art. I of the State
17766	Constitution after the investigation or review is complete or
17767	ceases to be active if the information is submitted to any law
17768	enforcement or administrative agency for further investigation,
17769	and shall remain confidential and exempt from the provisions of
17770	s. 119.07(1) and s. 24(a), Art. I of the State Constitution
17771	until that agency's investigation is complete or ceases to be
17772	active. For purposes of this subsection, an investigation or
17773	review shall be considered "active" so long as the office
17774	department, a law enforcement agency, or an administrative
17775	agency is proceeding with reasonable dispatch and has a
17776	reasonable good faith belief that the investigation may lead to
17777	the filing of an administrative, civil, or criminal proceeding.
17778	This section shall not be construed to prohibit disclosure of
17779	information which is required by law to be filed with the office
17780	departmentand which, but for the investigation, would otherwise
17781	be subject to s. 119.07(1).
17782	(c) Nothing in this section shall be construed to prohibit
17783	the officedepartmentfrom providing information to any law
17784	enforcement or administrative agency. Any law enforcement or
17785	administrative agency receiving confidential information in
17786	connection with its official duties shall maintain the
17787	confidentiality of the information so long as it would otherwise
17788	be confidential.
17789	(d) In the event officedepartmentpersonnel are or have
17790	been involved in an investigation or review of such nature as to
17791	endanger their lives or physical safety or that of their
17792	families, the home addresses, telephone numbers, places of
17793	employment, and photographs of such personnel, together with the
17794	home addresses, telephone numbers, photographs, and places of
17795	employment of spouses and children of such personnel and the
17796	names and locations of schools and day care facilities attended
17797	by the children of such personnel are confidential and exempt
17798	from s. 119.07(1).
17799	(e) All information obtained by the officedepartmentfrom
17800	any person which is only made available to the officedepartment
17801	on a confidential or similarly restricted basis shall be
17802	confidential and exempt from s. 119.07(1). This exemption shall
17803	not be construed to prohibit disclosure of information which is
17804	specifically required by law to be filed with the office
17805	departmentor which is otherwise subject to s. 119.07(1).
17806	(g) A privilege against civil liability is granted to a
17807	person with regard to information or evidence furnished to the
17808	officedepartment, unless such person acts in bad faith or with
17809	malice in providing such information or evidence.
17810	(17) Notwithstanding the limitations set forth in
17811	paragraph (7)(a), in the first fiscal year in which the total
17812	insurance premium tax collections as determined by the Revenue
17813	Estimating Conference exceed collections for fiscal year 2000-
17814	2001 by more than the total amount of tax credits issued
17815	pursuant to this section which were used by certified investors
17816	in that year, the Office of Tourism, Trade, and Economic
17817	Developmentmay allocate to certified investors in accordance
17818	with paragraph (7)(a) tax credits for Program Two. The
17819	commissiondepartmentshall establish, by rule, a date and
17820	procedures by which certified capital companies must file
17821	applications for allocations of such additional premium tax
17822	credits, which date shall be no later than 180 days from the
17823	date of determination by the Revenue Estimating Conference. With
17824	respect to new certified capital invested and premium tax
17825	credits earned pursuant to this subsection, the schedule
17826	specified in subparagraphs (5)(a)1.-4. is satisfied by
17827	investments by December 31 of the 2nd, 3rd, 4th, and 5th
17828	calendar year, respectively, after the date established by the
17829	commissiondepartmentfor applications of additional premium tax
17830	credits. The commissiondepartmentshall adopt rules by which an
17831	entity not already certified as a certified capital company may
17832	apply for certification as a certified capital company for
17833	participation in this additional allocation. The insurance
17834	premium tax credit authorized by Program Two may not be used by
17835	certified investors until the annual return due March 1, 2004,
17836	and may be used on all subsequent returns and estimated
17837	payments; however, notwithstanding the provisions of s.
17838	624.5092(2)(b), the installments of taxes due and payable on
17839	April 15, 2004, and June 15, 2004, shall be based on the net tax
17840	due in 2003 not taking into account credits granted pursuant to
17841	this section for Program Two.
17842	Section 344. Paragraph (c) of subsection (1) of section
17843	289.051, Florida Statutes, is amended to read:
17844	289.051 Membership of financial institutions; loans to
17845	corporation, limitations.--
17846	(1) Any financial institution may request membership in
17847	the corporation by making application to the board of directors
17848	on such form and in such manner as said board of directors may
17849	require, and membership shall become effective upon acceptance
17850	of such application by said board. Each member of the
17851	corporation shall make loans to the corporation as and when
17852	called upon by it to do so, on such terms and other conditions
17853	as shall be approved from time to time by the board of
17854	directors, subject to the following conditions:
17855	(c) The total amount outstanding on loans to the
17856	corporation made by any member at any one time, when added to
17857	the amount of the investment in the capital stock of the
17858	corporation then held by such member, shall not exceed:
17859	1. Twenty percent of the total amount then outstanding on
17860	loans to the corporation by all members, including, in said
17861	total amount outstanding, amounts validly called for loan but
17862	not yet loaned.
17863	2. The following limit, to be determined as of the time
17864	such member becomes a member on the basis of the audited balance
17865	sheet of such member at the close of its fiscal year immediately
17866	preceding its application for membership, or, in the case of an
17867	insurance company, its last annual statement to the Office of
17868	Insurance Regulation of the Financial Services Commission
17869	Department of Insurance: 2.5 percent of the capital and surplus
17870	of commercial banks and trust companies; 0.5 percent of the
17871	total outstanding loans made by savings and loan associations
17872	and building and loan associations; 2.5 percent of the capital
17873	and unassigned surplus of stock insurance companies, except fire
17874	insurance companies; 2.5 percent of the unassigned surplus of
17875	mutual insurance companies, except fire insurance companies; 0.1
17876	percent of the assets of fire insurance companies; and such
17877	limits as may be approved by the board of directors of the
17878	corporation for other financial institutions.
17879	Section 345. Subsection (1) of section 289.081, Florida
17880	Statutes, is amended to read:
17881	289.081 Amendments to articles of incorporation.--
17882	(1) The articles of incorporation may be amended by the
17883	votes of the stockholders and the members of the corporation,
17884	voting separately by classes, and such amendments shall require
17885	approval by the affirmative vote of two-thirds of the votes to
17886	which the stockholders shall be entitled and two-thirds of the
17887	votes to which the members shall be entitled. No amendment of
17888	the articles of incorporation which is inconsistent with the
17889	general purposes expressed herein, or which authorizes any
17890	additional class of capital stock to be issued, or which
17891	eliminates or curtails the right of the Office of Financial
17892	Institutions and Securities Regulation of the Financial Services
17893	CommissionDepartment of Banking and Financeto examine the
17894	corporation or the obligation of the corporation to make reports
17895	as provided in s. 289.121, shall be made. No amendment of the
17896	articles of incorporation which increases the obligation of a
17897	member to make loans to the corporation, or makes any change in
17898	the principal amount, interest rate, maturity date, or in the
17899	security or credit position of any outstanding loan of a member
17900	to the corporation, or affects a member's right to withdraw from
17901	membership as provided herein, or affects a member's voting
17902	rights as provided herein, shall be made without the consent of
17903	each member affected by such amendment.
17904	Section 346. Section 289.121, Florida Statutes, is amended
17905	to read:
17906	289.121 Periodic examinations; reports.--The corporation
17907	shall be examined at least once annually by the Office of
17908	Financial Institutions and Securities Regulation of the
17909	Financial Services CommissionDepartment of Banking and Finance
17910	and shall make reports of its condition not less than annually
17911	to that officesaid departmentand more frequently upon call of
17912	the officedepartment, which in turn shall make copies of such
17913	reports available to the Office of Insurance Regulation of the
17914	Financial Services CommissionDepartment of Insuranceand the
17915	Governor; and the corporation shall also furnish such other
17916	information as may from time to time be required by the Office
17917	of Financial Institutions and Securities RegulationDepartment
17918	of Banking and Financeand Department of State. The corporation
17919	shall pay the actual cost of said examinations. The office
17920	Department of Banking and Financeshall exercise the same power
17921	and authority over corporations organized under this act as is
17922	exercised over financial institutions under the provisions of
17923	the financial institutions codes, when such codes are not in
17924	conflict with this act.
17925	Section 347. Paragraph (d) of subsection (1) of section
17926	420.101, Florida Statutes, is amended to read:
17927	420.101 Housing Development Corporation of Florida;
17928	creation, membership, and purposes.--
17929	(1) Twenty-five or more persons, a majority of whom shall
17930	be residents of this state, who may desire to create a housing
17931	development corporation under the provisions of this part for
17932	the purpose of promoting and developing housing and advancing
17933	the prosperity and economic welfare of the state and, to that
17934	end, to exercise the powers and privileges hereinafter provided,
17935	may be incorporated by filing in the Department of State, as
17936	hereinafter provided, articles of incorporation. The articles
17937	of incorporation shall contain:
17938	(d) The names and post office addresses of the members of
17939	the first board of directors. The first board of directors shall
17940	be elected by and from the stockholders of the corporation and
17941	shall consist of 21 members. However, fourfiveof such members
17942	shall consist of the following persons, who shall be nonvoting
17943	members: the secretary of the Department of Community Affairs or
17944	her or his designee; the head of the Department of Financial
17945	ServicesBanking and Finance or her or his designee; the head of
17946	the Department of Insurance or her or his designee;one state
17947	senator appointed by the President of the Senate; and one
17948	representative appointed by the Speaker of the House of
17949	Representatives.
17950	Section 348. Section 494.00125, Florida Statutes, is
17951	amended to read:
17952	494.00125 Confidentiality of information relating to
17953	investigations and examinations.--
17954	(1)(a) Except as otherwise provided by this section,
17955	information relative to an investigation or examination by the
17956	officedepartmentpursuant to this chapter, including any
17957	consumer complaint received by the office or the Department of
17958	Financial Services, is confidential and exempt from s. 119.07(1)
17959	until the investigation or examination is completed or ceases to
17960	be active. The information compiled by the officedepartmentin
17961	such an investigation or examination shall remain confidential
17962	and exempt from s. 119.07(1) after the office'sdepartment's
17963	investigation or examination is completed or ceases to be active
17964	if the officedepartmentsubmits the information to any law
17965	enforcement or administrative agency for further investigation.
17966	Such information shall remain confidential and exempt from s.
17967	119.07(1) until that agency's investigation is completed or
17968	ceases to be active. For purposes of this section, an
17969	investigation or examination shall be considered "active" so
17970	long as the officedepartmentor any law enforcement or
17971	administrative agency is proceeding with reasonable dispatch and
17972	has a reasonable good faith belief that the investigation or
17973	examination may lead to the filing of an administrative, civil,
17974	or criminal proceeding or to the denial or conditional grant of
17975	a license. This section shall not be construed to prohibit
17976	disclosure of information which is required by law to be filed
17977	with the officedepartmentand which, but for the investigation
17978	or examination, would be subject to s. 119.07(1).
17979	(b) Except as necessary for the officedepartmentto
17980	enforce the provisions of this chapter, a consumer complaint and
17981	other information relative to an investigation or examination
17982	shall remain confidential and exempt from s. 119.07(1) after the
17983	investigation or examination is completed or ceases to be active
17984	to the extent disclosure would:
17985	1. Jeopardize the integrity of another active
17986	investigation or examination.
17987	2. Reveal the name, address, telephone number, social
17988	security number, or any other identifying number or information
17989	of any complainant, customer, or account holder.
17990	3. Disclose the identity of a confidential source.
17991	4. Disclose investigative techniques or procedures.
17992	5. Reveal a trade secret as defined in s. 688.002.
17993	(c) In the event that officedepartmentpersonnel are or
17994	have been involved in an investigation or examination of such
17995	nature as to endanger their lives or physical safety or that of
17996	their families, then the home addresses, telephone numbers,
17997	places of employment, and photographs of such personnel,
17998	together with the home addresses, telephone numbers,
17999	photographs, and places of employment of spouses and children of
18000	such personnel and the names and locations of schools and day
18001	care facilities attended by the children of such personnel are
18002	confidential and exempt from s. 119.07(1).
18003	(d) Nothing in this section shall be construed to prohibit
18004	the officedepartmentfrom providing information to any law
18005	enforcement or administrative agency. Any law enforcement or
18006	administrative agency receiving confidential information in
18007	connection with its official duties shall maintain the
18008	confidentiality of the information so long as it would otherwise
18009	be confidential.
18010	(e) All information obtained by the officedepartmentfrom
18011	any person which is only made available to the officedepartment
18012	on a confidential or similarly restricted basis shall be
18013	confidential and exempt from s. 119.07(1). This exemption shall
18014	not be construed to prohibit disclosure of information which is
18015	required by law to be filed with the officedepartmentor which
18016	is otherwise subject to s. 119.07(1).
18017	(2) If information subject to subsection (1) is offered in
18018	evidence in any administrative, civil, or criminal proceeding,
18019	the presiding officer may, in her or his discretion, prevent the
18020	disclosure of information which would be confidential pursuant
18021	to paragraph (1)(b).
18022	(3) A privilege against civil liability is granted to a
18023	person who furnishes information or evidence to the office
18024	department, unless such person acts in bad faith or with malice
18025	in providing such information or evidence.
18026	Section 349. Subsection (7) of section 494.00421, Florida
18027	Statutes, is amended to read:
18028	494.00421 Fees earned upon obtaining a bona fide
18029	commitment.--Notwithstanding the provisions of ss. 494.001-
18030	494.0077, any mortgage brokerage business which contracts to
18031	receive from a borrower a mortgage brokerage fee upon obtaining
18032	a bona fide commitment shall accurately disclose in the mortgage
18033	brokerage agreement:
18034	(7)(a) The following statement, in no less than 12-point
18035	boldface type immediately above the signature lines for the
18036	borrowers:
18037
18038
18039	"You are entering into a contract with a mortgage brokerage
18040	business to obtain a bona fide mortgage loan commitment under
18041	the same terms and conditions as stated hereinabove or in a
18042	separate executed good faith estimate form. If the mortgage
18043	brokerage business obtains a bona fide commitment under the same
18044	terms and conditions, you will be obligated to pay the mortgage
18045	brokerage business fees, including, but not limited to, a
18046	mortgage brokerage fee, even if you choose not to complete the
18047	loan transaction. If the provisions of s. 494.00421, Florida
18048	Statutes, are not met, the mortgage brokerage fee can only be
18049	earned upon the funding of the mortgage loan. The borrower may
18050	contact the Department of Financial ServicesBanking and
18051	Finance, Tallahassee, Florida, regarding any complaints that the
18052	borrower may have against the mortgage broker or the mortgage
18053	brokerage business. The telephone number of the department as
18054	set by rule of the departmentis: . . . [insert telephone
18055	number] . . . ."
18056	(b) Paragraph (a) does not apply to nonresidential
18057	mortgage loan commitments in excess of $1 million.
18058	Section 350. Subsection (7) of section 517.021, Florida
18059	Statutes, is amended, present subsections (8)-(20) of said
18060	section are renumbered as subsections (9)-(21), respectively,
18061	and a new subsection (8) is added to that section to read:
18062	517.021 Definitions.--When used in this chapter, unless
18063	the context otherwise indicates, the following terms have the
18064	following respective meanings:
18065	(7) "Commission" means the Financial Services Commission
18066	"Department" means the Department of Banking and Finance.
18067	(8) "Office" means the Office of Financial Institutions
18068	and Securities Regulation of the commission.
18069	Section 351. Section 517.03, Florida Statutes, is amended
18070	to read:
18071	517.03 Rulemaking; immunity for acts in conformity with
18072	rules.--
18073	(1) The officeDepartment of Banking and Financeshall
18074	administer and provide for the enforcement of all the provisions
18075	of this chapter. The commission maydepartment has authority to
18076	adopt rules pursuant to ss. 120.536(1) and 120.54 to implement
18077	the provisions of this chapter conferring powers or duties upon
18078	the officeit, including, without limitation, adopting rules and
18079	forms governing reports. The commissiondepartmentshall also
18080	have the nonexclusive power to define by rule any term, whether
18081	or not used in this chapter, insofar as the definition is not
18082	inconsistent with the provisions of this chapter.
18083	(2) No provision of this chapter imposing liability shall
18084	apply to an act done, or omitted to be done, in conformity with
18085	a rule of the commissiondepartmentin existence at the time of
18086	the act or omission, even though such rule may thereafter be
18087	amended or repealed or determined by judicial or other authority
18088	to be invalid for any reason.
18089	Section 352. Section 517.051, Florida Statutes, is amended
18090	to read:
18091	517.051 Exempt securities.--The exemptions provided herein
18092	from the registration requirements of s. 517.07 are self-
18093	executing and do not require any filing with the office
18094	departmentprior to claiming such exemption. Any person who
18095	claims entitlement to any of these exemptions bears the burden
18096	of proving such entitlement in any proceeding brought under this
18097	chapter. The registration provisions of s. 517.07 do not apply
18098	to any of the following securities:
18099	(1) A security issued or guaranteed by the United States
18100	or any territory or insular possession of the United States, by
18101	the District of Columbia, or by any state of the United States
18102	or by any political subdivision or agency or other
18103	instrumentality thereof; provided that no person shall directly
18104	or indirectly offer or sell securities, other than general
18105	obligation bonds, under this subsection if the issuer or
18106	guarantor is in default or has been in default any time after
18107	December 31, 1975, as to principal or interest:
18108	(a) With respect to an obligation issued by the issuer or
18109	successor of the issuer; or
18110	(b) With respect to an obligation guaranteed by the
18111	guarantor or successor of the guarantor,
18112
18113	except by an offering circular containing a full and fair
18114	disclosure as prescribed by rule of the commissiondepartment.
18115	(2) A security issued or guaranteed by any foreign
18116	government with which the United States is maintaining
18117	diplomatic relations at the time of the sale or offer of sale of
18118	the security, or by any state, province, or political
18119	subdivision thereof having the power of taxation or assessment,
18120	which security is recognized at the time it is offered for sale
18121	in this state as a valid obligation by such foreign government
18122	or by such state, province, or political subdivision thereof
18123	issuing the security.
18124	(3) A security issued or guaranteed by:
18125	(a) A national bank, a federally chartered savings and
18126	loan association, or a federally chartered savings bank, or the
18127	initial subscription for equity securities in such national
18128	bank, federally chartered savings and loan association, or
18129	federally chartered savings bank;
18130	(b) Any federal land bank, joint-stock land bank, or
18131	national farm loan association under the provisions of the
18132	Federal Farm Loan Act of July 17, 1916;
18133	(c) An international bank of which the United States is a
18134	member; or
18135	(d) A corporation created and acting as an instrumentality
18136	of the government of the United States.
18137	(4) A security issued or guaranteed, as to principal,
18138	interest, or dividend, by a corporation owning or operating a
18139	railroad or any other public service utility; provided that such
18140	corporation is subject to regulation or supervision whether as
18141	to its rates and charges or as to the issue of its own
18142	securities by a public commission, board, or officer of the
18143	government of the United States, of any state, territory, or
18144	insular possession of the United States, of any municipality
18145	located therein, of the District of Columbia, or of the Dominion
18146	of Canada or of any province thereof; also equipment securities
18147	based on chattel mortgages, leases, or agreements for
18148	conditional sale of cars, motive power, or other rolling stock
18149	mortgaged, leased, or sold to or furnished for the use of or
18150	upon such railroad or other public service utility corporation
18151	or where the ownership or title of such equipment is pledged or
18152	retained in accordance with the provisions of the laws of the
18153	United States or of any state or of the Dominion of Canada to
18154	secure the payment of such equipment securities; and also bonds,
18155	notes, or other evidences of indebtedness issued by a holding
18156	corporation and secured by collateral consisting of any
18157	securities hereinabove described; provided, further, that the
18158	collateral securities equal in fair value at least 125 percent
18159	of the par value of the bonds, notes, or other evidences of
18160	indebtedness so secured.
18161	(5) A security issued or guaranteed by any of the
18162	following which are subject to the examination, supervision, or
18163	control of this state or of the Federal Deposit Insurance
18164	Corporation or the National Credit Union Association:
18165	(a) A bank,
18166	(b) A trust company,
18167	(c) A savings institution,
18168	(d) A building or savings and loan association,
18169	(e) An international development bank, or
18170	(f) A credit union;
18171
18172	or the initial subscription for equity securities of any
18173	institution listed in paragraphs (a)-(f), provided such
18174	institution is subject to the examination, supervision, or
18175	control of this state.
18176	(6) A security, other than common stock, providing for a
18177	fixed return, which security has been outstanding in the hands
18178	of the public for a period of not less than 5 years, and upon
18179	which security no default in payment of principal or failure to
18180	pay the fixed return has occurred for an immediately preceding
18181	period of 5 years.
18182	(7) Securities of nonprofit agricultural cooperatives
18183	organized under the laws of this state when the securities are
18184	sold or offered for sale to persons principally engaged in
18185	agricultural production or selling agricultural products.
18186	(8) A note, draft, bill of exchange, or banker's
18187	acceptance having a unit amount of $25,000 or more which arises
18188	out of a current transaction, or the proceeds of which have been
18189	or are to be used for current transactions, and which has a
18190	maturity period at the time of issuance not exceeding 9 months
18191	exclusive of days of grace, or any renewal thereof which has a
18192	maturity period likewise limited. This subsection applies only
18193	to prime quality negotiable commercial paper of a type not
18194	ordinarily purchased by the general public; that is, paper
18195	issued to facilitate well-recognized types of current
18196	operational business requirements and of a type eligible for
18197	discounting by Federal Reserve banks.
18198	(9) A security issued by a corporation organized and
18199	operated exclusively for religious, educational, benevolent,
18200	fraternal, charitable, or reformatory purposes and not for
18201	pecuniary profit, no part of the net earnings of which
18202	corporation inures to the benefit of any private stockholder or
18203	individual, or any security of a fund that is excluded from the
18204	definition of an investment company under s. 3(c)(10)(B) of the
18205	Investment Company Act of 1940; provided that no person shall
18206	directly or indirectly offer or sell securities under this
18207	subsection except by an offering circular containing full and
18208	fair disclosure, as prescribed by the rules of the commission
18209	department, of all material information, including, but not
18210	limited to, a description of the securities offered and terms of
18211	the offering, a description of the nature of the issuer's
18212	business, a statement of the purpose of the offering and the
18213	intended application by the issuer of the proceeds thereof, and
18214	financial statements of the issuer prepared in conformance with
18215	generally accepted accounting principles. Section 6(c) of the
18216	Philanthropy Protection Act of 1995, Pub. L. No. 104-62, shall
18217	not preempt any provision of this chapter.
18218	(10) Any insurance or endowment policy or annuity contract
18219	or optional annuity contract or self-insurance agreement issued
18220	by a corporation, insurance company, reciprocal insurer, or risk
18221	retention group subject to the supervision of the insurance
18222	regulatorcommissioner or bank regulatorcommissioner, or any
18223	agency or officer performing like functions, of any state or
18224	territory of the United States or the District of Columbia.
18225	Section 353. Section 517.061, Florida Statutes, is amended
18226	to read:
18227	517.061 Exempt transactions.--The exemption for each
18228	transaction listed below is self-executing and does not require
18229	any filing with the officedepartmentprior to claiming such
18230	exemption. Any person who claims entitlement to any of the
18231	exemptions bears the burden of proving such entitlement in any
18232	proceeding brought under this chapter. The registration
18233	provisions of s. 517.07 do not apply to any of the following
18234	transactions; however, such transactions are subject to the
18235	provisions of ss. 517.301, 517.311, and 517.312:
18236	(1) At any judicial, executor's, administrator's,
18237	guardian's, or conservator's sale, or at any sale by a receiver
18238	or trustee in insolvency or bankruptcy, or any transaction
18239	incident to a judicially approved reorganization in which a
18240	security is issued in exchange for one or more outstanding
18241	securities, claims, or property interests.
18242	(2) By or for the account of a pledgeholder or mortgagee
18243	selling or offering for sale or delivery in the ordinary course
18244	of business and not for the purposes of avoiding the provisions
18245	of this chapter, to liquidate a bona fide debt, a security
18246	pledged in good faith as security for such debt.
18247	(3) The isolated sale or offer for sale of securities when
18248	made by or on behalf of a vendor not the issuer or underwriter
18249	of the securities, who, being the bona fide owner of such
18250	securities, disposes of her or his own property for her or his
18251	own account, and such sale is not made directly or indirectly
18252	for the benefit of the issuer or an underwriter of such
18253	securities or for the direct or indirect promotion of any scheme
18254	or enterprise with the intent of violating or evading any
18255	provision of this chapter. For purposes of this subsection,
18256	isolated offers or sales include, but are not limited to, an
18257	isolated offer or sale made by or on behalf of a vendor of
18258	securities not the issuer or underwriter of the securities if:
18259	(a) The offer or sale of securities is in a transaction
18260	satisfying all of the requirements of subparagraphs (11)(a)1.,
18261	2., 3., and 4. and paragraph(11)(b); or
18262	(b) The offer or sale of securities is in a transaction
18263	exempt under s. 4(1) of the Securities Act of 1933, as amended.
18264
18265	For purposes of this subsection, any person, including, without
18266	limitation, a promoter or affiliate of an issuer, shall not be
18267	deemed an underwriter, an issuer, or a person acting for the
18268	direct or indirect benefit of the issuer or an underwriter with
18269	respect to any securities of the issuer which she or he has
18270	owned beneficially for at least 1 year.
18271	(4) The distribution by a corporation, trust, or
18272	partnership, actively engaged in the business authorized by its
18273	charter or other organizational articles or agreement, of
18274	securities to its stockholders or other equity security holders,
18275	partners, or beneficiaries as a stock dividend or other
18276	distribution out of earnings or surplus.
18277	(5) The issuance of securities to such equity security
18278	holders or other creditors of a corporation, trust, or
18279	partnership in the process of a reorganization of such
18280	corporation or entity, made in good faith and not for the
18281	purpose of avoiding the provisions of this chapter, either in
18282	exchange for the securities of such equity security holders or
18283	claims of such creditors or partly for cash and partly in
18284	exchange for the securities or claims of such equity security
18285	holders or creditors.
18286	(6) Any transaction involving the distribution of the
18287	securities of an issuer exclusively among its own security
18288	holders, including any person who at the time of the transaction
18289	is a holder of any convertible security, any nontransferable
18290	warrant, or any transferable warrant which is exercisable within
18291	not more than 90 days of issuance, when no commission or other
18292	remuneration is paid or given directly or indirectly in
18293	connection with the sale or distribution of such additional
18294	securities.
18295	(7) The offer or sale of securities to a bank, trust
18296	company, savings institution, insurance company, dealer,
18297	investment company as defined by the Investment Company Act of
18298	1940, pension or profit-sharing trust, or qualified
18299	institutional buyer as defined by rule of the commission
18300	departmentin accordance with Securities and Exchange Commission
18301	Rule 144A (17 C.F.R. 230.144(A)(a)), whether any of such
18302	entities is acting in its individual or fiduciary capacity;
18303	provided that such offer or sale of securities is not for the
18304	direct or indirect promotion of any scheme or enterprise with
18305	the intent of violating or evading any provision of this
18306	chapter.
18307	(8) The sale of securities from one corporation to another
18308	corporation provided that:
18309	(a) The sale price of the securities is $50,000 or more;
18310	and
18311	(b) The buyer and seller corporations each have assets of
18312	$500,000 or more.
18313	(9) The offer or sale of securities from one corporation
18314	to another corporation, or to security holders thereof, pursuant
18315	to a vote or consent of such security holders as may be provided
18316	by the articles of incorporation and the applicable corporate
18317	statutes in connection with mergers, share exchanges,
18318	consolidations, or sale of corporate assets.
18319	(10) The issuance of notes or bonds in connection with the
18320	acquisition of real property or renewals thereof, if such notes
18321	or bonds are issued to the sellers of, and are secured by all or
18322	part of, the real property so acquired.
18323	(11)(a) The offer or sale, by or on behalf of an issuer,
18324	of its own securities, which offer or sale is part of an
18325	offering made in accordance with all of the following
18326	conditions:
18327	1. There are no more than 35 purchasers, or the issuer
18328	reasonably believes that there are no more than 35 purchasers,
18329	of the securities of the issuer in this state during an offering
18330	made in reliance upon this subsection or, if such offering
18331	continues for a period in excess of 12 months, in any
18332	consecutive 12-month period.
18333	2. Neither the issuer nor any person acting on behalf of
18334	the issuer offers or sells securities pursuant to this
18335	subsection by means of any form of general solicitation or
18336	general advertising in this state.
18337	3. Prior to the sale, each purchaser or the purchaser's
18338	representative, if any, is provided with, or given reasonable
18339	access to, full and fair disclosure of all material information.
18340	4. No person defined as a "dealer" in this chapter is paid
18341	a commission or compensation for the sale of the issuer's
18342	securities unless such person is registered as a dealer under
18343	this chapter.
18344	5. When sales are made to five or more persons in this
18345	state, any sale in this state made pursuant to this subsection
18346	is voidable by the purchaser in such sale either within 3 days
18347	after the first tender of consideration is made by such
18348	purchaser to the issuer, an agent of the issuer, or an escrow
18349	agent or within 3 days after the availability of that privilege
18350	is communicated to such purchaser, whichever occurs later.
18351	(b) The following purchasers are excluded from the
18352	calculation of the number of purchasers under subparagraph
18353	(a)1.:
18354	1. Any relative or spouse, or relative of such spouse, of
18355	a purchaser who has the same principal residence as such
18356	purchaser.
18357	2. Any trust or estate in which a purchaser, any of the
18358	persons related to such purchaser specified in subparagraph 1.,
18359	and any corporation specified in subparagraph 3. collectively
18360	have more than 50 percent of the beneficial interest (excluding
18361	contingent interest).
18362	3. Any corporation or other organization of which a
18363	purchaser, any of the persons related to such purchaser
18364	specified in subparagraph 1., and any trust or estate specified
18365	in subparagraph 2. collectively are beneficial owners of more
18366	than 50 percent of the equity securities or equity interest.
18367	4. Any purchaser who makes a bona fide investment of
18368	$100,000 or more, provided such purchaser or the purchaser's
18369	representative receives, or has access to, the information
18370	required to be disclosed by subparagraph (a)3.
18371	5. Any accredited investor, as defined by rule of the
18372	commissiondepartmentin accordance with Securities and Exchange
18373	Commission Regulation 230.501 (17 C.F.R. 230.501).
18374	(c)1. For purposes of determining which offers and sales
18375	of securities constitute part of the same offering under this
18376	subsection and are therefore deemed to be integrated with one
18377	another:
18378	a. Offers or sales of securities occurring more than 6
18379	months prior to an offer or sale of securities made pursuant to
18380	this subsection shall not be considered part of the same
18381	offering, provided there are no offers or sales by or for the
18382	issuer of the same or a similar class of securities during such
18383	6-month period.
18384	b. Offers or sales of securities occurring at any time
18385	after 6 months from an offer or sale made pursuant to this
18386	subsection shall not be considered part of the same offering,
18387	provided there are no offers or sales by or for the issuer of
18388	the same or a similar class of securities during such 6-month
18389	period.
18390	2. Offers or sales which do not satisfy the conditions of
18391	any of the provisions of subparagraph 1. may or may not be part
18392	of the same offering, depending on the particular facts and
18393	circumstances in each case. The commissiondepartment may, but
18394	is not required to,adopt a rule or rules indicating what
18395	factors should be considered in determining whether offers and
18396	sales not qualifying for the provisions of subparagraph 1. are
18397	part of the same offering for purposes of this subsection.
18398	(d) Offers or sales of securities made pursuant to, and in
18399	compliance with, any other subsection of this section or any
18400	subsection of s. 517.051 shall not be considered part of an
18401	offering pursuant to this subsection, regardless of when such
18402	offers and sales are made.
18403	(12) The sale of securities by a bank or trust company
18404	organized or incorporated under the laws of the United States or
18405	this state at a profit to such bank or trust company of not more
18406	than 2 percent of the total sale price of such securities;
18407	provided that there is no solicitation of this business by such
18408	bank or trust company where such bank or trust company acts as
18409	agent in the purchase or sale of such securities.
18410	(13) An unsolicited purchase or sale of securities on
18411	order of, and as the agent for, another by a dealer registered
18412	with the Department of Banking and Financepursuant to the
18413	provisions of s. 517.12; provided that this exemption applies
18414	solely and exclusively to such registered dealers and does not
18415	authorize or permit the purchase or sale of securities on order
18416	of, and as agent for, another by any person other than a dealer
18417	so registered; and provided, further, that such purchase or sale
18418	is not directly or indirectly for the benefit of the issuer or
18419	an underwriter of such securities or for the direct or indirect
18420	promotion of any scheme or enterprise with the intent of
18421	violation or evading any provision of this chapter.
18422	(14) The offer or sale of shares of a corporation which
18423	represent ownership, or entitle the holders of the shares to
18424	possession and occupancy, of specific apartment units in
18425	property owned by such corporation and organized and operated on
18426	a cooperative basis, solely for residential purposes.
18427	(15) The offer or sale of securities under a bona fide
18428	employer-sponsored stock option, stock purchase, pension,
18429	profit-sharing, savings, or other benefit plan when offered only
18430	to employees of the sponsoring organization or to employees of
18431	its controlled subsidiaries.
18432	(16) The sale by or through a registered dealer of any
18433	securities option if at the time of the sale of the option:
18434	(a) The performance of the terms of the option is
18435	guaranteed by any dealer registered under the federal Securities
18436	Exchange Act of 1934, as amended, which guaranty and dealer are
18437	in compliance with such requirements or rules as may be approved
18438	or adopted by the commissiondepartment; or
18439	(b) Such options transactions are cleared by the Options
18440	Clearing Corporation or any other clearinghouse recognized by
18441	the officedepartment; and
18442	(c) The option is not sold by or for the benefit of the
18443	issuer of the underlying security; and
18444	(d) The underlying security may be purchased or sold on a
18445	recognized securities exchange or is quoted on the National
18446	Association of Securities Dealers Automated Quotation System;
18447	and
18448	(e) Such sale is not directly or indirectly for the
18449	purpose of providing or furthering any scheme to violate or
18450	evade any provisions of this chapter.
18451	(17)(a) The offer or sale of securities, as agent or
18452	principal, by a dealer registered pursuant to s. 517.12, when
18453	such securities are offered or sold at a price reasonably
18454	related to the current market price of such securities, provided
18455	such securities are:
18456	1. Securities of an issuer for which reports are required
18457	to be filed by s. 13 or s. 15(d) of the Securities Exchange Act
18458	of 1934, as amended;
18459	2. Securities of a company registered under the Investment
18460	Company Act of 1940, as amended;
18461	3. Securities of an insurance company, as that term is
18462	defined in s. 2(a)(17) of the Investment Company Act of 1940, as
18463	amended;
18464	4. Securities, other than any security that is a federal
18465	covered security pursuant to s. 18(b)(1) of the Securities Act
18466	of 1933 and is not subject to any registration or filing
18467	requirements under this act, which appear in any list of
18468	securities dealt in on any stock exchange registered pursuant to
18469	the Securities Exchange Act of 1934, as amended, and which
18470	securities have been listed or approved for listing upon notice
18471	of issuance by such exchange, and also all securities senior to
18472	any securities so listed or approved for listing upon notice of
18473	issuance, or represented by subscription rights which have been
18474	so listed or approved for listing upon notice of issuance, or
18475	evidences of indebtedness guaranteed by companies any stock of
18476	which is so listed or approved for listing upon notice of
18477	issuance, such securities to be exempt only so long as such
18478	listings or approvals remain in effect. The exemption provided
18479	for herein does not apply when the securities are suspended from
18480	listing approval for listing or trading.
18481	(b) The exemption provided in this subsection does not
18482	apply if the sale is made for the direct or indirect benefit of
18483	an issuer or controlling persons of such issuer or if such
18484	securities constitute the whole or part of an unsold allotment
18485	to, or subscription or participation by, a dealer as an
18486	underwriter of such securities.
18487	(c) This exemption shall not be available for any
18488	securities which have been denied registration by the department
18489	pursuant to s. 517.111. Additionally, the officedepartmentmay
18490	deny this exemption with reference to any particular security,
18491	other than a federal covered security, by order published in
18492	such manner as the officedepartmentfinds proper.
18493	(18) The offer or sale of any security effected by or
18494	through a person registered pursuant to s. 517.12(17).
18495	(19) Other transactions defined by rules as transactions
18496	exempted from the registration provisions of s. 517.07, which
18497	rules the commissiondepartment may, but is not required to,
18498	adopt from time to time, but only after a finding by the office
18499	departmentthat the application of the provisions of s. 517.07
18500	to a particular transaction is not necessary in the public
18501	interest and for the protection of investors because of the
18502	small dollar amount of securities involved or the limited
18503	character of the offering. In conjunction with its adoption of
18504	such rules, the commissiondepartmentmay also provide in such
18505	rules that persons selling or offering for sale the exempted
18506	securities are exempt from the registration requirements of s.
18507	517.12. No rule so adopted may have the effect of narrowing or
18508	limiting any exemption provided for by statute in the other
18509	subsections of this section.
18510	(20) Any nonissuer transaction by a registered associated
18511	person of a registered dealer, and any resale transaction by a
18512	sponsor of a unit investment trust registered under the
18513	Investment Company Act of 1940, in a security of a class that
18514	has been outstanding in the hands of the public for at least 90
18515	days; provided, at the time of the transaction:
18516	(a) The issuer of the security is actually engaged in
18517	business and is not in the organization stage or in bankruptcy
18518	or receivership and is not a blank check, blind pool, or shell
18519	company whose primary plan of business is to engage in a merger
18520	or combination of the business with, or an acquisition of, any
18521	unidentified person;
18522	(b) The security is sold at a price reasonably related to
18523	the current market price of the security;
18524	(c) The security does not constitute the whole or part of
18525	an unsold allotment to, or a subscription or participation by,
18526	the broker-dealer as an underwriter of the security;
18527	(d) A nationally recognized securities manual designated
18528	by rule of the commission or order of the officedepartmentor a
18529	document filed with the Securities and Exchange Commission that
18530	is publicly available through the commission's electronic data
18531	gathering and retrieval system contains:
18532	1. A description of the business and operations of the
18533	issuer;
18534	2. The names of the issuer's officers and directors, if
18535	any, or, in the case of an issuer not domiciled in the United
18536	States, the corporate equivalents of such persons in the
18537	issuer's country of domicile;
18538	3. An audited balance sheet of the issuer as of a date
18539	within 18 months before such transaction or, in the case of a
18540	reorganization or merger in which parties to the reorganization
18541	or merger had such audited balance sheet, a pro forma balance
18542	sheet; and
18543	4. An audited income statement for each of the issuer's
18544	immediately preceding 2 fiscal years, or for the period of
18545	existence of the issuer, if in existence for less than 2 years
18546	or, in the case of a reorganization or merger in which the
18547	parties to the reorganization or merger had such audited income
18548	statement, a pro forma income statement; and
18549	(e) The issuer of the security has a class of equity
18550	securities listed on a national securities exchange registered
18551	under the Securities Exchange Act of 1934 or designated for
18552	trading on the National Association of Securities Dealers
18553	Automated Quotation System, unless:
18554	1. The issuer of the security is a unit investment trust
18555	registered under the Investment Company Act of 1940;
18556	2. The issuer of the security has been engaged in
18557	continuous business, including predecessors, for at least 3
18558	years; or
18559	3. The issuer of the security has total assets of at least
18560	$2 million based on an audited balance sheet as of a date within
18561	18 months before such transaction or, in the case of a
18562	reorganization or merger in which parties to the reorganization
18563	or merger had such audited balance sheet, a pro forma balance
18564	sheet.
18565	Section 354. Section 517.07, Florida Statutes, is amended
18566	to read:
18567	517.07 Registration of securities.--
18568	(1) It is unlawful and a violation of this chapter for any
18569	person to sell or offer to sell a security within this state
18570	unless the security is exempt under s. 517.051, is sold in a
18571	transaction exempt under s. 517.061, is a federal covered
18572	security, or is registered pursuant to this chapter.
18573	(2) No securities that are required to be registered under
18574	this chapter shall be sold or offered for sale within this state
18575	unless such securities have been registered pursuant to this
18576	chapter and unless prior to each sale the purchaser is furnished
18577	with a prospectus meeting the requirements of rules adopted by
18578	the commissiondepartment.
18579	(3) The officedepartmentshall issue a permit when
18580	registration has been granted by the officedepartment. A
18581	permit to sell securities is effective for 1 year from the date
18582	it was granted. Registration of securities shall be deemed to
18583	include the registration of rights to subscribe to such
18584	securities if the application under s. 517.081 or s. 517.082 for
18585	registration of such securities includes a statement that such
18586	rights are to be issued.
18587	(4) A record of the registration of securities shall be
18588	kept byin the office of the department, in which register of
18589	securities shall also be recorded any orders entered by the
18590	officedepartmentwith respect to such securities. Such
18591	register, and all information with respect to the securities
18592	registered therein, shall be open to public inspection.
18593	(5) Notwithstanding any other provision of this section,
18594	offers of securities required to be registered by this section
18595	may be made in this state before the registration of such
18596	securities if the offers are made in conformity with rules
18597	adopted by the commissiondepartment.
18598	Section 355. Subsections (2), (3), (4), and (5) of section
18599	517.075, Florida Statutes, are amended to read:
18600	517.075 Cuba, prospectus disclosure of doing business
18601	with, required.--
18602	(2) Any disclosure required by subsection (1) must
18603	include:
18604	(a) The name of such person, affiliate, or government with
18605	which the issuer does business and the nature of that business;
18606	(b) A statement that the information is accurate as of the
18607	date the securities were effective with the United States
18608	Securities and Exchange Commission or with the office
18609	department, whichever date is later; and
18610	(c) A statement that current information concerning the
18611	issuer's business dealings with the government of Cuba or with
18612	any person or affiliate located in Cuba may be obtained from the
18613	officeDepartment of Banking and Finance, which statement must
18614	include the address and phone number of the officedepartment.
18615	(3) If an issuer commences engaging in business with the
18616	government of Cuba or with any person or affiliate located in
18617	Cuba, after the date issuer's securities become effective with
18618	the Securities and Exchange Commission or with the office
18619	department, whichever date is later, or if the information
18620	reported in the prospectus concerning that business changes in
18621	any material way, the issuer must provide the officedepartment
18622	notice of that business or change, as appropriate, in a manner
18623	form acceptable to the officedepartment. The commission
18624	departmentshall prescribe by rule a form for persons to use to
18625	report the commencement of such business or any change in such
18626	business which occurs after the effective registration of such
18627	securities. This form must include, at a minimum, the
18628	information required by subsection (2). The information reported
18629	on the form must be kept current. Information is current if
18630	reported to the officedepartmentwithin 90 days after the
18631	commencement of business or within 90 days after the change
18632	occurs with respect to previously reported information.
18633	(4) The officedepartmentshall provide, upon request, a
18634	copy of any form filed with the officedepartmentunder
18635	subsection (3) to any person requesting the form.
18636	(5) Each securities offering sold in violation of this
18637	section, and each failure of an issuer to timely file the form
18638	required by subsection (3), subjects the issuer to a fine of up
18639	to $5,000. Any fine collected under this section shall be
18640	deposited into the Anti-Fraud Trust Fund of the office
18641	Department of Banking and Finance.
18642	Section 356. Section 517.081, Florida Statutes, is amended
18643	to read:
18644	517.081 Registration procedure.--
18645	(1) All securities required by this chapter to be
18646	registered before being sold in this state and not entitled to
18647	registration by notification shall be registered in the manner
18648	provided by this section.
18649	(2) The officedepartmentshall receive and act upon
18650	applications to have securities registered and the commission
18651	may prescribe forms on which it may require such applications to
18652	be submitted. Applications shall be duly signed by the
18653	applicant, sworn to by any person having knowledge of the facts,
18654	and filed with the officedepartment. The commissiondepartment
18655	may establish, by rule, procedures for depositing fees and
18656	filing documents by electronic means provided such procedures
18657	provide the officedepartmentwith the information and data
18658	required by this section. An application may be made either by
18659	the issuer of the securities for which registration is applied
18660	or by any registered dealer desiring to sell the same within the
18661	state.
18662	(3) The officedepartmentmay require the applicant to
18663	submit to the officedepartmentthe following information
18664	concerning the issuer and such other relevant information as the
18665	officedepartmentmay in its judgment deem necessary to enable
18666	it to ascertain whether such securities shall be registered
18667	pursuant to the provisions of this section:
18668	(a) The names and addresses of the directors, trustees,
18669	and officers, if the issuer be a corporation, association, or
18670	trust; of all the partners, if the issuer be a partnership; or
18671	of the issuer, if the issuer be an individual.
18672	(b) The location of the issuer's principal business office
18673	and of its principal office in this state, if any.
18674	(c) The general character of the business actually to be
18675	transacted by the issuer and the purposes of the proposed issue.
18676	(d) A statement of the capitalization of the issuer.
18677	(e) A balance sheet showing the amount and general
18678	character of its assets and liabilities on a day not more than
18679	90 days prior to the date of filing such balance sheet or such
18680	longer period of time, not exceeding 6 months, as the office
18681	departmentmay permit at the written request of the issuer on a
18682	showing of good cause therefor.
18683	(f) A detailed statement of the plan upon which the issuer
18684	proposes to transact business.
18685	(g)1. A specimen copy of the security and a copy of any
18686	circular, prospectus, advertisement, or other description of
18687	such securities.
18688	2. The commissiondepartmentshall adopt a form for a
18689	simplified offering circular to be used solely by corporations
18690	to register, under this section, securities of the corporation
18691	that are sold in offerings in which the aggregate offering price
18692	in any consecutive 12-month period does not exceed the amount
18693	provided in s. 3(b) of the Securities Act of 1933. The
18694	following issuers shall not be eligible to submit a simplified
18695	offering circular adopted pursuant to this subparagraph:
18696	a. An issuer seeking to register securities for resale by
18697	persons other than the issuer.
18698	b. An issuer who is subject to any of the
18699	disqualifications described in 17 C.F.R. s. 230.262, adopted
18700	pursuant to the Securities Act of 1933, or who has been or is
18701	engaged or is about to engage in an activity that would be
18702	grounds for denial, revocation, or suspension under s. 517.111.
18703	For purposes of this subparagraph, an issuer includes an
18704	issuer's director, officer, shareholder who owns at least 10
18705	percent of the shares of the issuer, promoter, or selling agent
18706	of the securities to be offered or any officer, director, or
18707	partner of such selling agent.
18708	c. An issuer who is a development-stage company that
18709	either has no specific business plan or purpose or has indicated
18710	that its business plan is to merge with an unidentified company
18711	or companies.
18712	d. An issuer of offerings in which the specific business
18713	or properties cannot be described.
18714	e. Any issuer the officedepartmentdetermines is
18715	ineligible if the form would not provide full and fair
18716	disclosure of material information for the type of offering to
18717	be registered by the issuer.
18718	f. Any corporation which has failed to provide the office
18719	departmentthe reports required for a previous offering
18720	registered pursuant to this subparagraph.
18721
18722
18723	As a condition precedent to qualifying for use of the
18724	simplified offering circular, a corporation shall agree to
18725	provide the officedepartmentwith an annual financial report
18726	containing a balance sheet as of the end of the issuer's fiscal
18727	year and a statement of income for such year, prepared in
18728	accordance with generally accepted accounting principles and
18729	accompanied by an independent accountant's report. If the
18730	issuer has more than 100 security holders at the end of a fiscal
18731	year, the financial statements must be audited. Annual financial
18732	reports must be filed with the officedepartmentwithin 90 days
18733	after the close of the issuer's fiscal year for each of the
18734	first 5 years following the effective date of the registration.
18735	(h) A statement of the amount of the issuer's income,
18736	expenses, and fixed charges during the last fiscal year or, if
18737	in actual business less than 1 year, then for such time as the
18738	issuer has been in actual business.
18739	(i) A statement of the issuer's cash sources and
18740	application during the last fiscal year or, if in actual
18741	business less than 1 year, then for such time as the issuer has
18742	been in actual business.
18743	(j) A statement showing the maximum price at which such
18744	security is proposed to be sold, together with the maximum
18745	amount of commission, including expenses, or other form of
18746	remuneration to be paid in cash or otherwise, directly or
18747	indirectly, for or in connection with the sale or offering for
18748	sale of such securities.
18749	(k) A copy of the opinion or opinions of counsel
18750	concerning the legality of the issue or other matters which the
18751	officedepartmentmay determine to be relevant to the issue.
18752	(l) A detailed statement showing the items of cash,
18753	property, services, patents, good will, and any other
18754	consideration in payment for which such securities have been or
18755	are to be issued.
18756	(m) The amount of securities to be set aside and disposed
18757	of and a statement of all securities issued from time to time
18758	for promotional purposes.
18759	(n) If the issuer is a corporation, there shall be filed
18760	with the application a copy of its articles of incorporation
18761	with all amendments and of its existing bylaws, if not already
18762	on file in the officedepartment. If the issuer is a trustee,
18763	there shall be filed with the application a copy of all
18764	instruments by which the trust is created or declared and in
18765	which it is accepted and acknowledged. If the issuer is a
18766	partnership, unincorporated association, joint-stock company, or
18767	any other form of organization whatsoever, there shall be filed
18768	with the application a copy of its articles of partnership or
18769	association and all other papers pertaining to its organization,
18770	if not already on file in the officedepartment.
18771	(4) All of the statements, exhibits, and documents of
18772	every kind required by the departmentunder this section, except
18773	properly certified public documents, shall be verified by the
18774	oath of the applicant or of the issuer in such manner and form
18775	as may be required by the commissiondepartment.
18776	(5) The commissiondepartmentmay by rule fix the maximum
18777	discounts, commissions, expenses, remuneration, and other
18778	compensation to be paid in cash or otherwise, not to exceed 20
18779	percent, directly or indirectly, for or in connection with the
18780	sale or offering for sale of such securities in this state.
18781	(6) An issuer filing an application under this section
18782	shall, at the time of filing, pay the officedepartmenta
18783	nonreturnable fee of $1,000 per application.
18784	(7) If upon examination of any application the office
18785	departmentshall find that the sale of the security referred to
18786	therein would not be fraudulent and would not work or tend to
18787	work a fraud upon the purchaser, that the terms of the sale of
18788	such securities would be fair, just, and equitable, and that the
18789	enterprise or business of the issuer is not based upon unsound
18790	business principles, it shall record the registration of such
18791	security in the register of securities; and thereupon such
18792	security so registered may be sold by any registered dealer,
18793	subject, however, to the further order of the officedepartment.
18794	Section 357. Section 517.082, Florida Statutes, is amended
18795	to read:
18796	517.082 Notification registration.--
18797	(1) Except as provided in subsection (3), securities
18798	offered or sold pursuant to a registration statement filed under
18799	the Securities Act of 1933 shall be entitled to registration by
18800	notification in the manner provided in subsection (2), provided
18801	that prior to the offer or sale the registration statement has
18802	become effective.
18803	(2) An application for registration by notification shall
18804	be filed with the officedepartment, shall contain the following
18805	information, and shall be accompanied by the following:
18806	(a) An application to sell executed by the issuer, any
18807	person on whose behalf the offering is made, a dealer registered
18808	under this chapter, or any duly authorized agent of any such
18809	person, setting forth the name and address of the applicant, the
18810	name and address of the issuer, and the title of the securities
18811	to be offered and sold;
18812	(b) Copies of such documents filed with the Securities and
18813	Exchange Commission as the Financial Services Commission
18814	departmentmay by rule require;
18815	(c) An irrevocable written consent to service as required
18816	by s. 517.101; and
18817	(d) A nonreturnable fee of $1,000 per application.
18818
18819
18820	A registration under this section becomes effective when the
18821	federal registration statement becomes effective or as of the
18822	date the application is filed with the officedepartment,
18823	whichever is later, provided that, in addition to the items
18824	listed in paragraphs (a)-(d), the officedepartmenthas received
18825	written notification of effective registration under the
18826	Securities Act of 1933 or the Investment Company Act of 1940
18827	within 10 business days from the date federal registration is
18828	granted. Failure to provide all the information required by
18829	this subsection to the officedepartmentwithin 60 days of the
18830	date the registration statement becomes effective with the
18831	Securities and Exchange Commission shall be a violation of this
18832	chapter.
18833	(3) Except for units of limited partnership interests or
18834	such other securities as the commissiondepartmentdescribes by
18835	rule as exempt from this subsection due to high investment
18836	quality, the provisions of this section may not be used to
18837	register securities if the offering price at the time of
18838	effectiveness with the Securities and Exchange Commission is $5
18839	or less per share, unless such securities are listed or
18840	designated, or approved for listing or designation upon notice
18841	of issuance, on a stock exchange registered pursuant to the
18842	Securities Exchange Act of 1934 or on the National Association
18843	of Securities Dealers Automated Quotation (NASDAQ) System, or
18844	unless such securities are of the same issuer and of senior or
18845	substantially equal rank to securities so listed or designated.
18846	(4) In lieu of filing with the officedepartmentthe
18847	application, fees, and documents for registration required by
18848	subsection (2), the commissiondepartmentmay establish, by
18849	rule, procedures for depositing fees and filing documents by
18850	electronic means, provided such procedures provide the office
18851	departmentwith the information and data required by this
18852	section.
18853	Section 358. Section 517.101, Florida Statutes, is amended
18854	to read:
18855	517.101 Consent to service.--
18856	(1) Upon any initial application for registration under s.
18857	517.081 or s. 517.082 or upon request of the officedepartment,
18858	the issuer shall file with such application the irrevocable
18859	written consent of the issuer that in suits, proceedings, and
18860	actions growing out of the violation of any provision of this
18861	chapter, the service on the officedepartmentof a notice,
18862	process, or pleading therein, authorized by the laws of this
18863	state, shall be as valid and binding as if due service had been
18864	made on the issuer.
18865	(2) Any such action shall be brought either in the county
18866	of the plaintiff's residence or in the county in which the
18867	officedepartmenthas its official headquarters. The written
18868	consent shall be authenticated by the seal of said issuer, if it
18869	has a seal, and by the acknowledged signature of a member of the
18870	copartnership or company, or by the acknowledged signature of
18871	any officer of the incorporated or unincorporated association,
18872	if it be an incorporated or unincorporated association, duly
18873	authorized by resolution of the board of directors, trustees, or
18874	managers of the corporation or association, and shall in such
18875	case be accompanied by a duly certified copy of the resolution
18876	of the board of directors, trustees, or managers of the
18877	corporation or association, authorizing the officers to execute
18878	the same. In case any process or pleadings mentioned in this
18879	chapter are served upon the officedepartment, it shall be by
18880	duplicate copies, one of which shall be filed in the office
18881	department and another immediately forwarded by the office
18882	departmentby registered mail to the principal office of the
18883	issuer against which said process or pleadings are directed.
18884	Section 359. Section 517.111, Florida Statutes, is amended
18885	to read:
18886	517.111 Revocation or denial of registration of
18887	securities.--
18888	(1) The officedepartmentmay revoke or suspend the
18889	registration of any security, or may deny any application to
18890	register securities, if upon examination into the affairs of the
18891	issuer of such security it shall appear that:
18892	(a) The issuer is insolvent;
18893	(b) The issuer or any officer, director, or control person
18894	of the issuer has violated any provision of this chapter or any
18895	rule made hereunder or any order of the officedepartmentof
18896	which such issuer has notice;
18897	(c) The issuer or any officer, director, or control person
18898	of the issuer has been or is engaged or is about to engage in
18899	fraudulent transactions;
18900	(d) The issuer or any officer, director, or control person
18901	of the issuer has been found guilty of a fraudulent act in
18902	connection with any sale of securities, has engaged, is engaged,
18903	or is about to engage, in making a fictitious sale or purchase
18904	of any security, or in any practice or sale of any security
18905	which is fraudulent or a violation of any law;
18906	(e) The issuer or any officer, director, or control person
18907	of the issuer has had a final judgment entered against such
18908	issuer or person in a civil action on the grounds of fraud,
18909	embezzlement, misrepresentation, or deceit;
18910	(f) The issuer or any officer, director, or control person
18911	of the issuer has demonstrated any evidence of unworthiness;
18912	(g) The issuer or any officer, director, or control person
18913	of the issuer is in any other way dishonest or has made any
18914	fraudulent representations or failed to disclose any material
18915	information in any prospectus or in any circular or other
18916	literature that has been distributed concerning the issuer or
18917	its securities;
18918	(h) The security registered or sought to be registered is
18919	the subject of an injunction entered by a court of competent
18920	jurisdiction or is the subject of an administrative stop-order
18921	or similar order prohibiting the offer or sale of the security;
18922	(i) For any security for which registration has been
18923	applied pursuant to s. 517.081, the terms of the offer or sale
18924	of such securities would not be fair, just, or equitable; or
18925	(j) The issuer or any person acting on behalf of the
18926	issuer has failed to timely complete any application for
18927	registration filed with the officedepartmentpursuant to the
18928	provisions of s. 517.081 or s. 517.082 or any rule adopted under
18929	such sections.
18930
18931	In making such examination, the officedepartmentshall have
18932	access to and may compel the production of all the books and
18933	papers of such issuer and may administer oaths to and examine
18934	the officers of such issuer or any other person connected
18935	therewith as to its business and affairs and may also require a
18936	balance sheet exhibiting the assets and liabilities of any such
18937	issuer or its income statement, or both, to be certified to by a
18938	public accountant either of this state or of any other state
18939	where the issuer's business is located. Whenever the office
18940	deemsdepartment may deemit necessary, it may also require such
18941	balance sheet or income statement, or both, to be made more
18942	specific in such particulars as the officedepartmentmay
18943	require.
18944	(2) If any issuer shall refuse to permit an examination to
18945	be made by the officedepartment, it shall be proper ground for
18946	revocation of registration.
18947	(3) If the office deemsdepartment shall deemit
18948	necessary, it may enter an order suspending the right to sell
18949	securities pending any investigation, provided that the order
18950	shall state the office'sdepartment'sgrounds for taking such
18951	action.
18952	(4) Notice of the entry of such order shall be given by
18953	mail, personally, by telephone confirmed in writing, or by
18954	telegraph to the issuer. Before such order is made final, the
18955	issuer applying for registration shall, on application, be
18956	entitled to a hearing.
18957	(5) The officedepartmentmay deny any request to
18958	terminate any registration or to withdraw any application for
18959	registration if the officedepartmentbelieves that an act which
18960	would be grounds for denial, suspension, or revocation under
18961	this chapter has been committed.
18962	Section 360. Section 517.12, Florida Statutes, is amended
18963	to read:
18964	517.12 Registration of dealers, associated persons,
18965	investment advisers, and branch offices.--
18966	(1) No dealer, associated person, or issuer of securities
18967	shall sell or offer for sale any securities in or from offices
18968	in this state, or sell securities to persons in this state from
18969	offices outside this state, by mail or otherwise, unless the
18970	person has been registered with the officedepartmentpursuant
18971	to the provisions of this section. The officedepartmentshall
18972	not register any person as an associated person of a dealer
18973	unless the dealer with which the applicant seeks registration is
18974	lawfully registered with the officedepartmentpursuant to this
18975	chapter.
18976	(2) The registration requirements of this section do not
18977	apply to the issuers of securities exempted by s. 517.051(1)-(8)
18978	and (10).
18979	(3) Except as otherwise provided in s. 517.061(11)(a)4.,
18980	(13), (16), (17), or (19), the registration requirements of this
18981	section do not apply in a transaction exempted by s. 517.061(1)-
18982	(12), (14), and (15).
18983	(4) No investment adviser or associated person of an
18984	investment adviser or federal covered adviser shall engage in
18985	business from offices in this state, or render investment advice
18986	to persons of this state, by mail or otherwise, unless the
18987	federal covered adviser has made a notice filing with the office
18988	departmentpursuant to s. 517.1201 or the investment adviser is
18989	registered pursuant to the provisions of this chapter and
18990	associated persons of the federal covered adviser or investment
18991	adviser have been registered with the officedepartmentpursuant
18992	to this section. The officedepartmentshall not register any
18993	person or an associated person of a federal covered adviser or
18994	an investment adviser unless the federal covered adviser or
18995	investment adviser with which the applicant seeks registration
18996	is in compliance with the notice filing requirements of s.
18997	517.1201 or is lawfully registered with the officedepartment
18998	pursuant to this chapter. A dealer or associated person who is
18999	registered pursuant to this section may render investment advice
19000	upon notification to and approval from the officedepartment.
19001	(5) No dealer or investment adviser shall conduct business
19002	from a branch office within this state unless the branch office
19003	is registered with the officedepartmentpursuant to the
19004	provisions of this section.
19005	(6) A dealer, associated person, investment adviser, or
19006	branch office, in order to obtain registration, must file with
19007	the officedepartment a written application, on a form which the
19008	commissiondepartmentmay by rule prescribe, verified under
19009	oath. The commissiondepartmentmay establish, by rule,
19010	procedures for depositing fees and filing documents by
19011	electronic means provided such procedures provide the office
19012	departmentwith the information and data required by this
19013	section. Each dealer or investment adviser must also file an
19014	irrevocable written consent to service of civil process similar
19015	to that provided for in s. 517.101. The application shall
19016	contain such information as the commission or officedepartment
19017	may require concerning such matters as:
19018	(a) The name of the applicant and the address of its
19019	principal office and each office in this state.
19020	(b) The applicant's form and place of organization; and,
19021	if the applicant is a corporation, a copy of its articles of
19022	incorporation and amendments to the articles of incorporation
19023	or, if a partnership, a copy of the partnership agreement.
19024	(c) The applicant's proposed method of doing business and
19025	financial condition and history, including a certified financial
19026	statement showing all assets and all liabilities, including
19027	contingent liabilities of the applicant as of a date not more
19028	than 90 days prior to the filing of the application.
19029	(d) The names and addresses of all associated persons of
19030	the applicant to be employed in this state and the offices to
19031	which they will be assigned.
19032	(7) The application shall also contain such information as
19033	the commission or officedepartmentmay require about the
19034	applicant; any partner, officer, or director of the applicant or
19035	any person having a similar status or performing similar
19036	functions; any person directly or indirectly controlling the
19037	applicant; or any employee of a dealer or of an investment
19038	adviser rendering investment advisory services. Each applicant
19039	shall file a complete set of fingerprints taken by an authorized
19040	law enforcement officer. Such fingerprints shall be submitted
19041	to the Department of Law Enforcement or the Federal Bureau of
19042	Investigation for state and federal processing. The commission
19043	departmentmay waive, by rule, the requirement that applicants
19044	must file a set of fingerprints or the requirement that such
19045	fingerprints must be processed by the Department of Law
19046	Enforcement or the Federal Bureau of Investigation. The
19047	commission or officedepartmentmay require information about
19048	any such applicant or person concerning such matters as:
19049	(a) His or her full name, and any other names by which he
19050	or she may have been known, and his or her age, photograph,
19051	qualifications, and educational and business history.
19052	(b) Any injunction or administrative order by a state or
19053	federal agency, national securities exchange, or national
19054	securities association involving a security or any aspect of the
19055	securities business and any injunction or administrative order
19056	by a state or federal agency regulating banking, insurance,
19057	finance, or small loan companies, real estate, mortgage brokers,
19058	or other related or similar industries, which injunctions or
19059	administrative orders relate to such person.
19060	(c) His or her conviction of, or plea of nolo contendere
19061	to, a criminal offense or his or her commission of any acts
19062	which would be grounds for refusal of an application under s.
19063	517.161.
19064	(d) The names and addresses of other persons of whom the
19065	officedepartmentmay inquire as to his or her character,
19066	reputation, and financial responsibility.
19067	(8) The commission or officedepartmentmay require the
19068	applicant or one or more principals or general partners, or
19069	natural persons exercising similar functions, or any associated
19070	person applicant to successfully pass oral or written
19071	examinations. Because any principal, manager, supervisor, or
19072	person exercising similar functions shall be responsible for the
19073	acts of the associated persons affiliated with a dealer or
19074	investment adviser, the examination standards may be higher for
19075	a dealer, office manager, principal, or person exercising
19076	similar functions than for a nonsupervisory associated person.
19077	The commissiondepartmentmay waive the examination process when
19078	it determines that such examinations are not in the public
19079	interest. The officedepartmentshall waive the examination
19080	requirements for any person who has passed any tests as
19081	prescribed in s. 15(b)(7) of the Securities Exchange Act of 1934
19082	that relates to the position to be filled by the applicant.
19083	(9)(a) All dealers, except securities dealers who are
19084	designated by the Federal Reserve Bank of New York as primary
19085	government securities dealers or securities dealers registered
19086	as issuers of securities, shall comply with the net capital and
19087	ratio requirements imposed pursuant to the Securities Exchange
19088	Act of 1934. The commissiondepartmentmay by rule require a
19089	dealer to file with the officedepartmentany financial or
19090	operational information that is required to be filed by the
19091	Securities Exchange Act of 1934 or any rules adopted under such
19092	act.
19093	(b) The commissiondepartmentmay by rule require the
19094	maintenance of a minimum net capital for securities dealers who
19095	are designated by the Federal Reserve Bank of New York as
19096	primary government securities dealers and securities dealers
19097	registered as issuers of securities and investment advisers, or
19098	prescribe a ratio between net capital and aggregate
19099	indebtedness, to assure adequate protection for the investing
19100	public. The provisions of this section shall not apply to any
19101	investment adviser that maintains its principal place of
19102	business in a state other than this state, provided such
19103	investment adviser is registered in the state where it maintains
19104	its principal place of business and is in compliance with such
19105	state's net capital requirements.
19106	(10) An applicant for registration shall pay an assessment
19107	fee of $200, in the case of a dealer or investment adviser, or
19108	$40, in the case of an associated person. The assessment fee of
19109	an associated person shall be reduced to $30, but only after the
19110	officedepartmentdetermines, by final order, that sufficient
19111	funds have been allocated to the Securities Guaranty Fund
19112	pursuant to s. 517.1203 to satisfy all valid claims filed in
19113	accordance with s. 517.1203(2) and after all amounts payable
19114	under any service contract entered into by the officedepartment
19115	pursuant to s. 517.1204, and all notes, bonds, certificates of
19116	indebtedness, other obligations, or evidences of indebtedness
19117	secured by such notes, bonds, certificates of indebtedness, or
19118	other obligations, have been paid or provision has been made for
19119	the payment of such amounts, notes, bonds, certificates of
19120	indebtedness, other obligations, or evidences of indebtedness.
19121	An associated person not having current fingerprint cards filed
19122	with the National Association of Securities Dealers or a
19123	national securities exchange registered with the Securities and
19124	Exchange Commission shall be assessed an additional fee to cover
19125	the cost for said fingerprint cards to be processed by the
19126	officedepartment. Such fee shall be determined by rule of the
19127	commissiondepartment. Each dealer and each investment adviser
19128	shall pay an assessment fee of $100 for each office in this
19129	state, except its designated principal office. Such fees become
19130	the revenue of the state, except for those assessments provided
19131	for under s. 517.131(1) until such time as the Securities
19132	Guaranty Fund satisfies the statutory limits, and are not
19133	returnable in the event that registration is withdrawn or not
19134	granted.
19135	(11) If the officedepartmentfinds that the applicant is
19136	of good repute and character and has complied with the
19137	provisions of this chapter and the rules made pursuant hereto,
19138	it shall register the applicant. The registration of each
19139	dealer, investment adviser, and associated person will expire on
19140	December 31, and the registration of each branch office will
19141	expire on March 31, of the year in which it became effective
19142	unless the registrant has renewed its registration on or before
19143	that date. Registration may be renewed by furnishing such
19144	information as the commissiondepartmentmay require, together
19145	with payment of the fee required in subsection (10) for dealers,
19146	investment advisers, associated persons, or branch offices and
19147	the payment of any amount lawfully due and owing to the office
19148	department pursuant to any order of the officedepartmentor
19149	pursuant to any agreement with the officedepartment. Any
19150	dealer, investment adviser, or associated person registrant who
19151	has not renewed a registration by the time the current
19152	registration expires may request reinstatement of such
19153	registration by filing with the officedepartment, on or before
19154	January 31 of the year following the year of expiration, such
19155	information as may be required by the commissiondepartment,
19156	together with payment of the fee required in subsection (10) for
19157	dealers, investment advisers, or associated persons and a late
19158	fee equal to the amount of such fee. Any reinstatement of
19159	registration granted by the officedepartmentduring the month
19160	of January shall be deemed effective retroactive to January 1 of
19161	that year.
19162	(12)(a) The officedepartmentmay issue a license to a
19163	dealer, investment adviser, associated person, or branch office
19164	to evidence registration under this chapter. The office
19165	department may require the return to the officedepartmentof
19166	any license it may issue prior to issuing a new license.
19167	(b) Every dealer, investment adviser, or federal covered
19168	adviser shall promptly file with the officedepartment, as
19169	prescribed by rules adopted by the commissiondepartment, notice
19170	as to the termination of employment of any associated person
19171	registered for such dealer or investment adviser in this state
19172	and shall also furnish the reason or reasons for such
19173	termination.
19174	(c) Each dealer or investment adviser shall designate in
19175	writing to, and register with, the officedepartmenta manager
19176	for each office the dealer or investment adviser has in this
19177	state.
19178	(13) Changes in registration occasioned by changes in
19179	personnel of a partnership or in the principals, copartners,
19180	officers, or directors of any dealer or investment adviser or by
19181	changes of any material fact or method of doing business shall
19182	be reported by written amendment in such form and at such time
19183	as the commissiondepartmentmay specify. In any case in which
19184	a person or a group of persons, directly or indirectly or acting
19185	by or through one or more persons, proposes to purchase or
19186	acquire a controlling interest in a registered dealer or
19187	investment adviser, such person or group shall submit an initial
19188	application for registration as a dealer or investment adviser
19189	prior to such purchase or acquisition. The commissiondepartment
19190	shall adopt rules providing for waiver of the application
19191	required by this subsection where control of a registered dealer
19192	or investment adviser is to be acquired by another dealer or
19193	investment adviser registered under this chapter or where the
19194	application is otherwise unnecessary in the public interest.
19195	(14) Every dealer, investment adviser, or branch office
19196	registered or required to be registered with the office
19197	departmentshall keep records of all currency transactions in
19198	excess of $10,000 and shall file reports, as prescribed under
19199	the financial recordkeeping regulations in 31 C.F.R. part 103,
19200	with the officedepartmentwhen transactions occur in or from
19201	this state. All reports required by this subsection to be filed
19202	with the officedepartmentshall be confidential and exempt from
19203	s. 119.07(1) except that any law enforcement agency or the
19204	Department of Revenue shall have access to, and shall be
19205	authorized to inspect and copy, such reports.
19206	(15) In lieu of filing with the officedepartmentthe
19207	applications specified in subsection (6), the fees required by
19208	subsection(10), and the termination notices required by
19209	subsection (12), the commissiondepartmentmay by rule establish
19210	procedures for the deposit of such fees and documents with the
19211	Central Registration Depository of the National Association of
19212	Securities Dealers, Inc., as developed under contract with the
19213	North American Securities Administrators Association, Inc.;
19214	provided, however, that such procedures shall provide the office
19215	departmentwith the information and data as required by this
19216	section.
19217	(16) Except for securities dealers who are designated by
19218	the Federal Reserve Bank of New York as primary government
19219	securities dealers or securities dealers registered as issuers
19220	of securities, every applicant for initial or renewal
19221	registration as a securities dealer and every person registered
19222	as a securities dealer shall be registered as a broker or dealer
19223	with the Securities and Exchange Commission and shall be subject
19224	to insurance coverage by the Securities Investor Protection
19225	Corporation.
19226	(17)(a) A dealer that is located in Canada and has no
19227	office or other physical presence in this state may, provided
19228	the dealer is registered in accordance with this section, effect
19229	transactions in securities with or for, or induce or attempt to
19230	induce the purchase or sale of any security by:
19231	1. A person from Canada who temporarily resides in this
19232	state and with whom the Canadian dealer had a bona fide dealer-
19233	client relationship before the person entered the United States;
19234	or
19235	2. A person from Canada who is a resident of this state,
19236	and whose transactions are in a self-directed tax advantage
19237	retirement plan in Canada of which the person is the holder or
19238	contributor.
19239	(b) An associated person who represents a Canadian dealer
19240	registered under this section may, provided the agent is
19241	registered in accordance with this section, effect transactions
19242	in securities in this state as permitted for a dealer, under
19243	subsection (a).
19244	(c) A Canadian dealer may register under this section
19245	provided that such dealer:
19246	1. Files an application in the form required by the
19247	jurisdiction in which the dealer has a head office.
19248	2. Files a consent to service of process.
19249	3. Is registered as a dealer in good standing in the
19250	jurisdiction from which it is effecting transactions into this
19251	state and files evidence of such registration with the office
19252	department.
19253	4. Is a member of a self-regulatory organization or stock
19254	exchange in Canada.
19255	(d) An associated person who represents a Canadian dealer
19256	registered under this section in effecting transactions in
19257	securities in this state may register under this section
19258	provided that such person:
19259	1. Files an application in the form required by the
19260	jurisdiction in which the dealer has its head office.
19261	2. Is registered in good standing in the jurisdiction from
19262	which he or she is effecting transactions into this state and
19263	files evidence of such registration with the officedepartment.
19264	(e) If the officedepartmentfinds that the applicant is
19265	of good repute and character and has complied with the
19266	provisions of this chapter, the officedepartmentshall register
19267	the applicant.
19268	(f) A Canadian dealer registered under this section shall:
19269	1. Maintain its provincial or territorial registration and
19270	its membership in a self-regulatory organization or stock
19271	exchange in good standing.
19272	2. Provide the officedepartmentupon request with its
19273	books and records relating to its business in this state as a
19274	dealer.
19275	3. Provide the officedepartmentnotice of each civil,
19276	criminal, or administrative action initiated against the dealer.
19277	4. Disclose to its clients in this state that the dealer
19278	and its agents are not subject to the full regulatory
19279	requirements under this chapter.
19280	5. Correct any inaccurate information within 30 days, if
19281	the information contained in the application form becomes
19282	inaccurate for any reason before or after the dealer becomes
19283	registered.
19284	(g) An associated person of a Canadian dealer registered
19285	under this section shall:
19286	1. Maintain provincial or territorial registration in good
19287	standing.
19288	2. Provide the officedepartmentwith notice of each
19289	civil, criminal, or administrative action initiated against such
19290	person.
19291	3. Through the dealer, correct any inaccurate information
19292	within 30 days, if the information contained in the application
19293	form becomes inaccurate for any reason before or after the
19294	associated person becomes registered.
19295	(h) Renewal applications for Canadian dealers and
19296	associated persons under this section must be filed before
19297	December 31 each year. Every applicant for registration or
19298	renewal registration under this section shall pay the fee for
19299	dealers and associated persons under this chapter.
19300	(18) Every dealer or associated person registered or
19301	required to be registered with the officedepartmentshall
19302	satisfy any continuing education requirements established by
19303	rule pursuant to law.
19304	(19) The registration requirements of this section which
19305	apply to investment advisers and associated persons do not apply
19306	to a commodity trading adviser who:
19307	(a) Is registered as such with the Commodity Futures
19308	Trading Commission pursuant to the Commodity Exchange Act.
19309	(b) Advises or exercises trading discretion, with respect
19310	to foreign currency options listed and traded exclusively on the
19311	Philadelphia Stock Exchange, on behalf of an "appropriate
19312	person" as defined by the Commodity Exchange Act.
19313
19314
19315	The exemption provided in this subsection does not apply to a
19316	commodity trading adviser who engages in other activities that
19317	require registration under this chapter.
19318	(20) The registration requirements of this section do not
19319	apply to any general lines insurance agent or life insurance
19320	agent licensed under chapter 626individuals licensed under s.
19321	626.041 or its successor statute, or s. 626.051 or its successor
19322	statute, for the sale of a security as defined in s.
19323	517.021(20)(19)(g), if the individual is directly authorized by
19324	the issuer to offer or sell the security on behalf of the issuer
19325	and the issuer is a federally chartered savings bank subject to
19326	regulation by the Federal Deposit Insurance Corporation. Actions
19327	under this subsection shall constitute activity under the
19328	insurance agent's license for purposes of ss. 626.611 and
19329	626.621.
19330	Section 361. Section 517.1201, Florida Statutes, is
19331	amended to read:
19332	517.1201 Notice filing requirements for federal covered
19333	advisers.--
19334	(1) It is unlawful for a person to transact business in
19335	this state as a federal covered adviser unless such person has
19336	made a notice filing with the officedepartment. A notice
19337	filing under this section shall consist of a copy of those
19338	documents that have been filed or are required to be filed by
19339	the federal covered adviser with the Securities and Exchange
19340	Commission that the Financial Services Commissiondepartmentby
19341	rule requires to be filed, together with a consent to service of
19342	process and a filing fee of $200. The commissiondepartmentmay
19343	establish by rule procedures for the deposit of fees and the
19344	filing of documents to be made through electronic means, if the
19345	procedures provide to the officedepartmentthe information and
19346	data required by this section.
19347	(2) A notice filing shall be effective upon receipt. A
19348	notice filing shall expire on December 31 of the year in which
19349	the filing became effective unless the federal covered adviser
19350	has renewed the filing on or before that date. A federal covered
19351	adviser may renew a notice filing by furnishing to the office
19352	departmentsuch information that has been filed or is required
19353	to be filed with the Securities and Exchange Commission, as the
19354	Financial Services Commission or officedepartmentmay require,
19355	together with a renewal fee of $200 and the payment of any
19356	amount due and owing the officedepartmentpursuant to any
19357	agreement with the officedepartment. Any federal covered
19358	adviser who has not renewed a notice filing by the time a
19359	current notice filing expires may request reinstatement of such
19360	notice filing by filing with the officedepartment, on or before
19361	January 31 of the year following the year the notice filing
19362	expires, such information that has been filed or is required to
19363	be filed with the Securities and Exchange Commission as may be
19364	required by the Financial Services Commission or office
19365	department, together with the payment of $200 and a late fee
19366	equal to $200. Any reinstatement of a notice filing granted by
19367	the officedepartmentduring the month of January shall be
19368	deemed effective retroactive to January 1 of that year.
19369	(3) The commissiondepartmentmay require, by rule, a
19370	federal covered adviser who has made a notice filing pursuant to
19371	this section to file with the officedepartmentcopies of any
19372	amendments filed or required to be filed with the Securities and
19373	Exchange Commission.
19374	(4) The officedepartmentmay issue a permit to evidence
19375	the effectiveness of a notice filing for a federal covered
19376	adviser.
19377	(5) A notice filing may be terminated by filing notice of
19378	such termination with the officedepartment. Unless another
19379	date is specified by the federal covered adviser, such notice
19380	shall be effective upon its receipt by the officedepartment.
19381	(6) All fees collected under this section become the
19382	revenue of the state, except for those assessments provided for
19383	under s. 517.131(1) until such time as the Securities Guaranty
19384	Fund satisfies the statutory limits, and are not returnable in
19385	the event that a notice filing is withdrawn.
19386	Section 362. Section 517.1203, Florida Statutes, is
19387	amended to read:
19388	517.1203 Allocation and disbursement of assessment fees.--
19389	(1) Notwithstanding s. 517.131(1), an additional amount
19390	equal to 25 percent of all revenues received as assessment fees
19391	pursuant to s. 517.12(10) and (11) from persons applying for or
19392	renewing registrations as associated persons shall be allocated
19393	to the Securities Guaranty Fund and disbursed as provided in
19394	this section. This allocation shall continue until the office
19395	departmentdetermines, by final order, that sufficient funds
19396	have been allocated to the Securities Guaranty Fund pursuant to
19397	this section to satisfy all valid claims filed in accordance
19398	with subsection (2) and until all amounts payable under any
19399	service contract entered into by the officedepartmentpursuant
19400	to s. 517.1204, and all notes, bonds, certificates of
19401	indebtedness, other obligations, or evidences of indebtedness
19402	secured by such notes, bonds, certificates of indebtedness, or
19403	other obligations, have been paid or provision has been made for
19404	the payment of such amounts, notes, bonds, certificates of
19405	indebtedness, other obligations, or evidences of indebtedness.
19406	This assessment fee shall be part of the regular license fee and
19407	shall be transferred to or deposited into the Securities
19408	Guaranty Fund. The moneys allocated to the Securities Guaranty
19409	Fund under this section shall not be included in the calculation
19410	of the allocation of the assessment fees referred to in s.
19411	517.131(1)(b). Moneys allocated under this section in excess of
19412	the valid claims filed pursuant to subsection (2) shall be
19413	allocated to the Anti-Fraud Trust Fund.
19414	(2)(a) Notwithstanding the provisions of ss. 517.131 and
19415	517.141, moneys allocated to the Securities Guaranty Fund under
19416	this section shall be used to pay amounts payable under any
19417	service contract entered into by the officedepartmentpursuant
19418	to s. 517.1204, subject to annual appropriation by the
19419	Legislature, and to pay investors who have filed claims with the
19420	Department of Banking and Finance after October 1, 1996, and on
19421	or before December 31, 1998, who have:
19422	1. Received a final judgment against an associated person
19423	of GIC Government Securities, Inc., based upon allegations which
19424	would amount to a violation of s. 517.07 or s. 517.301; or
19425	2. Demonstrated to the former Department of Banking and
19426	Finance or officethat the claimant has suffered monetary
19427	damages as a result of the acts or actions of GIC Government
19428	Securities, Inc., or any associated person thereof, based upon
19429	allegations which would amount to a violation of s. 517.07 or s.
19430	517.301.
19431	(b)1. Claims shall be paid in the order that they were
19432	have been filed with the former Department of Banking and
19433	Finance, unless the department hasnoticed its intent to deny
19434	the claim in whole or in part. If a notice of intent to deny a
19435	claim in whole or in part wasisissued, the claim shall not be
19436	paid until a final order has been entered which is not subject
19437	to an order staying its effect.
19438	2. If at any time the money in the Securities Guaranty
19439	Fund allocated under this section is insufficient to satisfy any
19440	valid claim or portion of a valid claim approved by the
19441	department or office under this section, the officedepartment
19442	shall prorate the payment based upon the ratio that the person's
19443	claim bears to the total approved claims filed on the same day.
19444	The officedepartmentshall satisfy the unpaid claims as soon
19445	as a sufficient amount of money has been deposited in or
19446	transferred to the fund as provided in this section.
19447	3. A claimant shall not be substantially affected by the
19448	payment of another person's claim.
19449	(c) Claims shall be limited to the amount of the
19450	investment, reduced by any amounts received from a bankruptcy
19451	proceeding or from any other source. If an investor is deceased,
19452	the award shall be made to the surviving spouse. If the investor
19453	and surviving spouse are both deceased, the award shall be made
19454	pursuant to the laws of descent and distribution. Neither the
19455	officedepartmentnor the Investment Fraud Restoration Financing
19456	Corporation shall make payment to assignees, secured parties,
19457	lien creditors, or other such entities.
19458	(3) In rendering a determination, the officedepartment
19459	may rely on records from the bankruptcy proceeding regarding GIC
19460	Government Securities, Inc., unless there is good cause to
19461	believe that the record is not genuine.
19462	(4) Amounts deposited into the Securities Guaranty Fund
19463	pursuant to this section shall be applied to or allocated for
19464	payment of amounts payable by the officedepartmentpursuant to
19465	paragraph (2)(a), under a service contract entered into by the
19466	officedepartmentpursuant to s. 517.1204, subject to annual
19467	appropriation by the Legislature, before making or providing for
19468	any other disbursements from the fund.
19469	Section 363. Subsection (2), paragraph (e) of subsection
19470	(3), and subsections (4), (5), and(6) of section 517.1204,
19471	Florida Statutes, are amended to read:
19472	517.1204 Investment Fraud Restoration Financing
19473	Corporation.--
19474	(2) The corporation shall be governed by a board of
19475	directors consisting of the director of the office or his or her
19476	designeeassistant comptroller, the Secretary of Elderly Affairs
19477	or the secretary's designee, and the executive director of the
19478	Department of Veterans' Affairs or the executive director's
19479	designee. The executive director of the State Board of
19480	Administration shall be the chief executive officer of the
19481	corporation and shall direct and supervise the administrative
19482	affairs of the corporation and shall control, direct, and
19483	supervise the operation of the corporation. The corporation
19484	shall also have such other officers as may be determined by the
19485	board of directors.
19486	(3) The corporation shall have all the powers of a
19487	corporate body under the laws of this state to the extent not
19488	inconsistent with or restricted by the provisions of this
19489	section, including, but not limited to, the power to:
19490	(e) Elect or appoint and employ such officers, agents, and
19491	employees as the corporation deems advisable to operate and
19492	manage the affairs of the corporation, which officers, agents,
19493	and employees may be officers or employees of the office
19494	departmentand the state agencies represented on the board of
19495	directors of the corporation.
19496	(4) The corporation is authorized to enter into one or
19497	more service contracts with the officedepartmentpursuant to
19498	which the corporation shall provide services to the office
19499	departmentin connection with financing the functions and
19500	activities provided for in s. 517.1203. The officedepartment
19501	may enter into one or more such service contracts with the
19502	corporation and provide for payments under such contracts
19503	pursuant to s. 517.1203(2)(a), subject to annual appropriation
19504	by the Legislature. The proceeds from such service contracts
19505	may be used for the costs and expenses of administration of the
19506	corporation after payments as set forth in subsection(5). Each
19507	service contract shall have a term not to exceed 15 years and
19508	shall terminate no later than July 1, 2021. The aggregate
19509	amount payable from the Securities Guaranty Fund under all such
19510	service contracts shall not exceed the amount provided by s.
19511	517.1203(1). In compliance with provisions of s. 287.0641 and
19512	other applicable provisions of law, the obligations of the
19513	officedepartmentunder such service contracts shall not
19514	constitute a general obligation of the state or a pledge of the
19515	faith and credit or taxing power of the state nor shall such
19516	obligations be construed in any manner as an obligation of the
19517	State Board of Administration or entities for which it invests
19518	funds, other than the officedepartmentas provided in this
19519	section, but shall be payable solely from amounts available in
19520	the Securities Guaranty Fund, subject to annual appropriation.
19521	In compliance with this subsection and s. 287.0582, such service
19522	contracts shall expressly include the following statement: "The
19523	State of Florida's performance and obligation to pay under this
19524	contract is contingent upon an annual appropriation by the
19525	Legislature."
19526	(5) The corporation may issue and incur notes, bonds,
19527	certificates of indebtedness, or other obligations or evidences
19528	of indebtedness payable from and secured by amounts payable to
19529	the corporation by the officedepartmentunder a service
19530	contract entered into pursuant to subsection (4) for the purpose
19531	of the simultaneous payment of all claims approved pursuant to
19532	s. 517.1203. The term of any such note, bond, certificate of
19533	indebtedness, or other obligation or evidence of indebtedness
19534	shall not exceed 15 years. The corporation may select a
19535	financing team and issue obligations through competitive bidding
19536	or negotiated contracts, whichever is most cost-effective. Any
19537	such indebtedness of the corporation shall not constitute a debt
19538	or obligation of the state or a pledge of the faith and credit
19539	or taxing power of the state, but shall be payable from and
19540	secured by payments made by the officedepartmentunder the
19541	service contract pursuant to subsection (4).
19542	(6) The corporation shall pay all claims approved pursuant
19543	to s. 517.1203 as determined by and at the direction of the
19544	officedepartment.
19545	Section 364. Section 517.121, Florida Statutes, is amended
19546	to read:
19547	517.121 Books and records requirements; examinations.--
19548	(1) A dealer, investment adviser, branch office, or
19549	associated person shall maintain such books and records as the
19550	commissiondepartmentmay prescribe by rule.
19551	(2) The officedepartmentshall, at intermittent periods,
19552	examine the affairs and books and records of each registered
19553	dealer, investment adviser, branch office, or associated person,
19554	or require such records and reports to be submitted to it as
19555	requiredit may require by rule of the commission, to determine
19556	compliance with this act.
19557	Section 365. Paragraph (a) of subsection (1), paragraphs
19558	(b) and (e) of subsection (3), and subsection (4) of section
19559	517.131, Florida Statutes, are amended to read:
19560	517.131 Securities Guaranty Fund.--
19561	(1)(a) The Chief Financial OfficerTreasurershall
19562	establish a Securities Guaranty Fund. An amount not exceeding
19563	20 percent of all revenues received as assessment fees pursuant
19564	to s. 517.12(10) and (11) for dealers and investment advisers or
19565	s. 517.1201 for federal covered advisers and an amount not
19566	exceeding 10 percent of all revenues received as assessment fees
19567	pursuant to s. 517.12(10) and (11) for associated persons shall
19568	be allocated to the fund. An additional amount not exceeding
19569	3.5 percent of all revenues received as assessment fees for
19570	associated persons pursuant to s. 517.12(10) and (11) shall be
19571	allocated to the Securities Guaranty Fund but only after the
19572	officedepartmentdetermines, by final order, that sufficient
19573	funds have been allocated to the fund pursuant to s. 517.1203 to
19574	satisfy all valid claims filed in accordance with s. 517.1203(2)
19575	and after all amounts payable under any service contract entered
19576	into by the officedepartmentpursuant to s. 517.1204, and all
19577	notes, bonds, certificates of indebtedness, other obligations,
19578	or evidences of indebtedness secured by such notes, bonds,
19579	certificates of indebtedness, or other obligations, have been
19580	paid or provision has been made for the payment of such amounts,
19581	notes, bonds, certificates of indebtedness, other obligations,
19582	or evidences of indebtedness. This assessment fee shall be part
19583	of the regular license fee and shall be transferred to or
19584	deposited in the Securities Guaranty Fund.
19585	(3) Any person is eligible to seek recovery from the
19586	Securities Guaranty Fund if:
19587	(b) Such person has made all reasonable searches and
19588	inquiries to ascertain whether the judgment debtor possesses
19589	real or personal property or other assets subject to being sold
19590	or applied in satisfaction of the judgment, and by her or his
19591	search the person has discovered no property or assets; or she
19592	or he has discovered property and assets and has taken all
19593	necessary action and proceedings for the application thereof to
19594	the judgment, but the amount thereby realized was insufficient
19595	to satisfy the judgment. To verify compliance with such
19596	condition, the officedepartmentmay require such person to have
19597	a writ of execution be issued upon such judgment and may further
19598	require a showing that no personal or real property of the
19599	judgment debtor liable to be levied upon in complete
19600	satisfaction of the judgment can be found.
19601	(e) The officedepartmentwaives compliance with the
19602	requirements of paragraph (a) or paragraph (b). The office
19603	departmentmay waive such compliance if the dealer, investment
19604	adviser, or associated person which is the subject of the claim
19605	filed with the officedepartmentis the subject of any
19606	proceeding in which a receiver has been appointed by a court of
19607	competent jurisdiction. If the officedepartmentwaives such
19608	compliance, the officedepartmentmay, upon petition by the
19609	debtor or the court-appointed trustee, examiner, or receiver,
19610	distribute funds from the Securities Guaranty Fund up to the
19611	amount allowed under s. 517.141. Any waiver granted pursuant to
19612	this section shall be considered a judgment for purposes of
19613	complying with the requirements of this section and of s.
19614	517.141.
19615	(4) Any person who files an action that may result in the
19616	disbursement of funds from the Securities Guaranty Fund pursuant
19617	to the provisions of s. 517.141 shall give written notice by
19618	certified mail to the officedepartmentas soon as practicable
19619	after such action has been filed. The failure to give such
19620	notice shall not bar a payment from the Securities Guaranty Fund
19621	if all of the conditions specified in subsection (3) are
19622	satisfied.
19623	Section 366. Section 517.141, Florida Statutes, is amended
19624	to read:
19625	517.141 Payment from the fund.--
19626	(1) Any person who meets all of the conditions prescribed
19627	in s. 517.131 may apply to the officedepartmentfor payment to
19628	be made to such person from the Securities Guaranty Fund in the
19629	amount equal to the unsatisfied portion of such person's
19630	judgment or $10,000, whichever is less, but only to the extent
19631	and amount reflected in the judgment as being actual or
19632	compensatory damages, excluding costs and attorney's fees.
19633	(2) Regardless of the number of claimants involved,
19634	payments for claims shall be limited in the aggregate to
19635	$100,000 against any one dealer, investment adviser, or
19636	associated person. If the total claims exceed the aggregate
19637	limit of $100,000, the officedepartmentshall prorate the
19638	payment based upon the ratio that the person's claim bears to
19639	the total claims filed.
19640	(3) No payment shall be made on any claim against any one
19641	dealer, investment adviser, or associated person before the
19642	expiration of 2 years from the date any claimant is found by the
19643	officedepartmentto be eligible for recovery pursuant to this
19644	section. If during this 2-year period more than one claim is
19645	filed against the same dealer, investment adviser, or associated
19646	person, or if the officedepartmentreceives notice pursuant to
19647	s. 517.131(4) that an action against the same dealer, investment
19648	adviser, or associated person is pending, all such claims and
19649	notices of pending claims received during this period against
19650	the same dealer, investment adviser, or associated person may be
19651	handled by the officedepartmentas provided in this section.
19652	Two years after the first claimant against that same dealer,
19653	investment adviser, or associated person applies for payment
19654	pursuant to this section:
19655	(a) The officedepartmentshall determine those persons
19656	eligible for payment or for potential payment in the event of a
19657	pending action. All such persons may be entitled to receive
19658	their pro rata shares of the fund as provided in this section.
19659	(b) Those persons who meet all the conditions prescribed
19660	in s. 517.131 and who have applied for payment pursuant to this
19661	section will be entitled to receive their pro rata shares of the
19662	total disbursement.
19663	(c) Those persons who have filed notice with the office
19664	departmentof a pending claim pursuant to s. 517.131(4) but who
19665	are not yet eligible for payment from the fund will be entitled
19666	to receive their pro rata shares of the total disbursement once
19667	they have complied with subsection (1). However, in the event
19668	that the amounts they are eligible to receive pursuant to
19669	subsection (1) are less than their pro rata shares as determined
19670	under this section, any excess shall be distributed pro rata to
19671	those persons entitled to disbursement under this subsection
19672	whose pro rata shares of the total disbursement were less than
19673	the amounts of their claims.
19674	(4) Individual claims filed by persons owning the same
19675	joint account, or claims stemming from any other type of account
19676	maintained by a particular licensee on which more than one name
19677	appears, shall be treated as the claims of one eligible claimant
19678	with respect to payment from the fund. If a claimant who has
19679	obtained a judgment which qualifies for disbursement under s.
19680	517.131 has maintained more than one account with the dealer,
19681	investment adviser, or associated person who is the subject of
19682	the claims, for purposes of disbursement of the fund, all such
19683	accounts, whether joint or individual, shall be considered as
19684	one account and shall entitle such claimant to only one
19685	distribution from the fund not to exceed the lesser of $10,000
19686	or the unsatisfied portion of such claimant's judgment as
19687	provided in subsection (1). To the extent that a claimant
19688	obtains more than one judgment against a dealer, investment
19689	adviser, or one or more associated persons arising out of the
19690	same transactions, occurrences, or conduct or out of the
19691	dealer's, investment adviser's, or associated person's handling
19692	of the claimant's account, such judgments shall be consolidated
19693	for purposes of this section and shall entitle the claimant to
19694	only one disbursement from the fund not to exceed the lesser of
19695	$10,000 or the unsatisfied portion of such claimant's judgment
19696	as provided in subsection (1).
19697	(5) If the final judgment which gave rise to the claim is
19698	overturned in any appeal or in any collateral proceeding, the
19699	claimant shall reimburse the fund all amounts paid to the
19700	claimant on the claim. Such reimbursement shall be paid to the
19701	officedepartmentwithin 60 days after the final resolution of
19702	the appellate or collateral proceedings, with the 60-day period
19703	commencing on the date the final order or decision is entered in
19704	such proceedings.
19705	(6) If a claimant receives payments in excess of that
19706	which is permitted under this chapter, the claimant shall
19707	reimburse the fund such excess within 60 days after the claimant
19708	receives such excess payment or after the payment is determined
19709	to be in excess of that permitted by law, whichever is later.
19710	(7) The officedepartmentmay institute legal proceedings
19711	to enforce compliance with this section and with s. 517.131 to
19712	recover moneys owed to the fund, and shall be entitled to
19713	recover interest, costs, and attorney's fees in any action
19714	brought pursuant to this section in which the officedepartment
19715	prevails.
19716	(8) If at any time the money in the Securities Guaranty
19717	Fund is insufficient to satisfy any valid claim or portion of a
19718	valid claim approved by the officedepartment, the office
19719	departmentshall satisfy such unpaid claim or portion of such
19720	valid claim as soon as a sufficient amount of money has been
19721	deposited in or transferred to the fund. When there is more
19722	than one unsatisfied claim outstanding, such claims shall be
19723	paid in the order in which the claims were approved by final
19724	order of the officedepartment, which order is not subject to an
19725	appeal or other pending proceeding.
19726	(9) Upon receipt by the claimant of the payment from the
19727	Securities Guaranty Fund, the claimant shall assign any
19728	additional right, title, and interest in the judgment, to the
19729	extent of such payment, to the officedepartment. If the
19730	provisions of s. 517.131(3)(e) apply, the claimant must assign
19731	to the officedepartmentany right, title, and interest in the
19732	debt to the extent of any payment by the officedepartmentfrom
19733	the Securities Guaranty Fund.
19734	(10) All payments and disbursements made from the
19735	Securities Guaranty Fund shall be made by the Chief Financial
19736	OfficerTreasurer upon authorizationa voucher signed by the
19737	director of the officeComptroller, as head of the department,
19738	or such agent as she or he may designate.
19739	Section 367. Section 517.151, Florida Statutes, is amended
19740	to read:
19741	517.151 Investments of the fund.--The funds of the
19742	Securities Guaranty Fund shall be invested by the Chief
19743	Financial OfficerTreasurerunder the same limitations as other
19744	state funds, and the interest earned thereon shall be deposited
19745	to the credit of the fund and available for the same purpose as
19746	other moneys deposited in the Securities Guaranty Fund.
19747	Section 368. Subsection (1), (3), and (5), and paragraph
19748	(b) of subsection (6) of section 517.161, Florida Statutes, are
19749	amended to read:
19750	517.161 Revocation, denial, or suspension of registration
19751	of dealer, investment adviser, associated person, or branch
19752	office.--
19753	(1) Registration under s. 517.12 may be denied or any
19754	registration granted may be revoked, restricted, or suspended by
19755	the officedepartment if the officedepartmentdetermines that
19756	such applicant or registrant:
19757	(a) Has violated any provision of this chapter or any rule
19758	or order made under this chapter;
19759	(b) Has made a material false statement in the application
19760	for registration;
19761	(c) Has been guilty of a fraudulent act in connection with
19762	rendering investment advice or in connection with any sale of
19763	securities, has been or is engaged or is about to engage in
19764	making fictitious or pretended sales or purchases of any such
19765	securities or in any practice involving the rendering of
19766	investment advice or the sale of securities which is fraudulent
19767	or in violation of the law;
19768	(d) Has made a misrepresentation or false statement to, or
19769	concealed any essential or material fact from, any person in the
19770	rendering of investment advice or the sale of a security to such
19771	person;
19772	(e) Has failed to account to persons interested for all
19773	money and property received;
19774	(f) Has not delivered, after a reasonable time, to persons
19775	entitled thereto securities held or agreed to be delivered by
19776	the dealer, broker, or investment adviser, as and when paid for,
19777	and due to be delivered;
19778	(g) Is rendering investment advice or selling or offering
19779	for sale securities through any associated person not registered
19780	in compliance with the provisions of this chapter;
19781	(h) Has demonstrated unworthiness to transact the business
19782	of dealer, investment adviser, or associated person;
19783	(i) Has exercised management or policy control over or
19784	owned 10 percent or more of the securities of any dealer or
19785	investment adviser that has been declared bankrupt, or had a
19786	trustee appointed under the Securities Investor Protection Act;
19787	or is, in the case of a dealer or investment adviser, insolvent;
19788	(j) Has been convicted of, or has entered a plea of guilty
19789	or nolo contendere to, a crime against the laws of this state or
19790	any other state or of the United States or of any other country
19791	or government which relates to registration as a dealer,
19792	investment adviser, issuer of securities, associated person, or
19793	branch office; which relates to the application for such
19794	registration; or which involves moral turpitude or fraudulent or
19795	dishonest dealing;
19796	(k) Has had a final judgment entered against her or him in
19797	a civil action upon grounds of fraud, embezzlement,
19798	misrepresentation, or deceit;
19799	(l) Is of bad business repute; or
19800	(m) Has been the subject of any decision, finding,
19801	injunction, suspension, prohibition, revocation, denial,
19802	judgment, or administrative order by any court of competent
19803	jurisdiction, administrative law judge, or by any state or
19804	federal agency, national securities, commodities, or option
19805	exchange, or national securities, commodities, or option
19806	association, involving a violation of any federal or state
19807	securities or commodities law or any rule or regulation
19808	promulgated thereunder, or any rule or regulation of any
19809	national securities, commodities, or options exchange or
19810	national securities, commodities, or options association, or has
19811	been the subject of any injunction or adverse administrative
19812	order by a state or federal agency regulating banking,
19813	insurance, finance or small loan companies, real estate,
19814	mortgage brokers, or other related or similar industries. For
19815	purposes of this subsection, the officedepartmentmay not deny
19816	registration to any applicant who has been continuously
19817	registered with the officedepartmentfor 5 years from the entry
19818	of such decision, finding, injunction, suspension, prohibition,
19819	revocation, denial, judgment, or administrative order provided
19820	such decision, finding, injunction, suspension, prohibition,
19821	revocation, denial, judgment, or administrative order has been
19822	timely reported to the officedepartment pursuant to the
19823	commission'sdepartment's rules and regulations.
19824	(3) In the event the officedepartmentdetermines to deny
19825	an application or revoke a registration, it shall enter a final
19826	order with its findings on the register of dealers and
19827	associated persons; and denial, suspension, or revocation of the
19828	registration of a dealer or investment adviser shall also deny,
19829	suspend, or revoke the registration of all her or his associated
19830	persons.
19831	(5) The officedepartmentmay deny any request to
19832	terminate or withdraw any application or registration if the
19833	officedepartmentbelieves that an act which would be a ground
19834	for denial, suspension, restriction, or revocation under this
19835	chapter has been committed.
19836	(6) Registration under s. 517.12 may be denied or any
19837	registration granted may be suspended or restricted if an
19838	applicant or registrant is charged, in a pending enforcement
19839	action or pending criminal prosecution, with any conduct that
19840	would authorize denial or revocation under subsection (1).
19841	(b) Any order of suspension or restriction under this
19842	subsection shall:
19843	1. Take effect only after a hearing, unless no hearing is
19844	requested by the registrant or unless the suspension or
19845	restriction is made in accordance with s. 120.60(6).
19846	2. Contain a finding that evidence of a prima facie case
19847	supports the charge made in the enforcement action or criminal
19848	prosecution.
19849	3. Operate for no longer than 10 days beyond receipt of
19850	notice by the officedepartmentof termination with respect to
19851	the registrant of the enforcement action or criminal
19852	prosecution.
19853	Section 369. Section 517.181, Florida Statutes, is amended
19854	to read:
19855	517.181 Escrow agreement.--
19856	(1) If the statement containing information as to
19857	securities to be registered, as provided for in s. 517.081,
19858	shall disclose that any such securities or any securities senior
19859	thereto shall have been or shall be intended to be issued for
19860	any patent right, copyright, trademark, process, formula, or
19861	goodwill; for organization or promotion fees or expenses; or for
19862	goodwill or going-concern value or other intangible assets, then
19863	the amount and nature thereof shall be fully set forth, and the
19864	officedepartmentmay require that such securities so issued in
19865	payment of such patent right, copyright, trademark, process,
19866	formula, or goodwill; for organization or promotion fees or
19867	expenses; or for other intangible assets shall be delivered in
19868	escrow to the officedepartmentor other depository satisfactory
19869	to the officedepartmentunder an escrow agreement. The escrow
19870	agreement shall be in a form suitable to the officedepartment
19871	and shall provide for the escrow or impoundment of such
19872	securities for a reasonable length of time determined by the
19873	officedepartmentto be in the best interest of other
19874	shareholders. The securities subject to escrow shall also
19875	include any dividend, cash, or stock that may be paid during the
19876	life of the escrow and any stock issued through, or by reason
19877	of, any stock split, exchange of shares, recapitalization,
19878	merger, consolidation, reorganization, or similar combination or
19879	subdivision in substitution for or in lieu of any stock subject
19880	to this provision; and in case of dissolution or insolvency
19881	during the time such securities are held in escrow, the owners
19882	of such securities shall not participate in the assets until
19883	after the owners of all other securities shall have been paid in
19884	full.
19885	(2) Any securities held in escrow under this section on
19886	November 1, 1978, may be released to the owners thereof upon
19887	request, if satisfactory financial data is submitted to the
19888	officedepartmentshowing that the issuer is currently operating
19889	on sound business principles and has net income in accordance
19890	with criteria-implementing rules of the commissiondepartment
19891	relating to escrow of securities. At any time, the office
19892	departmentmay review any existing escrow agreement made under
19893	this section and determine that the same may be amended in order
19894	to permit a subsequent release of the securities upon terms and
19895	conditions which are just and equitable as defined by said
19896	rules.
19897	(3) When it shall appear from information available to the
19898	officedepartmentthat the issuer of securities held in escrow
19899	has been dissolved or disbanded or is defunct or no longer
19900	actively engaged in business and such securities are of no
19901	value, the officedepartment, after giving at least 60 days'
19902	notice in at least one newspaper of general circulation and
19903	after giving interested parties opportunity for hearing, may
19904	enter its order authorizing the destruction of said securities.
19905	Any affected escrow agent may rely on such order and shall not
19906	be required to determine the validity or sufficiency thereof.
19907	Section 370. Section 517.191, Florida Statutes, is amended
19908	to read:
19909	517.191 Injunction to restrain violations.--
19910	(1) When it appearsshall appear to the officedepartment,
19911	either upon complaint or otherwise, that a person has engaged or
19912	is about to engage in any act or practice constituting a
19913	violation of this chapter or a rule or order hereunder, the
19914	officedepartmentmay investigate; and whenever it shall believe
19915	from evidence satisfactory to it that any such person has
19916	engaged, is engaged, or is about to engage in any act or
19917	practice constituting a violation of this chapter or a rule or
19918	order hereunder, the officedepartmentmay, in addition to any
19919	other remedies, bring action in the name and on behalf of the
19920	state against such person and any other person concerned in or
19921	in any way participating in or about to participate in such
19922	practices or engaging therein or doing any act or acts in
19923	furtherance thereof or in violation of this chapter to enjoin
19924	such person or persons from continuing such fraudulent practices
19925	or engaging therein or doing any act or acts in furtherance
19926	thereof or in violation of this chapter. In any such court
19927	proceedings, the officedepartmentmay apply for, and on due
19928	showing be entitled to have issued, the court's subpoena
19929	requiring forthwith the appearance of any defendant and her or
19930	his employees, associated persons, or agents and the production
19931	of documents, books, and records that may appear necessary for
19932	the hearing of such petition, to testify or give evidence
19933	concerning the acts or conduct or things complained of in such
19934	application for injunction. In such action, the equity courts
19935	shall have jurisdiction of the subject matter, and a judgment
19936	may be entered awarding such injunction as may be proper.
19937	(2) In addition to all other means provided by law for the
19938	enforcement of any temporary restraining order, temporary
19939	injunction, or permanent injunction issued in any such court
19940	proceedings, the court shall have the power and jurisdiction,
19941	upon application of the officedepartment, to impound and to
19942	appoint a receiver or administrator for the property, assets,
19943	and business of the defendant, including, but not limited to,
19944	the books, records, documents, and papers appertaining thereto.
19945	Such receiver or administrator, when appointed and qualified,
19946	shall have all powers and duties as to custody, collection,
19947	administration, winding up, and liquidation of said property and
19948	business as shall from time to time be conferred upon her or him
19949	by the court. In any such action, the court may issue orders
19950	and decrees staying all pending suits and enjoining any further
19951	suits affecting the receiver's or administrator's custody or
19952	possession of the said property, assets, and business or, in its
19953	discretion, may with the consent of the presiding judge of the
19954	circuit require that all such suits be assigned to the circuit
19955	court judge appointing the said receiver or administrator.
19956	(3) In addition to any other remedies provided by this
19957	chapter, the officedepartmentmay apply to the court hearing
19958	this matter for an order of restitution whereby the defendants
19959	in such action shall be ordered to make restitution of those
19960	sums shown by the officedepartmentto have been obtained by
19961	them in violation of any of the provisions of this chapter.
19962	Such restitution shall, at the option of the court, be payable
19963	to the administrator or receiver appointed pursuant to this
19964	section or directly to the persons whose assets were obtained in
19965	violation of this chapter.
19966	Section 371. Section 517.201, Florida Statutes, is amended
19967	to read:
19968	517.201 Investigations; examinations; subpoenas; hearings;
19969	witnesses.--
19970	(1) The officedepartment:
19971	(a) May make investigations and examinations within or
19972	outside of this state as it deems necessary:
19973	1. To determine whether a person has violated or is about
19974	to violate any provision of this chapter or a rule or order
19975	hereunder; or
19976	2. To aid in the enforcement of this chapter.
19977	(b) May require or permit a person to file a statement in
19978	writing, under oath or otherwise as the officedepartment
19979	determines, as to all the facts and circumstances concerning the
19980	matter to be investigated.
19981	(2) When it is proposed to conduct an investigation or
19982	examination, the officedepartmentmay gather evidence in the
19983	matter. The officedepartmentmay administer oaths, examine
19984	witnesses, and issue subpoenas.
19985	(3) Subpoenas for witnesses whose evidence is deemed
19986	material to any investigation or examination may be issued by
19987	the officedepartment under the seal of the officedepartment,
19988	or by any county court judge or clerk of the circuit court or
19989	county court, commanding such witnesses to be or appear before
19990	the officedepartmentat a time and place to be therein named
19991	and to bring such books, records, and documents as may be
19992	specified or to submit such books, records, and documents to
19993	inspection; and such subpoenas may be served by an authorized
19994	representative of the officedepartment.
19995	(4)(a) In the event of substantial noncompliance with a
19996	subpoena or subpoena duces tecum issued or caused to be issued
19997	by the officedepartment pursuant to this section, the office
19998	departmentmay petition the circuit court of the county in which
19999	the person subpoenaed resides or has its principal place of
20000	business for an order requiring the subpoenaed person to appear
20001	and testify and to produce such books, records, and documents as
20002	are specified in such subpoena duces tecum. The court may grant
20003	injunctive relief restraining the issuance, sale or offer for
20004	sale, purchase or offer to purchase, promotion, negotiation,
20005	advertisement, or distribution in or from offices in this state
20006	of securities or investments by a person or agent, employee,
20007	broker, partner, officer, director, or stockholder thereof, and
20008	may grant such other relief, including, but not limited to, the
20009	restraint, by injunction or appointment of a receiver, of any
20010	transfer, pledge, assignment, or other disposition of such
20011	person's assets or any concealment, alteration, destruction, or
20012	other disposition of subpoenaed books, records, or documents, as
20013	the court deems appropriate, until such person has fully
20014	complied with such subpoena or subpoena duces tecum and the
20015	officedepartmenthas completed its investigation or
20016	examination. The officedepartmentis entitled to the summary
20017	procedure provided in s. 51.011, and the court shall advance the
20018	cause on its calendar. Costs incurred by the officedepartment
20019	to obtain an order granting, in whole or in part, such petition
20020	for enforcement of a subpoena or subpoena duces tecum shall be
20021	taxed against the subpoenaed person, and failure to comply with
20022	such order shall be a contempt of court.
20023	(b) When it shall appear to the officedepartmentthat the
20024	compliance with a subpoena or subpoena duces tecum issued or
20025	caused to be issued by the officedepartmentpursuant to this
20026	section is essential and otherwise unavailable to an
20027	investigation or examination, the officedepartment, in addition
20028	to the other remedies provided for herein, may, by verified
20029	petition setting forth the facts, apply to the circuit court of
20030	the county in which the subpoenaed person resides or has its
20031	principal place of business for a writ of ne exeat. The court
20032	shall thereupon direct the issuance of the writ against the
20033	subpoenaed person requiring sufficient bond conditioned on
20034	compliance with the subpoena or subpoena duces tecum. The court
20035	shall cause to be endorsed on the writ a suitable amount of bond
20036	on payment of which the person named in the writ shall be freed,
20037	having a due regard to the nature of the case.
20038	(5) Witnesses shall be entitled to the same fees and
20039	mileage as they may be entitled by law for attending as
20040	witnesses in the circuit court, except where such examination or
20041	investigation is held at the place of business or residence of
20042	the witness.
20043	Section 372. Subsections (1) and (3) of section 517.2015,
20044	Florida Statutes, are amended to read:
20045	517.2015 Confidentiality of information relating to
20046	investigations and examinations.--
20047	(1)(a) Except as otherwise provided by this section,
20048	information relative to an investigation or examination by the
20049	officedepartmentpursuant to this chapter, including any
20050	consumer complaint, is confidential and exempt from s. 119.07(1)
20051	until the investigation or examination is completed or ceases to
20052	be active. The information compiled by the officedepartmentin
20053	such an investigation or examination shall remain confidential
20054	and exempt from s. 119.07(1) after the office'sdepartment's
20055	investigation or examination is completed or ceases to be active
20056	if the officedepartmentsubmits the information to any law
20057	enforcement or administrative agency or regulatory organization
20058	for further investigation. Such information shall remain
20059	confidential and exempt from s. 119.07(1) until that agency's or
20060	organization's investigation is completed or ceases to be
20061	active. For purposes of this section, an investigation or
20062	examination shall be considered "active" so long as the office
20063	departmentor any law enforcement or administrative agency or
20064	regulatory organization is proceeding with reasonable dispatch
20065	and has a reasonable good faith belief that the investigation or
20066	examination may lead to the filing of an administrative, civil,
20067	or criminal proceeding or to the denial or conditional grant of
20068	a license, registration, or permit. This section shall not be
20069	construed to prohibit disclosure of information which is
20070	required by law to be filed with the officedepartmentand
20071	which, but for the investigation or examination, would be
20072	subject to s. 119.07(1).
20073	(b) Except as necessary for the officedepartmentto
20074	enforce the provisions of this chapter, a consumer complaint and
20075	other information relative to an investigation or examination
20076	shall remain confidential and exempt from s. 119.07(1) after the
20077	investigation or examination is completed or ceases to be active
20078	to the extent disclosure would:
20079	1. Jeopardize the integrity of another active
20080	investigation or examination.
20081	2. Reveal the name, address, telephone number, social
20082	security number, or any other identifying number or information
20083	of any complainant, customer, or account holder.
20084	3. Disclose the identity of a confidential source.
20085	4. Disclose investigative techniques or procedures.
20086	5. Reveal a trade secret as defined in s. 688.002.
20087	(c) In the event that officedepartmentpersonnel are or
20088	have been involved in an investigation or examination of such
20089	nature as to endanger their lives or physical safety or that of
20090	their families, then the home addresses, telephone numbers,
20091	places of employment, and photographs of such personnel,
20092	together with the home addresses, telephone numbers,
20093	photographs, and places of employment of spouses and children of
20094	such personnel and the names and locations of schools and day
20095	care facilities attended by the children of such personnel are
20096	confidential and exempt from s. 119.07(1).
20097	(d) Nothing in this section shall be construed to prohibit
20098	the officedepartmentfrom providing information to any law
20099	enforcement or administrative agency or regulatory organization.
20100	Any law enforcement or administrative agency or regulatory
20101	organization receiving confidential information in connection
20102	with its official duties shall maintain the confidentiality of
20103	the information so long as it would otherwise be confidential.
20104	(e) All information obtained by the officedepartmentfrom
20105	any person which is only made available to the officedepartment
20106	on a confidential or similarly restricted basis shall be
20107	confidential and exempt from s. 119.07(1). This exemption shall
20108	not be construed to prohibit disclosure of information which is
20109	required by law to be filed with the officedepartmentor which
20110	is otherwise subject to s. 119.07(1).
20111	(3) A privilege against civil liability is granted to a
20112	person who furnishes information or evidence to the office
20113	department, unless such person acts in bad faith or with malice
20114	in providing such information or evidence.
20115	Section 373. Section 517.221, Florida Statutes, is amended
20116	to read:
20117	517.221 Cease and desist orders.--
20118	(1) The officedepartmentmay issue and serve upon a
20119	person a cease and desist order whenever the officedepartment
20120	has reason to believe that such person is violating, has
20121	violated, or is about to violate any provision of this chapter,
20122	any rule or order promulgated by the commission or office
20123	department, or any written agreement entered into with the
20124	officedepartment.
20125	(2) Whenever the officedepartmentfinds that conduct
20126	described in subsection (1) presents an immediate danger to the
20127	public requiring an immediate final order, it may issue an
20128	emergency cease and desist order reciting with particularity the
20129	facts underlying such findings. The emergency cease and desist
20130	order is effective immediately upon service of a copy of the
20131	order on the respondent named therein and remains effective for
20132	90 days. If the officedepartmentbegins nonemergency cease and
20133	desist proceedings under subsection (1), the emergency cease and
20134	desist order remains effective until conclusion of the
20135	proceedings under ss. 120.569 and 120.57.
20136	(3) The officedepartmentmay impose and collect an
20137	administrative fine against any person found to have violated
20138	any provision of this chapter, any rule or order promulgated by
20139	the commission or officedepartment, or any written agreement
20140	entered into with the officedepartmentin an amount not to
20141	exceed $5,000 for each such violation. All fines collected
20142	hereunder shall be deposited as received in the Anti-Fraud Trust
20143	Fund.
20144	Section 374. Subsection (1) of section 517.241, Florida
20145	Statutes, is amended to read:
20146	517.241 Remedies.--
20147	(1) Any person aggrieved by a final order of the office
20148	departmentmay have the order reviewed as provided by chapter
20149	120, the Administrative Procedure Act.
20150	Section 375. Paragraph (c) of subsection (1) and paragraph
20151	(b) of subsection (2) of section 517.301, Florida Statutes, are
20152	amended to read:
20153	517.301 Fraudulent transactions; falsification or
20154	concealment of facts.--
20155	(1) It is unlawful and a violation of the provisions of
20156	this chapter for a person:
20157	(c) In any matter within the jurisdiction of the office
20158	department, to knowingly and willfully falsify, conceal, or
20159	cover up, by any trick, scheme, or device, a material fact, make
20160	any false, fictitious, or fraudulent statement or
20161	representation, or make or use any false writing or document,
20162	knowing the same to contain any false, fictitious, or fraudulent
20163	statement or entry.
20164	(2) For purposes of ss. 517.311 and 517.312 and this
20165	section, the term "investment" means any commitment of money or
20166	property principally induced by a representation that an
20167	economic benefit may be derived from such commitment, except
20168	that the term "investment" does not include a commitment of
20169	money or property for:
20170	(b) The purchase of tangible personal property through a
20171	person not engaged in telephone solicitation, where said
20172	property is offered and sold in accordance with the following
20173	conditions:
20174	1. There are no specific representations or guarantees
20175	made by the offeror or seller as to the economic benefit to be
20176	derived from the purchase;
20177	2. The tangible property is delivered to the purchaser
20178	within 30 days after sale, except that such 30-day period may be
20179	extended by the officedepartmentif market conditions so
20180	warrant; and
20181	3. The seller has offered the purchaser a full refund
20182	policy in writing, exercisable by the purchaser within 10 days
20183	of the date of delivery of such tangible personal property,
20184	except that the amount of such refund in no event shall exceed
20185	the bid price in effect at the time the property is returned to
20186	the seller. If the applicable sellers' market is closed at the
20187	time the property is returned to the seller for a refund, the
20188	amount of such refund shall be based on the bid price for such
20189	property at the next opening of such market.
20190	Section 376. Subsection (3) of section 517.302, Florida
20191	Statutes, is amended to read:
20192	517.302 Criminal penalties; alternative fine; Anti-Fraud
20193	Trust Fund; time limitation for criminal prosecution.--
20194	(3) In lieu of a fine otherwise authorized by law, a
20195	person who has been convicted of or who has pleaded guilty or no
20196	contest to having engaged in conduct in violation of the
20197	provisions of this chapter may be sentenced to pay a fine that
20198	does not exceed the greater of three times the gross value
20199	gained or three times the gross loss caused by such conduct,
20200	plus court costs and the costs of investigation and prosecution
20201	reasonably incurred.
20202	(a) There is created within the officedepartmenta trust
20203	fund to be known as the Anti-Fraud Trust Fund. Any amounts
20204	assessed as costs of investigation and prosecution under this
20205	subsection shall be deposited in the trust fund. Funds deposited
20206	in such trust fund shall be used, when authorized by
20207	appropriation, for investigation and prosecution of
20208	administrative, civil, and criminal actions arising under the
20209	provisions of this chapter. Funds may also be used to improve
20210	the public's awareness and understanding of prudent investing.
20211	(b) The officedepartmentshall report to the Executive
20212	Office of the Governor annually by November 15, the amounts
20213	deposited into the Anti-Fraud Trust Fund during the previous
20214	fiscal year. The Executive Office of the Governor shall
20215	distribute these reports to the President of the Senate and the
20216	Speaker of the House of Representatives.
20217	Section 377. Subsections (1) and (2) of section 517.313,
20218	Florida Statutes, are amended to read:
20219	517.313 Destroying certain records; reproduction.--
20220	(1) The commission and office maydepartment is authorized
20221	tophotograph, microphotograph, or reproduce on film or prints
20222	documents, records, data, and information of a permanent
20223	character.
20224	(2) The commission and office maydepartment is authorized
20225	to destroy any of said documents after audit of the officehas
20226	been completed for the period embracing the dates of said
20227	instruments, after complying with the provisions of chapter 119.
20228	Section 378. Section 517.315, Florida Statutes, is amended
20229	to read:
20230	517.315 Fees.--All fees and charges of any nature
20231	collected by the officedepartmentpursuant to this chapter,
20232	except the fees and charges collected pursuant to s. 517.131,
20233	shall be paid into the State Treasury and credited to the
20234	General Revenue Fund; and an appropriation shall be made
20235	annually of necessary funds for the administration of the
20236	provisions of this chapter.
20237	Section 379. Section 517.32, Florida Statutes, is amended
20238	to read:
20239	517.32 Exemption from excise tax, certain obligations to
20240	pay.--There shall be exempt from all excise taxes imposed by
20241	chapter 201 all promissory notes, nonnegotiable notes, and other
20242	written obligations to pay money bearing dates subsequent to
20243	July 1, 1957, when the maker thereof is a security dealer
20244	registered by the officedepartmentunder this chapter and when
20245	such promissory note, nonnegotiable note or notes, or other
20246	written obligation to pay money shall be for the duration of 30
20247	days or less and secured by pledge or deposit, as collateral
20248	security for the payment thereof, security or securities as
20249	defined in s. 517.021, provided all excise taxes imposed by
20250	chapter 201 shall have been paid upon such collateral security.
20251	Section 380. Section 520.996, Florida Statutes, is amended
20252	to read:
20253	520.996 Investigations and complaints.--
20254	(1)(a) The officedepartmentor its agent may, at
20255	intermittent periods, make such investigations and examinations
20256	of any licensee or other person as it deems necessary to
20257	determine compliance with this chapter. For such purposes, it
20258	may examine the books, accounts, records, and other documents or
20259	matters of any licensee or other person. It shall have the power
20260	to compel the production of all relevant books, records, and
20261	other documents and materials relative to an examination or
20262	investigation. Such investigations and examinations shall not
20263	be made more often than once during any 12-month period unless
20264	the officedepartmenthas good and sufficient reason to believe
20265	the licensee is not complying with the provisions of this
20266	chapter. Such examination fee shall be calculated on an hourly
20267	basis and shall be rounded to the nearest hour.
20268	(b) The officedepartmentshall conduct all examinations
20269	at a convenient location in this state unless the office
20270	departmentdetermines that it is more effective or cost-
20271	efficient to perform an examination at the licensee's out-of-
20272	state location. For an examination performed at the licensee's
20273	out-of-state location, the licensee shall pay the travel expense
20274	and per diem subsistence at the rate provided by law for up to
20275	thirty 8-hour days per year for each examiner who participates
20276	in such an examination. However, if the examination involves or
20277	reveals possible fraudulent conduct of the licensee, the
20278	licensee shall pay the travel expenses and per diem subsistence
20279	provided by law, without limitation, for each participating
20280	examiner.
20281	(2) The examination expenses incurred by the office
20282	departmentin each examination shall be paid by the licensee
20283	examined. The expenses of the officedepartmentincurred in
20284	each examination of a home improvement finance seller or of an
20285	employee representing such home improvement finance seller shall
20286	be paid by the home improvement finance seller. Expenses
20287	incurred for each examination of a sales finance company shall
20288	be paid by it. The examination expenses shall be paid by such
20289	licensee examined or such other person obligated to pay such
20290	examination expenses within 30 days after demand therefor by the
20291	officedepartment.
20292	(3) Any retail buyer or owner having reason to believe
20293	that the provisions of this chapter have been violated may file
20294	with the office or the Department of Financial Servicesa
20295	written complaint setting forth the details of such alleged
20296	violations and the officedepartmentupon receipt of such
20297	complaint, may inspect the pertinent books, records, letters,
20298	and contracts of the licensee and of the seller involved,
20299	relating to such specific written complaint.
20300	Section 381. Section 520.9965, Florida Statutes, is
20301	amended to read:
20302	520.9965 Confidentiality of information relating to
20303	investigations and examinations.--
20304	(1)(a) Except as otherwise provided by this section,
20305	information relative to an investigation or examination by the
20306	officedepartmentpursuant to this chapter, including any
20307	consumer complaint received by the office or the Department of
20308	Financial Services, is confidential and exempt from s. 119.07(1)
20309	until the investigation or examination is completed or ceases to
20310	be active. The information compiled by the officedepartmentin
20311	such an investigation or examination shall remain confidential
20312	and exempt from s. 119.07(1) after the office'sdepartment's
20313	investigation or examination is completed or ceases to be active
20314	if the officedepartmentsubmits the information to any law
20315	enforcement or administrative agency for further investigation.
20316	Such information shall remain confidential and exempt from s.
20317	119.07(1) until that agency's investigation is completed or
20318	ceases to be active. For purposes of this section, an
20319	investigation or examination shall be considered "active" so
20320	long as the officedepartmentor any law enforcement or
20321	administrative agency is proceeding with reasonable dispatch and
20322	has a reasonable good faith belief that the investigation or
20323	examination may lead to the filing of an administrative, civil,
20324	or criminal proceeding or to the denial or conditional grant of
20325	a license, registration, or permit. This section shall not be
20326	construed to prohibit disclosure of information which is
20327	required by law to be filed with the officedepartmentand
20328	which, but for the investigation or examination, would be
20329	subject to s. 119.07(1).
20330	(b) Except as necessary for the officedepartmentto
20331	enforce the provisions of this chapter, a consumer complaint and
20332	other information relative to an investigation or examination
20333	shall remain confidential and exempt from s. 119.07(1) after the
20334	investigation or examination is completed or ceases to be active
20335	to the extent disclosure would:
20336	1. Jeopardize the integrity of another active
20337	investigation or examination.
20338	2. Reveal the name, address, telephone number, social
20339	security number, or any other identifying number or information
20340	of any complainant, customer, or account holder.
20341	3. Disclose the identity of a confidential source.
20342	4. Disclose investigative techniques or procedures.
20343	5. Reveal a trade secret as defined in s. 688.002.
20344	(c) In the event that officedepartment personnel or
20345	personnel of the former Department of Banking and Financeare or
20346	have been involved in an investigation or examination of such
20347	nature as to endanger their lives or physical safety or that of
20348	their families, then the home addresses, telephone numbers,
20349	places of employment, and photographs of such personnel,
20350	together with the home addresses, telephone numbers,
20351	photographs, and places of employment of spouses and children of
20352	such personnel and the names and locations of schools and day
20353	care facilities attended by the children of such personnel are
20354	confidential and exempt from s. 119.07(1).
20355	(d) Nothing in this section shall be construed to prohibit
20356	the officedepartmentfrom providing information to any law
20357	enforcement or administrative agency. Any law enforcement or
20358	administrative agency receiving confidential information in
20359	connection with its official duties shall maintain the
20360	confidentiality of the information so long as it would otherwise
20361	be confidential.
20362	(e) All information obtained by the officedepartmentfrom
20363	any person which is only made available to the officedepartment
20364	on a confidential or similarly restricted basis shall be
20365	confidential and exempt from s. 119.07(1). This exemption shall
20366	not be construed to prohibit disclosure of information which is
20367	required by law to be filed with the officedepartmentor which
20368	is otherwise subject to s. 119.07(1).
20369	(2) If information subject to subsection (1) is offered in
20370	evidence in any administrative, civil, or criminal proceeding,
20371	the presiding officer may, in his or her discretion, prevent the
20372	disclosure of information which would be confidential pursuant
20373	to paragraph (1)(b).
20374	(3) A privilege against civil liability is granted to a
20375	person who furnishes information or evidence to the office
20376	department, unless such person acts in bad faith or with malice
20377	in providing such information or evidence.
20378	Section 382. Paragraph (b) of subsection (2) of section
20379	527.008, Florida Statutes, is amended to read:
20380	537.008 Title loan agreement.--
20381	(2) The following information shall also be printed on all
20382	title loan agreements:
20383	(b) The name and address of the Department of Financial
20384	Servicesas well as a telephone number to which consumers may
20385	address complaints.
20386	Section 383. Section 537.009, Florida Statutes, is amended
20387	to read:
20388	537.009 Recordkeeping; reporting; safekeeping of
20389	property.--
20390	(1) Every title loan lender shall maintain, at the
20391	lender's title loan office, such books, accounts, and records of
20392	the business conducted under the license issued for such place
20393	of business as will enable the officedepartmentto determine
20394	the licensee's compliance with this act.
20395	(2) The officedepartmentmay authorize the maintenance of
20396	books, accounts, and records at a location other than the
20397	lender's title loan office. The officedepartmentmay require
20398	books, accounts, and records to be produced and available at a
20399	reasonable and convenient location in this state within a
20400	reasonable period of time after such a request.
20401	(3) The title loan lender shall maintain the original copy
20402	of each completed title loan agreement on the title loan office
20403	premises, and shall not obliterate, discard, or destroy any such
20404	original copy, for a period of at least 2 years after making the
20405	final entry on any loan recorded in such office or after ana
20406	department examination by the Office of Financial Institutions
20407	and Securities Regulation, whichever is later.
20408	(4) Loan property which is delivered to a title loan
20409	lender shall be securely stored and maintained at the title loan
20410	office unless the loan property has been forwarded to the
20411	appropriate state agency for the purpose of having a lien
20412	recorded or deleted.
20413	(5) The commissiondepartmentmay prescribe by rule the
20414	books, accounts, and records, and the minimum information to be
20415	shown in the books, accounts, and records, of licensees so that
20416	such records will enable the officedepartmentto determine
20417	compliance with the provisions of this act.
20418	Section 384. Subsection (2) and paragraph (c) of
20419	subsection (4) of section 537.011, Florida Statutes, are amended
20420	to read:
20421	537.011 Title loan charges.--
20422	(2) The annual percentage rate that may be charged for a
20423	title loan may equal, but not exceed, the annual percentage rate
20424	that must be computed and disclosed as required by the federal
20425	Truth in Lending Act and Regulation Z of the Board of Governors
20426	of the Federal Reserve System. The maximum annual percentage
20427	rate of interest that may be charged is 12 times the maximum
20428	monthly rate, and the maximum monthly rate must be computed on
20429	the basis of one-twelfth of the annual rate for each full month.
20430	The commissionDepartment of Banking and Financeshall establish
20431	by rule the rate for each day in a fraction of a month when the
20432	period for which the charge is computed is more or less than 1
20433	month.
20434	(4) Any interest contracted for or received, directly or
20435	indirectly, by a title loan lender, or an agent of the title
20436	loan lender, in excess of the amounts authorized under this
20437	chapter is prohibited and may not be collected by the title loan
20438	lender or an agent of the title loan lender.
20439	(c) The officedepartmentmay order a title loan lender,
20440	or an agent of the title loan lender, to comply with the
20441	provisions of paragraphs (a) and (b).
20442	Section 385. Paragraphs (b), (f), and (n) of subsection
20443	(1) of section 537.013, Florida Statutes, are amended to read:
20444	537.013 Prohibited acts.--
20445	(1) A title loan lender, or any agent or employee of a
20446	title loan lender, shall not:
20447	(b) Refuse to allow the officedepartmentto inspect
20448	completed title loan agreements, extensions of such agreements,
20449	or loan property during the ordinary operating hours of the
20450	title loan lender's business or other times acceptable to both
20451	parties.
20452	(f) Fail to exercise reasonable care, as defined by
20453	commissiondepartmentrule, in the safekeeping of loan property
20454	or of titled personal property repossessed pursuant to this act.
20455	(n) Act as a title loan lender under this act within a
20456	place of business in which the licensee solicits or engages in
20457	business outside the scope of this act if the officedepartment
20458	determines that the licensee's operation of and conduct
20459	pertaining to such other business results in an evasion of this
20460	act. Upon making such a determination, the officedepartment
20461	shall order the licensee to cease and desist from such evasion;
20462	provided, no licensee shall engage in the pawnbroker business.
20463	Section 386. Section 537.016, Florida Statutes, is amended
20464	to read:
20465	537.016 Subpoenas; enforcement actions; rules.--
20466	(1) The officedepartmentmay issue and serve subpoenas to
20467	compel the attendance of witnesses and the production of
20468	documents, papers, books, records, and other evidence before the
20469	officedepartment in any matter pertaining to this act. The
20470	officedepartmentmay administer oaths and affirmations to any
20471	person whose testimony is required. If any person refuses to
20472	testify; produce books, records, and documents; or otherwise
20473	refuses to obey a subpoena issued under this section, the office
20474	departmentmay enforce the subpoena in the same manner as
20475	subpoenas issued under the Administrative Procedure Act are
20476	enforced. Witnesses are entitled to the same fees and mileage as
20477	they are entitled to by law for attending as witnesses in the
20478	circuit court, unless such examination or investigation is held
20479	at the place of business or residence of the witness.
20480	(2) In addition to any other powers conferred upon the
20481	officedepartment to enforce or administer this act, the office
20482	departmentmay:
20483	(a) Bring an action in any court of competent jurisdiction
20484	to enforce or administer this act, any rule or order adopted
20485	under this act, or any written agreement entered into with the
20486	officedepartment. In such action, the officedepartmentmay
20487	seek any relief at law or equity, including a temporary or
20488	permanent injunction, appointment of a receiver or
20489	administrator, or an order of restitution.
20490	(b) Issue and serve upon a person an order requiring such
20491	person to cease and desist and take corrective action whenever
20492	the officedepartmentfinds that such person is violating, has
20493	violated, or is about to violate any provision of this act, any
20494	rule or order adopted under this act, or any written agreement
20495	entered into with the officedepartment.
20496	(c) Whenever the officedepartmentfinds that conduct
20497	described in paragraph (b) presents an immediate danger to the
20498	public health, safety, or welfare requiring an immediate final
20499	order, the officedepartmentmay issue an emergency cease and
20500	desist order reciting with particularity the facts underlying
20501	such findings. The emergency cease and desist order is effective
20502	immediately upon service of a copy of the order on the
20503	respondent named in the order and shall remain effective for 90
20504	days. If the officedepartmentbegins nonemergency proceedings
20505	under paragraph (b), the emergency cease and desist order
20506	remains effective until the conclusion of the proceedings under
20507	ss. 120.569 and 120.57.
20508	(3) The commissiondepartmentmay adopt rules to
20509	administer this act.
20510	Section 387. Section 537.017, Florida Statutes, is amended
20511	to read:
20512	537.017 Investigations and complaints.--
20513	(1) The officedepartmentmay make any investigation and
20514	examination of any licensee or other person the office
20515	departmentdeems necessary to determine compliance with this
20516	act. For such purposes, the officedepartmentmay examine the
20517	books, accounts, records, and other documents or matters of any
20518	licensee or other person. The officedepartmentmay compel the
20519	production of all relevant books, records, and other documents
20520	and materials relative to an examination or investigation.
20521	Examinations shall not be made more often than once during any
20522	12-month period unless the officedepartmenthas reason to
20523	believe the licensee is not complying with the provisions of
20524	this act.
20525	(2) The officedepartmentshall conduct all examinations
20526	at a convenient location in this state unless the office
20527	departmentdetermines that it is more effective or cost-
20528	efficient to perform an examination at the licensee's out-of-
20529	state location. For an examination performed at the licensee's
20530	out-of-state location, the licensee shall pay the travel expense
20531	and per diem subsistence at the rate provided by law for up to
20532	thirty 8-hour days per year for each officedepartmentexaminer
20533	who participates in such an examination. However, if the
20534	examination involves or reveals possible fraudulent conduct by
20535	the licensee, the licensee shall pay the travel expenses and per
20536	diem subsistence provided by law, without limitation, for each
20537	participating examiner.
20538	(3) Any person having reason to believe that any provision
20539	of this act has been violated may file with the Department of
20540	Financial Services or the officea written complaint setting
20541	forth the details of such alleged violation, and the office
20542	departmentmay investigate such complaint.
20543	Section 388. Section 559.725, Florida Statutes, is amended
20544	to read:
20545	559.725 Consumer complaints; administrative duties.--
20546	(1) The Division of Consumer Services of the Department of
20547	Agriculture and Consumer Servicesshall serve as the registry
20548	for receiving and maintaining records of inquiries,
20549	correspondence, and complaints from consumers concerning any and
20550	all persons who collect debts, including consumer collection
20551	agencies.
20552	(2) The division shall classify complaints by type and
20553	identify the number of written complaints against persons
20554	collecting or attempting to collect debts in this state,
20555	including credit grantors collecting their own debts, debt
20556	collectors generally, and, specifically, consumer collection
20557	agencies as distinguished from other persons who collect debts
20558	such as commercial debt collection agencies regulated under part
20559	V of this chapter. The division shall identify the nature and
20560	number of various kinds of written complaints, including
20561	specifically those alleging violations of s. 559.72.
20562	(3) The division shall inform and furnish relevant
20563	information to the appropriate regulatory body of the state, or
20564	The Florida Bar in the case of attorneys, when any consumer debt
20565	collector exempt from registration under this part has been
20566	named in five or more written consumer complaints alleging
20567	violations of s. 559.72 within a 12-month period.
20568	(4) The division shall furnish a form to each complainant
20569	whose complaint concerns an alleged violation of s. 559.72 by a
20570	consumer collection agency. Such form may be filed with the
20571	officeDepartment of Banking and Finance. The form shall
20572	identify the accused consumer collection agency and provide for
20573	the complainant's summary of the nature of the alleged violation
20574	and facts which allegedly support the complaint. The form shall
20575	include a provision for the complainant to state under oath
20576	before a notary public that the allegations therein made are
20577	true.
20578	(5) Upon receipt of such sworn complaint, the office
20579	departmentshall promptly furnish a copy of the sworn complaint
20580	to the accused consumer collection agency.
20581	(6) The officedepartmentshall investigate sworn
20582	complaints by direct written communication with the complainant
20583	and the affected consumer collection agency. In addition, the
20584	officedepartmentshall attempt to resolve each sworn complaint
20585	and shall record the resolution of such complaints.
20586	(7) Periodically, the officedepartmentshall identify
20587	consumer collection agencies that have unresolved sworn consumer
20588	complaints from five or more different consumers within a 12-
20589	month period under the provisions of this part.
20590	(8) The officedepartmentshall issue a written warning
20591	notice to the accused consumer collection agency if the office
20592	departmentis unable to resolve all such sworn complaints and
20593	fewer than five unresolved complaints remain. Such notice shall
20594	include a statement that the warning may constitute evidence in
20595	any future investigation of similar complaints against that
20596	agency and in any future administrative determination of the
20597	imposition of other administrative remedies available to the
20598	officedepartmentunder this part.
20599	(9) The officedepartmentmay issue a written reprimand
20600	when five or more such unresolved sworn complaints against a
20601	consumer collection agency collectively fall short of
20602	constituting apparent repeated violations that warrant more
20603	serious administrative sanctions. Such reprimand shall include a
20604	statement that the reprimand may constitute evidence in any
20605	future investigation of similar complaints against that agency
20606	and in any future administrative determination of the imposition
20607	of other administrative remedies available to the office
20608	department.
20609	(10) The officedepartmentshall issue a notice of intent
20610	either to revoke or suspend the registration or to impose an
20611	administrative fine when the officedepartmentpreliminarily
20612	determines that repeated violations of s. 559.72 by an accused
20613	registrant have occurred which would warrant more serious
20614	administrative sanctions being imposed under this part. The
20615	officedepartmentshall advise each registrant of the right to
20616	require an administrative hearing under chapter 120, prior to
20617	the agency's final action on the matter as authorized by s.
20618	559.730.
20619	(11) The officedepartmentshall advise the appropriate
20620	state attorney, or the Attorney General in the case of an out-
20621	of-state consumer debt collector, of any determination by the
20622	officedepartmentof a violation of the requirements of this
20623	part by any consumer collection agency which is not registered
20624	as required by this part. The officedepartmentshall furnish
20625	the state attorney or Attorney General with the office's
20626	department'sinformation concerning the alleged violations of
20627	such requirements.
20628	Section 389. Section 560.128, Florida Statutes, is amended
20629	to read:
20630	560.128 Consumer disclosure.--
20631	(1) Every money transmitter and authorized vendor shall
20632	provide each consumer of a money transmitter transaction a toll-
20633	free telephone number for the purpose of consumer contacts;
20634	however, in lieu of such toll-free telephone number, the money
20635	transmitter or authorized vendor may provide the address and
20636	telephone number of the office and the Division of Consumer
20637	Services of the Department of Financial Servicesdepartment.
20638	(2) The commissiondepartmentmay by rule require every
20639	money transmitter to display its registration at each location,
20640	including the location of each person designated by the
20641	registrant as an authorized vendor, where the money transmitter
20642	engages in the activities authorized by the registration.
20643	Section 390. Section 560.129, Florida Statutes, is amended
20644	to read:
20645	560.129 Confidentiality.--
20646	(1) For purposes of this section, the definitions
20647	contained in s. 560.103, as created by chapter 94-238, Laws of
20648	Florida, and chapter 94-354, Laws of Florida, apply.
20649	(1)(2)(a) Except as otherwise provided in this section,
20650	all information concerning an investigation or examination by
20651	the officedepartmentpursuant to this chapter, including any
20652	consumer complaint received by the office or the Department of
20653	Financial Services, is confidential and exempt from s. 119.07(1)
20654	and s. 24(a), Art. I of the State Constitution until the
20655	investigation or examination ceases to be active. For purposes
20656	of this section, an investigation or examination is considered
20657	"active" so long as the officedepartmentor any other
20658	administrative, regulatory, or law enforcement agency of any
20659	jurisdiction is proceeding with reasonable dispatch and has a
20660	reasonable good faith belief that action may be initiated by the
20661	officedepartmentor other administrative, regulatory, or law
20662	enforcement agency.
20663	(b) Notwithstanding paragraph (a), all information
20664	obtained by the officedepartmentin the course of its
20665	investigation or examination which is a trade secret, as defined
20666	in s. 688.002, or which is personal financial information shall
20667	remain confidential. If any administrative, civil, or criminal
20668	proceeding against the money transmitter or a money transmitter-
20669	affiliated party is initiated and the officedepartmentseeks to
20670	use matter that a registrant believes to be a trade secret or
20671	personal financial information, such records shall be subject to
20672	an in camera review by the administrative law judge, if the
20673	matter is before the Division of Administrative Hearings, or a
20674	judge of any court of this state, any other state, or the United
20675	States, as appropriate, for the purpose of determining if the
20676	matter is a trade secret or is personal financial information.
20677	If it is determined that the matter is a trade secret, the
20678	matter shall remain confidential. If it is determined that the
20679	matter is personal financial information, the matter shall
20680	remain confidential unless the administrative law judge or judge
20681	determines that, in the interests of justice, the matter should
20682	become public.
20683	(c) If any administrative, civil, or criminal proceeding
20684	against the money transmitter or a money transmitter-affiliated
20685	party results in an acquittal or the dismissal of all of the
20686	allegations against the money transmitter or a money
20687	transmitter-affiliated party, upon the request of any party, the
20688	administrative law judge or the judge may order all or a portion
20689	of the record of the proceeding to be sealed, and it shall
20690	thereafter be confidential and exempt from s. 119.07(1) and s.
20691	24(a), Art. I of the State Constitution.
20692	(d) Except as necessary for the officedepartmentor any
20693	other administrative, regulatory, or law enforcement agency of
20694	any jurisdiction to enforce the provisions of this chapter or
20695	the law of any other state or the United States, a consumer
20696	complaint and other information concerning an investigation or
20697	examination shall remain confidential and exempt from s.
20698	119.07(1) and s. 24(a), Art. I of the State Constitution after
20699	the investigation or examination ceases to be active to the
20700	extent that disclosure would:
20701	1. Jeopardize the integrity of another active
20702	investigation;
20703	2. Reveal personal financial information;
20704	3. Reveal the identity of a confidential source; or
20705	4. Reveal investigative techniques or procedures.
20706	(2)(3)This section does not prevent or restrict:
20707	(a) Furnishing records or information to any appropriate
20708	regulatory agency if such agency adheres to the confidentiality
20709	provisions of the code;
20710	(b) Furnishing records or information to an independent
20711	third party or a certified public accountant who has been
20712	approved by the officedepartmentto conduct an examination
20713	under s. 560.118(1)(b), if the independent third party or
20714	certified public accountant adheres to the confidentiality
20715	provisions of the code; or
20716	(c) Reporting any suspected criminal activity, with
20717	supporting documents and information, to appropriate law
20718	enforcement or prosecutorial agencies.
20719	(3)(4)All quarterly reports submitted by a money
20720	transmitter to the officedepartmentunder s. 560.118(2)(b) are
20721	confidential and exempt from s. 119.07(1) and s. 24(a), Art. I
20722	of the State Constitution.
20723	(4)(5)Examination reports, investigatory records,
20724	applications, and related information compiled by the office
20725	department, or photographic copies thereof, shall be retained by
20726	the officedepartmentfor a period of at least 10 years.
20727	(5)(6)Any person who willfully discloses information made
20728	confidential by this section commits a felony of the third
20729	degree, punishable as provided in s. 775.082 or s. 775.083.
20730	Section 391. Subsection (3), paragraph (b) of subsection
20731	(19), paragraph (b) of subsection(22), and subsection (23) of
20732	section 560.404, Florida Statutes, are amended to read:
20733	560.404 Requirements for deferred presentment
20734	transactions.--
20735	(3) Each written agreement shall contain the following
20736	information, in addition to any information the commission
20737	departmentrequires by rule:
20738	(a) The name or trade name, address, and telephone number
20739	of the deferred presentment provider and the name and title of
20740	the person who signs the agreement on behalf of the deferred
20741	presentment provider.
20742	(b) The date the deferred presentment transaction was
20743	made.
20744	(c) The amount of the drawer's check.
20745	(d) The length of deferral period.
20746	(e) The last day of the deferment period.
20747	(f) The address and telephone number of the office and the
20748	Division of Consumer Services of the Department of Financial
20749	Servicesdepartment.
20750	(g) A clear description of the drawer's payment
20751	obligations under the deferred presentment transaction.
20752	(h) The transaction number assigned by the office's
20753	department'sdatabase.
20754	(19) A deferred presentment provider may not enter into a
20755	deferred presentment transaction with a person who has an
20756	outstanding deferred presentment transaction with that provider
20757	or with any other deferred presentment provider, or with a
20758	person whose previous deferred presentment transaction with that
20759	provider or with any other provider has been terminated for less
20760	than 24 hours. The deferred presentment provider must verify
20761	such information as follows:
20762	(b) The deferred presentment provider shall access the
20763	office'sdepartment'sdatabase established pursuant to
20764	subsection (23) and shall verify whether any other deferred
20765	presentment provider has an outstanding deferred presentment
20766	transaction with a particular person or has terminated a
20767	transaction with that person within the previous 24 hours. Prior
20768	to the time that the officedepartmenthas implemented such a
20769	database, the deferred presentment provider may rely upon the
20770	written verification of the drawer as provided in subsection
20771	(20).
20772	(22)
20773	(b) At the commencement of the grace period, the deferred
20774	presentment provider shall provide the drawer:
20775	1. Verbal notice of the availability of the grace period
20776	consistent with the written notice in subsection (20).
20777	2. A list of approved consumer credit counseling agencies
20778	prepared by the officedepartment. The department shall prepare
20779	the list by October 1, 2001. The officedepartmentlist shall
20780	include nonprofit consumer credit counseling agencies affiliated
20781	with the National Foundation for Credit Counseling which provide
20782	credit counseling services to Florida residents in person, by
20783	telephone, or through the Internet. The officedepartmentlist
20784	must include phone numbers for the agencies, the counties served
20785	by the agencies, and indicate the agencies that provide
20786	telephone counseling and those that provide Internet counseling.
20787	The officedepartmentshall update the list at least once each
20788	year.
20789	3. The following notice in at least 14-point type in
20790	substantially the following form:
20791
20792	AS A CONDITION OF OBTAINING A GRACE PERIOD EXTENDING THE TERM OF
20793	YOUR DEFERRED PRESENTMENT AGREEMENT FOR AN ADDITIONAL 60 DAYS,
20794	UNTIL [DATE], WITHOUT ANY ADDITIONAL FEES, YOU MUST COMPLETE
20795	CONSUMER CREDIT COUNSELING PROVIDED BY AN AGENCY INCLUDED ON THE
20796	LIST THAT WILL BE PROVIDED TO YOU BY THIS PROVIDER. YOU MAY ALSO
20797	AGREE TO COMPLY WITH AND ADHERE TO A REPAYMENT PLAN APPROVED BY
20798	THE AGENCY. THE COUNSELING MAY BE IN PERSON, BY TELEPHONE, OR
20799	THROUGH THE INTERNET. YOU MUST NOTIFY US WITHIN SEVEN (7) DAYS,
20800	BY [DATE], THAT YOU HAVE MADE AN APPOINTMENT WITH SUCH A
20801	CONSUMER CREDIT COUNSELING AGENCY. YOU MUST ALSO NOTIFY US
20802	WITHIN SIXTY (60) DAYS, BY [DATE], THAT YOU HAVE COMPLETED THE
20803	CONSUMER CREDIT COUNSELING. WE MAY VERIFY THIS INFORMATION WITH
20804	THE AGENCY. IF YOU FAIL TO PROVIDE EITHER THE 7-DAY OR 60-DAY
20805	NOTICE, OR IF YOU HAVE NOT MADE THE APPOINTMENT OR COMPLETED THE
20806	COUNSELING WITHIN THE TIME REQUIRED, WE MAY DEPOSIT OR PRESENT
20807	YOUR CHECK FOR PAYMENT AND PURSUE ALL LEGALLY AVAILABLE CIVIL
20808	MEANS TO ENFORCE THE DEBT.
20809	(23) On or before March 1, 2002, the officedepartment
20810	shall implement a common database with real-time access through
20811	an Internet connection for deferred presentment providers, as
20812	provided in this subsection. The database must be accessible to
20813	the officedepartmentand the deferred presentment providers to
20814	verify whether any deferred presentment transactions are
20815	outstanding for a particular person. Deferred presentment
20816	providers shall submit such data before entering into each
20817	deferred presentment transaction in such format as the
20818	commissiondepartmentshall require by rule, including the
20819	drawer's name, social security number or employment
20820	authorization alien number, address, driver's license number,
20821	amount of the transaction, date of transaction, the date that
20822	the transaction is closed, and such additional information as is
20823	required by the commissiondepartment. The commissiondepartment
20824	may impose a fee not to exceed $1 per transaction for data
20825	required to be submitted by a deferred presentment provider. A
20826	deferred presentment provider may rely on the information
20827	contained in the database as accurate and is not subject to any
20828	administrative penalty or civil liability as a result of relying
20829	on inaccurate information contained in the database. The
20830	commissiondepartmentmay adopt rules to administer and enforce
20831	the provisions of this section and to assure that the database
20832	is used by deferred presentment providers in accordance with
20833	this section.
20834	Section 392. Section 609.05, Florida Statutes, is amended
20835	to read:
20836	609.05 Qualification with Office of Financial Institutions
20837	and Securities RegulationDepartment of Banking and
20838	Finance.--Before any person may offer for sale, barter or sell
20839	any unit, share, contract, note, bond, mortgage, oil or mineral
20840	lease or other security of an association doing business under
20841	what is known as a "declaration of trust" in this state, such
20842	person shall procure from the Office of Financial Institutions
20843	and Securities Regulation of the Financial Services Commission
20844	Department of Banking and Financea permit to offer for sale and
20845	sell such securities, which permit shall be applied for and
20846	granted under the same conditions as like permits are applied
20847	for and granted to corporations.
20848	Section 393. Section 655.012, Florida Statutes, is amended
20849	to read:
20850	655.012 General supervisory powers of the department;
20851	rulemaking; seal.--
20852	(1)In addition to other powers conferred by the financial
20853	institutions codes, the officedepartmentshall have:
20854
20855	(a)(1)General supervision over all state financial
20856	institutions, their subsidiaries, and service corporations.
20857	(b)(2)Access to all books and records of all persons over
20858	whom the officedepartmentexercises general supervision as is
20859	necessary for the performance of the duties and functions of the
20860	officedepartmentprescribed by the financial institutions
20861	codes.
20862	(c)(3)Power to issue orders and declaratory statements,
20863	disseminate information, and otherwise exercise its discretion
20864	to effectuate the purposes, policies, and provisions of the
20865	financial institutions codes.
20866	(2) In addition to other powers conferred by the financial
20867	institutions codes, the commission shall have the powerandto
20868	adopt rules pursuant to ss. 120.536(1) and 120.54 to implement
20869	the provisions of such codes.
20870	(3) The office shall have an official seal by which its
20871	proceedings are authenticated.
20872	Section 394. This act shall not affect the validity of any
20873	administrative or judicial action involving the Department of
20874	Banking and Finance or the Department of Insurance occurring
20875	prior to, or pending on, January 7, 2003, and the Department of
20876	Financial Services or the Financial Services Commission, or the
20877	respective office, shall be substituted as a party in interest
20878	on any such pending action.
20879	Section 395. Any certificate of authority, license, form,
20880	rate, or other filing or action that was approved or authorized
20881	by the Department of Insurance or the Department of Banking and
20882	Finance, or that was otherwise lawfully in use prior to January
20883	7, 2003, may continue to be used or be effective as originally
20884	authorized or permitted, until the Chief Financial Officer, the
20885	Department of Financial Services, the Financial Services
20886	Commission, or either of the respective offices, otherwise
20887	prescribes.
20888	Section 396. In the event of any conflict between any
20889	provision of this act and any provision of other legislation
20890	enacted during the 2003 Regular Session, the provisions of this
20891	act shall control.
20892	Section 397. This act shall take effect upon becoming a
20893	law.