HB 1337 2003
1	CHAMBER ACTION
2
3
4
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6	The Committee on Commerce recommends the following:
7
8	Committee Substitute
9	Remove the entire bill and insert:
10	A bill to be entitled
11	An act relating to governmental reorganization; revising
12	and conforming provisions of the Florida Statutes to the
13	amendment of Article IV, Section 4 of the State
14	Constitution, in which the functions of the former
15	positions of Comptroller and Treasurer were combined into
16	the office of Chief Financial Officer, and chapter 2002-
17	404, Laws of Florida, which reorganized certain executive-
18	branch duties and functions to implement such
19	constitutional amendment; revising and conforming
20	provisions of the Florida Statues to the creation of the
21	Department of Financial Services and the Financial
22	Services Commission and the abolition of the Department of
23	Insurance and the Department of Banking and Finance;
24	amending ss. 103.091, 110.1127, 112.215, 215.555, 215.559,
25	391.221, 401.245, 408.05, 408.7056, 440.13, 440.20,
26	440.24, 440.38, 440.381, 440.385, 440.386, 440.44, 440.52,
27	440.525, 553.74,.624.05, 624.155, 624.303, 624.305,
28	624.316, 624.317, 624.404, 624.4072, 624.413, 624.424,
29	624.476, 624.477, 625.01115, 625.121, 625.151, 625.317,
30	625.325, and 626.015, F.S., to revise and conform;
31	amending s. 20.121,, F.S., to revise and conform;
32	authorizing the Division of Consumer Services to request
33	certain information; providing procedures and requirements
34	for providing such information; authorizing the division
35	to impose administrative penalties; requiring the division
36	to report certain violations; authorizing the Department
37	of Financial Services to adopt rules; providing
38	construction; creating s. 626.016, F.S.; prescribing
39	powers and duties of the Department of Financial Services,
40	Financial Services Commission, and Office of Insurance
41	Regulation; amending ss. 626.025, 626.112, 626.161,
42	626.171, 626.181, 626.191, 626.201, 626.202, 626.211,
43	626.221, 626.231, 626.241, 626.251, 626.261, 626.266,
44	626.271, 626.281, 626.2815, 626.2817, 626.291, 626.292,
45	626.301, 626.322, 626.361, 626.371, 626.381, 626.431,
46	626.451, 626.461, 626.471, 626.511, 626.521, 626.541,
47	626.551, 626.561, 626.591, 626.592, 626.601, 626.611,
48	626.621, 626.631, 626.641, 626.661, 626.681, 626.691,
49	626.692, 626.7315, 626.732, 626.742, 626.7451, 626.7454,
50	626.7491, 626.7492, 626.752, 626.7845, 626.7851, 626.8305,
51	626.8311, 626.8427, 626.8463, 626.8467, 626.847, 626.8473,
52	626.8582, 626.8584, 626.859, 626.861, 626.863, 626.865,
53	626.866, 626.867, 626.869, 626.8695, 626.8696, 626.8697,
54	626.8698, 626.870, 626.871, 626.872, 626.873, 626.8732,
55	626.8734, 626.8736, 626.8738, 626.874, 626.878, 626.88,
56	626.8805, 626.8809, 626.8814, 626.884, 626.89, 626.891,
57	626.892, 626.894, 626.895, 626.896, 626.897, 626.898,
58	626.899, 626.901, 626.906, 626.907, 626.909, 626.910,
59	626.912, 626.914, 626.916, 626.917, 626.918, 626.919,
60	626.921, 626.931, 626.932, 626.936, 626.9361, 626.937,
61	626.938, 626.9511, 626.9541, 626.9543, 626.9545, 626.9551,
62	626.9561, 626.9571, 626.9581, 626.9591, 626.9601,
63	626.9611, 626.9621, 626.9631, 626.9641, 626.9651, 626.989,
64	626.9892, 626.99, 626.9911, 626.9912, 626.9913, 626.9914,
65	626.9915, 626.9916, 626.9919, 626.9921, 626.9922,
66	626.99235, 626.99245, 626.9925, 626.9926, 626.9927,
67	626.99272, 626.99285, 626.99295, 627.0628, 627.0629,
68	627.311, 627.3111, 627.351, 627.3511, 627.3513, 627.3515,
69	627.357, 627.4236, 627.6488, 627.6699, 627.7015, 627.745,
70	628.4615, 628.917, 631.021, 631.025, 631.031, 631.041,
71	631.042, 631.051, 631.0515, 631.061, 631.071, 631.081,
72	631.091, 631.111, 631.152, 631.154, 631.221, 631.231,
73	631.361, 631.371, 631.391, 631.392, 631.398, 631.54,
74	631.55, 631.56, 631.57, 631.59, 631.60, 631.62, 631.66,
75	631.714, 631.72, 631.722, 631.723, 631.727, 631.813,
76	631.814, 631.821, 631.825, 631.904, 631.911, 631.912, 631.
77	917, 631.918, 631.931, 634.3284, 634.430, 634.433,
78	636.067, 641.183, 641.185, 641.19, 641.2017, 641.2018,
79	641.21, 641.215, 641.22, 641.225, 641.227, 641.228,
80	641.23, 641.234, 641.2342, 641.25, 641.255, 641.26,
81	641.27, 641.28, 641.281, 641.284, 641.285, 641.29,
82	641.3007, 641.305, 641.31, 641.3105, 641.31071, 641.31074,
83	641.315, 641.3154, 641.3155, 641.316, 641.35, 641.35,
84	641.36, 641.365, 641.385, 641.39001, 641.3903, 641.3905,
85	641.3907, 641.3909, 641.3911, 641.3913, 641.3917,
86	641.3922, 641.402, 641.403, 641.,405, 641.406, 641.4065,
87	641.407, 641.409, 641.41, 641.412, 641.418, 641.42,
88	641.421, 641.424, 641.437, 641.443, 641.444, 641.445,
89	641.446, 641.447, 641.448, 641.45, 641.452, 641.453,
90	641.454, 641.455, 641.457, 641.48, 641.49, 641.495,
91	641.511, 641.511, 641.512, 641.52, 641.54, 641.55, 641.58,
92	642.0475, 651.119, 252.62, 288.778, 288.99, 289.051,
93	289.081, 289.121, 420.101, 494.00125, 494.00421 517.021,
94	517.03, 517.051, 517.061, 517.07, 517.075, 517.081,
95	517.082, 517.101, 517.111, 517.12, 517.1201, 517.1203,
96	517.1204, 517.121, 517.131, 517.141, 517.151, 517.161,
97	517.181, 517.191, 517.201, 517.2015, 517.221, 517.241,
98	517.301, 517.302 517.313, 517.315, 517.32, 520.996,
99	520.9965, 537.008, 537.009, 537.011, 537.013, 537.016,
100	537.017, 559.725, 560.128, 560.129, 560.404, 609.05, and
101	655.012, F.S., to revise and conform; protecting the
102	validity of certain administrative and judicial actions;
103	providing for substitution of parties; providing for
104	continuation and effect of certain certificates of
105	authority, forms, licenses, rates, filings, and actions;
106	providing for controlling effect; providing an effective
107	date.
108
109	Be It Enacted by the Legislature of the State of Florida:
110
111	Section 1. Section 20.121, Florida Statutes, is amended to
112	read:
113	20.121 Department of Financial Services.--There is created
114	a Department of Financial Services.
115	(1) DEPARTMENT HEAD.--The head of the Department of
116	Financial Services is the Chief Financial Officer.
117	(2) DIVISIONS.--The Department of Financial Services shall
118	consist of the following divisions:
119	(a) The Division of Accounting and Auditing, which shall
120	include the following bureau and office:
121	1. The Bureau of Unclaimed Property.
122	2. The Office of Fiscal Integrity which shall function as
123	a criminal justice agency for purposes of ss. 943.045-943.08 and
124	shall have a separate budget. The office may conduct
125	investigations within or outside this state as the bureau deems
126	necessary to aid in the enforcement of this section. If during
127	an investigation the office has reason to believe that any
128	criminal law of this state has or may have been violated, the
129	office shall refer any records tending to show such violation to
130	state or federal law enforcement or prosecutorial agencies and
131	shall provide investigative assistance to those agencies as
132	required.
133	(b) The Division of State Fire Marshal.
134	(c) The Division of Risk Management.
135	(d) The Division of Treasury, which shall include a Bureau
136	of Deferred Compensation responsible for administering the
137	Government Employees Deferred Compensation Plan established
138	under s. 112.215 for state employees.
139	(e) The Division of Insurance Fraud.
140	(f) The Division of Rehabilitation and Liquidation.
141	(g) The Division of Insurance Agents and Agency Services.
142	(h) The Division of Consumer Services, which shall include
143	a Bureau of Funeral and Cemetery Services.
144	1. The Division of Consumer Services shall perform the
145	following functions concerning products or services regulated by
146	the Department of Financial Services or by either office of the
147	Financial Services Commission:
148	a. Receive inquiries and complaints from consumers;
149	b. Prepare and disseminate such information as the
150	department deems appropriate to inform or assist consumers;
151	c. Provide direct assistance and advocacy for consumers
152	who request such assistance or advocacy;
153	d. With respect to apparent or potential violations of law
154	or applicable rules by a person or entity licensed by the
155	department or by either office of the commission, report such
156	apparent or potential violation to the appropriate division of
157	the department or office of the commission, which may take such
158	further action as it deems appropriate.
159	2. The division may request that any person in possession
160	of, or reasonably believed to be in possession of, accounts,
161	records, documents, files, or any other information relating to
162	a consumer inquiry or complaint, provide such information to the
163	division. All requested information in the person’s possession
164	or control shall be filed with the division within 20 days after
165	the date of the request unless the division grants an extension
166	for filing. If the requested information is not in the person’s
167	possession or control, the person shall inform the division
168	within 20 days after the date of the request. Possession and
169	control of information includes, but is not limited to,
170	information in the possession of the person’s officers,
171	attorneys, employees, agents and representatives. The division
172	may, in its discretion, impose an administrative penalty upon
173	any entity licensed by the department or the Office of Insurance
174	Regulation for failure to comply with this subparagraph in an
175	amount up to $2,500 per violation, and upon any individual
176	licensed by the department or the Office of Insurance Regulation
177	for failure to comply with this subparagraph in an amount of
178	$250 for the first violation, $500 for the second violation, and
179	up to $1,000 per violation thereafter. Additionally, the
180	division shall report violations of this subparagraph to the
181	appropriate division of the department or the appropriate
182	office. This subparagraph shall not apply to entities regulated
183	by the Office of Financial Institutions and Securities
184	Regulation.
185	3. The department shall have the authority to adopt rules
186	to implement the provisions of this paragraph.
187	4. The powers, duties, and responsibilities expressed or
188	granted in this paragraph shall not limit the powers, duties,
189	and responsibilities of the Department of Financial Services,
190	the Financial Services Commission, the Office of the Insurance
191	Regulation, or the Office of Financial Institutions and
192	Securities Regulation as provided by law.
193	(i) The Division of Workers' Compensation.
194	(j) The Division of Administration.
195	(k) The Division of Legal Services.
196	(l) The Division of Information Systems.
197	(m) The Office of Insurance Consumer Advocate.
198	(3) FINANCIAL SERVICES COMMISSION.--Effective January 7,
199	2003, there is created within the Department of Financial
200	Services the Financial Services Commission, composed of the
201	Governor, the Attorney General, the Chief Financial Officer, and
202	the Commissioner of Agriculture, which shall for purposes of
203	this section be referred to as the commission. Commission
204	members shall serve as agency head of the Financial Services
205	Commission. The commission shall be a separate budget entity
206	and shall be exempt from the provisions of s. 20.052. Commission
207	action shall be by majority vote consisting of at least three
208	affirmative votes. The commission shall not be subject to
209	control, supervision, or direction by the Department of
210	Financial Services in any manner, including purchasing,
211	transactions involving real or personal property, personnel, or
212	budgetary matters.
213	(a) Structure.--The major structural unit of the
214	commission is the office. Each office shall be headed by a
215	director. The following offices are established:
216	1. The Office of Insurance Regulation, which shall be
217	responsible for all activities concerning insurers and other
218	risk bearing entities, including licensing, rates, policy forms,
219	market conduct, claims, adjusters, issuance of certificates of
220	authority, solvency, viatical settlements, premium financing,
221	and administrative supervision, as provided under the insurance
222	code or chapter 636. The head of the Office of Insurance
223	Regulation is the Director of the Office of Insurance
224	Regulation.
225	2. The Office of Financial Institutions and Securities
226	Regulation, also to be known as the Office of Financial
227	Regulation,which shall be responsible for all activities of the
228	Financial Services Commission relating to the regulation of
229	banks, credit unions, other financial institutions, finance
230	companies, and the securities industry. The head of the office
231	is the Director of the Office of Financial Institutions and
232	Securities Regulation. The Office of Financial Institutions and
233	Securities Regulation shall include a Bureau of Financial
234	Investigations, which shall function as a criminal justice
235	agency for purposes of ss. 943.045-943.08 and shall have a
236	separate budget. The bureau may conduct investigations within
237	or outside this state as the bureau deems necessary to aid in
238	the enforcement of this section. If, during an investigation,
239	the office has reason to believe that any criminal law of this
240	state has or may have been violated, the office shall refer any
241	records tending to show such violation to state or federal law
242	enforcement or prosecutorial agencies and shall provide
243	investigative assistance to those agencies as required.
244	(b) Organization.--The commission shall establish by rule
245	any additional organizational structure of the offices. It is
246	the intent of the Legislature to provide the commission with the
247	flexibility to organize the offices in any manner they determine
248	appropriate to promote both efficiency and accountability.
249	(c) Powers.--Commission members shall serve as the agency
250	head for purposes of rulemaking under ss. 120.536-120.565 by the
251	commission and all subunits of the commission. Each director is
252	agency head for purposes of final agency action under chapter
253	120 for all areas within the regulatory authority delegated to
254	the director's office.
255	(d) Appointment and qualifications of directors.--The
256	commission shall appoint or remove each director by a majority
257	vote consisting of at least three affirmative votes, with both
258	the Governor and the Chief Financial Officer on the prevailing
259	side. The minimum qualifications of the directors are as
260	follows:
261	1. Prior to appointment as director, the Director of the
262	Office of Insurance Regulation must have had, within the
263	previous 10 years, at least 5 years of responsible private
264	sector experience working full time in areas within the scope of
265	the subject matter jurisdiction of the Office of Insurance
266	Regulation or at least 5 years of experience as a senior
267	examiner or other senior employee of a state or federal agency
268	having regulatory responsibility over insurers or insurance
269	agencies.
270	2. Prior to appointment as director, the Director of the
271	Office of Financial Institutions and Securities Regulation must
272	have had, within the previous 10 years, at least 5 years of
273	responsible private sector experience working full time in areas
274	within the subject matter jurisdiction of the Office of
275	Financial Institutions and Securities Regulation or at least 5
276	years of experience as a senior examiner or other senior
277	employee of a state or federal agency having regulatory
278	responsibility over financial institutions, finance companies,
279	or securities companies.
280	(e) Administrative support.--The offices shall have a
281	sufficient number of attorneys, examiners, investigators, other
282	professional personnel to carry out their responsibilities and
283	administrative personnel as determined annually in the
284	appropriations process. The Department of Financial Services
285	shall provide administrative and information systems support to
286	the offices.
287	Section 2. Subsection (6) of section 103.091, Florida
288	Statutes, is amended to read:
289	103.091 Political parties.--
290	(6)(a)1.In addition to the members provided for in
291	subsection (1), each county executive committee shall include
292	all members of the Legislature who are residents of the county
293	and members of their respective political party and who shall be
294	known as at-large committeemen and committeewomen.
295	(b)2.Each state executive committee shall include, as at-
296	large committeemen and committeewomen, all members of the United
297	States Congress representing the State of Florida who are
298	members of the political party, all statewide elected officials
299	who are members of the party, and the President of the Senate or
300	the Minority Leader in the Senate, and the Speaker of the House
301	of Representatives or the Minority Leader in the House of
302	Representatives, whichever is a member of the political party,
303	and 20 members of the Legislature who are members of the
304	political party. Ten of the legislators shall be appointed with
305	the concurrence of the state chair of the respective party, as
306	follows: five to be appointed by the President of the Senate;
307	five by the Minority Leader in the Senate; five by the Speaker
308	of the House of Representatives; and five by the Minority Leader
309	in the House.
310	(c)3.When a political party allows any member of the
311	state executive committee to have more than one vote per person,
312	other than by proxy, in a matter coming before the state
313	executive committee, the 20 members of the Legislature appointed
314	under subparagraph 2. shall not be appointed to the state
315	executive committee and the following elected officials who are
316	members of that political party shall be appointed and shall
317	have the following votes:
318	1.a.Governor: a number equal to 15 percent of votes cast
319	by state executive committeemen and committeewomen;
320	2.b.Lieutenant Governor: a number equal to 5 percent of
321	the votes cast by state executive committeemen and
322	committeewomen;
323	3.c.Each member of the United States Senate representing
324	the state: a number equal to 10 percent of the votes cast by
325	state executive committeemen and committeewomen;
326	d. Secretary of State: a number equal to 5 percent of the
327	votes cast by state executive committeemen and committeewomen;
328	4.e.Attorney General: a number equal to 5 percent of the
329	votes cast by state executive committeemen and committeewomen;
330	5.f.Chief Financial OfficerComptroller: a number equal
331	to 5 percent of the votes cast by state executive committeemen
332	and committeewomen;
333	g. Treasurer: a number equal to 5 percent of the votes
334	cast by state executive committeemen and committeewomen;
335	6.h.Commissioner of Agriculture: a number equal to 5
336	percent of the votes cast by state executive committeemen and
337	committeewomen;
338	i. Commissioner of Education: a number equal to 5 percent
339	of the votes cast by state executive committeemen and
340	committeewomen;
341	7.j.President of the Senate: a number equal to 10 percent
342	of the votes cast by state executive committeemen and
343	committeewomen;
344	8.k.Minority leader of the Senate: a number equal to 10
345	percent of the votes cast by state executive committeemen and
346	committeewomen;
347	9.l.Speaker of the House of Representatives: a number
348	equal to 10 percent of the votes cast by state executive
349	committeemen and committeewomen;
350	10.m.Minority leader of the House of Representatives: a
351	number equal to 10 percent of the votes cast by state executive
352	committeemen and committeewomen; and
353	11.n.Each member of the United States House of
354	Representatives representing the state: a number equal to 1
355	percent of the votes cast by state executive committeemen and
356	committeewomen.
357	(d)1.4.a.The governing body of each state executive
358	committee as defined by party rule shall include as at-large
359	committeemen and committeewomen all statewide elected officials
360	who are members of such political party; up to four members of
361	the United States Congress representing the state who are
362	members of such political party and who shall be appointed by
363	the state chair on the basis of geographic representation; the
364	permanent presiding officer selected by the members of each
365	house of the Legislature who are members of such political
366	party; and the minority leader selected by the members of each
367	house of the Legislature who are members of such political
368	party.
369	2.b.All members of the governing body shall have one vote
370	per person.
371	Section 3. Paragraph (a) of subsection (2) of section
372	110.1127, Florida Statutes, is amended to read:
373	110.1127 Employee security checks.--
374	(2)(a) All positions within the Division of Treasury of
375	the Department of Financial ServicesInsuranceare deemed to be
376	positions of special trust or responsibility, and a person may
377	be disqualified for employment in any such position by reason
378	of:
379	1. The conviction or prior conviction of a crime which is
380	reasonably related to the nature of the position sought or held
381	by the individual; or
382	2. The entering of a plea of nolo contendere or, when a
383	jury verdict of guilty is rendered but adjudication of guilt is
384	withheld, with respect to a crime which is reasonably related to
385	the nature of the position sought or held by the individual.
386	Section 4. Subsection (4), paragraph (a) of subsection
387	(6), paragraphs (a), (d), (f), and(h) of subsection (8),
388	paragraph (b) of subsection (10), and subsections (11) and (12)
389	of section 112.215, Florida Statutes, are amended to read:
390	112.215 Government employees; deferred compensation
391	program.--
392	(4)(a) The Chief Financial OfficerTreasurer, with the
393	approval of the State Board of Administration, shall establish
394	such plan or plans of deferred compensation for state employees,
395	including all such investment vehicles or products incident
396	thereto, as may be available through, or offered by, qualified
397	companies or persons, and may approve one or more such plans for
398	implementation by and on behalf of the state and its agencies
399	and employees.
400	(b) If the Chief Financial OfficerTreasurerdeems it
401	advisable, he or she shall have the power, with the approval of
402	the State Board of Administration, to create a trust or other
403	special funds for the segregation of funds or assets resulting
404	from compensation deferred at the request of employees of the
405	state or its agencies and for the administration of such
406	program.
407	(c) The Chief Financial OfficerTreasurer, with the
408	approval of the State Board of Administration, may delegate
409	responsibility for administration of the plan to a person the
410	Chief Financial OfficerTreasurerdetermines to be qualified,
411	compensate such person, and, directly or through such person or
412	pursuant to a collective bargaining agreement, contract with a
413	private corporation or institution to provide such services as
414	may be part of any such plan or as may be deemed necessary or
415	proper by the Chief Financial OfficerTreasureror such person,
416	including, but not limited to, providing consolidated billing,
417	individual and collective recordkeeping and accountings, asset
418	purchase, control, and safekeeping, and direct disbursement of
419	funds to employees or other beneficiaries. The Chief Financial
420	OfficerTreasurermay authorize a person, private corporation,
421	or institution to make direct disbursement of funds under the
422	plan to an employee or other beneficiary only upon the order of
423	the Comptroller to the Treasurer.
424	(d) In accordance with such approved plan, and upon
425	contract or agreement with an eligible employee, deferrals of
426	compensation may be accomplished by payroll deductions made by
427	the appropriate officer or officers of the state, with such
428	funds being thereafter held and administered in accordance with
429	the plan.
430	(6)(a) No deferred compensation plan of the state shall
431	become effective until approved by the State Board of
432	Administration and the Chief Financial OfficerTreasureris
433	satisfied by opinion from such federal agency or agencies as may
434	be deemed necessary that the compensation deferred thereunder
435	and/or the investment products purchased pursuant to the plan
436	will not be included in the employee's taxable income under
437	federal or state law until it is actually received by such
438	employee under the terms of the plan, and that such compensation
439	will nonetheless be deemed compensation at the time of deferral
440	for the purposes of social security coverage, for the purposes
441	of the state retirement system, and for any other retirement,
442	pension, or benefit program established by law.
443	(8)(a) There is herebycreated a Deferred Compensation
444	Advisory Council composed of seven members.
445	1. One member shall be appointed by the Speaker of the
446	House of Representatives and the President of the Senate jointly
447	and shall be an employee of the legislative branch.
448	2. One member shall be appointed by the Chief Justice of
449	the Supreme Court and shall be an employee of the judicial
450	branch.
451	3. One member shall be appointed by the chair of the
452	Public Employees Relations Commission and shall be a nonexempt
453	public employee.
454	4. The remaining four members shall be employed by the
455	executive branch and shall be appointed as follows:
456	a. One member shall be appointed by the Chancellor of the
457	State University System and shall be an employee of the
458	university system.
459	b. One member shall be appointed by the Chief Financial
460	OfficerTreasurer and shall be an employee of the Chief
461	Financial OfficerTreasurer.
462	c. One member shall be appointed by the Governor and shall
463	be an employee of the executive branch.
464	d. One member shall be appointed by the Comptroller and
465	shall be an employee of the Comptroller.
466	(d) The council shall meet at the call of its chair, at
467	the request of a majority of its membership, or at the request
468	of the Chief Financial OfficerTreasurer, but not less than
469	twice a year. The business of the council shall be presented to
470	the council in the form of an agenda. The agenda shall be set
471	by the Chief Financial OfficerTreasurerand shall include items
472	of business requested by the council members.
473	(f) The council shall make a report of each meeting to the
474	Chief Financial OfficerTreasurer, which shall show the names of
475	the members present and shall include a record of its
476	discussions, recommendations, and actions taken. The Chief
477	Financial OfficerTreasurershall keep the records of the
478	proceedings of each meeting on file and shall make the records
479	available to any interested person or group.
480	(h) The advisory council shall provide assistance and
481	recommendations to the Chief Financial OfficerTreasurer
482	relating to the provisions of the plan, the insurance or
483	investment options to be offered under the plan, and any other
484	contracts or appointments deemed necessary by the council and
485	the Chief Financial OfficerTreasurerto carry out the
486	provisions of this act. The Chief Financial OfficerTreasurer
487	shall inform the council of the manner in which each council
488	recommendation is being addressed. The Chief Financial Officer
489	Treasurershall provide the council, at least annually, a report
490	on the status of the deferred compensation program, including,
491	but not limited to, information on participant enrollment,
492	amount of compensation deferred, total plan assets, product
493	provider performance, and participant satisfaction with the
494	program.
495	(10)
496	(b)1. There is created in the State Treasury the Deferred
497	Compensation Trust Fund, through which the Chief Financial
498	OfficerTreasureras trustee shall hold moneys, pensions,
499	annuities, or other benefits accrued or accruing under and
500	pursuant to 26 U.S.C. s. 457 and the deferred compensation plan
501	provided for therein and adopted by this state; and
502	a. All amounts of compensation deferred thereunder;
503	b. All property and rights purchased with such amounts;
504	and
505	c. All income attributable to such amounts, property, or
506	rights.
507	2. Notwithstanding the mandates of 26 U.S.C. s. 457(b)(6),
508	all of the assets specified in subparagraph 1. shall be held in
509	trust for the exclusive benefit of participants and their
510	beneficiaries as mandated by 26 U.S.C. s. 457(g)(1).
511	(11) With respect to any funds held pursuant to a deferred
512	compensation plan, any plan provider which is a bank or savings
513	association and which provides time deposit accounts and
514	certificates of deposit as an investment product to the plan
515	participants may, with the approval of the State Board of
516	Administration for providers in the state plan, or with the
517	approval of the appropriate official or body designated under
518	subsection (5) for a plan of a county, municipality, other
519	political subdivision, or constitutional county officer, be
520	exempt from the provisions of chapter 280 requiring it to be a
521	qualified public depository, provided:
522	(a) The bank or savings association shall, to the extent
523	that the time deposit accounts or certificates of deposit are
524	not insured by the Federal Deposit Insurance Corporation or the
525	Federal Savings and Loan Insurance Corporation, pledge
526	collateral with the Chief Financial OfficerTreasurerfor all
527	state funds held by it under a deferred compensation plan, or
528	with such other appropriate official for all public funds held
529	by it under a deferred compensation plan of a county,
530	municipality, other political subdivision, or constitutional
531	county officer, in an amount which equals at least 150 percent
532	of all uninsured deferred compensation funds then held.
533	(b) Said collateral shall be of the kind permitted by s.
534	280.13 and shall be pledged in the manner provided for by the
535	applicable provisions of chapter 280.
536
537	The Chief Financial OfficerTreasurershall have all the
538	applicable powers provided in ss. 280.04, 280.05, and 280.08
539	relating to the sale or other disposition of the pledged
540	collateral.
541	(12) The Chief Financial OfficerTreasurermay adopt any
542	rule necessary to administer and implement this act with respect
543	to deferred compensation plans for state employees.
544	Section 5. Paragraph (c) of subsection (2), paragraph (d)
545	of subsection (4), and paragraphs (a), (b), and (c) of
546	subsection (6) of section 215.555, Florida Statutes, are amended
547	to read:
548	215.555 Florida Hurricane Catastrophe Fund.--
549	(2) DEFINITIONS.--As used in this section:
550	(c) "Covered policy" means any insurance policy covering
551	residential property in this state, including, but not limited
552	to, any homeowner's, mobile home owner's, farm owner's,
553	condominium association, condominium unit owner's, tenant's, or
554	apartment building policy, or any other policy covering a
555	residential structure or its contents issued by any authorized
556	insurer, including any joint underwriting association or similar
557	entity created pursuant to law. The term "covered policy"
558	includes any collateral protection insurance policy covering
559	personal residences which protects both the borrower's and the
560	lender's financial interests, in an amount at least equal to the
561	coverage for the dwelling in place under the lapsed homeowner's
562	policy, if such policy can be accurately reported as required in
563	subsection(5). Additionally, covered policies include policies
564	covering the peril of wind removed from the Florida Residential
565	Property and Casualty Joint Underwriting Association or from the
566	Citizens Property Insurance Corporation, created pursuant to s.
567	627.351(6), or from the Florida Windstorm Underwriting
568	Association, created pursuant to s. 627.351(2), by an authorized
569	insurer under the terms and conditions of an executed assumption
570	agreement between the authorized insurer and eithersuch
571	association. Each assumption agreement between theeither
572	association and such authorized insurer must be approved by the
573	Florida Department of Insurance or the Office of Insurance
574	Regulationprior to the effective date of the assumption, and
575	the Department of Insurance or the Office of Insurance
576	Regulationmust provide written notification to the board within
577	15 working days after such approval. "Covered policy" does not
578	include any policy that excludes wind coverage or hurricane
579	coverage or any reinsurance agreement and does not include any
580	policy otherwise meeting this definition which is issued by a
581	surplus lines insurer or a reinsurer.
582	(4) REIMBURSEMENT CONTRACTS.--
583	(d)1. For purposes of determining potential liability and
584	to aid in the sound administration of the fund, the contract
585	shall require each insurer to report such insurer's losses from
586	each covered event on an interim basis, as directed by the
587	board. The contract shall require the insurer to report to the
588	board no later than December 31 of each year, and quarterly
589	thereafter, its reimbursable losses from covered events for the
590	year. The contract shall require the board to determine and pay,
591	as soon as practicable after receiving these reports of
592	reimbursable losses, the initial amount of reimbursement due and
593	adjustments to this amount based on later loss information. The
594	adjustments to reimbursement amounts shall require the board to
595	pay, or the insurer to return, amounts reflecting the most
596	recent calculation of losses.
597	2. In determining reimbursements pursuant to this
598	subsection, the contract shall provide that the board shall:
599	a. First reimburse insurers writing covered policies,
600	which insurers are in full compliance with this section and have
601	petitioned the Office of Insurance RegulationDepartment of
602	Insuranceand qualified as limited apportionment companies under
603	s. 627.351(2)(b)3. The amount of such reimbursement shall be
604	the lesser of $10 million or an amount equal to 10 times the
605	insurer's reimbursement premium for the current year. The
606	amount of reimbursement paid under this sub-subparagraph may not
607	exceed the full amount of reimbursement promised in the
608	reimbursement contract. This sub-subparagraph does not apply
609	with respect to any contract year in which the year-end
610	projected cash balance of the fund, exclusive of any bonding
611	capacity of the fund, exceeds $2 billion. Only one member of any
612	insurer group may receive reimbursement under this sub-
613	subparagraph.
614	b. Next pay to each insurer such insurer's projected
615	payout, which is the amount of reimbursement it is owed, up to
616	an amount equal to the insurer's share of the actual premium
617	paid for that contract year, multiplied by the actual claims-
618	paying capacity available for that contract year; provided,
619	entities created pursuant to s. 627.351 shall be further
620	reimbursed in accordance with sub-subparagraph c.
621	c. Thereafter, establish, based on reimbursable losses,
622	the prorated reimbursement level at the highest level for which
623	any remaining fund balance or bond proceeds are sufficient to
624	reimburse entities created pursuant to s. 627.351 for losses
625	exceeding the amounts payable pursuant to sub-subparagraph b.
626	for the current contract year.
627	(6) REVENUE BONDS.--
628	(a) General provisions.--
629	1. Upon the occurrence of a hurricane and a determination
630	that the moneys in the fund are or will be insufficient to pay
631	reimbursement at the levels promised in the reimbursement
632	contracts, the board may take the necessary steps under
633	paragraph (b) or paragraph (c) for the issuance of revenue bonds
634	for the benefit of the fund. The proceeds of such revenue bonds
635	may be used to make reimbursement payments under reimbursement
636	contracts; to refinance or replace previously existing
637	borrowings or financial arrangements; to pay interest on bonds;
638	to fund reserves for the bonds; to pay expenses incident to the
639	issuance or sale of any bond issued under this section,
640	including costs of validating, printing, and delivering the
641	bonds, costs of printing the official statement, costs of
642	publishing notices of sale of the bonds, and related
643	administrative expenses; or for such other purposes related to
644	the financial obligations of the fund as the board may
645	determine. The term of the bonds may not exceed 30 years. The
646	board may pledge or authorize the corporation to pledge all or a
647	portion of all revenues under subsection (5) and under
648	subparagraph 3. to secure such revenue bonds and the board may
649	execute such agreements between the board and the issuer of any
650	revenue bonds and providers of other financing arrangements
651	under paragraph (7)(b) as the board deems necessary to evidence,
652	secure, preserve, and protect such pledge. If reimbursement
653	premiums received under subsection (5) or earnings on such
654	premiums are used to pay debt service on revenue bonds, such
655	premiums and earnings shall be used only after the use of the
656	moneys derived from assessments under subparagraph 3. The
657	funds, credit, property, or taxing power of the state or
658	political subdivisions of the state shall not be pledged for the
659	payment of such bonds. The board may also enter into agreements
660	under paragraph (b) or paragraph (c) for the purpose of issuing
661	revenue bonds in the absence of a hurricane upon a determination
662	that such action would maximize the ability of the fund to meet
663	future obligations.
664	2. The Legislature finds and declares that the issuance of
665	bonds under this subsection is for the public purpose of paying
666	the proceeds of the bonds to insurers, thereby enabling insurers
667	to pay the claims of policyholders to assure that policyholders
668	are able to pay the cost of construction, reconstruction,
669	repair, restoration, and other costs associated with damage to
670	property of policyholders of covered policies after the
671	occurrence of a hurricane. Revenue bonds may not be issued under
672	this subsection until validated under chapter 75. The validation
673	of at least the first obligations incurred pursuant to this
674	subsection shall be appealed to the Supreme Court, to be handled
675	on an expedited basis.
676	3. If the board determines that the amount of revenue
677	produced under subsection (5) is insufficient to fund the
678	obligations, costs, and expenses of the fund and the
679	corporation, including repayment of revenue bonds, the board
680	shall direct the Office of Insurance RegulationDepartment of
681	Insuranceto levy an emergency assessment on each insurer
682	writing property and casualty business in this state. Pursuant
683	to the emergency assessment, each such insurer shall pay to the
684	corporation by July 1 of each year an amount set by the board
685	not exceeding 2 percent of its gross direct written premium for
686	the prior year from all property and casualty business in this
687	state except for workers' compensation, except that, if the
688	Governor has declared a state of emergency under s. 252.36 due
689	to the occurrence of a covered event, the amount of the
690	assessment for the contract year may be increased to an amount
691	not exceeding 4 percent of such premium. Any assessment
692	authority not used for the contract year may be used for a
693	subsequent contract year. If, for a subsequent contract year,
694	the board determines that the amount of revenue produced under
695	subsection (5) is insufficient to fund the obligations, costs,
696	and expenses of the fund and the corporation, including
697	repayment of revenue bonds for that contract year, the board
698	shall direct the Office of Insurance RegulationDepartment of
699	Insuranceto levy an emergency assessment up to an amount not
700	exceeding the amount of unused assessment authority from a
701	previous contract year or years, plus an additional 2 percent if
702	the Governor has declared a state of emergency under s. 252.36
703	due to the occurrence of a covered event. Any assessment
704	authority not used for the contract year may be used for a
705	subsequent contract year. As used in this subsection, the term
706	"property and casualty business" includes all lines of business
707	identified on Form 2, Exhibit of Premiums and Losses, in the
708	annual statement required by s. 624.424 and any rules adopted
709	under such section, except for those lines identified as
710	accident and health insurance. The annual assessments under this
711	subparagraph shall continue as long as the revenue bonds issued
712	with respect to which the assessment was imposed are
713	outstanding, unless adequate provision has been made for the
714	payment of such bonds pursuant to the documents authorizing
715	issuance of the bonds. An insurer shall not at any time be
716	subject to aggregate annual assessments under this subparagraph
717	of more than 2 percent of premium, except that in the case of a
718	declared emergency, an insurer shall not at any time be subject
719	to aggregate annual assessments under this subparagraph of more
720	than 6 percent of premium; provided, no more than 4 percent may
721	be assessed for any one contract year. Any rate filing or
722	portion of a rate filing reflecting a rate change attributable
723	entirely to the assessment levied under this subparagraph shall
724	be deemed approved when made, subject to the authority of the
725	Office of Insurance RegulationDepartment of Insuranceto
726	require actuarial justification as to the adequacy of any rate
727	at any time. If the rate filing reflects only a rate change
728	attributable to the assessment under this paragraph, the filing
729	may consist of a certification so stating. The assessments
730	otherwise payable to the corporation pursuant to this
731	subparagraph shall be paid instead to the fund unless and until
732	the Office of Insurance RegulationDepartment of Insurancehas
733	received from the corporation and the fund a notice, which shall
734	be conclusive and upon which the Office of Insurance Regulation
735	Department of Insurancemay rely without further inquiry, that
736	the corporation has issued bonds and the fund has no agreements
737	in effect with local governments pursuant to paragraph (b). On
738	or after the date of such notice and until such date as the
739	corporation has no bonds outstanding, the fund shall have no
740	right, title, or interest in or to the assessments, except as
741	provided in the fund's agreements with the corporation.
742	(b) Revenue bond issuance through counties or
743	municipalities.--
744	1. If the board elects to enter into agreements with local
745	governments for the issuance of revenue bonds for the benefit of
746	the fund, the board shall enter into such contracts with one or
747	more local governments, including agreements providing for the
748	pledge of revenues, as are necessary to effect such issuance.
749	The governing body of a county or municipality is authorized to
750	issue bonds as defined in s. 125.013 or s. 166.101 from time to
751	time to fund an assistance program, in conjunction with the
752	Florida Hurricane Catastrophe Fund, for the purposes set forth
753	in this section or for the purpose of paying the costs of
754	construction, reconstruction, repair, restoration, and other
755	costs associated with damage to properties of policyholders of
756	covered policies due to the occurrence of a hurricane by
757	assuring that policyholders located in this state are able to
758	recover claims under property insurance policies after a covered
759	event.
760	2. In order to avoid needless and indiscriminate
761	proliferation, duplication, and fragmentation of such assistance
762	programs, any local government may provide for the payment of
763	fund reimbursements, regardless of whether or not the losses for
764	which reimbursement is made occurred within or outside of the
765	territorial jurisdiction of the local government.
766	3. The state hereby covenants with holders of bonds issued
767	under this paragraph that the state will not repeal or abrogate
768	the power of the board to direct the Office of Insurance
769	RegulationDepartment of Insuranceto levy the assessments and
770	to collect the proceeds of the revenues pledged to the payment
771	of such bonds as long as any such bonds remain outstanding
772	unless adequate provision has been made for the payment of such
773	bonds pursuant to the documents authorizing the issuance of such
774	bonds.
775	4. There shall be no liability on the part of, and no
776	cause of action shall arise against any members or employees of
777	the governing body of a local government for any actions taken
778	by them in the performance of their duties under this paragraph.
779	(c) Florida Hurricane Catastrophe Fund Finance
780	Corporation.--
781	1. In addition to the findings and declarations in
782	subsection (1), the Legislature also finds and declares that:
783	a. The public benefits corporation created under this
784	paragraph will provide a mechanism necessary for the cost-
785	effective and efficient issuance of bonds. This mechanism will
786	eliminate unnecessary costs in the bond issuance process,
787	thereby increasing the amounts available to pay reimbursement
788	for losses to property sustained as a result of hurricane
789	damage.
790	b. The purpose of such bonds is to fund reimbursements
791	through the Florida Hurricane Catastrophe Fund to pay for the
792	costs of construction, reconstruction, repair, restoration, and
793	other costs associated with damage to properties of
794	policyholders of covered policies due to the occurrence of a
795	hurricane.
796	c. The efficacy of the financing mechanism will be
797	enhanced by the corporation's ownership of the assessments, by
798	the insulation of the assessments from possible bankruptcy
799	proceedings, and by covenants of the state with the
800	corporation's bondholders.
801	2.a. There is created a public benefits corporation, which
802	is an instrumentality of the state, to be known as the Florida
803	Hurricane Catastrophe Fund Finance Corporation.
804	b. The corporation shall operate under a five-member board
805	of directors consisting of the Governor or a designee, the Chief
806	Financial OfficerComptroller or a designee, the Attorney
807	GeneralTreasureror a designee, the director of the Division of
808	Bond Finance of the State Board of Administration, and the
809	senior employee of the State Board of Administration responsible
810	for operationschief operating officerof the Florida Hurricane
811	Catastrophe Fund.
812	c. The corporation has all of the powers of corporations
813	under chapter 607 and under chapter 617, subject only to the
814	provisions of this subsection.
815	d. The corporation may issue bonds and engage in such
816	other financial transactions as are necessary to provide
817	sufficient funds to achieve the purposes of this section.
818	e. The corporation may invest in any of the investments
819	authorized under s. 215.47.
820	f. There shall be no liability on the part of, and no
821	cause of action shall arise against, any board members or
822	employees of the corporation for any actions taken by them in
823	the performance of their duties under this paragraph.
824	3.a. In actions under chapter 75 to validate any bonds
825	issued by the corporation, the notice required by s. 75.06 shall
826	be published only in Leon County and in two newspapers of
827	general circulation in the state, and the complaint and order of
828	the court shall be served only on the State Attorney of the
829	Second Judicial Circuit.
830	b. The state hereby covenants with holders of bonds of the
831	corporation that the state will not repeal or abrogate the power
832	of the board to direct the Office of Insurance Regulation
833	Department of Insuranceto levy the assessments and to collect
834	the proceeds of the revenues pledged to the payment of such
835	bonds as long as any such bonds remain outstanding unless
836	adequate provision has been made for the payment of such bonds
837	pursuant to the documents authorizing the issuance of such
838	bonds.
839	4. The bonds of the corporation are not a debt of the
840	state or of any political subdivision, and neither the state nor
841	any political subdivision is liable on such bonds. The
842	corporation does not have the power to pledge the credit, the
843	revenues, or the taxing power of the state or of any political
844	subdivision. The credit, revenues, or taxing power of the state
845	or of any political subdivision shall not be deemed to be
846	pledged to the payment of any bonds of the corporation.
847	5.a. The property, revenues, and other assets of the
848	corporation; the transactions and operations of the corporation
849	and the income from such transactions and operations; and all
850	bonds issued under this paragraph and interest on such bonds are
851	exempt from taxation by the state and any political subdivision,
852	including the intangibles tax under chapter 199 and the income
853	tax under chapter 220. This exemption does not apply to any tax
854	imposed by chapter 220 on interest, income, or profits on debt
855	obligations owned by corporations other than the Florida
856	Hurricane Catastrophe Fund Finance Corporation.
857	b. All bonds of the corporation shall be and constitute
858	legal investments without limitation for all public bodies of
859	this state; for all banks, trust companies, savings banks,
860	savings associations, savings and loan associations, and
861	investment companies; for all administrators, executors,
862	trustees, and other fiduciaries; for all insurance companies and
863	associations and other persons carrying on an insurance
864	business; and for all other persons who are now or may hereafter
865	be authorized to invest in bonds or other obligations of the
866	state and shall be and constitute eligible securities to be
867	deposited as collateral for the security of any state, county,
868	municipal, or other public funds. This sub-subparagraph shall be
869	considered as additional and supplemental authority and shall
870	not be limited without specific reference to this sub-
871	subparagraph.
872	6. The corporation and its corporate existence shall
873	continue until terminated by law; however, no such law shall
874	take effect as long as the corporation has bonds outstanding
875	unless adequate provision has been made for the payment of such
876	bonds pursuant to the documents authorizing the issuance of such
877	bonds. Upon termination of the existence of the corporation, all
878	of its rights and properties in excess of its obligations shall
879	pass to and be vested in the state.
880	Section 6. Subsection (5) of section 215.559, Florida
881	Statutes, is amended to read:
882	215.559 Hurricane Loss Mitigation Program.--
883	(5) Except for the program set forth in subsection (3),
884	the Department of Community Affairs shall develop the programs
885	set forth in this section in consultation with an advisory
886	council consisting of a representative designated by the Chief
887	Financial OfficerDepartment of Insurance, a representative
888	designated by the Florida Home Builders Association, a
889	representative designated by the Florida Insurance Council, a
890	representative designated by the Federation of Manufactured Home
891	Owners, a representative designated by the Florida Association
892	of Counties, and a representative designated by the Florida
893	Manufactured Housing Association.
894	Section 7. Subsection (2) of section 391.221, Florida
895	Statutes, is amended to read:
896	391.221 Statewide Children's Medical Services Network
897	Advisory Council.--
898	(2) The council shall be composed of 12 members
899	representing the private health care provider sector, families
900	with children who have special health care needs, the Agency for
901	Health Care Administration, the Office of Insurance Regulation
902	of the Financial Services CommissionDepartment of Insurance,
903	the Florida Chapter of the American Academy of Pediatrics, an
904	academic health center pediatric program, and the health
905	insurance industry. Members shall be appointed for 4-year,
906	staggered terms. In no case shall an employee of the Department
907	of Health serve as a member or as an ex officio member of the
908	advisory council. A vacancy shall be filled for the remainder
909	of the unexpired term in the same manner as the original
910	appointment. A member may not be appointed to more than two
911	consecutive terms. However, a member may be reappointed after
912	being off the council for at least 2 years.
913	Section 8. Paragraph (b) of subsection (2) of section
914	401.245, Florida Statutes, is amended to read:
915	401.245 Emergency Medical Services Advisory Council.--
916	(2)
917	(b) Representation on the Emergency Medical Services
918	Advisory Council shall include: two licensed physicians who are
919	"medical directors" as defined in s. 401.23(15) or whose medical
920	practice is closely related to emergency medical services; two
921	emergency medical service administrators, one of whom is
922	employed by a fire service; two certified paramedics, one of
923	whom is employed by a fire service; two certified emergency
924	medical technicians, one of whom is employed by a fire service;
925	one emergency medical services educator; one emergency nurse;
926	one hospital administrator; one representative of air ambulance
927	services; one representative of a commercial ambulance operator;
928	and two laypersons who are in no way connected with emergency
929	medical services, one of whom is a representative of the
930	elderly. Ex officio members of the advisory council from state
931	agencies shall include, but shall not be limited to,
932	representatives from the Department of Education, the Department
933	of Management Services, the Office of Insurance Regulation of
934	the Financial Services CommissionDepartment of Insurance, the
935	Department of Highway Safety and Motor Vehicles, the Department
936	of Transportation, and the Department of Community Affairs.
937	Section 9. Paragraph (a) of subsection (8) of section
938	408.05, Florida Statutes, is amended to read:
939	408.05 State Center for Health Statistics.--
940	(8) STATE COMPREHENSIVE HEALTH INFORMATION SYSTEM ADVISORY
941	COUNCIL.--
942	(a) There is established in the agency the State
943	Comprehensive Health Information System Advisory Council to
944	assist the center in reviewing the comprehensive health
945	information system and to recommend improvements for such
946	system. The council shall consist of the following members:
947	1. An employee of the Executive Office of the Governor, to
948	be appointed by the Governor.
949	2. An employee of the Department of Financial Services
950	Department of Insurance, to be appointed by the Chief Financial
951	OfficerInsurance Commissioner.
952	3. An employee of the Department of Education, to be
953	appointed by the Commissioner of Education.
954	4. Ten persons, to be appointed by the Secretary of Health
955	Care Administration, representing other state and local
956	agencies, state universities, the Florida Association of
957	Business/Health Coalitions, local health councils, professional
958	health-care-related associations, consumers, and purchasers.
959	Section 10. Section 408.7056, Florida Statutes, is amended
960	to read:
961	408.7056 Statewide Provider and Subscriber Assistance
962	Program.--
963	(1) As used in this section, the term:
964	(a) "Agency" means the Agency for Health Care
965	Administration.
966	(b) "Department" means the Department of Insurance.
967	(b)(c)"Grievance procedure" means an established set of
968	rules that specify a process for appeal of an organizational
969	decision.
970	(c)(d)"Health care provider" or "provider" means a state-
971	licensed or state-authorized facility, a facility principally
972	supported by a local government or by funds from a charitable
973	organization that holds a current exemption from federal income
974	tax under s. 501(c)(3) of the Internal Revenue Code, a licensed
975	practitioner, a county health department established under part
976	I of chapter 154, a prescribed pediatric extended care center
977	defined in s. 400.902, a federally supported primary care
978	program such as a migrant health center or a community health
979	center authorized under s. 329 or s. 330 of the United States
980	Public Health Services Act that delivers health care services to
981	individuals, or a community facility that receives funds from
982	the state under the Community Alcohol, Drug Abuse, and Mental
983	Health Services Act and provides mental health services to
984	individuals.
985	(d)(e)"Managed care entity" means a health maintenance
986	organization or a prepaid health clinic certified under chapter
987	641, a prepaid health plan authorized under s. 409.912, or an
988	exclusive provider organization certified under s. 627.6472.
989	(e) "Office" means the Office of Insurance Regulation of
990	the Financial Services Commission.
991	(f) "Panel" means a statewide provider and subscriber
992	assistance panel selected as provided in subsection (11).
993	(2) The agency shall adopt and implement a program to
994	provide assistance to subscribers and providers, including those
995	whose grievances are not resolved by the managed care entity to
996	the satisfaction of the subscriber or provider. The program
997	shall consist of one or more panels that meet as often as
998	necessary to timely review, consider, and hear grievances and
999	recommend to the agency or the officedepartmentany actions
1000	that should be taken concerning individual cases heard by the
1001	panel. The panel shall hear every grievance filed by subscribers
1002	and providers on behalf of subscribers, unless the grievance:
1003	(a) Relates to a managed care entity's refusal to accept a
1004	provider into its network of providers;
1005	(b) Is part of an internal grievance in a Medicare managed
1006	care entity or a reconsideration appeal through the Medicare
1007	appeals process which does not involve a quality of care issue;
1008	(c) Is related to a health plan not regulated by the state
1009	such as an administrative services organization, third-party
1010	administrator, or federal employee health benefit program;
1011	(d) Is related to appeals by in-plan suppliers and
1012	providers, unless related to quality of care provided by the
1013	plan;
1014	(e) Is part of a Medicaid fair hearing pursued under 42
1015	C.F.R. ss. 431.220 et seq.;
1016	(f) Is the basis for an action pending in state or federal
1017	court;
1018	(g) Is related to an appeal by nonparticipating providers,
1019	unless related to the quality of care provided to a subscriber
1020	by the managed care entity and the provider is involved in the
1021	care provided to the subscriber;
1022	(h) Was filed before the subscriber or provider completed
1023	the entire internal grievance procedure of the managed care
1024	entity, the managed care entity has complied with its timeframes
1025	for completing the internal grievance procedure, and the
1026	circumstances described in subsection (6) do not apply;
1027	(i) Has been resolved to the satisfaction of the
1028	subscriber or provider who filed the grievance, unless the
1029	managed care entity's initial action is egregious or may be
1030	indicative of a pattern of inappropriate behavior;
1031	(j) Is limited to seeking damages for pain and suffering,
1032	lost wages, or other incidental expenses, including accrued
1033	interest on unpaid balances, court costs, and transportation
1034	costs associated with a grievance procedure;
1035	(k) Is limited to issues involving conduct of a health
1036	care provider or facility, staff member, or employee of a
1037	managed care entity which constitute grounds for disciplinary
1038	action by the appropriate professional licensing board and is
1039	not indicative of a pattern of inappropriate behavior, and the
1040	agency or officedepartmenthas reported these grievances to the
1041	appropriate professional licensing board or to the health
1042	facility regulation section of the agency for possible
1043	investigation; or
1044	(l) Is withdrawn by the subscriber or provider. Failure
1045	of the subscriber or the provider to attend the hearing shall be
1046	considered a withdrawal of the grievance.
1047	(3) The agency shall review all grievances within 60 days
1048	after receipt and make a determination whether the grievance
1049	shall be heard. Once the agency notifies the panel, the
1050	subscriber or provider, and the managed care entity that a
1051	grievance will be heard by the panel, the panel shall hear the
1052	grievance either in the network area or by teleconference no
1053	later than 120 days after the date the grievance was filed. The
1054	agency shall notify the parties, in writing, by facsimile
1055	transmission, or by phone, of the time and place of the hearing.
1056	The panel may take testimony under oath, request certified
1057	copies of documents, and take similar actions to collect
1058	information and documentation that will assist the panel in
1059	making findings of fact and a recommendation. The panel shall
1060	issue a written recommendation, supported by findings of fact,
1061	to the provider or subscriber, to the managed care entity, and
1062	to the agency or the officedepartmentno later than 15 working
1063	days after hearing the grievance. If at the hearing the panel
1064	requests additional documentation or additional records, the
1065	time for issuing a recommendation is tolled until the
1066	information or documentation requested has been provided to the
1067	panel. The proceedings of the panel are not subject to chapter
1068	120.
1069	(4) If, upon receiving a proper patient authorization
1070	along with a properly filed grievance, the agency requests
1071	medical records from a health care provider or managed care
1072	entity, the health care provider or managed care entity that has
1073	custody of the records has 10 days to provide the records to the
1074	agency. Failure to provide requested medical records may result
1075	in the imposition of a fine of up to $500. Each day that
1076	records are not produced is considered a separate violation.
1077	(5) Grievances that the agency determines pose an
1078	immediate and serious threat to a subscriber's health must be
1079	given priority over other grievances. The panel may meet at the
1080	call of the chair to hear the grievances as quickly as possible
1081	but no later than 45 days after the date the grievance is filed,
1082	unless the panel receives a waiver of the time requirement from
1083	the subscriber. The panel shall issue a written recommendation,
1084	supported by findings of fact, to the officedepartmentor the
1085	agency within 10 days after hearing the expedited grievance.
1086	(6) When the agency determines that the life of a
1087	subscriber is in imminent and emergent jeopardy, the chair of
1088	the panel may convene an emergency hearing, within 24 hours
1089	after notification to the managed care entity and to the
1090	subscriber, to hear the grievance. The grievance must be heard
1091	notwithstanding that the subscriber has not completed the
1092	internal grievance procedure of the managed care entity. The
1093	panel shall, upon hearing the grievance, issue a written
1094	emergency recommendation, supported by findings of fact, to the
1095	managed care entity, to the subscriber, and to the agency or the
1096	officedepartmentfor the purpose of deferring the imminent and
1097	emergent jeopardy to the subscriber's life. Within 24 hours
1098	after receipt of the panel's emergency recommendation, the
1099	agency or officedepartmentmay issue an emergency order to the
1100	managed care entity. An emergency order remains in force until:
1101	(a) The grievance has been resolved by the managed care
1102	entity;
1103	(b) Medical intervention is no longer necessary; or
1104	(c) The panel has conducted a full hearing under
1105	subsection (3) and issued a recommendation to the agency or the
1106	officedepartment, and the agency or officedepartmenthas
1107	issued a final order.
1108	(7) After hearing a grievance, the panel shall make a
1109	recommendation to the agency or the officedepartmentwhich may
1110	include specific actions the managed care entity must take to
1111	comply with state laws or rules regulating managed care
1112	entities.
1113	(8) A managed care entity, subscriber, or provider that is
1114	affected by a panel recommendation may within 10 days after
1115	receipt of the panel's recommendation, or 72 hours after receipt
1116	of a recommendation in an expedited grievance, furnish to the
1117	agency or officedepartmentwritten evidence in opposition to
1118	the recommendation or findings of fact of the panel.
1119	(9) No later than 30 days after the issuance of the
1120	panel's recommendation and, for an expedited grievance, no later
1121	than 10 days after the issuance of the panel's recommendation,
1122	the agency or the officedepartmentmay adopt the panel's
1123	recommendation or findings of fact in a proposed order or an
1124	emergency order, as provided in chapter 120, which it shall
1125	issue to the managed care entity. The agency or office
1126	departmentmay issue a proposed order or an emergency order, as
1127	provided in chapter 120, imposing fines or sanctions, including
1128	those contained in ss. 641.25 and 641.52. The agency or the
1129	officedepartmentmay reject all or part of the panel's
1130	recommendation. All fines collected under this subsection must
1131	be deposited into the Health Care Trust Fund.
1132	(10) In determining any fine or sanction to be imposed,
1133	the agency and the officedepartmentmay consider the following
1134	factors:
1135	(a) The severity of the noncompliance, including the
1136	probability that death or serious harm to the health or safety
1137	of the subscriber will result or has resulted, the severity of
1138	the actual or potential harm, and the extent to which provisions
1139	of chapter 641 were violated.
1140	(b) Actions taken by the managed care entity to resolve or
1141	remedy any quality-of-care grievance.
1142	(c) Any previous incidents of noncompliance by the managed
1143	care entity.
1144	(d) Any other relevant factors the agency or office
1145	departmentconsiders appropriate in a particular grievance.
1146	(11) The panel shall consist of members employed by the
1147	agency,and members employed by the officedepartment, and
1148	members employed by the Department of Financial Services,chosen
1149	by their respective agencies; a consumer appointed by the
1150	Governor; a physician appointed by the Governor, as a standing
1151	member; and physicians who have expertise relevant to the case
1152	to be heard, on a rotating basis. The agency may contract with a
1153	medical director and a primary care physician who shall provide
1154	additional technical expertise to the panel. The medical
1155	director shall be selected from a health maintenance
1156	organization with a current certificate of authority to operate
1157	in Florida.
1158	(12) Every managed care entity shall submit a quarterly
1159	report to the agency and the officedepartmentlisting the
1160	number and the nature of all subscribers' and providers'
1161	grievances which have not been resolved to the satisfaction of
1162	the subscriber or provider after the subscriber or provider
1163	follows the entire internal grievance procedure of the managed
1164	care entity. The agency shall notify all subscribers and
1165	providers included in the quarterly reports of their right to
1166	file an unresolved grievance with the panel.
1167	(13) Any information which would identify a subscriber or
1168	the spouse, relative, or guardian of a subscriber and which is
1169	contained in a report obtained by the officeDepartment of
1170	Insurancepursuant to this section is confidential and exempt
1171	from the provisions of s. 119.07(1) and s. 24(a), Art. I of the
1172	State Constitution.
1173	(14) A proposed order issued by the agency or office
1174	departmentwhich only requires the managed care entity to take a
1175	specific action under subsection (7) is subject to a summary
1176	hearing in accordance with s. 120.574, unless all of the parties
1177	agree otherwise. If the managed care entity does not prevail at
1178	the hearing, the managed care entity must pay reasonable costs
1179	and attorney's fees of the agency or the officedepartment
1180	incurred in that proceeding.
1181	(15)(a) Any information which would identify a subscriber
1182	or the spouse, relative, or guardian of a subscriber which is
1183	contained in a document, report, or record prepared or reviewed
1184	by the panel or obtained by the agency pursuant to this section
1185	is confidential and exempt from the provisions of s. 119.07(1)
1186	and s. 24(a), Art. I of the State Constitution.
1187	(b) Meetings of the panel shall be open to the public
1188	unless the provider or subscriber whose grievance will be heard
1189	requests a closed meeting or the agency or the officeDepartment
1190	of Insurancedetermines that information of a sensitive personal
1191	nature which discloses the subscriber's medical treatment or
1192	history; or information which constitutes a trade secret as
1193	defined by s. 812.081; or information relating to internal risk
1194	management programs as defined in s. 641.55(5)(c), (6), and (8)
1195	may be revealed at the panel meeting, in which case that portion
1196	of the meeting during which such sensitive personal information,
1197	trade secret information, or internal risk management program
1198	information is discussed shall be exempt from the provisions of
1199	s. 286.011 and s. 24(b), Art. I of the State Constitution. All
1200	closed meetings shall be recorded by a certified court reporter.
1201
1202	This subsection is subject to the Open Government Sunset Review
1203	Act of 1995 in accordance with s. 119.15, and shall stand
1204	repealed on October 2, 2003, unless reviewed and saved from
1205	repeal through reenactment by the Legislature.
1206	Section 11. Subsections (11) and (12) of section 440.13,
1207	Florida Statutes, are amended to read:
1208	440.13 Medical services and supplies; penalty for
1209	violations; limitations.--
1210	(11) AUDITS BY AGENCY FOR HEALTH CARE ADMINISTRATION AND
1211	THE DEPARTMENT OF INSURANCE; JURISDICTION.--
1212	(a) The Agency for Health Care Administration may
1213	investigate health care providers to determine whether providers
1214	are complying with this chapter and with rules adopted by the
1215	agency, whether the providers are engaging in overutilization,
1216	and whether providers are engaging in improper billing
1217	practices. If the agency finds that a health care provider has
1218	improperly billed, overutilized, or failed to comply with agency
1219	rules or the requirements of this chapter it must notify the
1220	provider of its findings and may determine that the health care
1221	provider may not receive payment from the carrier or may impose
1222	penalties as set forth in subsection (8) or other sections of
1223	this chapter. If the health care provider has received payment
1224	from a carrier for services that were improperly billed or for
1225	overutilization, it must return those payments to the carrier.
1226	The agency may assess a penalty not to exceed $500 for each
1227	overpayment that is not refunded within 30 days after
1228	notification of overpayment by the agency or carrier.
1229	(b) The department shall monitor carriers as provided in
1230	this chapter and the Office of Insurance Regulation shalland
1231	audit insurers and group self-insurance fundscarriersas
1232	provided in s. 624.3161, to determine if medical bills are paid
1233	in accordance with this section and department rules of the
1234	department and Financial Services Commission, respectively. Any
1235	employer, if self-insured, or carrier found by the department or
1236	Office of Insurance Regulationdivisionnot to be within 90
1237	percent compliance as to the payment of medical bills after July
1238	1, 1994, must be assessed a fine not to exceed 1 percent of the
1239	prior year's assessment levied against such entity under s.
1240	440.51 for every quarter in which the entity fails to attain 90-
1241	percent compliance. The department shall fine or otherwise
1242	discipline an employer or carrier, pursuant to this chapter, the
1243	insurance code, or rules adopted by the department, and the
1244	Office of Insurance Regulation shall fine or otherwise
1245	discipline an insurer or group self-insurance fund pursuant to
1246	the insurance code or rules adopted by the Financial Services
1247	Commission,for each late payment of compensation that is below
1248	the minimum 90-percent performance standard. Any carrier that is
1249	found to be not in compliance in subsequent consecutive quarters
1250	must implement a medical-bill review program approved by the
1251	department or officedivision, and an insurer or group self-
1252	insurance fundthe carrieris subject to disciplinary action by
1253	the Office of Insurance RegulationDepartment of Insurance.
1254	(c) The agency has exclusive jurisdiction to decide any
1255	matters concerning reimbursement, to resolve any overutilization
1256	dispute under subsection (7), and to decide any question
1257	concerning overutilization under subsection (8), which question
1258	or dispute arises after January 1, 1994.
1259	(d) The following agency actions do not constitute agency
1260	action subject to review under ss. 120.569 and 120.57 and do not
1261	constitute actions subject to s. 120.56: referral by the entity
1262	responsible for utilization review; a decision by the agency to
1263	refer a matter to a peer review committee; establishment by a
1264	health care provider or entity of procedures by which a peer
1265	review committee reviews the rendering of health care services;
1266	and the review proceedings, report, and recommendation of the
1267	peer review committee.
1268	(12) CREATION OF THREE-MEMBER PANEL; GUIDES OF MAXIMUM
1269	REIMBURSEMENT ALLOWANCES.--
1270	(a) A three-member panel is created, consisting of the
1271	Chief Financial OfficerInsurance Commissioner, or the Chief
1272	Financial Officer'sInsurance Commissioner'sdesignee, and two
1273	members to be appointed by the Governor, subject to confirmation
1274	by the Senate, one member who, on account of present or previous
1275	vocation, employment, or affiliation, shall be classified as a
1276	representative of employers, the other member who, on account of
1277	previous vocation, employment, or affiliation, shall be
1278	classified as a representative of employees. The panel shall
1279	determine statewide schedules of maximum reimbursement
1280	allowances for medically necessary treatment, care, and
1281	attendance provided by physicians, hospitals, ambulatory
1282	surgical centers, work-hardening programs, pain programs, and
1283	durable medical equipment. The maximum reimbursement allowances
1284	for inpatient hospital care shall be based on a schedule of per
1285	diem rates, to be approved by the three-member panel no later
1286	than March 1, 1994, to be used in conjunction with a
1287	precertification manual as determined by the agency. All
1288	compensable charges for hospital outpatient care shall be
1289	reimbursed at 75 percent of usual and customary charges. Until
1290	the three-member panel approves a schedule of per diem rates for
1291	inpatient hospital care and it becomes effective, all
1292	compensable charges for hospital inpatient care must be
1293	reimbursed at 75 percent of their usual and customary charges.
1294	Annually, the three-member panel shall adopt schedules of
1295	maximum reimbursement allowances for physicians, hospital
1296	inpatient care, hospital outpatient care, ambulatory surgical
1297	centers, work-hardening programs, and pain programs. However,
1298	the maximum percentage of increase in the individual
1299	reimbursement allowance may not exceed the percentage of
1300	increase in the Consumer Price Index for the previous year. An
1301	individual physician, hospital, ambulatory surgical center, pain
1302	program, or work-hardening program shall be reimbursed either
1303	the usual and customary charge for treatment, care, and
1304	attendance, the agreed-upon contract price, or the maximum
1305	reimbursement allowance in the appropriate schedule, whichever
1306	is less.
1307	(b) As to reimbursement for a prescription medication, the
1308	reimbursement amount for a prescription shall be the average
1309	wholesale price times 1.2 plus $4.18 for the dispensing fee,
1310	except where the carrier has contracted for a lower amount. Fees
1311	for pharmaceuticals and pharmaceutical services shall be
1312	reimbursable at the applicable fee schedule amount. Where the
1313	employer or carrier has contracted for such services and the
1314	employee elects to obtain them through a provider not a party to
1315	the contract, the carrier shall reimburse at the schedule,
1316	negotiated, or contract price, whichever is lower.
1317	(c) Reimbursement for all fees and other charges for such
1318	treatment, care, and attendance, including treatment, care, and
1319	attendance provided by any hospital or other health care
1320	provider, ambulatory surgical center, work-hardening program, or
1321	pain program, must not exceed the amounts provided by the
1322	uniform schedule of maximum reimbursement allowances as
1323	determined by the panel or as otherwise provided in this
1324	section. This subsection also applies to independent medical
1325	examinations performed by health care providers under this
1326	chapter. Until the three-member panel approves a uniform
1327	schedule of maximum reimbursement allowances and it becomes
1328	effective, all compensable charges for treatment, care, and
1329	attendance provided by physicians, ambulatory surgical centers,
1330	work-hardening programs, or pain programs shall be reimbursed at
1331	the lowest maximum reimbursement allowance across all 1992
1332	schedules of maximum reimbursement allowances for the services
1333	provided regardless of the place of service. In determining the
1334	uniform schedule, the panel shall first approve the data which
1335	it finds representative of prevailing charges in the state for
1336	similar treatment, care, and attendance of injured persons. Each
1337	health care provider, health care facility, ambulatory surgical
1338	center, work-hardening program, or pain program receiving
1339	workers' compensation payments shall maintain records verifying
1340	their usual charges. In establishing the uniform schedule of
1341	maximum reimbursement allowances, the panel must consider:
1342	1. The levels of reimbursement for similar treatment,
1343	care, and attendance made by other health care programs or
1344	third-party providers;
1345	2. The impact upon cost to employers for providing a level
1346	of reimbursement for treatment, care, and attendance which will
1347	ensure the availability of treatment, care, and attendance
1348	required by injured workers;
1349	3. The financial impact of the reimbursement allowances
1350	upon health care providers and health care facilities, including
1351	trauma centers as defined in s. 395.4001, and its effect upon
1352	their ability to make available to injured workers such
1353	medically necessary remedial treatment, care, and attendance.
1354	The uniform schedule of maximum reimbursement allowances must be
1355	reasonable, must promote health care cost containment and
1356	efficiency with respect to the workers' compensation health care
1357	delivery system, and must be sufficient to ensure availability
1358	of such medically necessary remedial treatment, care, and
1359	attendance to injured workers; and
1360	4. The most recent average maximum allowable rate of
1361	increase for hospitals determined by the Health Care Board under
1362	chapter 408.
1363	(d) In addition to establishing the uniform schedule of
1364	maximum reimbursement allowances, the panel shall:
1365	1. Take testimony, receive records, and collect data to
1366	evaluate the adequacy of the workers' compensation fee schedule,
1367	nationally recognized fee schedules and alternative methods of
1368	reimbursement to certified health care providers and health care
1369	facilities for inpatient and outpatient treatment and care.
1370	2. Survey certified health care providers and health care
1371	facilities to determine the availability and accessibility of
1372	workers' compensation health care delivery systems for injured
1373	workers.
1374	3. Survey carriers to determine the estimated impact on
1375	carrier costs and workers' compensation premium rates by
1376	implementing changes to the carrier reimbursement schedule or
1377	implementing alternative reimbursement methods.
1378	4. Submit recommendations on or before January 1, 2003,
1379	and biennially thereafter, to the President of the Senate and
1380	the Speaker of the House of Representatives on methods to
1381	improve the workers' compensation health care delivery system.
1382
1383	The agency and the department, as requested,divisionshall
1384	provide data to the panel, including but not limited to,
1385	utilization trends in the workers' compensation health care
1386	delivery system. The agencydivisionshall provide the panel
1387	with an annual report regarding the resolution of medical
1388	reimbursement disputes and any actions pursuant to s. 440.13(8).
1389	The departmentdivisionshall provide administrative support and
1390	service to the panel to the extent requested by the panel.
1391	Section 12. Paragraph (c) of subsection (8) and
1392	subsections (10), (15), (16), and (17) of section 440.20,
1393	Florida Statutes, are amended to read:
1394	440.20 Time for payment of compensation; penalties for
1395	late payment.--
1396	(8) In addition to any other penalties provided by this
1397	chapter for late payment, if any installment of compensation is
1398	not paid when it becomes due, the employer, carrier, or
1399	servicing agent shall pay interest thereon at the rate of 12
1400	percent per year from the date the installment becomes due until
1401	it is paid, whether such installment is payable without an order
1402	or under the terms of an order. The interest payment shall be
1403	the greater of the amount of interest due or $5.
1404	(c) In order to ensure carrier compliance under this
1405	chapter and provisions of the Florida Insurance Code, the office
1406	departmentshall monitor the performance of carriers by
1407	conducting market conduct examinations, as provided in s.
1408	624.3161, and conducting investigations, as provided in s.
1409	624.317. The department shall establish by rule minimum
1410	performance standards for carriers to ensure that a minimum of
1411	90 percent of all compensation benefits are timely paid. The
1412	department shall fine a carrier as provided in s. 440.13(11)(b)
1413	up to $50 for each late payment of compensation that is below
1414	the minimum 90 percent performance standard. This paragraph does
1415	not affect the imposition of any penalties or interest due to
1416	the claimant. If a carrier contracts with a servicing agent to
1417	fulfill its administrative responsibilities under this chapter,
1418	the payment practices of the servicing agent are deemed the
1419	payment practices of the carrier for the purpose of assessing
1420	penalties against the carrier.
1421	(10) Whenever the department deems it advisable, it may
1422	require any employer to make a deposit with the Chief Financial
1423	OfficerTreasurerto secure the prompt and convenient payments
1424	of such compensation; and payments therefrom upon any awards
1425	shall be made upon order of the department or judge of
1426	compensation claims.
1427	(15)(a) The officedepartmentshall examine on an ongoing
1428	basis claims files in accordance with s. 624.3161 and may impose
1429	fines pursuant to s. 624.310(5) and this chapter in order to
1430	identify questionable claims-handling techniques, questionable
1431	patterns or practices of claims, or a pattern of repeated
1432	unreasonably controverted claims by carriers, as defined in s.
1433	440.02, providing services to employees pursuant to this
1434	chapter. If the officedepartmentfinds such questionable
1435	techniques, patterns, or repeated unreasonably controverted
1436	claims as constitute a general business practice of a carrier,
1437	as defined in s. 440.02, the officedepartmentshall take
1438	appropriate action so as to bring such general business
1439	practices to a halt pursuant to s. 440.38(3) or may impose
1440	penalties pursuant to s. 624.4211. The department and officemay
1441	initiate investigations of questionable techniques, patterns,
1442	practices, or repeated unreasonably controverted claims. The
1443	Financial Services Commissiondepartmentmay by rule establish
1444	forms and procedures for corrective action plans and for
1445	auditing carriers.
1446	(b) As to any examination, investigation, or hearing being
1447	conducted under this chapter, the department and office
1448	Insurance Commissioner or his or her designee:
1449	1. May administer oaths, examine and cross-examine
1450	witnesses, receive oral and documentary evidence; and
1451	2. Shall have the power to subpoena witnesses, compel
1452	their attendance and testimony, and require by subpoena the
1453	production of books, papers, records, files, correspondence,
1454	documents, or other evidence which is relevant to the inquiry.
1455	(c) If any person refuses to comply with any such subpoena
1456	or to testify as to any matter concerning which she or he may be
1457	lawfully interrogated, the Circuit Court of Leon County or of
1458	the county wherein such examination, investigation, or hearing
1459	is being conducted, or of the county wherein such person
1460	resides, may, on the application of the department or the
1461	office, issue an order requiring such person to comply with the
1462	subpoena and to testify.
1463	(d) Subpoenas shall be served, and proof of such service
1464	made, in the same manner as if issued by a circuit court.
1465	Witness fees, costs, and reasonable travel expenses, if claimed,
1466	shall be allowed the same as for testimony in a circuit court.
1467	(e) The department shall publish annually a report which
1468	indicates the promptness of first payment of compensation
1469	records of each carrier or self-insurer so as to focus attention
1470	on those carriers or self-insurers with poor payment records for
1471	the preceding year. The department and the officeshall take
1472	appropriate steps so as to cause such poor carrier payment
1473	practices to halt pursuant to s. 440.38(3). In addition, the
1474	department shall take appropriate action so as to halt such poor
1475	payment practices of self-insurers. "Poor payment practice"
1476	means a practice of late payment sufficient to constitute a
1477	general business practice.
1478	(f) The Financial Services Commission, in consultation
1479	with the department, shall adoptpromulgaterules providing
1480	guidelines to carriers, as defined in s. 440.02, self-insurers,
1481	and employers to indicate behavior that may be construed as
1482	questionable claims-handling techniques, questionable patterns
1483	of claims, repeated unreasonably controverted claims, or poor
1484	payment practices.
1485	(16) No penalty assessed under this section may be
1486	recouped by any carrier or self-insurer in the rate base, the
1487	premium, or any rate filing. The officeDepartment of Insurance
1488	shall enforce this subsection.
1489	(17) The Financial Services Commissiondepartmentmay by
1490	rule establish audit procedures and set standards for the
1491	Automated Carrier Performance System.
1492	Section 13. Subsections (2) and (3) of section 440.24,
1493	Florida Statutes, is amended to read:
1494	440.24 Enforcement of compensation orders; penalties.--
1495	(2) In any case where the employer is insured and the
1496	carrier fails to comply with any compensation order of a judge
1497	of compensation claims or court within 10 days after such order
1498	becomes final, the department shall notify the office of such
1499	failure and the office shallthereuponsuspend the license of
1500	such carrier to do an insurance business in this state, until
1501	such carrier has complied with such order.
1502	(3) In any case where the employer is a self-insurer and
1503	fails to comply with any compensation order of a judge of
1504	compensation claims or court within 10 days after such order
1505	becomes final, the department of Insurancemay suspend or revoke
1506	any authorization previously given to the employer to be a self-
1507	insurer, and the Florida Self-Insurers Guaranty Association,
1508	Incorporated, may call or sue upon the surety bond or exercise
1509	its rights under the letter of credit deposited by the self-
1510	insurer with the association as a qualifying security deposit as
1511	may be necessary to satisfy the order.
1512	Section 14. Subsections (1), (2), (3), and (4) of section
1513	440.38, Florida Statutes, are amended to read:
1514	440.38 Security for compensation; insurance carriers and
1515	self-insurers.--
1516	(1) Every employer shall secure the payment of
1517	compensation under this chapter:
1518	(a) By insuring and keeping insured the payment of such
1519	compensation with any stock company or mutual company or
1520	association or exchange, authorized to do business in the state;
1521	(b) By furnishing satisfactory proof to the Florida Self-
1522	Insurers Guaranty Association, Incorporated, created in s.
1523	440.385, that it has the financial strength necessary to ensure
1524	timely payment of all current and future claims individually and
1525	on behalf of its subsidiary and affiliated companies with
1526	employees in this state and receiving an authorization from the
1527	department of Insuranceto pay such compensation directly. The
1528	association shall review the financial strength of applicants
1529	for membership, current members, and former members and make
1530	recommendations to the department of Insuranceregarding their
1531	qualifications to self-insure in accordance with this section
1532	and ss. 440.385 and 440.386. The department shall act in
1533	accordance with the recommendations unless it finds by clear and
1534	convincing evidence that the recommendations are erroneous.
1535	1. As a condition of authorization under paragraph (a),
1536	the association may recommend that the department of Insurance
1537	require an employer to deposit with the association a qualifying
1538	security deposit. The association shall recommend the type and
1539	amount of the qualifying security deposit and shall prescribe
1540	conditions for the qualifying security deposit, which shall
1541	include authorization for the association to call the qualifying
1542	security deposit in the case of default to pay compensation
1543	awards and related expenses of the association. As a condition
1544	to authorization to self-insure, the employer shall provide
1545	proof that the employer has provided for competent personnel
1546	with whom to deliver benefits and to provide a safe working
1547	environment. The employer shall also provide evidence that it
1548	carries reinsurance at levels that will ensure the financial
1549	strength and actuarial soundness of such employer in accordance
1550	with rules adopted by the department of Insurance. The
1551	department of Insurancemay by rule require that, in the event
1552	of an individual self-insurer's insolvency, such qualifying
1553	security deposits and reinsurance policies are payable to the
1554	association. Any employer securing compensation in accordance
1555	with the provisions of this paragraph shall be known as a self-
1556	insurer and shall be classed as a carrier of her or his own
1557	insurance. The employer shall, if requested, provide the
1558	association an actuarial report signed by a member of the
1559	American Academy of Actuaries providing an opinion of the
1560	appropriate present value of the reserves, using a 4-percent
1561	discount rate, for current and future compensation claims. If
1562	any member or former member of the association refuses to timely
1563	provide such a report, the association may obtain an order from
1564	a circuit court requiring the member to produce such a report
1565	and ordering any other relief that the court determines is
1566	appropriate. The association may recover all reasonable costs
1567	and attorney's fees in such proceedings.
1568	2. If the employer fails to maintain the foregoing
1569	requirements, the association shall recommend to the department
1570	of Insurancethat the department revoke the employer's authority
1571	to self-insure, unless the employer provides to the association
1572	the certified opinion of an independent actuary who is a member
1573	of the American Academy of Actuaries as to the actuarial present
1574	value of the employer's determined and estimated future
1575	compensation payments based on cash reserves, using a 4-percent
1576	discount rate, and a qualifying security deposit equal to 1.5
1577	times the value so certified. The employer shall thereafter
1578	annually provide such a certified opinion until such time as the
1579	employer meets the requirements of subparagraph 1. The
1580	qualifying security deposit shall be adjusted at the time of
1581	each such annual report. Upon the failure of the employer to
1582	timely provide such opinion or to timely provide a security
1583	deposit in an amount equal to 1.5 times the value certified in
1584	the latest opinion, the association shall provide that
1585	information to the department of Insurancealong with a
1586	recommendation, and the department of Insuranceshall then
1587	revoke such employer's authorization to self-insure. Failure to
1588	comply with this subparagraph constitutes an immediate serious
1589	danger to the public health, safety, or welfare sufficient to
1590	justify the summary suspension of the employer's authorization
1591	to self-insure pursuant to s. 120.68.
1592	3. Upon the suspension or revocation of the employer's
1593	authorization to self-insure, the employer shall provide to the
1594	association the certified opinion of an independent actuary who
1595	is a member of the American Academy of Actuaries of the
1596	actuarial present value of the determined and estimated future
1597	compensation payments of the employer for claims incurred while
1598	the member exercised the privilege of self-insurance, using a
1599	discount rate of 4 percent. The employer shall provide such an
1600	opinion at 6-month intervals thereafter until such time as the
1601	latest opinion shows no remaining value of claims. With each
1602	such opinion, the employer shall deposit with the association a
1603	qualifying security deposit in an amount equal to the value
1604	certified by the actuary. The association has a cause of action
1605	against an employer, and against any successor of the employer,
1606	who fails to timely provide such opinion or who fails to timely
1607	maintain the required security deposit with the association. The
1608	association shall recover a judgment in the amount of the
1609	actuarial present value of the determined and estimated future
1610	compensation payments of the employer for claims incurred while
1611	the employer exercised the privilege of self-insurance, together
1612	with attorney's fees. For purposes of this section, the
1613	successor of an employer means any person, business entity, or
1614	group of persons or business entities, which holds or acquires
1615	legal or beneficial title to the majority of the assets or the
1616	majority of the shares of the employer.
1617	4. A qualifying security deposit shall consist, at the
1618	option of the employer, of:
1619	a. Surety bonds, in a form and containing such terms as
1620	prescribed by the association, issued by a corporation surety
1621	authorized to transact surety business by the department of
1622	Insurance, and whose policyholders' and financial ratings, as
1623	reported in A.M. Best's Insurance Reports, Property-Liability,
1624	are not less than "A" and "V", respectively.
1625	b. Irrevocable letters of credit in favor of the
1626	association issued by financial institutions located within this
1627	state, the deposits of which are insured through the Federal
1628	Deposit Insurance Corporation.
1629	5. The qualifying security deposit shall be held by the
1630	association exclusively for the benefit of workers' compensation
1631	claimants. The security shall not be subject to assignment,
1632	execution, attachment, or any legal process whatsoever, except
1633	as necessary to guarantee the payment of compensation under this
1634	chapter. No surety bond may be terminated, and no letter of
1635	credit may be allowed to expire, without 90 days' prior written
1636	notice to the association and deposit by the self-insuring
1637	employer of some other qualifying security deposit of equal
1638	value within 10 business days after such notice. Failure to
1639	provide such written notice or failure to timely provide
1640	qualifying replacement security after such notice shall
1641	constitute grounds for the association to call or sue upon the
1642	surety bond or to exercise its rights under a letter of credit.
1643	Current self-insured employers must comply with this section on
1644	or before December 31, 2001, or upon the maturity of existing
1645	security deposits, whichever occurs later. The department of
1646	Insurancemay specify by rule the amount of the qualifying
1647	security deposit required prior to authorizing an employer to
1648	self-insure and the amount of net worth required for an employer
1649	to qualify for authorization to self-insure;
1650	(c) By entering into a contract with a public utility
1651	under an approved utility-provided self-insurance program as set
1652	forth in s. 624.46225 in effect as of July 1, 1983. The
1653	departmentdivisionshall adopt rules to implement this
1654	paragraph;
1655	(d) By entering into an interlocal agreement with other
1656	local governmental entities to create a local government pool
1657	pursuant to s. 624.4622;
1658	(e) In accordance with s. 440.135, an employer, other than
1659	a local government unit, may elect coverage under the Workers'
1660	Compensation Law and retain the benefit of the exclusiveness of
1661	liability provided in s. 440.11 by obtaining a 24-hour health
1662	insurance policy from an authorized property and casualty
1663	insurance carrier or an authorized life and health insurance
1664	carrier, or by participating in a fully or partially self-
1665	insured 24-hour health plan that is established or maintained by
1666	or for two or more employers, so long as the law of this state
1667	is not preempted by the Employee Retirement Income Security Act
1668	of 1974, Pub. L. No. 93-406, or any amendment to that law, which
1669	policy or plan must provide, for at least occupational injuries
1670	and illnesses, medical benefits that are comparable to those
1671	required by this chapter. A local government unit, as a single
1672	employer, in accordance with s. 440.135, may participate in the
1673	24-hour health insurance coverage plan referenced in this
1674	paragraph. Disputes and remedies arising under policies issued
1675	under this section are governed by the terms and conditions of
1676	the policies and under the applicable provisions of the Florida
1677	Insurance Code and rules adopted under the insurance code and
1678	other applicable laws of this state. The 24-hour health
1679	insurance policy may provide for health care by a health
1680	maintenance organization or a preferred provider organization.
1681	The premium for such 24-hour health insurance policy shall be
1682	paid entirely by the employer. The 24-hour health insurance
1683	policy may use deductibles and coinsurance provisions that
1684	require the employee to pay a portion of the actual medical care
1685	received by the employee. If an employer obtains a 24-hour
1686	health insurance policy or self-insured plan to secure payment
1687	of compensation as to medical benefits, the employer must also
1688	obtain an insurance policy or policies that provide indemnity
1689	benefits as follows:
1690	1. If indemnity benefits are provided only for
1691	occupational-related disability, such benefits must be
1692	comparable to those required by this chapter.
1693	2. If indemnity benefits are provided for both
1694	occupational-related and nonoccupational-related disability,
1695	such benefits must be comparable to those required by this
1696	chapter, except that they must be based on 60 percent of the
1697	average weekly wages.
1698	3. The employer shall provide for each of its employees
1699	life insurance with a death benefit of $100,000.
1700	4. Policies providing coverage under this subsection must
1701	use prescribed and acceptable underwriting standards, forms, and
1702	policies approved by the Department of Insurance. If any
1703	insurance policy that provides coverage under this section is
1704	canceled, terminated, or nonrenewed for any reason, the
1705	cancellation, termination, or nonrenewal is ineffective until
1706	the self-insured employer or insurance carrier or carriers
1707	notify the division and the Department of Insurance of the
1708	cancellation, termination, or nonrenewal, and until the division
1709	has actually received the notification. The division must be
1710	notified of replacement coverage under a workers' compensation
1711	and employer's liability insurance policy or plan by the
1712	employer prior to the effective date of the cancellation,
1713	termination, or nonrenewal; or
1714	(e)(f)By entering into a contract with an individual
1715	self-insurer under an approved individual self-insurer-provided
1716	self-insurance program as set forth in s. 624.46225. The
1717	departmentdivisionmay adopt rules to administer this
1718	subsection.
1719	(2)(a) The department of Insuranceshall adopt rules by
1720	which businesses may become qualified to provide underwriting
1721	claims-adjusting, loss control, and safety engineering services
1722	to self-insurers.
1723	(b) The department of Insuranceshall adopt rules
1724	requiring self-insurers to file any reports necessary to fulfill
1725	the requirements of this chapter. Any self-insurer who fails to
1726	file any report as prescribed by the rules adopted by the
1727	department of Insuranceshall be subject to a civil penalty.
1728	(3)(a) The license of any stock company or mutual company
1729	or association or exchange authorized to do insurance business
1730	in the state shall for good cause, upon recommendation of the
1731	departmentdivision, be suspended or revoked by the office
1732	Department of Insurance. No suspension or revocation shall
1733	affect the liability of any carrier already incurred.
1734	(b) The department of Insuranceshall suspend or revoke
1735	any authorization to a self-insurer for failure to comply with
1736	this section or for good cause, as defined by rule of the
1737	department of Insurance. No suspension or revocation shall
1738	affect the liability of any self-insurer already incurred.
1739	(c) Violation of s. 440.381 by a self-insurance fund shall
1740	result in the imposition of a fine not to exceed $1,000 per
1741	audit if the self-insurance fund fails to act on said audits by
1742	correcting errors in employee classification or accepted
1743	applications for coverage where it knew employee classifications
1744	were incorrect. Such fines shall be levied by the department
1745	divisionand deposited into the Workers' Compensation
1746	Administration Trust Fund.
1747	(4)(a) A carrier of insurance, including the parties to
1748	any mutual, reciprocal, or other association, may not write any
1749	compensation insurance under this chapter without a certificate
1750	of authoritypermit from the officeDepartment of Insurance.
1751	Such certificate of authoritypermitshall be given, upon
1752	application therefor, to any insurance or mutual or reciprocal
1753	insurance association upon the office'sdepartment'sbeing
1754	satisfied of the solvency of such corporation or association and
1755	its ability to perform all its undertakings. The office
1756	Department of Insurance may revoke any certificate of authority
1757	permitso issued for violation of any provision of this chapter.
1758	(b) A carrier of insurance, including the parties to any
1759	mutual, reciprocal, or other association, may not write any
1760	compensation insurance under this chapter unless such carrier
1761	has a claims adjuster, either in-house or under contract,
1762	situated within this state. Self-insurers whose compensation
1763	payments are administered through a third party and carriers of
1764	insurance shall maintain a claims adjuster within this state
1765	during any period for which there are any open claims against
1766	such self-insurer or carrier arising under the compensation
1767	insurance written by the self-insurer or carrier. Individual
1768	self-insurers whose compensation payments are administered by
1769	employees of the self-insurer shall not be required to have
1770	their claims adjuster situated within this state. Individual
1771	self-insurers shall not be required to have their claims
1772	adjusters situated within this state.
1773	Section 15. Subsections (1) and (3) of section 440.381,
1774	Florida Statutes, are amended to read:
1775	440.381 Application for coverage; reporting payroll;
1776	payroll audit procedures; penalties.--
1777	(1) Applications by an employer to a carrier for coverage
1778	required by s. 440.38 must be made on a form prescribed by the
1779	Financial Services CommissionDepartment of Insurance. The
1780	Financial Services CommissionDepartment of Insuranceshall
1781	adopt rules for applications for coverage required by s. 440.38.
1782	The rules must provide that an application include information
1783	on the employer, the type of business, past and prospective
1784	payroll, estimated revenue, previous workers' compensation
1785	experience, employee classification, employee names, and any
1786	other information necessary to enable a carrier to accurately
1787	underwrite the applicant. The rules must include a provision
1788	that a carrier or self-insurance fund may require that an
1789	employer update an application monthly to reflect any change in
1790	the required application information.
1791	(3) The Financial Services Commission, in consultation
1792	with the department,shall establish by rule minimum
1793	requirements for audits of payroll and classifications in order
1794	to ensure that the appropriate premium is charged for workers'
1795	compensation coverage. The rules shall ensure that audits
1796	performed by both carriers and employers are adequate to provide
1797	that all sources of payments to employees, subcontractors, and
1798	independent contractors have been reviewed and that the accuracy
1799	of classification of employees has been verified. The rules
1800	shall provide that employers in all classes other than the
1801	construction class be audited not less frequently than
1802	biennially and may provide for more frequent audits of employers
1803	in specified classifications based on factors such as amount of
1804	premium, type of business, loss ratios, or other relevant
1805	factors. In no event shall employers in the construction class,
1806	generating more than the amount of premium required to be
1807	experience rated, be audited less than annually. The annual
1808	audits required for construction classes shall consist of
1809	physical onsite audits. Payroll verification audit rules must
1810	include, but need not be limited to, the use of state and
1811	federal reports of employee income, payroll and other accounting
1812	records, certificates of insurance maintained by subcontractors,
1813	and duties of employees. At the completion of an audit, the
1814	employer or officer of the corporation and the auditor must
1815	print and sign their names on the audit document and attach
1816	proof of identification to the audit document.
1817	Section 16. Section 440.385, Florida Statutes, is amended
1818	to read:
1819	440.385 Florida Self-Insurers Guaranty Association,
1820	Incorporated.--
1821	(1) CREATION OF ASSOCIATION.--
1822	(a) There is created a nonprofit corporation to be known
1823	as the "Florida Self-Insurers Guaranty Association,
1824	Incorporated," hereinafter referred to as "the association."
1825	Upon incorporation of the association, all individual self-
1826	insurers as defined in ss. 440.02(23)(a) and 440.38(1)(b), other
1827	than individual self-insurers which are public utilities or
1828	governmental entities, shall be members of the association as a
1829	condition of their authority to individually self-insure in this
1830	state. The association shall perform its functions under a plan
1831	of operation as established and approved under subsection (5)
1832	and shall exercise its powers and duties through a board of
1833	directors as established under subsection (2). The association
1834	shall have those powers granted or permitted corporations not
1835	for profit, as provided in chapter 617. The activities of the
1836	association shall be subject to review by the department of
1837	Insurance. The department of Insuranceshall have oversight
1838	responsibility as set forth in this section. The association is
1839	specifically authorized to enter into agreements with this state
1840	to perform specified services.
1841	(b) A member may voluntarily withdraw from the association
1842	when the member voluntarily terminates the self-insurance
1843	privilege and pays all assessments due to the date of such
1844	termination. However, the withdrawing member shall continue to
1845	be bound by the provisions of this section relating to the
1846	period of his or her membership and any claims charged pursuant
1847	thereto. The withdrawing member who is a member on or after
1848	January 1, 1991, shall also be required to provide to the
1849	association upon withdrawal, and at 12-month intervals
1850	thereafter, satisfactory proof, including, if requested by the
1851	association, a report of known and potential claims certified by
1852	a member of the American Academy of Actuaries, that it continues
1853	to meet the standards of s. 440.38(1)(b)1. in relation to claims
1854	incurred while the withdrawing member exercised the privilege of
1855	self-insurance. Such reporting shall continue until the
1856	withdrawing member demonstrates to the association that there is
1857	no remaining value to claims incurred while the withdrawing
1858	member was self-insured. If a withdrawing member fails or
1859	refuses to timely provide an actuarial report to the
1860	association, the association may obtain an order from a circuit
1861	court requiring the member to produce such a report and ordering
1862	any other relief that the court determines appropriate. The
1863	association is entitled to recover all reasonable costs and
1864	attorney's fees expended in such proceedings. If during this
1865	reporting period the withdrawing member fails to meet the
1866	standards of s. 440.38(1)(b)1., the withdrawing member who is a
1867	member on or after January 1, 1991, shall thereupon, and at 6-
1868	month intervals thereafter, provide to the association the
1869	certified opinion of an independent actuary who is a member of
1870	the American Academy of Actuaries of the actuarial present value
1871	of the determined and estimated future compensation payments of
1872	the member for claims incurred while the member was a self-
1873	insurer, using a discount rate of 4 percent. With each such
1874	opinion, the withdrawing member shall deposit with the
1875	association security in an amount equal to the value certified
1876	by the actuary and of a type that is acceptable for qualifying
1877	security deposits under s. 440.38(1)(b). The withdrawing member
1878	shall continue to provide such opinions and to provide such
1879	security until such time as the latest opinion shows no
1880	remaining value of claims. The association has a cause of
1881	action against a withdrawing member, and against any successor
1882	of a withdrawing member, who fails to timely provide the
1883	required opinion or who fails to maintain the required deposit
1884	with the association. The association shall be entitled to
1885	recover a judgment in the amount of the actuarial present value
1886	of the determined and estimated future compensation payments of
1887	the withdrawing member for claims incurred during the time that
1888	the withdrawing member exercised the privilege of self-
1889	insurance, together with reasonable attorney's fees. The
1890	association is also entitled to recover reasonable attorney's
1891	fees in any action to compel production of any actuarial report
1892	required by this section. For purposes of this section, the
1893	successor of a withdrawing member means any person, business
1894	entity, or group of persons or business entities, which holds or
1895	acquires legal or beneficial title to the majority of the assets
1896	or the majority of the shares of the withdrawing member.
1897	(2) BOARD OF DIRECTORS.--The board of directors of the
1898	association shall consist of nine persons and shall be organized
1899	as established in the plan of operation. All board members shall
1900	be experienced in self-insurance in this state. Each director
1901	shall serve for a 4-year term and may be reappointed.
1902	Appointments after January 1, 2002, shall be made by the
1903	department of Insuranceupon recommendation of members of the
1904	association. Any vacancy on the board shall be filled for the
1905	remaining period of the term in the same manner as appointments
1906	other than initial appointments are made. Each director shall be
1907	reimbursed for expenses incurred in carrying out the duties of
1908	the board on behalf of the association.
1909	(3) POWERS AND DUTIES.--
1910	(a) Upon creation of the Insolvency Fund pursuant to the
1911	provisions of subsection (4), the association is obligated for
1912	payment of compensation under this chapter to insolvent members'
1913	employees resulting from incidents and injuries existing prior
1914	to the member becoming an insolvent member and from incidents
1915	and injuries occurring within 30 days after the member has
1916	become an insolvent member, provided the incidents giving rise
1917	to claims for compensation under this chapter occur during the
1918	year in which such insolvent member is a member of the guaranty
1919	fund and was assessable pursuant to the plan of operation, and
1920	provided the employee makes timely claim for such payments
1921	according to procedures set forth by a court of competent
1922	jurisdiction over the delinquency or bankruptcy proceedings of
1923	the insolvent member. Such obligation includes only that amount
1924	due the injured worker or workers of the insolvent member under
1925	this chapter. In no event is the association obligated to a
1926	claimant in an amount in excess of the obligation of the
1927	insolvent member. The association shall be deemed the insolvent
1928	employer for purposes of this chapter to the extent of its
1929	obligation on the covered claims and, to such extent, shall have
1930	all rights, duties, and obligations of the insolvent employer as
1931	if the employer had not become insolvent. However, in no event
1932	shall the association be liable for any penalties or interest.
1933	(b) The association may:
1934	1. Employ or retain such persons as are necessary to
1935	handle claims and perform other duties of the association.
1936	2. Borrow funds necessary to effect the purposes of this
1937	section in accord with the plan of operation.
1938	3. Sue or be sued.
1939	4. Negotiate and become a party to such contracts as are
1940	necessary to carry out the purposes of this section.
1941	5. Purchase such reinsurance as is determined necessary
1942	pursuant to the plan of operation.
1943	6. Review all applicants for membership in the association
1944	to determine whether the applicant is qualified for membership
1945	under the law. The association shall recommend to the department
1946	of Insurancethat the application be accepted or rejected based
1947	on the criteria set forth in s. 440.38(1)(b). The department of
1948	Insuranceshall approve or disapprove the application as
1949	provided in paragraph (6)(a).
1950	7. Collect and review financial information from employers
1951	and make recommendations to the department of Insurance
1952	regarding the appropriate security deposit and reinsurance
1953	amounts necessary for an employer to demonstrate that it has the
1954	financial strength necessary to ensure the timely payment of all
1955	current and future claims. The association may audit and examine
1956	an employer to verify the financial strength of its current and
1957	former members. If the association determines that a current or
1958	former self-insured employer does not have the financial
1959	strength necessary to ensure the timely payment of all current
1960	and estimated future claims, the association may recommend to
1961	the department of Insurancethat the department:
1962	a. Revoke the employer's self-insurance privilege.
1963	b. Require the employer to provide a certified opinion of
1964	an independent actuary who is a member of the American Academy
1965	of Actuaries as to the actuarial present value of the employer's
1966	estimated current and future compensation payments, using a 4-
1967	percent discount rate.
1968	c. Require an increase in the employer's security deposit
1969	in an amount determined by the association to be necessary to
1970	ensure payment of compensation claims. The department of
1971	Insuranceshall act on such recommendations as provided in
1972	paragraph (6)(a). The association has a cause of action against
1973	an employer, and against any successor of an employer, who fails
1974	to provide an additional security deposit required by the
1975	department of Insurance. The association shall file an action
1976	in circuit court to recover a judgment in the amount of the
1977	requested additional security deposit together with reasonable
1978	attorney's fees. For the purposes of this section, the
1979	successor of an employer is any person, business entity, or
1980	group of persons or business entities which holds or acquires
1981	legal or beneficial title to the majority of the assets or the
1982	majority of the shares of the employer.
1983	8. Charge fees to any member of the association to cover
1984	the actual costs of examining the financial and safety
1985	conditions of that member.
1986	9. Charge an applicant for membership in the association a
1987	fee sufficient to cover the actual costs of examining the
1988	financial condition of the applicant.
1989	10. Implement any procedures necessary to ensure
1990	compliance with regulatory actions taken by the department of
1991	Insurance.
1992	(c)1. To the extent necessary to secure funds for the
1993	payment of covered claims and also to pay the reasonable costs
1994	to administer them, the association, subject to approval by the
1995	department of Insurance, shall levy assessments based on the
1996	annual written premium each employer would have paid had the
1997	employer not been self-insured. Every assessment shall be made
1998	as a uniform percentage of the figure applicable to all
1999	individual self-insurers, provided that the assessment levied
2000	against any self-insurer in any one year shall not exceed 1
2001	percent of the annual written premium during the calendar year
2002	preceding the date of the assessment. Assessments shall be
2003	remitted to and administered by the board of directors in the
2004	manner specified by the approved plan. Each employer so
2005	assessed shall have at least 30 days' written notice as to the
2006	date the assessment is due and payable. The association shall
2007	levy assessments against any newly admitted member of the
2008	association so that the basis of contribution of any newly
2009	admitted member is the same as previously admitted members,
2010	provision for which shall be contained in the plan of operation.
2011	2. If, in any one year, funds available from such
2012	assessments, together with funds previously raised, are not
2013	sufficient to make all the payments or reimbursements then
2014	owing, the funds available shall be prorated, and the unpaid
2015	portion shall be paid as soon thereafter as sufficient
2016	additional funds become available.
2017	3. Funds may be allocated or paid from the Workers'
2018	Compensation Administration Trust Fund to contract with the
2019	association to perform services required by law. However, no
2020	state funds of any kind shall be allocated or paid to the
2021	association or any of its accounts for payment of covered claims
2022	or related expenses except those state funds accruing to the
2023	association by and through the assignment of rights of an
2024	insolvent employer. The department of Insurancemay not levy any
2025	assessment on the association.
2026	(4) INSOLVENCY FUND.--Upon the adoption of a plan of
2027	operation, there shall be created an Insolvency Fund to be
2028	managed by the association.
2029	(a) The Insolvency Fund is created for purposes of meeting
2030	the obligations of insolvent members incurred while members of
2031	the association and after the exhaustion of any security
2032	deposit, as required under this chapter. However, if such
2033	security deposit or reinsurance policy is payable to the
2034	association, the association shall commence to provide benefits
2035	out of the Insolvency Fund and be reimbursed from the security
2036	deposit or reinsurance policy. The method of operation of the
2037	Insolvency Fund shall be defined in the plan of operation as
2038	provided in subsection (5).
2039	(b) The department of Insuranceshall have the authority
2040	to audit the financial soundness of the Insolvency Fund
2041	annually.
2042	(c) The department of Insurancemay offer certain
2043	amendments to the plan of operation to the board of directors of
2044	the association for purposes of assuring the ongoing financial
2045	soundness of the Insolvency Fund and its ability to meet the
2046	obligations of this section.
2047	(5) PLAN OF OPERATION.--The association shall operate
2048	pursuant to a plan of operation approved by the board of
2049	directors. The plan of operation in effect on January 1, 2002,
2050	and approved by the Department of Labor and Employment Security
2051	shall remain in effect. However, any amendments to the plan
2052	shall not become effective until approved by the Department of
2053	Financial ServicesInsurance.
2054	(a) The purpose of the plan of operation shall be to
2055	provide the association and the board of directors with the
2056	authority and responsibility to establish the necessary programs
2057	and to take the necessary actions to protect against the
2058	insolvency of a member of the association. In addition, the
2059	plan shall provide that the members of the association shall be
2060	responsible for maintaining an adequate Insolvency Fund to meet
2061	the obligations of insolvent members provided for under this act
2062	and shall authorize the board of directors to contract and
2063	employ those persons with the necessary expertise to carry out
2064	this stated purpose. By January 1, 2003, the board of directors
2065	shall submit to the department of Insurancea proposed plan of
2066	operation for the administration of the association. The
2067	department of Insuranceshall approve the plan by order,
2068	consistent with this section. The department of Insuranceshall
2069	approve any amendments to the plan, consistent with this
2070	section, which are determined appropriate to carry out the
2071	duties and responsibilities of the association.
2072	(b) All member employers shall comply with the plan of
2073	operation.
2074	(c) The plan of operation shall:
2075	1. Establish the procedures whereby all the powers and
2076	duties of the association under subsection (3) will be
2077	performed.
2078	2. Establish procedures for handling assets of the
2079	association.
2080	3. Establish the amount and method of reimbursing members
2081	of the board of directors under subsection (2).
2082	4. Establish procedures by which claims may be filed with
2083	the association and establish acceptable forms of proof of
2084	covered claims. Notice of claims to the receiver or liquidator
2085	of the insolvent employer shall be deemed notice to the
2086	association or its agent, and a list of such claims shall be
2087	submitted periodically to the association or similar
2088	organization in another state by the receiver or liquidator.
2089	5. Establish regular places and times for meetings of the
2090	board of directors.
2091	6. Establish procedures for records to be kept of all
2092	financial transactions of the association and its agents and the
2093	board of directors.
2094	7. Provide that any member employer aggrieved by any final
2095	action or decision of the association may appeal to the
2096	department of Insurancewithin 30 days after the action or
2097	decision.
2098	8. Establish the procedures whereby recommendations of
2099	candidates for the board of directors shall be submitted to the
2100	department of Insurance.
2101	9. Contain additional provisions necessary or proper for
2102	the execution of the powers and duties of the association.
2103	(d) The plan of operation may provide that any or all of
2104	the powers and duties of the association, except those specified
2105	under subparagraphs (c)1. and 2., be delegated to a corporation,
2106	association, or other organization which performs or will
2107	perform functions similar to those of this association or its
2108	equivalent in two or more states. Such a corporation,
2109	association, or organization shall be reimbursed as a servicing
2110	facility would be reimbursed and shall be paid for its
2111	performance of any other functions of the association. A
2112	delegation of powers or duties under this subsection shall take
2113	effect only with the approval of both the board of directors and
2114	the department of Insuranceand may be made only to a
2115	corporation, association, or organization which extends
2116	protection which is not substantially less favorable and
2117	effective than the protection provided by this section.
2118	(6) POWERS AND DUTIES OF DEPARTMENT OF INSURANCE.--The
2119	department of Insuranceshall:
2120	(a) Review recommendations of the association concerning
2121	whether current or former self-insured employers or members of
2122	the association have the financial strength necessary to ensure
2123	the timely payment of all current and estimated future claims.
2124	If the association determines an employer does not have the
2125	financial strength necessary to ensure the timely payment of all
2126	current and future claims and recommends action pursuant to
2127	paragraph (3)(b), the department shall take such action as
2128	necessary to order the employer to comply with the
2129	recommendation, unless the department finds by clear and
2130	convincing evidence that the recommendation is erroneous.
2131	(b) Contract with the association for services, which may
2132	include, but are not limited to:
2133	1. Processing applications for self-insurance.
2134	2. Collecting and reviewing financial statements and loss
2135	reserve information from individual self-insurers.
2136	3. Collecting and maintaining files for original security
2137	deposit documents and reinsurance policies from individual self-
2138	insurers and, if necessary, perfecting security interests in
2139	security deposits.
2140	4. Processing compliance documentation for individual
2141	self-insurers and providing copies of such documentation to the
2142	department.
2143	5. Collecting all data necessary to calculate annual
2144	premium for all individual self-insurers, including individual
2145	self-insurers that are public utilities or governmental
2146	entities, and providing such calculated annual premium to the
2147	departmentdivisionfor assessment purposes.
2148	6. Inspecting and auditing annually, if necessary, the
2149	payroll and other records of each individual self-insurer,
2150	including individual self-insurers that are public utilities or
2151	governmental entities, in order to determine the wages paid by
2152	each individual self-insurer, the premium such individual self-
2153	insurer would have to pay if insured, and all payments of
2154	compensation made by such individual self-insurer during each
2155	prior period with the results of such audit provided to the
2156	departmentdivision. For purposes of this section, the payroll
2157	records of each individual self-insurer shall be open to
2158	inspection and audit by the association and the department, or
2159	their authorized representatives, during regular business hours.
2160	7. Processing applications and making recommendations with
2161	respect to the qualification of a business to be approved to
2162	provide or continue to provide services to individual self-
2163	insurers in the areas of underwriting, claims adjusting, loss
2164	control, and safety engineering.
2165	8. Providing legal representation to implement the
2166	administration and audit of individual self-insurers and making
2167	recommendations regarding prosecution of any administrative or
2168	legal proceedings necessitated by the regulation of the
2169	individual self-insurers by the department.
2170	(c) Contract with an attorney or attorneys recommended by
2171	the association for representation of the department in any
2172	administrative or legal proceedings necessitated by the
2173	recommended regulation of the individual self-insurers.
2174	(d) Direct the association to require from each individual
2175	self-insurer, at such time and in accordance with such
2176	regulations as the department prescribes, reports relating to
2177	wages paid, the amount of premiums such individual self-insurer
2178	would have to pay if insured, and all payments of compensation
2179	made by such individual self-insurer during each prior period
2180	and to determine the amounts paid by each individual self-
2181	insurer and the amounts paid by all individual self-insurers
2182	during such period. For purposes of this section, the payroll
2183	records of each individual self-insurer shall be open to annual
2184	inspection and audit by the association and the department, or
2185	their authorized representative, during regular business hours,
2186	and if any audit of such records of an individual self-insurer
2187	discloses a deficiency in the amount reported to the association
2188	or in the amounts paid to the departmentdivisionby an
2189	individual self-insurer for its assessment for the Workers'
2190	Compensation Administration Trust Fund, the department or the
2191	association may assess the cost of such audit against the
2192	individual self-insurer.
2193	(e) Require that the association notify the member
2194	employers and any other interested parties of the determination
2195	of insolvency and of their rights under this section. Such
2196	notification shall be by mail at the last known address thereof
2197	when available; but, if sufficient information for notification
2198	by mail is not available, notice by publication in a newspaper
2199	of general circulation shall be sufficient.
2200	(f) Suspend or revoke the authority of any member employer
2201	failing to pay an assessment when due or failing to comply with
2202	the plan of operation to self-insure in this state. As an
2203	alternative, the department may levy a fine on any member
2204	employer failing to pay an assessment when due. Such fine shall
2205	not exceed 5 percent of the unpaid assessment per month, except
2206	that no fine shall be less than $100 per month.
2207	(g) Revoke the designation of any servicing facility if
2208	the department finds that claims are being handled
2209	unsatisfactorily.
2210	(7) EFFECT OF PAID CLAIMS.--
2211	(a) Any person who recovers from the association under
2212	this section shall be deemed to have assigned his or her rights
2213	to the association to the extent of such recovery. Every
2214	claimant seeking the protection of this section shall cooperate
2215	with the association to the same extent as such person would
2216	have been required to cooperate with the insolvent member. The
2217	association shall have no cause of action against the employee
2218	of the insolvent member for any sums the association has paid
2219	out, except such causes of action as the insolvent member would
2220	have had if such sums had been paid by the insolvent member. In
2221	the case of an insolvent member operating on a plan with
2222	assessment liability, payments of claims by the association
2223	shall not operate to reduce the liability of the insolvent
2224	member to the receiver, liquidator, or statutory successor for
2225	unpaid assessments.
2226	(b) The receiver, liquidator, or statutory successor of an
2227	insolvent member shall be bound by settlements of covered claims
2228	by the association or a similar organization in another state.
2229	The court having jurisdiction shall grant such claims priority
2230	against the assets of the insolvent member equal to that to
2231	which the claimant would have been entitled in the absence of
2232	this section. The expense of the association or similar
2233	organization in handling claims shall be accorded the same
2234	priority as the expenses of the liquidator.
2235	(c) The association shall file periodically with the
2236	receiver or liquidator of the insolvent member statements of the
2237	covered claims paid by the association and estimates of
2238	anticipated claims on the association, which shall preserve the
2239	rights of the association against the assets of the insolvent
2240	member.
2241	(8) NOTIFICATION OF INSOLVENCIES.--To aid in the detection
2242	and prevention of employer insolvencies: Upon determination by
2243	majority vote that any member employer may be insolvent or in a
2244	financial condition hazardous to the employees thereof or to the
2245	public, it shall be the duty of the board of directors to notify
2246	the department of Insuranceof any information indicating such
2247	condition.
2248	(9) EXAMINATION OF THE ASSOCIATION.--The association shall
2249	be subject to examination and regulation by the department of
2250	Insurance. No later than March 30 of each year, the board of
2251	directors shall submit an audited financial statement for the
2252	preceding calendar year in a form approved by the department.
2253	(10) IMMUNITY.--There shall be no liability on the part
2254	of, and no cause of action of any nature shall arise against,
2255	any member employer, the association or its agents or employees,
2256	the board of directors, or the department of Insuranceor its
2257	representatives for any action taken by them in the performance
2258	of their powers and duties under this section.
2259	(11) STAY OF PROCEEDINGS; REOPENING OF DEFAULT
2260	JUDGMENTS.--All proceedings in which an insolvent employer is a
2261	party, or is obligated to defend a party, in any court or before
2262	any quasi-judicial body or administrative board in this state
2263	shall be stayed for up to 6 months, or for such additional
2264	period from the date the employer becomes an insolvent member,
2265	as is deemed necessary by a court of competent jurisdiction to
2266	permit proper defense by the association of all pending causes
2267	of action as to any covered claims arising from a judgment under
2268	any decision, verdict, or finding based on the default of the
2269	insolvent member. The association, either on its own behalf or
2270	on behalf of the insolvent member, may apply to have such
2271	judgment, order, decision, verdict, or finding set aside by the
2272	same court or administrator that made such judgment, order,
2273	decision, verdict, or finding and shall be permitted to defend
2274	against such claim on the merits. If requested by the
2275	association, the stay of proceedings may be shortened or waived.
2276	(12) LIMITATION ON CERTAIN ACTIONS.--Notwithstanding any
2277	other provision of this chapter, a covered claim, as defined
2278	herein, with respect to which settlement is not effected and
2279	pursuant to which suit is not instituted against the insured of
2280	an insolvent member or the association within 1 year after the
2281	deadline for filing claims with the receiver of the insolvent
2282	member, or any extension of the deadline, shall thenceforth be
2283	barred as a claim against the association.
2284	(13) CORPORATE INCOME TAX CREDIT.--Any sums acquired by a
2285	member by refund, dividend, or otherwise from the association
2286	shall be payable within 30 days of receipt to the Department of
2287	Revenue for deposit with the Chief Financial OfficerTreasurer
2288	to the credit of the General Revenue Fund. All provisions of
2289	chapter 220 relating to penalties and interest on delinquent
2290	corporate income tax payments apply to payments due under this
2291	subsection.
2292	Section 17. Subsections (2), (3), and (4) of section
2293	440.386, Florida Statutes, are amended to read:
2294	440.386 Individual self-insurers' insolvency;
2295	conservation; liquidation.--
2296	(2) COMMENCEMENT OF DELINQUENCY PROCEEDING.--The
2297	department of Insuranceor the Florida Self-Insurers Guaranty
2298	Association, Incorporated, may commence a delinquency proceeding
2299	by application to the court for an order directing the
2300	individual self-insurer to show cause why the department or
2301	association should not have the relief sought. On the return of
2302	such order to show cause, and after a full hearing, the court
2303	shall either deny the application or grant the application,
2304	together with such other relief as the nature of the case and
2305	the interests of the claimants, creditors, stockholders,
2306	members, subscribers, or public may require. The department and
2307	the association shall give reasonable written notice to each
2308	other of all hearings which pertain to an adjudication of
2309	insolvency of a member individual self-insurer.
2310	(3) GROUNDS FOR LIQUIDATION.--The department of Insurance
2311	or the association may apply to the court for an order
2312	appointing a receiver and directing the receiver to liquidate
2313	the business of a domestic individual self-insurer if such
2314	individual self-insurer is insolvent.
2315	(4) GROUNDS FOR CONSERVATION; FOREIGN INDIVIDUAL SELF-
2316	INSURERS.--
2317	(a) The department of Insuranceor the association may
2318	apply to the court for an order appointing a receiver or
2319	ancillary receiver, and directing the receiver to conserve the
2320	assets within this state, of a foreign individual self-insurer
2321	if such individual self-insurer is insolvent.
2322	(b) An order to conserve the assets of an individual self-
2323	insurer shall require the receiver forthwith to take possession
2324	of the property of the receiver within the state and to conserve
2325	it, subject to the further direction of the court.
2326	Section 18. Subsections (3), (4), and (6) of section
2327	440.44, Florida Statutes, are amended to read:
2328	440.44 Workers' compensation; staff organization.--
2329	(3) EXPENDITURES.--The department, the agency, the office,
2330	the Department of Education, and the director of the Division of
2331	Administrative Hearings shall make such expenditures, including
2332	expenditures for personal services and rent at the seat of
2333	government and elsewhere, for law books; for telephone services
2334	and WATS lines; for books of reference, periodicals, equipment,
2335	and supplies; and for printing and binding as may be necessary
2336	in the administration of this chapter. All expenditures in the
2337	administration of this chapter shall be allowed and paid as
2338	provided in s. 440.50 upon the presentation of itemized vouchers
2339	therefor approved by the department, the agency, the office,the
2340	Department of Education, or the director of the Division of
2341	Administrative Hearings.
2342	(4) PERSONNEL ADMINISTRATION.--Subject to the other
2343	provisions of this chapter, the department, the agency, the
2344	office,the Department of Education, and the Division of
2345	Administrative Hearings may appoint, and prescribe the duties
2346	and powers of, bureau chiefs, attorneys, accountants, medical
2347	advisers, technical assistants, inspectors, claims examiners,
2348	and such other employees as may be necessary in the performance
2349	of their duties under this chapter.
2350	(6) SEAL.--The department and the judges of compensation
2351	claims shall have a seal upon which shall be inscribed the words
2352	"State of Florida Department of Financial ServicesInsurance--
2353	Seal" and "Division of Administrative Hearings--Seal,"
2354	respectively.
2355	Section 19. Subsections (3) and (4) of section 440.52,
2356	Florida Statutes, are amended to read:
2357	440.52 Registration of insurance carriers; notice of
2358	cancellation or expiration of policy; suspension or revocation
2359	of authority.--
2360	(3) If the department finds, after due notice and a
2361	hearing at which the insurance carrier is entitled to be heard
2362	in person or by counsel and present evidence, that the insurance
2363	carrier has repeatedly failed to comply with its obligations
2364	under this chapter, the department may request the office to
2365	suspend or revoke the authorization of such insurance carrier to
2366	write workers' compensation insurance under this chapter. Such
2367	suspension or revocation shall not affect the liability of any
2368	such insurance carrier under policies in force prior to the
2369	suspension or revocation.
2370	(4) In addition to the penalties prescribed in subsection
2371	(3), violation of s. 440.381 by an insurance carrier shall
2372	result in the imposition of a fine not to exceed $1,000 per
2373	audit, if the insurance carrier fails to act on said audits by
2374	correcting errors in employee classification or accepted
2375	applications for coverage where it knew employee classifications
2376	were incorrect. Such fines shall be levied by the office
2377	Department of Insurance and deposited into the Insurance
2378	Commissioner'sRegulatory Trust Fund.
2379	Section 20. Section 440.525, Florida Statutes, is amended
2380	to read:
2381	440.525 Examination of carriers.--The department and
2382	officemay examine each carrier as often as is warranted to
2383	ensure that carriers are fulfilling their obligations under this
2384	chapterthe law. The examination may cover any period of the
2385	carrier's operations since the last previous examination.
2386	Section 21. Paragraph (k) of subsection (1) of section
2387	553.74, Florida Statutes, is amended to read:
2388	553.74 Florida Building Commission.--
2389	(1) The Florida Building Commission is created and shall
2390	be located within the Department of Community Affairs for
2391	administrative purposes. Members shall be appointed by the
2392	Governor subject to confirmation by the Senate. The commission
2393	shall be composed of 23 members, consisting of the following:
2394	(k) One member who represents the Department of Financial
2395	ServicesInsurance.
2396	Section 22. Effective October 1, 2003, paragraph (k) of
2397	subsection (1) of section 553.74, Florida Statutes, as amended
2398	by chapter 2002-293, Laws of Florida, is amended to read:
2399	553.74 Florida Building Commission.--
2400	(1) The Florida Building Commission is created and shall
2401	be located within the Department of Community Affairs for
2402	administrative purposes. Members shall be appointed by the
2403	Governor subject to confirmation by the Senate. The commission
2404	shall be composed of 23 members, consisting of the following:
2405	(k) One member who represents the Department of Financial
2406	ServicesInsurance.
2407
2408	Any person serving on the commission under paragraph (c) or
2409	paragraph (h) on October 1, 2003, and who has served less than
2410	two full terms is eligible for reappointment to the commission
2411	regardless of whether he or she meets the new qualification.
2412	Section 23. Section 624.05, Florida Statutes, is amended
2413	to read:
2414	624.05 "Department," "commission," and "office"
2415	defined.--As used in the Insurance Code:
2416	(1) "Department" means the Department of Financial
2417	Services. The term does not mean the Financial Services
2418	Commission or any office of the Financial Services Commission
2419	Insurance of this state, unless the context otherwise requires.
2420	(2) "Commission" means the Financial Services Commission.
2421	(3) "Office" means the Office of Insurance Regulation of
2422	the Financial Services Commission.
2423	Section 24. Subsections (2) and (5) of section 624.155,
2424	Florida Statutes, are amended to read:
2425	624.155 Civil remedy.--
2426	(2)(a) As a condition precedent to bringing an action
2427	under this section, the officedepartmentand the insurer must
2428	have been given 60 days' written notice of the violation. If
2429	the officedepartmentreturns a notice for lack of specificity,
2430	the 60-day time period shall not begin until a proper notice is
2431	filed.
2432	(b) The notice shall be on a form adopted by the
2433	commission and provided by the officedepartmentand shall state
2434	with specificity the following information,and such other
2435	information as the commission requiresdepartment may require:
2436	1. The statutory provision, including the specific
2437	language of the statute, which the insurer allegedly violated.
2438	2. The facts and circumstances giving rise to the
2439	violation.
2440	3. The name of any individual involved in the violation.
2441	4. Reference to specific policy language that is relevant
2442	to the violation, if any. If the person bringing the civil
2443	action is a third party claimant, she or he shall not be
2444	required to reference the specific policy language if the
2445	insurer has not provided a copy of the policy to the third party
2446	claimant pursuant to written request.
2447	5. A statement that the notice is given in order to
2448	perfect the right to pursue the civil remedy authorized by this
2449	section.
2450	(c) Within 20 days of receipt of the notice, the office
2451	departmentmay return any notice that does not provide the
2452	specific information required by this section, and the office
2453	departmentshall indicate the specific deficiencies contained in
2454	the notice. A determination by the officedepartmentto return a
2455	notice for lack of specificity shall be exempt from the
2456	requirements of chapter 120.
2457	(d) No action shall lie if, within 60 days after filing
2458	notice, the damages are paid or the circumstances giving rise to
2459	the violation are corrected.
2460	(e) The insurer that is the recipient of a notice filed
2461	pursuant to this section shall report to the officedepartment
2462	on the disposition of the alleged violation.
2463	(f) The applicable statute of limitations for an action
2464	under this section shall be tolled for a period of 65 days by
2465	the mailing of the notice required by this subsection or the
2466	mailing of a subsequent notice required by this subsection.
2467	(5) This section shall not be construed to authorize a
2468	class action suit against an insurer or a civil action against
2469	the commission, the office, or the department or any of their,
2470	its employees, or the Insurance Commissioner,or to create a
2471	cause of action when a health insurer refuses to pay a claim for
2472	reimbursement on the ground that the charge for a service was
2473	unreasonably high or that the service provided was not medically
2474	necessary.
2475	Section 25. Section 624.303, Florida Statutes, is amended
2476	to read:
2477	624.303 Seal; certified copies as evidence.--
2478	(1) The department, commission, and office shall eachhave
2479	an official seal by which its respectiveproceedings are
2480	authenticated.
2481	(2) All certificates executed by the department or office,
2482	other than licenses of agents, solicitors, or adjusters or
2483	similar licenses or permits, shall bear its respectiveseal.
2484	(3) Any written instrument purporting to be a copy of any
2485	action, proceeding, or finding of fact by the department,
2486	commission, or office or any record of the department,
2487	commission, or officeor copy of any document on file in its
2488	office when authenticated under hand of the respective agency
2489	head or his or her designeecommissionerby the seal shall be
2490	accepted by all the courts of this state as prima facie evidence
2491	of its contents.
2492	Section 26. Section 624.305, Florida Statutes, is amended
2493	to read:
2494	624.305 Prohibited interests, rewards.--
2495	(1) No employee of the department, commission, or office,
2496	including the members of the commission, but not including
2497	employees of the Office of Financial Institutions and Securities
2498	Regulation,Insurance Commissioner and Treasurershall:
2499	(a) Be financially interested, directly or indirectly, in
2500	any insurer or insurance agency authorized to transact insurance
2501	in this state, or in any insurance transaction except as a
2502	policyholder or claimant under a policy; or
2503	(b) Be given or receive any fee, compensation, loan, gift,
2504	or other thing of value in addition to the compensation and
2505	expense allowance provided by law, for any service rendered or
2506	to be rendered in her or his capacity as a department,
2507	commission, or officeemployee.
2508	(2) This section shall not be deemed to prohibit an
2509	insurer from making, in the regular course of business, a loan
2510	to any employee of the department, commission, or office,if
2511	such loan is adequately secured by a mortgage upon real estate
2512	or other collateral and qualifies as an eligible investment of
2513	the insurer under part II of chapter 625.
2514	(3) When there is no conflict of interest, the department,
2515	commission, and office may eachemploy or retain from time to
2516	time an insurance actuary, accountant, or other professional
2517	person who is independently practicing her or his profession
2518	even though such person is similarly employed or retained by
2519	insurers or others.
2520	(4) Any person employed by the department, commission, or
2521	office on January 7, 2003, including a member of the commission,
2522	who was not subject to this section prior to that date, has
2523	until January 1, 2004, to comply with this section.
2524	Section 27. Section 624.316, Florida Statutes, is amended
2525	to read:
2526	624.316 Examination of insurers.--
2527	(1)(a) The officedepartmentshall examine the affairs,
2528	transactions, accounts, records, and assets of each authorized
2529	insurer and of the attorney in fact of a reciprocal insurer as
2530	to its transactions affecting the insurer as often as it deems
2531	advisable, except as provided in this section. The examination
2532	may include examination of the affairs, transactions, accounts,
2533	and records relating directly or indirectly to the insurer and
2534	of the assets of the insurer's managing general agents and
2535	controlling or controlled person, as defined in s. 625.012. The
2536	examination shall be pursuant to a written order of the office
2537	department. Such order shall expire upon receipt by the office
2538	departmentof the written report of the examination.
2539	(b) As a part of its examination procedure, the office
2540	departmentshall examine each insurer regarding all of the
2541	information required by s. 627.915.
2542	(c) The officedepartmentshall examine each insurer
2543	according to accounting procedures designed to fulfill the
2544	requirements of generally accepted insurance accounting
2545	principles and practices and good internal control and in
2546	keeping with generally accepted accounting forms, accounts,
2547	records, methods, and practices relating to insurers. To
2548	facilitate uniformity in examinations, the commissiondepartment
2549	may adopt, by rule, the Market and Financial Conduct Examiners
2550	Examination Handbook and the Financial Condition Examiners
2551	Handbook of the National Association of Insurance Commissioners,
2552	20021990, and may adopt subsequent amendments thereto, if the
2553	examination methodology remains substantially consistent.
2554	(2)(a) Except as provided in paragraph (f), the office
2555	departmentmay examine each insurer as often as may be warranted
2556	for the protection of the policyholders and in the public
2557	interest, and shall examine each domestic insurer not less
2558	frequently than once every 3 years. The examination shall cover
2559	the preceding 3 fiscal years of the insurer and shall be
2560	commenced within 12 months after the end of the most recent
2561	fiscal year being covered by the examination. The examination
2562	may cover any period of the insurer's operations since the last
2563	previous examination. The examination may include examination of
2564	events subsequent to the end of the most recent fiscal year and
2565	the events of any prior period that affect the present financial
2566	condition of the insurer. In lieu of making its own examination,
2567	the officedepartmentmay accept an independent certified public
2568	accountant's audit report prepared on a statutory basis
2569	consistent with the Florida Insurance Code on that specific
2570	company. The officedepartmentmay not accept the report in lieu
2571	of the requirement imposed by paragraph (1)(b). When an
2572	examination is conducted by the officedepartmentfor the sole
2573	purpose of examining the 3 preceding fiscal years of the insurer
2574	within 12 months after the opinion date of an independent
2575	certified public accountant's audit report prepared on a
2576	statutory basis on that specific company consistent with the
2577	Florida Insurance Code, the cost of the examination as charged
2578	to the insurer pursuant to s. 624.320 shall be reduced by the
2579	cost to the insurer of the independent certified public
2580	accountant's audit reports. Requests for the reduction in cost
2581	of examination must be submitted to the officedepartmentin
2582	writing no later than 90 days after the conclusion of the
2583	examination and shall include sufficient documentation to
2584	support the charges incurred for the statutory audit performed
2585	by the independent certified public accountant.
2586	(b) The officedepartmentshall examine each insurer
2587	applying for an initial certificate of authority to transact
2588	insurance in this state before granting the initial certificate.
2589	(c) In lieu of making its own examination, the office
2590	departmentmay accept a full report of the last recent
2591	examination of a foreign insurer, certified to by the insurance
2592	supervisory official of another state.
2593	(d) The examination by the officedepartmentof an alien
2594	insurer shall be limited to the alien insurer's insurance
2595	transactions and affairs in the United States, except as
2596	otherwise required by the officedepartment.
2597	(e) The commissiondepartmentshall adopt rules providing
2598	that, upon agreement between the officedepartmentand the
2599	insurer, an examination under this section may be conducted by
2600	independent certified public accountants, actuaries meeting
2601	criteria specified by rule, and reinsurance specialists meeting
2602	criteria specified by rule. The rules shall provide:
2603	1. That the agreement of the insurer is not required if
2604	the officedepartmentreasonably suspects criminal misconduct on
2605	the part of the insurer.
2606	2. That the officedepartmentshall provide the insurer
2607	with a list of three firms acceptable to the officedepartment,
2608	and that the insurer shall select the firm to conduct the
2609	examination from the list provided by the officedepartment.
2610	3. That the insurer being examined must make payment for
2611	the examination directly to the firm performing the examination
2612	in accordance with the rates and terms agreed to by the office
2613	department, the insurer, and the firm performing the
2614	examination.
2615	4. That if the examination is conducted without the
2616	consent of the insurer, the insurer must pay all reasonable
2617	charges of the examining firm if the examination finds
2618	impairment, insolvency, or criminal misconduct on the part of
2619	the insurer.
2620	(f)1.
2621	a. An examination under this section must be conducted at
2622	least once every year with respect to a domestic insurer that
2623	has continuously held a certificate of authority for less than 3
2624	years. The examination must cover the preceding fiscal year or
2625	the period since the last examination of the insurer. The office
2626	departmentmay limit the scope of the examination.
2627	b. The officedepartmentmay not accept an independent
2628	certified public accountant's audit report in lieu of an
2629	examination required by this subparagraph.
2630	c. An insurer may not be required to pay more than $25,000
2631	to cover the costs of any one examination under this
2632	subparagraph.
2633	2. An examination under this section must be conducted not
2634	less frequently than once every 5 years with respect to an
2635	insurer that has continuously held a certificate of authority,
2636	without a change in ownership subject to s. 624.4245 or s.
2637	628.461, for more than 15 years. The examination must cover the
2638	preceding 5 fiscal years of the insurer or the period since the
2639	last examination of the insurer. This subparagraph does not
2640	limit the ability of the officedepartmentto conduct more
2641	frequent examinations.
2642	Section 28. Section 624.317, Florida Statutes, is amended
2643	to read:
2644	624.317 Investigation of agents, adjusters,
2645	administrators, service companies, and others.--If it has reason
2646	to believe that any person has violated or is violating any
2647	provision of this code, or upon the written complaint signed by
2648	any interested person indicating that any such violation may
2649	exist:,
2650	(1)The department shall conduct such investigation as it
2651	deems necessary of the accounts, records, documents, and
2652	transactions pertaining to or affecting the insurance affairs of
2653	any:
2654	(1) general agent, surplus line agent, managing general
2655	agent,adjuster, administrator, service company, or other
2656	person.
2657	(2) insurance agent, customer representative, service
2658	representative, or other person subject to its jurisdictionor
2659	solicitor, subject to the requirements of s. 626.601.
2660	(2) The office shall conduct such investigation as it
2661	deems necessary of the accounts, records, documents, and
2662	transactions pertaining to or affecting the insurance affairs of
2663	any:
2664	(a) Adjuster, administrator, service company, or other
2665	person subject to its jurisdiction.
2666	(b)(3)Person having a contract or power of attorney under
2667	which she or he enjoys in fact the exclusive or dominant right
2668	to manage or control an insurer.
2669	(c)(4)Person engaged in or proposing to be engaged in the
2670	promotion or formation of:
2671	1.(a)A domestic insurer;
2672	2.(b)An insurance holding corporation; or
2673	3.(c)A corporation to finance a domestic insurer or in
2674	the production of the domestic insurer's business.
2675	Section 29. Subsections (2), (3), (4), (5), and (7) of
2676	section 624.404, Florida Statutes, are amended to read:
2677	624.404 General eligibility of insurers for certificate of
2678	authority.--To qualify for and hold authority to transact
2679	insurance in this state, an insurer must be otherwise in
2680	compliance with this code and with its charter powers and must
2681	be an incorporated stock insurer, an incorporated mutual
2682	insurer, or a reciprocal insurer, of the same general type as
2683	may be formed as a domestic insurer under this code; except
2684	that:
2685	(2) No foreign or alien insurer or exchange shall be
2686	authorized to transact insurance in this state unless it is
2687	otherwise qualified therefor under this code and has operated
2688	satisfactorily for at least 3 years in its state or country of
2689	domicile; however, the officedepartmentmay waive the 3-year
2690	requirement if the foreign or alien insurer or exchange:
2691	(a) Has operated successfully and has capital and surplus
2692	of $5 million;
2693	(b) Is the wholly owned subsidiary of an insurer which is
2694	an authorized insurer in this state;
2695	(c) Is the successor in interest through merger or
2696	consolidation of an authorized insurer; or
2697	(d) Provides a product or service not readily available to
2698	the consumers of this state.
2699	(3)(a) The officedepartmentshall not grant or continue
2700	authority to transact insurance in this state as to any insurer
2701	the management, officers, or directors of which are found by it
2702	to be incompetent or untrustworthy; or so lacking in insurance
2703	company managerial experience as to make the proposed operation
2704	hazardous to the insurance-buying public; or so lacking in
2705	insurance experience, ability, and standing as to jeopardize the
2706	reasonable promise of successful operation; or which it has good
2707	reason to believe are affiliated directly or indirectly through
2708	ownership, control, reinsurance transactions, or other insurance
2709	or business relations, with any person or persons whose business
2710	operations are or have been marked, to the detriment of
2711	policyholders or stockholders or investors or creditors or of
2712	the public, by manipulation of assets, accounts, or reinsurance
2713	or by bad faith.
2714	(b) The officedepartmentshall not grant or continue
2715	authority to transact insurance in this state as to any insurer
2716	if any person, including any subscriber, stockholder, or
2717	incorporator, who exercises or has the ability to exercise
2718	effective control of the insurer, or who influences or has the
2719	ability to influence the transaction of the business of the
2720	insurer, does not possess the financial standing and business
2721	experience for the successful operation of the insurer.
2722	(c) The officedepartmentmay deny, suspend, or revoke the
2723	authority to transact insurance in this state of any insurer if
2724	any person, including any subscriber, stockholder, or
2725	incorporator, who exercises or has the ability to exercise
2726	effective control of the insurer, or who influences or has the
2727	ability to influence the transaction of the business of the
2728	insurer, has been found guilty of, or has pleaded guilty or nolo
2729	contendere to, any felony or crime punishable by imprisonment of
2730	1 year or more under the law of the United States or any state
2731	thereof or under the law of any other country which involves
2732	moral turpitude, without regard to whether a judgment of
2733	conviction has been entered by the court having jurisdiction in
2734	such case. However, in the case of an insurer operating under a
2735	subsisting certificate of authority, the insurer shall remove
2736	any such person immediately upon discovery of the conditions set
2737	forth in this paragraph when applicable to such person or upon
2738	the order of the officedepartment, and the failure to so act by
2739	said insurer shall be grounds for revocation or suspension of
2740	the insurer's certificate of authority.
2741	(d) The officedepartmentmay deny, suspend, or revoke the
2742	authority of an insurer to transact insurance in this state if
2743	any person, including any subscriber, stockholder, or
2744	incorporator, who exercises or has the ability to exercise
2745	effective control of the insurer, or who influences or has the
2746	ability to influence the transaction of the business of the
2747	insurer, which person the officedepartmenthas good reason to
2748	believe is now or was in the past affiliated directly or
2749	indirectly, through ownership interest of 10 percent or more,
2750	control, or reinsurance transactions, with any business,
2751	corporation, or other entity that has been found guilty of or
2752	has pleaded guilty or nolo contendere to any felony or crime
2753	punishable by imprisonment for 1 year or more under the laws of
2754	the United States, any state, or any other country, regardless
2755	of adjudication. However, in the case of an insurer operating
2756	under a subsisting certificate of authority, the insurer shall
2757	immediately remove such person or immediately notify the office
2758	departmentof such person upon discovery of the conditions set
2759	forth in this paragraph, either when applicable to such person
2760	or upon order of the officedepartment; the failure to remove
2761	such person, provide such notice, or comply with such order
2762	constitutes grounds for suspension or revocation of the
2763	insurer's certificate of authority.
2764	(4)(a) No authorized insurer shall act as a fronting
2765	company for any unauthorized insurer which is not an approved
2766	reinsurer.
2767	(b) A "fronting company" is an authorized insurer which by
2768	reinsurance or otherwise generally transfers more than 50
2769	percent to one unauthorized insurer which does not meet the
2770	requirements of s. 624.610(3)(a), (b), or (c), or more than 75
2771	percent to two or more unauthorized insurers which do not meet
2772	the requirements of s. 624.610(3)(a), (b), or (c), of the entire
2773	risk of loss on all of the insurance written by it in this
2774	state, or on one or more lines of insurance, on all of the
2775	business produced through one or more agents or agencies, or on
2776	all of the business from a designated geographical territory,
2777	without obtaining the prior approval of the officedepartment.
2778	(c) The officedepartmentmay, in its discretion, approve
2779	a transfer of risk in excess of the limits in paragraph (b) upon
2780	presentation of evidence, satisfactory to the officedepartment,
2781	that the transfer would be in the best interests of the
2782	financial condition of the insurer and in the best interests of
2783	the policyholders.
2784	(5) No insurer shall be authorized to transact insurance
2785	in this state which, during the 3 years immediately preceding
2786	its application for a certificate of authority, has violated any
2787	of the insurance laws of this state and after being informed of
2788	such violation has failed to correct the same; except that, if
2789	all other requirements are met, the officedepartmentmay
2790	nevertheless issue a certificate of authority to such an insurer
2791	upon the filing by the insurer of a sworn statement of all such
2792	insurance so written in violation of law, and upon payment to
2793	the officedepartmentof a sum of money as additional filing fee
2794	equivalent to all premium taxes and other state taxes and fees
2795	as would have been payable by the insurer if such insurance had
2796	been lawfully written by an authorized insurer under the laws of
2797	this state. This fee, when collected, shall be deposited to the
2798	credit of the Insurance Commissioner'sRegulatory Trust Fund.
2799	(7) For the purpose of satisfying the requirements of ss.
2800	624.407 and 624.408, the investment portfolio of an insurer
2801	applying for an initial certificate of authority to do business
2802	in this state shall value its bonds and stocks in accordance
2803	with the provisions of the latest edition of the publication
2804	"Purposes and Procedures Manual of the NAIC Securities Valuation
2805	Office""Valuations of Securities"by the National Association
2806	of Insurance Commissioners, July 1, 20021990, and subsequent
2807	amendments thereto, if the valuation methodology remains
2808	substantially unchanged.
2809	Section 30. Subsection (1) of section 624.4072, Florida
2810	Statutes, is amended to read:
2811	624.4072 Minority-owned property and casualty insurers;
2812	limited exemption for taxation and assessments.--
2813	(1) A minority business that is at least 51 percent owned
2814	by minority persons, as defined in s. 288.703(3), initially
2815	issued a certificate of authority in this state as an authorized
2816	insurer after May 1, 1998, and before January 1, 2002, to write
2817	property and casualty insurance shall be exempt, for a period
2818	not to exceed 10 years from the date of receiving its
2819	certificate of authority, from the following taxes and
2820	assessments:
2821	(a) Taxes imposed under ss. 175.101, 185.08, and 624.509;
2822	(b) Assessments by the Citizens Property Insurance
2823	CorporationFlorida Residential Property and Casualty Joint
2824	Underwriting Association or by the Florida Windstorm
2825	Underwriting Association, as provided under s. 627.351, except
2826	for emergency assessments collected from policyholders pursuant
2827	to s. 627.351(6)(b)3.d.s. 627.351(2)(b)2.d.(III) and(6)(b)3.d.
2828	Any such insurer shall be a member insurer of the Citizens
2829	Property Insurance CorporationFlorida Windstorm Underwriting
2830	Association and the Florida Residential Property and Casualty
2831	Joint Underwriting Association. The premiums of such insurer
2832	shall be included in determining, for the Citizens Property
2833	Insurance CorporationFlorida Windstorm Underwriting
2834	Association, the aggregate statewide direct written premium for
2835	property insurance and in determining, for the Florida
2836	Residential Property and Casualty Joint Underwriting
2837	Association, the aggregate statewide direct written premium for
2838	the subject lines of business for all member insurers.
2839	Section 31. Subsection (1) of section 624.413, Florida
2840	Statutes, is amended to read:
2841	624.413 Application for certificate of authority.--
2842	(1) To apply for a certificate of authority, an insurer
2843	shall file its application therefor with the officedepartment,
2844	upon a form adopted by the commission and furnished by the
2845	officeit, showing its name; location of its home office and, if
2846	an alien insurer, its principal office in the United States;
2847	kinds of insurance to be transacted; state or country of
2848	domicile; and such additional information as the commission
2849	department may reasonably requiresrequire, together with the
2850	following documents:
2851	(a) One copy of its corporate charter, articles of
2852	incorporation, existing and proposed nonfacultative reinsurance
2853	contracts, declaration of trust, or other charter documents,
2854	with all amendments thereto, certified by the public official
2855	with whom the originals are on file in the state or country of
2856	domicile.
2857	(b) If a mutual insurer, a copy of its bylaws, as amended,
2858	certified by its secretary or other officer having custody
2859	thereof.
2860	(c) If a foreign or alien reciprocal insurer, a copy of
2861	the power of attorney of its attorney in fact and of its
2862	subscribers' agreement, if any, certified by the attorney in
2863	fact; and, if a domestic reciprocal insurer, the declaration
2864	provided for in s. 629.081.
2865	(d) A copy of its financial statement as of December 31
2866	next preceding, containing information generally included in
2867	insurer financial statements prepared in accordance with
2868	generally accepted insurance accounting principles and practices
2869	and in a form generally utilized by insurers for financial
2870	statements, sworn to by at least two executive officers of the
2871	insurer, or certified by the public official having supervision
2872	of insurance in the insurer's state of domicile or of entry into
2873	the United States. To facilitate uniformity in financial
2874	statements, the commissiondepartmentmay by rule adopt the form
2875	for financial statements approved by the National Association of
2876	Insurance Commissioners in 20021990, and may adopt subsequent
2877	amendments thereto if the form remains substantially consistent.
2878	(e) Supplemental quarterly financial statements for each
2879	calendar quarter since the beginning of the year of its
2880	application for the certificate of authority, sworn to by at
2881	least two of its executive officers. To facilitate uniformity in
2882	financial statements, the commissiondepartmentmay by rule
2883	adopt the form for quarterly financial statements approved by
2884	the National Association of Insurance Commissioners in 2002
2885	1990, and may adopt subsequent amendments thereto if the form
2886	remains substantially consistent.
2887	(f) If a foreign or alien insurer, a copy of the report of
2888	the most recent examination of the insurer certified by the
2889	public official having supervision of insurance in its state of
2890	domicile or of entry into the United States. The end of the
2891	most recent year covered by the examination must be within the
2892	3-year period preceding the date of application. In lieu of the
2893	certified examination report, the officedepartmentmay accept
2894	an audited certified public accountant's report prepared on a
2895	basis consistent with the insurance laws of the insurer's state
2896	of domicile, certified by the public official having supervision
2897	of insurance in its state of domicile or of entry into the
2898	United States.
2899	(g) If a foreign or alien insurer, a certificate of
2900	compliance from the public official having supervision of
2901	insurance in its state or country of domicile showing that it is
2902	duly organized and authorized to transact insurance therein and
2903	the kinds of insurance it is so authorized to transact.
2904	(h) If a foreign or alien insurer, a certificate of the
2905	public official having custody of any deposit maintained by the
2906	insurer in another state in lieu of a deposit or part thereof
2907	required in this state under s. 624.411 or s. 624.412, showing
2908	the amount of such deposit and the assets or securities of which
2909	comprised.
2910	(i) If a life insurer, a certificate of valuation.
2911	(j) If an alien insurer, a copy of the appointment and
2912	authority of its United States manager, certified by its officer
2913	having custody of its records.
2914	Section 32. Section 624.424, Florida Statutes, is amended
2915	to read:
2916	624.424 Annual statement and other information.--
2917	(1)(a) Each authorized insurer shall file with the office
2918	departmentfull and true statements of its financial condition,
2919	transactions, and affairs. An annual statement covering the
2920	preceding calendar year shall be filed on or before March 1, and
2921	quarterly statements covering the periods ending on March 31,
2922	June 30, and September 30 shall be filed within 45 days after
2923	each such date. The officedepartmentmay, for good cause, grant
2924	an extension of time for filing of an annual or quarterly
2925	statement. The statements shall contain information generally
2926	included in insurers' financial statements prepared in
2927	accordance with generally accepted insurance accounting
2928	principles and practices and in a form generally utilized by
2929	insurers for financial statements, sworn to by at least two
2930	executive officers of the insurer or, if a reciprocal insurer,
2931	by the oath of the attorney in fact or its like officer if a
2932	corporation. To facilitate uniformity in financial statements
2933	and to facilitate officedepartment analysis, the commission
2934	departmentmay by rule adopt the form for financial statements
2935	approved by the National Association of Insurance Commissioners
2936	in 20021990, and may adopt subsequent amendments thereto if the
2937	methodology remains substantially consistent, and may by rule
2938	require each insurer to submit to the officedepartmentor such
2939	organization as the officedepartmentmay designate all or part
2940	of the information contained in the financial statement in a
2941	computer-readable form compatible with the electronic data
2942	processing system specified by the officedepartment.
2943	(b) Each insurer's annual statement must contain a
2944	statement of opinion on loss and loss adjustment expense
2945	reserves made by a member of the American Academy of Actuaries
2946	or by a qualified loss reserve specialist, under criteria
2947	established by rule of the commissiondepartment. In adopting
2948	the rule, the commissiondepartmentmust consider any criteria
2949	established by the National Association of Insurance
2950	Commissioners. The officedepartmentmay require semiannual
2951	updates of the annual statement of opinion as to a particular
2952	insurer if the officedepartmenthas reasonable cause to believe
2953	that such reserves are understated to the extent of materially
2954	misstating the financial position of the insurer. Workpapers in
2955	support of the statement of opinion must be provided to the
2956	officedepartmentupon request. This paragraph does not apply to
2957	life insurance or title insurance.
2958	(c) The commissiondepartmentmay by rule require reports
2959	or filings required under the insurance code to be submitted on
2960	a computer-diskette compatible with the electronic data
2961	processing equipment specified by the commissiondepartment.
2962	(2) The statement of an alien insurer shall be verified by
2963	the insurer's United States manager or other officer duly
2964	authorized. It shall be a separate statement, to be known as
2965	its general statement, of its transactions, assets, and affairs
2966	within the United States unless the officedepartmentrequires
2967	otherwise. If the officedepartmentrequires a statement as to
2968	the insurer's affairs elsewhere, the insurer shall file such
2969	statement with the officedepartmentas soon as reasonably
2970	possible.
2971	(3) Each insurer having a deposit as required under s.
2972	624.411 shall file with the officedepartmentannually with its
2973	annual statement a certificate to the effect that the assets so
2974	deposited have a market value equal to or in excess of the
2975	amount of deposit so required.
2976	(4) At the time of filing, the insurer shall pay the fee
2977	for filing its annual statement in the amount specified in s.
2978	624.501.
2979	(5) The officedepartmentmay refuse to continue, or may
2980	suspend or revoke, the certificate of authority of an insurer
2981	failing to file its annual or quarterly statements and
2982	accompanying certificates when due.
2983	(6) In addition to information called for and furnished in
2984	connection with its annual or quarterly statements, an insurer
2985	shall furnish to the officedepartmentas soon as reasonably
2986	possible such information as to its transactions or affairs as
2987	the officedepartmentmay from time to time request in writing.
2988	All such information furnished pursuant to the office's
2989	department'srequest shall be verified by the oath of two
2990	executive officers of the insurer or, if a reciprocal insurer,
2991	by the oath of the attorney in fact or its like officers if a
2992	corporation.
2993	(7) The signatures of all such persons when written on
2994	annual or quarterly statements or other reports required by this
2995	section shall be presumed to have been so written by authority
2996	of the person whose signature is affixed thereon. The affixing
2997	of any signature by anyone other than the purported signer
2998	constitutes a felony of the second degree, punishable as
2999	provided in s. 775.082, s. 775.083, or s. 775.084.
3000	(8)(a) All authorized insurers must have conducted an
3001	annual audit by an independent certified public accountant and
3002	must file an audited financial report with the officedepartment
3003	on or before June 1 for the preceding year ending December 31.
3004	The officedepartmentmay require an insurer to file an audited
3005	financial report earlier than June 1 upon 90 days' advance
3006	notice to the insurer. The officedepartmentmay immediately
3007	suspend an insurer's certificate of authority by order if an
3008	insurer's failure to file required reports, financial
3009	statements, or information required by this subsection or rule
3010	adopted pursuant thereto creates a significant uncertainty as to
3011	the insurer's continuing eligibility for a certificate of
3012	authority.
3013	(b) Any authorized insurer otherwise subject to this
3014	section having direct premiums written in this state of less
3015	than $1 million in any calendar year and fewerlessthan 1,000
3016	policyholders or certificateholders of directly written policies
3017	nationwide at the end of such calendar year is exempt from this
3018	section for such year unless the officedepartmentmakes a
3019	specific finding that compliance is necessary in order for the
3020	officedepartmentto carry out its statutory responsibilities.
3021	However, any insurer having assumed premiums pursuant to
3022	contracts or treaties or reinsurance of $1 million or more is
3023	not exempt. Any insurer subject to an exemption must submit by
3024	March 1 following the year to which the exemption applies an
3025	affidavit sworn to by a responsible officer of the insurer
3026	specifying the amount of direct premiums written in this state
3027	and number of policyholders or certificateholders.
3028	(c) The board of directors of an insurer shall hire the
3029	certified public accountant that prepares the audit required by
3030	this subsection and the board shall establish an audit committee
3031	of three or more directors of the insurer or an affiliated
3032	company. The audit committee shall be responsible for discussing
3033	audit findings and interacting with the certified public
3034	accountant with regard to her or his findings. The audit
3035	committee shall be comprised solely of members who are free from
3036	any relationship that, in the opinion of its board of directors,
3037	would interfere with the exercise of independent judgment as a
3038	committee member. The audit committee shall report to the board
3039	any findings of adverse financial conditions or significant
3040	deficiencies in internal controls that have been noted by the
3041	accountant. The insurer may request the officedepartmentto
3042	waive this requirement of the audit committee membership based
3043	upon unusual hardship to the insurer.
3044	(d) An insurer may not use the same accountant or partner
3045	of an accounting firm responsible for preparing the report
3046	required by this subsection for more than 7 consecutive years.
3047	Following this period, the insurer may not use such accountant
3048	or partner for a period of 2 years, but may use another
3049	accountant or partner of the same firm. An insurer may request
3050	the officedepartmentto waive this prohibition based upon an
3051	unusual hardship to the insurer and a determination that the
3052	accountant is exercising independent judgment that is not unduly
3053	influenced by the insurer considering such factors as the number
3054	of partners, expertise of the partners or the number of
3055	insurance clients of the accounting firm; the premium volume of
3056	the insurer; and the number of jurisdictions in which the
3057	insurer transacts business.
3058	(e) The commissiondepartmentshall adopt rules to
3059	implement this subsection, which rules must be in substantial
3060	conformity with the 19981990Model Rule Requiring Annual
3061	Audited Financial Reports adopted by the National Association of
3062	Insurance Commissioners, except where inconsistent with the
3063	requirements of this subsection. Any exception to, waiver of, or
3064	interpretation of accounting requirements of the commission
3065	departmentmust be in writing and signed by an authorized
3066	representative of the officedepartment. No insurer may raise as
3067	a defense in any action, any exception to, waiver of, or
3068	interpretation of accounting requirements, unless previously
3069	issued in writing by an authorized representative of the office
3070	department.
3071	(9)(a) Each authorized insurer shall, pursuant to s.
3072	409.910(20), provide records and information to the Agency for
3073	Health Care Administration to identify potential insurance
3074	coverage for claims filed with that agency and its fiscal agents
3075	for payment of medical services under the Medicaid program.
3076	(b) Each authorized insurer shall, pursuant to s.
3077	409.2561(5)(c), notify the Medicaid agency of a cancellation or
3078	discontinuance of a policy within 30 days if the insurer
3079	received notification from the Medicaid agency to do so.
3080	(c) Any information provided by an insurer under this
3081	subsection does not violate any right of confidentiality or
3082	contract that the insurer may have with covered persons. The
3083	insurer is immune from any liability that it may otherwise incur
3084	through its release of such information to the Agency for Health
3085	Care Administration.
3086	(10) Each insurer or insurer group doing business in this
3087	state shall file on a quarterly basis in conjunction with
3088	financial reports required by paragraph (1)(a) a supplemental
3089	report on an individual and group basis on a form prescribed by
3090	the commissiondepartmentwith information on personal lines and
3091	commercial lines residential property insurance policies in this
3092	state. The supplemental report shall include separate
3093	information for personal lines property policies and for
3094	commercial lines property policies and totals for each item
3095	specified, including premiums written for each of the property
3096	lines of business as described in ss. 215.555(2)(c) and
3097	627.351(6)(a). The report shall include the following
3098	information for each county on a monthly basis:
3099	(a) Total number of policies in force at the end of each
3100	month.
3101	(b) Total number of policies canceled.
3102	(c) Total number of policies nonrenewed.
3103	(d) Number of policies canceled due to hurricane risk.
3104	(e) Number of policies nonrenewed due to hurricane risk.
3105	(f) Number of new policies written.
3106	(g) Total dollar value of structure exposure under
3107	policies that include wind coverage.
3108	(h) Number of policies that exclude wind coverage.
3109	Section 33. Subsections (2), (3), and (4) of section
3110	624.476, Florida Statutes, are amended to read:
3111	624.476 Impaired self-insurance funds.--
3112	(2) If any fund levies an assessment pursuant to
3113	subsection (1), the officedepartmentshall require the fund to
3114	consent to administrative supervision under part VI of this
3115	chapter. The officedepartmentmay waive the requirement to
3116	consent to administrative supervision for good cause.
3117	(3) If the trustees fail to make an assessment as required
3118	by subsection(1), the officedepartmentshall order the trustees
3119	to do so. If the deficiency is not sufficiently made up within
3120	60 days after the date of the order, the fund shall be deemed
3121	insolvent and grounds shall exist to proceed against the fund as
3122	provided for in part I of chapter 631.
3123	(4) Notwithstanding the requirement of the fund to make an
3124	assessment pursuant to subsection (1) or subsection (3), the
3125	officedepartment may at any time request that the departmentto
3126	be appointed receiver for purposes of rehabilitation or
3127	liquidation if it is able to demonstrate that any grounds for
3128	rehabilitation or liquidation exist pursuant to s. 631.051 or s.
3129	631.061.
3130	Section 34. Section 624.477, Florida Statutes, is amended
3131	to read:
3132	624.477 Liquidation, rehabilitation, reorganization, and
3133	conservation.--Any rehabilitation, liquidation, conservation, or
3134	dissolution of a self-insurance fund shall be conducted under
3135	the supervision of the office and department, which shall each
3136	have all power with respect thereto granted to the fund under
3137	part I of chapter 631 governing the rehabilitation, liquidation,
3138	conservation, or dissolution of insurers and including all
3139	grounds for the appointment of a receiver contained in ss.
3140	631.051 and 631.061.
3141	Section 35. Section 625.01115, Florida Statutes, is
3142	amended to read:
3143	625.01115 Definitions.--As used in this chapter, the term
3144	"statutory accounting principles" means accounting principles as
3145	defined in the National Association of Insurance Commissioners
3146	Accounting Practices and Procedures Manual as of March 2002 and
3147	subsequent amendments thereto if the methodology remains
3148	substantially consistenteffective January 1, 2001.
3149	Section 36. Subsections (2), (3), and (4), paragraphs (c),
3150	(d), (g), (h), (i), and (j) of subsection (5), paragraph (e) of
3151	subsection (6), subsection (10), paragraph(b) of subsection
3152	(12), and subsection (14) of section 625.121, Florida Statutes,
3153	are amended to read:
3154	625.121 Standard Valuation Law; life insurance.--
3155	(2) ANNUAL VALUATION.--The officedepartmentshall
3156	annually value, or cause to be valued, the reserve liabilities,
3157	hereinafter called "reserves," for all outstanding life
3158	insurance policies and annuity and pure endowment contracts of
3159	every life insurer doing business in this state, and may certify
3160	the amount of any such reserves, specifying the mortality table
3161	or tables, rate or rates of interest, and methods, net-level
3162	premium method or others, used in the calculation of such
3163	reserves. In the case of an alien insurer, such valuation shall
3164	be limited to its insurance transactions in the United States.
3165	In calculating such reserves, the officedepartmentmay use
3166	group methods and approximate averages for fractions of a year
3167	or otherwise. It may accept in its discretion the insurer's
3168	calculation of such reserves. In lieu of the valuation of the
3169	reserves herein required of any foreign or alien insurer, it may
3170	accept any valuation made or caused to be made by the insurance
3171	supervisory official of any state or other jurisdiction when
3172	such valuation complies with the minimum standard herein
3173	provided and if the official of such state or jurisdiction
3174	accepts as sufficient and valid for all legal purposes the
3175	certificate of valuation of the officedepartmentwhen such
3176	certificate states the valuation to have been made in a
3177	specified manner according to which the aggregate reserves would
3178	be at least as large as if they had been computed in the manner
3179	prescribed by the law of that state or jurisdiction. When any
3180	such valuation is made by the officedepartment, it may use the
3181	actuary of the officedepartmentor employ an actuary for the
3182	purpose; and the reasonable compensation of the actuary, at a
3183	rate approved by the officedepartment, and reimbursement of
3184	travel expenses pursuant to s. 624.320 upon demand by the office
3185	department, supported by an itemized statement of such
3186	compensation and expenses, shall be paid by the insurer. When a
3187	domestic insurer furnishes the officedepartmentwith a
3188	valuation of its outstanding policies as computed by its own
3189	actuary or by an actuary deemed satisfactory for the purpose by
3190	the officedepartment, the valuation shall be verified by the
3191	actuary of the officedepartmentwithout cost to the insurer.
3192	(3) ACTUARIAL OPINION OF RESERVES.--
3193	(a)1. Each life insurance company doing business in this
3194	state shall annually submit the opinion of a qualified actuary
3195	as to whether the reserves and related actuarial items held in
3196	support of the policies and contracts specified by the
3197	commissiondepartmentby rule are computed appropriately, are
3198	based on assumptions which satisfy contractual provisions, are
3199	consistent with prior reported amounts, and comply with
3200	applicable laws of this state. The commissiondepartmentby rule
3201	shall define the specifics of this opinion and add any other
3202	items determined to be necessary to its scope.
3203	2. The opinion shall be submitted with the annual
3204	statement reflecting the valuation of such reserve liabilities
3205	for each year ending on or after December 31, 1992.
3206	3. The opinion shall apply to all business in force,
3207	including individual and group health insurance plans, in the
3208	form and substance acceptable to the officedepartmentas
3209	specified by rule of the commission.
3210	4. The commissiondepartmentmay adopt rules providing the
3211	standards of the actuarial opinion consistent with standards
3212	adopted by the Actuarial Standards Board on December 31, 2002
3213	October 1, 1991, and subsequent revisions thereto, provided that
3214	the standards remain substantially consistent.
3215	5. In the case of an opinion required to be submitted by a
3216	foreign or alien company, the officedepartmentmay accept the
3217	opinion filed by that company with the insurance supervisory
3218	official of another state if the officedepartmentdetermines
3219	that the opinion reasonably meets the requirements applicable to
3220	a company domiciled in this state.
3221	6. For the purposes of this subsection, "qualified
3222	actuary" means a member in good standing of the American Academy
3223	of Actuaries who also meets the requirements specified by rule
3224	of the commissiondepartment.
3225	7. Disciplinary action by the officedepartmentagainst
3226	the company or the qualified actuary shall be in accordance with
3227	the insurance code and related rules adopted by the commission
3228	department.
3229	8. A memorandum in the form and substance specified by
3230	rule shall be prepared to support each actuarial opinion.
3231	9. If the insurance company fails to provide a supporting
3232	memorandum at the request of the officedepartmentwithin a
3233	period specified by rule of the commission, or if the office
3234	departmentdetermines that the supporting memorandum provided by
3235	the insurance company fails to meet the standards prescribed by
3236	rule of the commission, the officedepartmentmay engage a
3237	qualified actuary at the expense of the company to review the
3238	opinion and the basis for the opinion and prepare such
3239	supporting memorandum as is required by the officedepartment.
3240	10. Except as otherwise provided in this paragraph, any
3241	memorandum or other material in support of the opinion is
3242	confidential and exempt from the provisions of s. 119.07(1);
3243	however, the memorandum or other material may be released by the
3244	officedepartmentwith the written consent of the company, or to
3245	the American Academy of Actuaries upon request stating that the
3246	memorandum or other material is required for the purpose of
3247	professional disciplinary proceedings and setting forth
3248	procedures satisfactory to the officedepartmentfor preserving
3249	the confidentiality of the memorandum or other material. If any
3250	portion of the confidential memorandum is cited by the company
3251	in its marketing or is cited before any governmental agency
3252	other than a state insurance department or is released by the
3253	company to the news media, no portion of the memorandum is
3254	confidential.
3255	(b) In addition to the opinion required by subparagraph
3256	(a)1., the officedepartment may, pursuant to commissionby
3257	rule,require an opinion of the same qualified actuary as to
3258	whether the reserves and related actuarial items held in support
3259	of the policies and contracts specified by the commission
3260	departmentby rule, when considered in light of the assets held
3261	by the company with respect to the reserves and related
3262	actuarial items, including but not limited to the investment
3263	earnings on the assets and considerations anticipated to be
3264	received and retained under the policies and contracts, make
3265	adequate provision for the company's obligations under the
3266	policies and contracts, including, but not limited to, the
3267	benefits under, and expenses associated with, the policies and
3268	contracts.
3269	(c) The commissiondepartmentmay provide by rule for a
3270	transition period for establishing any higher reserves which the
3271	qualified actuary may deem necessary in order to render the
3272	opinion required by this subsection.
3273	(4) MINIMUM STANDARD FOR VALUATION OF POLICIES AND
3274	CONTRACTS ISSUED BEFORE OPERATIVE DATE OF STANDARD NONFORFEITURE
3275	LAW.--The minimum standard for the valuation of all such
3276	policies and contracts issued prior to the operative date of s.
3277	627.476 (Standard Nonforfeiture Law) shall be any basis
3278	satisfactory to the officedepartment. Any basis satisfactory to
3279	the former Department of Insuranceon the effective date of this
3280	code shall be deemed to meet such minimum standards.
3281	(5) MINIMUM STANDARD FOR VALUATION OF POLICIES AND
3282	CONTRACTS ISSUED ON OR AFTER OPERATIVE DATE OF STANDARD
3283	NONFORFEITURE LAW.--Except as otherwise provided in paragraph
3284	(h) and subsections (6), (11), and (14), the minimum standard
3285	for the valuation of all such policies and contracts issued on
3286	or after the operative date of s. 627.476 (Standard
3287	Nonforfeiture Law for Life Insurance) shall be the
3288	commissioners' reserve valuation method defined in subsections
3289	(7), (11), and (14); 5 percent interest for group annuity and
3290	pure endowment contracts and 3.5 percent interest for all other
3291	such policies and contracts, or in the case of life insurance
3292	policies and contracts, other than annuity and pure endowment
3293	contracts, issued on or after July 1, 1973, 4 percent interest
3294	for such policies issued prior to October 1, 1979, and 4.5
3295	percent interest for such policies issued on or after October 1,
3296	1979; and the following tables:
3297	(c) For individual annuity and pure endowment contracts,
3298	excluding any disability and accidental death benefits in such
3299	policies, the 1937 Standard Annuity Mortality Table or, at the
3300	option of the insurer, the Annuity Mortality Table for 1949,
3301	Ultimate, or any modification of either of these tables approved
3302	by the officedepartment.
3303	(d) For group annuity and pure endowment contracts,
3304	excluding any disability and accidental death benefits in such
3305	policies, the Group Annuity Mortality Table for 1951; any
3306	modification of such table approved by the officedepartment;
3307	or, at the option of the insurer, any of the tables or
3308	modifications of tables specified for individual annuity and
3309	pure endowment contracts.
3310	(g) For group life insurance, life insurance issued on the
3311	substandard basis, and other special benefits, such tables as
3312	may be approved by the officedepartmentas being sufficient
3313	with relation to the benefits provided by such policies.
3314	(h) Except as provided in subsection (6), the minimum
3315	standard for the valuation of all individual annuity and pure
3316	endowment contracts issued on or after the operative date of
3317	this paragraph and for all annuities and pure endowments
3318	purchased on or after such operative date under group annuity
3319	and pure endowment contracts shall be the commissioners' reserve
3320	valuation method defined in subsection (7) and the following
3321	tables and interest rates:
3322	1. For individual annuity and pure endowment contracts
3323	issued prior to October 1, 1979, excluding any disability and
3324	accidental death benefits in such contracts, the 1971 Individual
3325	Annuity Mortality Table, or any modification of this table
3326	approved by the officedepartment, and 6 percent interest for
3327	single-premium immediate annuity contracts and 4 percent
3328	interest for all other individual annuity and pure endowment
3329	contracts.
3330	2. For individual single-premium immediate annuity
3331	contracts issued on or after October 1, 1979, and prior to
3332	October 1, 1986, excluding any disability and accidental death
3333	benefits in such contracts, the 1971 Individual Annuity
3334	Mortality Table, or any modification of this table approved by
3335	the officedepartment, and 7.5 percent interest. For such
3336	contracts issued on or after October 1, 1986, the 1983
3337	Individual Annual Mortality Table, or any modification of such
3338	table approved by the officedepartment, and the applicable
3339	calendar year statutory valuation interest rate as described in
3340	subsection (6).
3341	3. For individual annuity and pure endowment contracts
3342	issued on or after October 1, 1979, and prior to October 1,
3343	1986, other than single-premium immediate annuity contracts,
3344	excluding any disability and accidental death benefits in such
3345	contracts, the 1971 Individual Annuity Mortality Table, or any
3346	modification of this table approved by the officedepartment,
3347	and 5.5 percent interest for single-premium deferred annuity and
3348	pure endowment contracts and 4.5 percent interest for all other
3349	such individual annuity and pure endowment contracts. For such
3350	contracts issued on or after October 1, 1986, the 1983
3351	Individual Annual Mortality Table, or any modification of such
3352	table approved by the officedepartment, and the applicable
3353	calendar year statutory valuation interest rate as described in
3354	subsection (6).
3355	4. For all annuities and pure endowments purchased prior
3356	to October 1, 1979, under group annuity and pure endowment
3357	contracts, excluding any disability and accidental death
3358	benefits purchased under such contracts, the 1971 Group Annuity
3359	Mortality Table, or any modification of this table approved by
3360	the officedepartment, and 6 percent interest.
3361	5. For all annuities and pure endowments purchased on or
3362	after October 1, 1979, and prior to October 1, 1986, under group
3363	annuity and pure endowment contracts, excluding any disability
3364	and accidental death benefits purchased under such contracts,
3365	the 1971 Group Annuity Mortality Table, or any modification of
3366	this table approved by the officedepartment, and 7.5 percent
3367	interest. For such contracts purchased on or after October 1,
3368	1986, the 1983 Group Annuity Mortality Table, or any
3369	modification of such table approved by the officedepartment,
3370	and the applicable calendar year statutory valuation interest
3371	rate as described in subsection (6).
3372
3373
3374	After July 1, 1973, any insurer may have filedfile with the
3375	former Department of Insurancea written notice of its election
3376	to comply with the provisions of this paragraph after a
3377	specified date before January 1, 1979, which shall be the
3378	operative date of this paragraph for such insurer. However, an
3379	insurer may elect a different operative date for individual
3380	annuity and pure endowment contracts from that elected for group
3381	annuity and pure endowment contracts. If an insurer makes no
3382	such election, the operative date of this paragraph for such
3383	insurer shall be January 1, 1979.
3384	(i) In lieu of the mortality tables specified in this
3385	subsection, and subject to rules previously adopted by the
3386	former Department of Insurance, the insurance company may, at
3387	its option:
3388	1. Substitute the applicable 1958 CSO or CET Smoker and
3389	Nonsmoker Mortality Tables, in lieu of the 1980 CSO or CET
3390	mortality table standard, for policies issued on or after the
3391	operative date of s. 627.476(9) and before January 1, 1989.
3392	2. Substitute the applicable 1980 CSO or CET Smoker and
3393	Nonsmoker Mortality Tables in lieu of the 1980 CSO or CET
3394	mortality table standard;
3395	3. Use the Annuity 2000 Mortality Table for determining
3396	the minimum standard of valuation for individual annuity and
3397	pure endowment contracts issued on or after January 1, 1998, and
3398	before July 1, 1998the operative date of this section until the
3399	department, on a date certain that is on or after January 1,
3400	1998, adopts by rule that table for determining the minimum
3401	standard for valuation purposes.
3402	4. Use the 1994 GAR Table for determining the minimum
3403	standard of valuation for annuities and pure endowments
3404	purchased on or after January 1, 1998, and before July 1, 1998,
3405	the operative date of this sectionunder group annuity and pure
3406	endowment contracts until the department, on a date certain that
3407	is on or after January 1, 1998, adopts by rule that table for
3408	determining the minimum standard for valuation purposes.
3409	(j) The commissiondepartmentmay adopt by rule the model
3410	regulation for valuation of life insurance policies as approved
3411	by the National Association of Insurance Commissioners in March
3412	1999, including tables of select mortality factors, and may make
3413	the regulation effective for policies issued on or afterJanuary
3414	1, 2000.
3415	(6) MINIMUM STANDARD OF VALUATION.--
3416	(e) The interest rate index shall be the Moody's Corporate
3417	Bond Yield Average-Monthly Average Corporates as published by
3418	Moody's Investors Service, Inc., as long as this index is
3419	calculated by using substantially the same methodology as used
3420	by it on January 1, 1981. If Moody's corporate bond yield
3421	average ceases to be calculated in this manner, the interest
3422	rate index shall be the index approved by rule promulgated by
3423	the commissiondepartment. The methodology used in determining
3424	the index approved by rule shall be substantially the same as
3425	the methodology employed on January 1, 1981, for determining
3426	Moody's Corporate Bond Yield Average-Monthly Average Corporates
3427	as published by Moody's Investors Services, Inc.
3428	(10) LOWER VALUATIONS.--An insurer which at any time had
3429	adopted any standard of valuation producing greater aggregate
3430	reserves than those calculated according to the minimum standard
3431	herein provided may, with the approval of the officedepartment,
3432	adopt any lower standard of valuation, but not lower than the
3433	minimum herein provided; however, for the purposes of this
3434	subsection, the holding of additional reserves previously
3435	determined by a qualified actuary to be necessary to render the
3436	opinion required by subsection (3) shall not be deemed to be the
3437	adoption of a higher standard of valuation.
3438	(12) ALTERNATE METHOD FOR DETERMINING RESERVES IN CERTAIN
3439	CASES.--In the case of any plan of life insurance which provides
3440	for future premium determination, the amounts of which are to be
3441	determined by the insurer based on then estimates of future
3442	experience, or in the case of any plan of life insurance or
3443	annuity which is of such a nature that the minimum reserves
3444	cannot be determined by the methods described in subsection (7),
3445	the reserves which are held under any such plan shall:
3446	(b) Be computed by a method which is consistent with the
3447	principles of this section, as determined by rules promulgated
3448	by the commissiondepartment.
3449	(14) MINIMUM STANDARDS FOR HEALTH PLANS.--The commission
3450	departmentshall adopt a rule containing the minimum standards
3451	applicable to the valuation of health plans in accordance with
3452	sound actuarial principles.
3453	Section 37. Subsections (1), (2), and (4) of section
3454	625.151, Florida Statutes, are amended to read:
3455	625.151 Valuation of other securities.--
3456	(1) Securities, other than those referred to in s.
3457	625.141, held by an insurer shall be valued, in the discretion
3458	of the officedepartment, at their market value, or at their
3459	appraised value, or at prices determined by it as representing
3460	their fair market value.
3461	(2) Preferred or guaranteed stocks or shares while paying
3462	full dividends may be carried at a fixed value in lieu of market
3463	value, at the discretion of the officedepartmentand in
3464	accordance with such method of valuation as it may approve.
3465	(4) No valuations under this section shall be inconsistent
3466	with any applicable valuation or method contained in the latest
3467	edition of the publication "Valuation of Securities" published
3468	by the National Association of Insurance Commissioners or its
3469	successor organization; provided that such valuation methodology
3470	is substantially similar to the methodology used by the National
3471	Association of Insurance Commissioners in its July 1, 2002,1988
3472	edition of such publication.
3473	Section 38. Section 625.317, Florida Statutes, is amended
3474	to read:
3475	625.317 Corporate bonds and debentures.--An insurer may
3476	invest in bonds, notes, or other interest-bearing or interest-
3477	accruing obligations of any solvent corporation organized under
3478	the laws of the United States or Canada or under the laws of any
3479	state, the District of Columbia, any territory or possession of
3480	the United States, or any Province of Canada or in bonds or
3481	notes issued by the Citizens Property Insurance Corporation as
3482	authorized by s. 627.351(6)Florida Windstorm Underwriting
3483	Association or a private nonprofit corporation, a private
3484	nonprofit unincorporated association, or a nonprofit mutual
3485	company organized by that association, all as authorized in s.
3486	627.351(2)(c), or any subsidiary or affiliate thereof authorized
3487	by the Department of Insurance to issue such bonds or notes.
3488	Section 39. Subsection (4) of section 625.325, Florida
3489	Statutes, is amended to read:
3490	625.325 Investments in subsidiaries and related
3491	corporations.--
3492	(4) DEBT OBLIGATIONS.--Debt obligations, other than
3493	mortgage loans, made under the authority of this section must
3494	meet amortization requirements in accordance with the latest
3495	edition of the publication "Valuation of Securities" by the
3496	National Association of Insurance Commissioners or its successor
3497	organization; provided that such amortization methodology is
3498	substantially similar to the methodology used by the National
3499	Association of Insurance Commissioners in its July 1, 2002,1988
3500	edition of such publication.
3501	Section 40. Subsections (6) and (11) of section 626.015,
3502	Florida Statutes, are amended, and present subsections (7)-(19)
3503	of said section are renumbered as subsections (6)-(18),
3504	respectively, to read:
3505	626.015 Definitions.--As used in this part:
3506	(6) "Department" means the Department of Insurance.
3507	(10)(11)"License" means a document issued by the
3508	department or officeauthorizing a person to be appointed to
3509	transact insurance or adjust claims for the kind, line, or class
3510	of insurance identified in the document.
3511	Section 41. Section 626.016, Florida Statutes, is created
3512	to read:
3513	626.016 Powers and duties of department, commission, and
3514	office.--
3515	(1) The powers and duties of the Chief Financial Officer
3516	and the department specified in this chapter apply only with
3517	respect to insurance agents, managing general agents,
3518	reinsurance intermediaries, viatical settlement brokers,
3519	customer representatives, service representatives, agencies, and
3520	unlicensed persons subject to the regulatory jurisdiction of the
3521	department.
3522	(2) The powers and duties of the commission and office
3523	specified in this chapter apply only with respect to insurance
3524	adjusters, service companies, administrators, viatical
3525	settlement providers and contracts, and unlicensed persons
3526	subject to the regulatory jurisdiction of the commission and
3527	office.
3528	(3) The department has jurisdiction to enforce provisions
3529	of this chapter with respect to persons who engage in actions
3530	for which a license issued by the department is legally
3531	required. The office has jurisdiction to enforce provisions of
3532	this chapter with respect to persons who engage in actions for
3533	which a license or certificate of authority issued by the office
3534	is legally required. For persons who violate a provision of this
3535	chapter for whom a license or certificate of authority issued by
3536	either the department or office is not required, either the
3537	department or office may take administrative action against such
3538	person as authorized by this chapter, pursuant to agreement
3539	between the office and department.
3540	(4) Nothing in this section is intended to limit the
3541	authority of the department and the Division of Insurance Fraud,
3542	as specified in s. 626.989.
3543	Section 42. Subsection (16) of section 626.025, Florida
3544	Statutes, is amended to read:
3545	626.025 Consumer protections.--To transact insurance,
3546	agents shall comply with consumer protection laws, including the
3547	following, as applicable:
3548	(16) Any other licensing requirement, restriction, or
3549	prohibition designated a consumer protection by the Chief
3550	Financial OfficerInsurance Commissioner, but not inconsistent
3551	with the requirements of Subtitle C of the Gramm-Leach-Bliley
3552	Act, 15 U.S.C.A. ss. 6751 et seq.
3553	Section 43. Paragraph (a) of subsection (1) of section
3554	626.112, Florida Statutes, is amended to read:
3555	626.112 License and appointment required; agents, customer
3556	representatives, adjusters, insurance agencies, service
3557	representatives, managing general agents.--
3558	(1)(a) No person may be, act as, or advertise or hold
3559	himself or herself out to be an insurance agent, orcustomer
3560	representative, or adjusterunless he or she is currently
3561	licensed by the department and appointed by one or more
3562	insurers. No person may be, act as, or advertise or hold himself
3563	or herself out to be an insurance adjuster unless he or she is
3564	currently licensed by the office and appointed by one or more
3565	insurers.
3566
3567	However, an employee leasing company licensed pursuant to
3568	chapter 468 which is seeking to enter into a contract with an
3569	employer that identifies products and services offered to
3570	employees may deliver proposals for the purchase of employee
3571	leasing services to prospective clients of the employee leasing
3572	company setting forth the terms and conditions of doing
3573	business; classify employees as permitted by s. 468.529; collect
3574	information from prospective clients and other sources as
3575	necessary to perform due diligence on the prospective client and
3576	to prepare a proposal for services; provide and receive
3577	enrollment forms, plans, and other documents; and discuss or
3578	explain in general terms the conditions, limitations, options,
3579	or exclusions of insurance benefit plans available to the client
3580	or employees of the employee leasing company were the client to
3581	contract with the employee leasing company. Any advertising
3582	materials or other documents describing specific insurance
3583	coverages must identify and be from a licensed insurer or its
3584	licensed agent or a licensed and appointed agent employed by the
3585	employee leasing company. The employee leasing company may not
3586	advise or inform the prospective business client or individual
3587	employees of specific coverage provisions, exclusions, or
3588	limitations of particular plans. As to clients for which the
3589	employee leasing company is providing services pursuant to s.
3590	468.525(4), the employee leasing company may engage in
3591	activities permitted by ss. 626.7315, 626.7845, and 626.8305,
3592	subject to the restrictions specified in those sections. If a
3593	prospective client requests more specific information concerning
3594	the insurance provided by the employee leasing company, the
3595	employee leasing company must refer the prospective business
3596	client to the insurer or its licensed agent or to a licensed and
3597	appointed agent employed by the employee leasing company.
3598	Section 44. Section 626.161, Florida Statutes, is amended
3599	to read:
3600	626.161 Licensing forms.--The department shall prescribe
3601	and furnish all printed forms required in connection with the
3602	application for issuance of and termination of all licenses and
3603	appointments, except that, with respect to adjusters, the
3604	commission shall prescribe and the office shall furnish such
3605	forms.
3606	Section 45. Subsections (1), (2), and (5) of section
3607	626.171, Florida Statutes, are amended to read:
3608	626.171 Application for license.--
3609	(1) The department or officeshall not issue a license as
3610	agent, customer representative, adjuster, insurance agency,
3611	service representative, managing general agent, or reinsurance
3612	intermediary to any person except upon written application
3613	therefor filed with it, qualification therefor, and payment in
3614	advance of all applicable fees. Any such application shall be
3615	made under the oath of the applicant and be signed by the
3616	applicant. Beginning November 1, 2002, the department shall
3617	accept the uniform application for nonresident agent licensing.
3618	The department may adopt revised versions of the uniform
3619	application by rule.
3620	(2) In the application, the applicant shall set forth:
3621	(a) His or her full name, age, social security number,
3622	residence, and place of business.
3623	(b) Proof that he or she has completed or is in the
3624	process of completing any required prelicensing course.
3625	(c) Whether he or she has been refused or has voluntarily
3626	surrendered or has had suspended or revoked a license to solicit
3627	insurance by the department or by the supervising officials of
3628	any state.
3629	(d) Whether any insurer or any managing general agent
3630	claims the applicant is indebted under any agency contract or
3631	otherwise and, if so, the name of the claimant, the nature of
3632	the claim, and the applicant's defense thereto, if any.
3633	(e) Proof that the applicant meets the requirements for
3634	the type of license for which he or she is applying.
3635	(f) Such other or additional information as the department
3636	or officemay deem proper to enable it to determine the
3637	character, experience, ability, and other qualifications of the
3638	applicant to hold himself or herself out to the public as an
3639	insurance representative.
3640	(5) An application for a license as an agent, customer
3641	representative, adjuster, insurance agency, service
3642	representative, managing general agent, or reinsurance
3643	intermediary must be accompanied by a set of the individual
3644	applicant's fingerprints, or, if the applicant is not an
3645	individual, by a set of the fingerprints of the sole proprietor,
3646	majority owner, partners, officers, and directors, on a form
3647	adopted by rule of the department or commissionand accompanied
3648	by the fingerprint processing fee set forth in s. 624.501. The
3649	fingerprints shall be certified by a law enforcement officer.
3650	Section 46. Section 626.181, Florida Statutes, is amended
3651	to read:
3652	626.181 Number of applications for licensure
3653	required.--After a license as agent, customer representative, or
3654	adjuster has been issued to an individual, the same individual
3655	shall not be required to take another examination for a similar
3656	license, regardless, in the case of an agent, of the number of
3657	insurers to be represented by him or her as agent, unless:
3658	(1) Specifically ordered by the department or officeto
3659	complete a new application for license; or
3660	(2) During any period of 48 months since the filing of the
3661	original license application, such individual was not appointed
3662	as an agent, customer representative, or adjuster, unless the
3663	failure to be so appointed was due to military service, in which
3664	event the period within which a new application is not required
3665	may, in the discretion of the department or office, be extended
3666	to 12 months following the date of discharge from military
3667	service if the military service does not exceed 3 years, but in
3668	no event to extend under this clause for a period of more than 6
3669	years from the date of filing of the original application for
3670	license.
3671	Section 47. Section 626.191, Florida Statutes, is amended
3672	to read:
3673	626.191 Repeated applications.--The failure of an
3674	applicant to secure a license upon an application shall not
3675	preclude him or her from applying again as many times as
3676	desired, but the department or officeshall not give
3677	consideration to or accept any further application by the same
3678	individual for a similar license dated or filed within 30 days
3679	subsequent to the date the department or officedenied the last
3680	application, except as provided in s. 626.281.
3681	Section 48. Section 626.201, Florida Statutes, is amended
3682	to read:
3683	626.201 Investigation.--The department or officemay
3684	propound any reasonable interrogatories in addition to those
3685	contained in the application, to any applicant for license or
3686	appointment, or on any renewal, reinstatement, or continuation
3687	thereof, relating to his or her qualifications, residence,
3688	prospective place of business, and any other matter which, in
3689	the opinion of the department or office, is deemed necessary or
3690	advisable for the protection of the public and to ascertain the
3691	applicant's qualifications. The department or officemay, upon
3692	completion of the application, make such further investigation
3693	as it may deem advisable of the applicant's character,
3694	experience, background, and fitness for the license or
3695	appointment. Such an inquiry or investigation shall be in
3696	addition to any examination required to be taken by the
3697	applicant as hereinafter in this chapter provided.
3698	Section 49. Section 626.202, Florida Statutes, is amended
3699	to read:
3700	626.202 Fingerprinting requirements.--If there is a change
3701	in ownership or control of any entity licensed under this
3702	chapter, or if a new partner, officer, or director is employed
3703	or appointed, a set of fingerprints of the new owner, partner,
3704	officer, or director must be filed with the department or office
3705	within 30 days after the change. The acquisition of 10 percent
3706	or more of the voting securities of a licensed entity is
3707	considered a change of ownership or control. The fingerprints
3708	must be certified by a law enforcement officer and be
3709	accompanied by the fingerprint processing fee in s. 624.501.
3710	Section 50. Section 626.211, Florida Statutes, is amended
3711	to read:
3712	626.211 Approval, disapproval of application.--
3713	(1) If upon the basis of a completed application for
3714	license and such further inquiry or investigation as the
3715	department or officemay make concerning an applicant the
3716	department or officeis satisfied that, subject to any
3717	examination required to be taken and passed by the applicant for
3718	a license, the applicant is qualified for the license applied
3719	for and that all pertinent fees have been paid, it shall approve
3720	the application. The department or officeshall not deny,
3721	delay, or withhold approval of an application due to the fact
3722	that it has not received a criminal history report based on the
3723	applicant's fingerprints.
3724	(2) Upon approval of an applicant for license as agent,
3725	customer representative, or adjuster who is subject to written
3726	examination, the department or officeshall notify the applicant
3727	when and where he or she may take the required examination.
3728	(3) Upon approval of an applicant for license who is not
3729	subject to examination, the department or officeshall promptly
3730	issue the license.
3731	(4) If upon the basis of the completed application and
3732	such further inquiry or investigation the department or office
3733	deems the applicant to be lacking in any one or more of the
3734	required qualifications for the license applied for, the
3735	department or officeshall disapprove the application and notify
3736	the applicant, stating the grounds of disapproval.
3737	Section 51. Section 626.221, Florida Statutes, is amended
3738	to read:
3739	626.221 Examination requirement; exemptions.--
3740	(1) The department or officeshall not issue any license
3741	as agent, customer representative, or adjuster to any individual
3742	who has not qualified for, taken, and passed to the satisfaction
3743	of the department or officea written examination of the scope
3744	prescribed in s. 626.241.
3745	(2) However, no such examination shall be necessary in any
3746	of the following cases:
3747	(a) An applicant for renewal of appointment as an agent,
3748	customer representative, or adjuster, unless the department or
3749	officedetermines that an examination is necessary to establish
3750	the competence or trustworthiness of such applicant.
3751	(b) An applicant for limited license as agent for personal
3752	accident insurance, baggage and motor vehicle excess liability
3753	insurance, credit life or disability insurance, credit
3754	insurance, credit property insurance, in-transit and storage
3755	personal property insurance, or communications equipment
3756	property insurance or communication equipment inland marine
3757	insurance.
3758	(c) In the discretion of the department or office, an
3759	applicant for reinstatement of license or appointment as an
3760	agent, customer representative, or adjuster whose license has
3761	been suspended within 2 years prior to the date of application
3762	or written request for reinstatement.
3763	(d) An applicant who, within 2 years prior to application
3764	for license and appointment as an agent, customer
3765	representative, or adjuster, was a full-time salaried employee
3766	of the department or officeand had continuously been such an
3767	employee with responsible insurance duties for not less than 2
3768	years and who had been a licensee within 2 years prior to
3769	employment by the department or officewith the same class of
3770	license as that being applied for.
3771	(e) An individual who qualified as a managing general
3772	agent, service representative, customer representative, or all-
3773	lines adjuster by passing a general lines agent's examination
3774	and subsequently was licensed and appointed and has been
3775	actively engaged in all lines of property and casualty insurance
3776	may, upon filing an application for appointment, be licensed and
3777	appointed as a general lines agent for the same kinds of
3778	business without taking another examination if he or she holds
3779	any such currently effective license referred to in this
3780	paragraph or held the license within 24 months prior to the date
3781	of filing the application with the department.
3782	(f) A person who has been licensed and appointed by the
3783	departmentas a public adjuster or independent adjuster, or
3784	licensed and appointed either as an agent or company adjuster as
3785	to all property, casualty, and surety insurances, may be
3786	licensed and appointed as a company adjuster as to any of such
3787	insurances, or as an independent adjuster or public adjuster,
3788	without additional written examination if an application for
3789	appointment is filed with the officedepartmentwithin 24 months
3790	following the date of cancellation or expiration of the prior
3791	appointment.
3792	(g) A person who has been licensed by the departmentas an
3793	adjuster for motor vehicle, property and casualty, workers'
3794	compensation, and health insurance may be licensed as such an
3795	adjuster without additional written examination if his or her
3796	application for appointment is filed with the officedepartment
3797	within 24 months after cancellation or expiration of the prior
3798	license.
3799	(h) An applicant for temporary license, except as provided
3800	in this code.
3801	(i) An applicant for a life or health license who has
3802	received the designation of chartered life underwriter (CLU)
3803	from the American College of Life Underwriters and who has been
3804	engaged in the insurance business within the past 4 years,
3805	except that such an individual may be examined on pertinent
3806	provisions of this code.
3807	(j) An applicant for license as a general lines agent,
3808	customer representative, or adjuster who has received the
3809	designation of chartered property and casualty underwriter
3810	(CPCU) from the American Institute for Property and Liability
3811	Underwriters and who has been engaged in the insurance business
3812	within the past 4 years, except that such an individual may be
3813	examined on pertinent provisions of this code.
3814	(k) An applicant for license as a customer representative
3815	who has the designation of Accredited Advisor in Insurance (AAI)
3816	from the Insurance Institute of America, the designation of
3817	Certified Insurance Counselor (CIC) from the Society of
3818	Certified Insurance Service Counselors, the designation of
3819	Accredited Customer Service Representative (ACSR) from the
3820	Independent Insurance Agents of America, the designation of
3821	Certified Professional Service Representative (CPSR) from the
3822	National Association of Professional Insurance Agents, the
3823	designation of Certified Insurance Service Representative (CISR)
3824	from the Society of Certified Insurance Service Representatives.
3825	Also, an applicant for license as a customer representative who
3826	has the designation of Certified Customer Service Representative
3827	(CCSR) from the Florida Association of Insurance Agents, or the
3828	designation of Registered Customer Service Representative (RCSR)
3829	from a regionally accredited postsecondary institution in this
3830	state, or the designation of Professional Customer Service
3831	Representative (PCSR) from the Professional Career Institute,
3832	whose curriculum has been approved by the department and whose
3833	curriculum includes comprehensive analysis of basic property and
3834	casualty lines of insurance and testing at least equal to that
3835	of standard department testing for the customer representative
3836	license. The department shall adopt rules establishing standards
3837	for the approval of curriculum.
3838	(l) An applicant for license as an adjuster who has the
3839	designation of Accredited Claims Adjuster (ACA) from a
3840	regionally accredited postsecondary institution in this state,
3841	or the designation of Professional Claims Adjuster(PCA) from the
3842	Professional Career Institute, whose curriculum has been
3843	approved by the officedepartmentand whose curriculum includes
3844	comprehensive analysis of basic property and casualty lines of
3845	insurance and testing at least equal to that of standard office
3846	department testing for the all-lines adjuster license. The
3847	commissiondepartmentshall adopt rules establishing standards
3848	for the approval of curriculum.
3849	(m) An applicant qualifying for a license transfer under
3850	s. 626.292, if the applicant:
3851	1. Has successfully completed the prelicensing examination
3852	requirements in the applicant's previous state which are
3853	substantially equivalent to the examination requirements in this
3854	state, as determined by the departmentInsurance Commissioner of
3855	this state;
3856	2. Has received the designation of chartered property and
3857	casualty underwriter (CPCU) from the American Institute for
3858	Property and Liability Underwriters and has been engaged in the
3859	insurance business within the past 4 years if applying to
3860	transfer a general lines agent license; or
3861	3. Has received the designation of chartered life
3862	underwriter (CLU) from the American College of Life Underwriters
3863	and has been engaged in the insurance business within the past 4
3864	years, if applying to transfer a life or health agent license.
3865	(n) An applicant for a nonresident agent license, if the
3866	applicant:
3867	1. Has successfully completed prelicensing examination
3868	requirements in the applicant's home state which are
3869	substantially equivalent to the examination requirements in this
3870	state, as determined by the departmentInsurance Commissioner of
3871	this state, as a requirement for obtaining a resident license in
3872	his or her home state;
3873	2. Held a general lines agent license, life agent license,
3874	or health agent license prior to the time a written examination
3875	was required;
3876	3. Has received the designation of chartered property and
3877	casualty underwriter (CPCU) from the American Institute for
3878	Property and Liability Underwriters and has been engaged in the
3879	insurance business within the past 4 years, if an applicant for
3880	a nonresident license as a general lines agent; or
3881	4. Has received the designation of chartered life
3882	underwriter (CLU) from the American College of Life Underwriters
3883	and has been in the insurance business within the past 4 years,
3884	if an applicant for a nonresident license as a life agent or
3885	health agent.
3886	(3) An individual who is already licensed as a customer
3887	representative shall not be licensed as a general lines agent
3888	without application and examination for such license.
3889	Section 52. Section 626.231, Florida Statutes, is amended
3890	to read:
3891	626.231 Eligibility for examination.--No person shall be
3892	permitted to take an examination for license until his or her
3893	application for the license has been approved and the required
3894	fees have been received by the department or officeor a person
3895	designated by the department or officeto administer the
3896	examination.
3897	Section 53. Subsection (1) of section 626.241, Florida
3898	Statutes, is amended to read:
3899	626.241 Scope of examination.--
3900	(1) Each examination for a license as agent, customer
3901	representative, or adjuster shall be of such scope as is deemed
3902	by the department or officeto be reasonably necessary to test
3903	the applicant's ability and competence and knowledge of the
3904	kinds of insurance and transactions to be handled under the
3905	license applied for, of the duties and responsibilities of such
3906	a licensee, and of the pertinent provisions of the laws of this
3907	state.
3908	Section 54. Section 626.251, Florida Statutes, is amended
3909	to read:
3910	626.251 Time and place of examination; notice.--
3911	(1) The department or officeor a person designated by the
3912	department or officeshall mail written notice of the time and
3913	place of the examination to each applicant for license required
3914	to take an examination who will be eligible to take the
3915	examination as of the examination date. The notice shall be so
3916	mailed, postage prepaid, and addressed to the applicant at his
3917	or her address shown on the application for license or at such
3918	other address as requested by the applicant in writing filed
3919	with the department or officeprior to the mailing of the
3920	notice. Notice shall be deemed given when so mailed.
3921	(2) The examination shall be held in an adequate and
3922	designated examination center in this state.
3923	(3) The department or officeshall make an examination
3924	available to the applicant, to be taken as soon as reasonably
3925	possible after the applicant is eligible therefor. Any
3926	examination required under this part shall be available in this
3927	state at a designated examination center.
3928	Section 55. Section 626.261, Florida Statutes, is amended
3929	to read:
3930	626.261 Conduct of examination.--
3931	(1) The applicant for license shall appear in person and
3932	personally take the examination for license at the time and
3933	place specified by the department or officeor by a person
3934	designated by the department or office.
3935	(2) The examination shall be conducted by an employee of
3936	the department or officeor a person designated by the
3937	department or officefor that purpose.
3938	(3) The questions propounded shall be as prepared by the
3939	department or office, or by a person designated by the
3940	department or officefor that purpose, consistent with the
3941	applicable provisions of this code.
3942	(4) All examinations shall be given and graded in a fair
3943	and impartial manner and without unfair discrimination in favor
3944	of or against any particular applicant.
3945	Section 56. Section 626.266, Florida Statutes, is amended
3946	to read:
3947	626.266 Printing of examinations or related materials to
3948	preserve examination security.--A contract let for the
3949	development, administration, or grading of examinations or
3950	related materials by the department or officeof Insurance
3951	pursuant to the various agent, customer representative,
3952	solicitor, or adjuster licensing and examination provisions of
3953	this code may include the printing or furnishing of these
3954	examinations or related materials in order to preserve security.
3955	Any such contract shall be let as a contract for a contractual
3956	service pursuant to s. 287.057.
3957	Section 57. Subsection (1) of section 626.271, Florida
3958	Statutes, is amended to read:
3959	626.271 Examination fee; determination, refund.--
3960	(1) Prior to being permitted to take an examination, each
3961	applicant who is subject to examination shall pay to the
3962	department or office or a person designated by the department or
3963	officean examination fee. A separate and additional
3964	examination fee shall be payable for each separate class of
3965	license applied for, notwithstanding that all such examinations
3966	are taken on the same date and at the same place.
3967	Section 58. Section 626.281, Florida Statutes, is amended
3968	to read:
3969	626.281 Reexamination.--
3970	(1) Any applicant for license who has either:
3971	(a) Taken an examination and failed to make a passing
3972	grade, or
3973	(b) Failed to appear for the examination or to take or
3974	complete the examination at the time and place specified in the
3975	notice of the department or office,
3976
3977
3978	may take additional examinations, after filing with the
3979	department or officean application for reexamination together
3980	with applicable fees. The failure of an applicant to pass an
3981	examination or the failure to appear for the examination or to
3982	take or complete the examination does not preclude the applicant
3983	from taking subsequent examinations.
3984	(2) The department or officemay require any individual
3985	whose license as an agent, customer representative, or adjuster
3986	has expired or has been suspended to pass an examination prior
3987	to reinstating or relicensing the individual as to any class of
3988	license. The examination fee shall be paid as to each
3989	examination.
3990	Section 59. Subsections (5) and (6) of section 626.2815,
3991	Florida Statutes, are amended to read:
3992	626.2815 Continuing education required; application;
3993	exceptions; requirements; penalties.--
3994	(5) The department of Insuranceshall refuse to renew the
3995	appointment of any agent who has not had his or her continuing
3996	education requirements certified unless the agent has been
3997	granted an extension by the department. The department may not
3998	issue a new appointment of the same or similar type, with any
3999	insurer, to an agent who was denied a renewal appointment for
4000	failure to complete continuing education as required until the
4001	agent completes his or her continuing education requirement.
4002	(6)(a) There is created an 11-member continuing education
4003	advisory board to be appointed by the Chief Financial Officer
4004	Insurance Commissioner and Treasurer. Appointments shall be for
4005	terms of 4 years. The purpose of the board is to advise the
4006	department in determining standards by which courses may be
4007	evaluated and categorized as basic, intermediate, or advanced.
4008	The board shall establish such criteria and the department shall
4009	implement such criteria by January 1, 1997.The board shall
4010	submit recommendations to the department of changes needed in
4011	such criteria not less frequently than every 2 years thereafter.
4012	The department shall require all approved course providers to
4013	submit courses for approval to the department using the
4014	criteria. All materials, brochures, and advertisements related
4015	to the approved courses must specify the level assigned to the
4016	course.
4017	(b) The board members shall be appointed as follows:
4018	1. Seven members representing agents of which at least one
4019	must be a representative from each of the following
4020	organizations: the Florida Association of Insurance Agents; the
4021	Florida Association of Life Underwriters; the Professional
4022	Insurance Agents of Florida, Inc.; the Florida Association of
4023	Health Underwriters; the Specialty Agents' Association; the
4024	Latin American Agents' Association; and the National Association
4025	of Insurance Women. Such board members must possess at least a
4026	bachelor's degree or higher from an accredited college or
4027	university with major coursework in insurance, risk management,
4028	or education or possess the designation of CLU, CPCU, CHFC, CFP,
4029	AAI, or CIC. In addition, each member must possess 5 years of
4030	classroom instruction experience or 5 years of experience in the
4031	development or design of educational programs or 10 years of
4032	experience as a licensed resident agent. Each organization may
4033	submit to the department a list of recommendations for
4034	appointment. If one organization does not submit a list of
4035	recommendations, the Chief Financial OfficerInsurance
4036	Commissionermay select more than one recommended person from a
4037	list submitted by other eligible organizations.
4038	2. Two members representing insurance companies at least
4039	one of whom must represent a Florida Domestic Company and one of
4040	whom must represent the Florida Insurance Council. Such board
4041	members must be employed within the training department of the
4042	insurance company. At least one such member must be a member of
4043	the Society of Insurance Trainers and Educators.
4044	3. One member representing the general public who is not
4045	directly employed in the insurance industry. Such board member
4046	must possess a minimum of a bachelor's degree or higher from an
4047	accredited college or university with major coursework in
4048	insurance, risk management, training, or education.
4049	4. One member, appointed by the Chief Financial Officer
4050	Insurance Commissioner, who represents the department.
4051	(c) The members of the board shall serve at the pleasure
4052	of the Chief Financial OfficerInsurance Commissioner and
4053	Treasurer. Each board member shall be entitled to reimbursement
4054	for expenses pursuant to s. 112.061. The board shall designate
4055	one member as chair. The board shall meet at the call of the
4056	chair or the Chief Financial OfficerInsurance Commissioner and
4057	Treasurer.
4058	Section 60. Section 626.2817, Florida Statutes, is amended
4059	to read:
4060	626.2817 Regulation of course providers, instructors,
4061	school officials, and monitor groups involved in prelicensure
4062	education for insurance agents and other licensees.--
4063	(1) Any course provider, instructor, school official, or
4064	monitor group must be approved by and registered with the
4065	department or officebefore offering prelicensure education
4066	courses for insurance agents and other licensees.
4067	(2) The department or commissionshall adopt rules
4068	establishing standards for the approval, registration,
4069	discipline, or removal from registration of course providers,
4070	instructors, school officials, and monitor groups. The standards
4071	must be designed to ensure that such persons have the knowledge,
4072	competence, and integrity to fulfill the educational objectives
4073	of the prelicensure requirements of this chapter and chapter 648
4074	and to assure that insurance agents and licensees are competent
4075	to engage in the activities authorized under the license.
4076	(3) The department or commissionshall adopt rules to
4077	establish a process for determining compliance with the
4078	prelicensure requirements of this chapter and chapter 648 and
4079	shall establish a prelicensure cycle for insurance agents and
4080	other licensees. The department or commissionshall adopt rules
4081	prescribing the forms necessary to administer the prelicensure
4082	requirements.
4083	Section 61. Section 626.291, Florida Statutes, is amended
4084	to read:
4085	626.291 Denial, issuance of license.--
4086	(1) Within 30 days after the applicant has completed any
4087	examination required under s. 626.221, the department or office
4088	or its designee shall provide a score report; and, if it finds
4089	that the applicant has received a passing grade, the department
4090	or officeshall within such period notify the applicant and
4091	issue and transmit the license to which such examination
4092	related. If it finds that the applicant did not make a passing
4093	grade on the examination for a particular license, the
4094	department or officeor its designee shall within this period
4095	provide notice to the applicant to that effect and of its denial
4096	of the license.
4097	(2) As to an applicant for a license for which no
4098	examination is required, the department or officeshall promptly
4099	issue the license applied for as soon as it has approved the
4100	application.
4101	(3) The department or officeshall not deny, delay, or
4102	withhold issuance of a license due to the fact that it has not
4103	received a criminal history report based on the applicant's
4104	fingerprints.
4105	Section 62. Paragraph (d) of subsection (2) of section
4106	626.292, Florida Statutes, is amended to read:
4107	626.292 Transfer of license from another state.--
4108	(2) To qualify for a license transfer, an individual
4109	applicant must meet the following requirements:
4110	(d) The individual shall satisfy prelicensing education
4111	requirements in this state, unless the completion of
4112	prelicensing education requirements was a prerequisite for
4113	licensure in the other state and the prelicensing education
4114	requirements in the other state are substantially equivalent to
4115	the prelicensing requirements of this state as determined by the
4116	departmentInsurance Commissioner of this state.
4117	Section 63. Section 626.301, Florida Statutes, is amended
4118	to read:
4119	626.301 Form and contents of licenses, in general.--Each
4120	license issued by the department or officeshall be in such form
4121	as the department or commissionmay designate and contain the
4122	licensee's name, lines of authority the licensee is authorized
4123	to transact, the licensee's personal identification number, the
4124	date of issuance, and any other information the department or
4125	commissiondeems necessary to fully identify the licensee and
4126	the authority being granted. The department or commissionmay by
4127	rule require photographs of applicants as a part of the
4128	licensing process.
4129	Section 64. Section 626.322, Florida Statutes, is amended
4130	to read:
4131	626.322 License, appointment; certain military
4132	installations.--A natural person, not a resident of this state,
4133	may be licensed and appointed to represent an authorized life
4134	insurer domiciled in this state or an authorized foreign life
4135	insurer which maintains a regional home office in this state,
4136	provided such person represents such insurer exclusively at a
4137	United States military installation located in a foreign
4138	country. The department may, upon request of the applicant and
4139	the insurer on application forms furnished by the department and
4140	upon payment of fees as prescribed in s. 624.501, issue a
4141	license and appointment to such person. The insurer shall
4142	certify to the department that the applicant has the necessary
4143	training to hold himself or herself out as a life insurance
4144	representative, and the insurer shall further certify that it is
4145	willing to be bound by the acts of such applicant within the
4146	scope of his or her employment. Appointments shall be continued
4147	as prescribed in s. 626.381 and upon payment of a fee as
4148	prescribed in s. 624.501, unless sooner terminated. Such fees
4149	received shall be credited to the Insurance Commissioner's
4150	Regulatory Trust Fund as provided for in s. 624.523.
4151	Section 65. Section 626.361, Florida Statutes, is amended
4152	to read:
4153	626.361 Effective date of appointments.--All appointments
4154	shall be submitted to the department or officeon a monthly
4155	basis no later than 45 days after the date of appointment. All
4156	appointments shall be effective as of the date requested on the
4157	appointment form.
4158	Section 66. Section 626.371, Florida Statutes, is amended
4159	to read:
4160	626.371 Payment of fees, taxes for appointment period
4161	without appointment.--If, upon application and qualification for
4162	an appointment and such investigation as the department or
4163	office may make, it appears to the department or officethat an
4164	individual who was formerly appointed has been actively engaged
4165	or is currently actively engaged as such an appointee, but
4166	without being appointed as required, the department or office
4167	may, if it finds that such failure to be appointed was an
4168	inadvertent error on the part of the insurer or employer so
4169	represented, nevertheless issue the appointment as applied for
4170	but subject to the condition that, before the appointment is
4171	issued, all fees and taxes which would have been due had the
4172	applicant been so appointed during such current and prior
4173	periods, together with a continuation fee for such current and
4174	prior terms of appointment, shall be paid to the department or
4175	office.
4176	Section 67. Subsections (2), (3), and (4), of section
4177	626.381, Florida Statutes, are amended to read:
4178	626.381 Renewal, continuation, reinstatement, or
4179	termination of appointment.--
4180	(2) Each appointing entity shall file with the department
4181	or officethe lists, statements, and information as to
4182	appointees whose appointments are being renewed or terminated,
4183	accompanied by payment of the applicable renewal fees and taxes
4184	as prescribed in s. 624.501, by a date set forth by the
4185	department or officefollowing the month during which the
4186	appointments will expire.
4187	(3) Renewal of an appointment which is received on a date
4188	set forth by the department or officein the succeeding month
4189	may be renewed by the department or officewithout penalty and
4190	shall be effective as of the day the appointment would have
4191	expired.
4192	(4) Renewal of an appointment which is received by the
4193	department or office after the date set by the department or
4194	office may be accepted and effectuated by the department or
4195	officein its discretion if an additional appointment,
4196	continuation, and reinstatement fee accompanies the renewal
4197	pursuant to s. 624.501.
4198	Section 68. Subsection (2) of section 626.431, Florida
4199	Statutes, is amended to read:
4200	626.431 Effect of expiration of license and appointment.--
4201	(2) When a licensee's last appointment for a particular
4202	class of insurance has been terminated or not renewed, the
4203	department or officemust notify the licensee that his or her
4204	eligibility for appointment as such an appointee will expire
4205	unless he or she is appointed prior to expiration of the 48-
4206	month period referred to in subsection (3).
4207	Section 69. Section 626.451, Florida Statutes, is amended
4208	to read:
4209	626.451 Appointment of agent or other representative.--
4210	(1) Each appointing entity appointing an agent, adjuster,
4211	service representative, customer representative, or managing
4212	general agent in this state shall file the appointment with the
4213	department or officeand, at the same time, pay the applicable
4214	appointment fee and taxes. Every appointment shall be subject
4215	to the prior issuance of the appropriate agent's, adjuster's,
4216	service representative's, customer representative's, or managing
4217	general agent's license.
4218	(2) As a part of each appointment there shall be a
4219	certified statement or affidavit of an appropriate officer or
4220	official of the appointing entity stating what investigation the
4221	appointing entity has made concerning the proposed appointee and
4222	his or her background and the appointing entity's opinion to the
4223	best of its knowledge and belief as to the moral character,
4224	fitness, and reputation of the proposed appointee and any other
4225	information the department or officemay reasonably require
4226	relative to the proposed appointee.
4227	(3) In the appointment of an agent, adjuster, service
4228	representative, customer representative, or managing general
4229	agent the appointing entity shall also certify therein that it
4230	is willing to be bound by the acts of the agent, adjuster,
4231	service representative, customer representative, or managing
4232	general agent, within the scope of his or her employment.
4233	(4) Each appointing entity shall advise the department or
4234	officein writing within 15 days after it or its general agent,
4235	officer, or other official becomes aware that an appointee has
4236	pleaded guilty or nolo contendere to or has been found guilty of
4237	a felony after being appointed.
4238	(5) Any law enforcement agency or state attorney's office
4239	that is aware that an agent, adjuster, service representative,
4240	customer representative, or managing general agent has pleaded
4241	guilty or nolo contendere to or has been found guilty of a
4242	felony shall notify the department or officeof such fact.
4243	(6) Upon the filing of an information or indictment
4244	against an agent, adjuster, service representative, customer
4245	representative, or managing general agent, the state attorney
4246	shall immediately furnish the department or officea certified
4247	copy of the information or indictment.
4248	Section 70. Section 626.461, Florida Statutes, is amended
4249	to read:
4250	626.461 Continuation of appointment of agent or other
4251	representative.--Subject to renewal or continuation by the
4252	appointing entity, the appointment of the agent, adjuster,
4253	solicitor, service representative, customer representative, or
4254	managing general agent shall continue in effect until the
4255	person's license is revoked or otherwise terminated, unless
4256	written notice of earlier termination of the appointment is
4257	filed with the department or officeby either the appointing
4258	entity or the appointee.
4259	Section 71. Subsections (2), (3), (4), and (5) of section
4260	626.471, Florida Statutes, are amended to read:
4261	626.471 Termination of appointment.--
4262	(2) As soon as possible and at all events within 30 days
4263	after terminating the appointment of an appointee, other than as
4264	to an appointment terminated by the appointing entity's failure
4265	to continue or renew it, the appointing entity shall file
4266	written notice thereof with the department or office, together
4267	with a statement that it has given the appointee notice thereof
4268	as provided in subsection (1) and shall file with the department
4269	or officethe reasons and facts involved in such termination as
4270	required under s. 626.511.
4271	(3) Upon termination of the appointment of an appointee,
4272	whether by failure to renew or continue the appointment, the
4273	appointing entity shall:
4274	(a) File with the department or officethe information
4275	required under s. 626.511.
4276	(b) Subject to the exceptions provided under subsection
4277	(1), continue the outstanding contracts transacted by an agent
4278	until the expiration date or anniversary date when the policy is
4279	a continuous policy with no expiration date. This paragraph
4280	shall not be construed to prohibit the cancellation of such
4281	contracts when not otherwise prohibited by law.
4282	(4) An appointee may terminate the appointment at any time
4283	by giving written notice thereof to the appointing entity and
4284	filing a copy of the notice with the department or office. Such
4285	termination shall be subject to the appointee's contract rights,
4286	if any.
4287	(5) Upon receiving notice of termination, the department
4288	or officeshall terminate the appointment.
4289	Section 72. Section 626.511, Florida Statutes, is amended
4290	to read:
4291	626.511 Reasons for termination; confidential
4292	information.--
4293	(1) Any insurer terminating the appointment of an agent;
4294	any general lines agent terminating the appointment of a
4295	customer representative or a crop hail or multiple-peril crop
4296	insurance agent; and any employer terminating the appointment of
4297	an adjuster, service representative, or managing general agent,
4298	whether such termination is by direct action of the appointing
4299	insurer, agent, or employer or by failure to renew or continue
4300	the appointment as provided, shall file with the department or
4301	officea statement of the reasons, if any, for and the facts
4302	relative to such termination. In the case of termination of the
4303	appointment of an agent, such information may be filed by the
4304	insurer or by the general agent of the insurer.
4305	(2) In the case of terminations by failure to renew or
4306	continue the appointment, the information required under
4307	subsection (1) shall be filed with the department or officeas
4308	soon as possible, and at all events within 30 days, after the
4309	date notice of intention not to so renew or continue was filed
4310	with the department or officeas required in this chapter. In
4311	all other cases, the information required under subsection (1)
4312	shall be filed with the department or officeat the time, or at
4313	all events within 10 days after, notice of the termination was
4314	filed with the department or office.
4315	(3) Any information, document, record, or statement
4316	furnished to the department or officeunder subsection (1) is
4317	confidential and exempt from the provisions of s. 119.07(1).
4318	Section 73. Subsections (2), (3), and (5) of section
4319	626.521, Florida Statutes, are amended to read:
4320	626.521 Character, credit reports.--
4321	(2) If requested by the department or office, the insurer,
4322	manager, general agent, general lines agent, or employer, as the
4323	case may be, shall furnish to the department or office on a form
4324	adopted by the department or commission andfurnished by the
4325	department or office, such information as it may reasonably
4326	require relative to such individual and investigation.
4327	(3) As to an applicant for an adjuster's or reinsurance
4328	intermediary's license who is to be self-employed, the
4329	department or officemay secure, at the cost of the applicant, a
4330	full detailed credit and character report made by an established
4331	and reputable independent reporting service relative to the
4332	applicant.
4333	(5) Information contained in credit or character reports
4334	furnished to or secured by the department or officeunder this
4335	section is confidential and exempt from the provisions of s.
4336	119.07(1).
4337	Section 74. Subsections (1) and (2) of section 626.541,
4338	Florida Statutes, are amended to read:
4339	626.541 Firm, corporate, and business names; officers;
4340	associates; notice of changes.--
4341	(1) Any licensed agent or adjuster doing business under a
4342	firm or corporate name or under any business name other than his
4343	or her own individual name shall, within 30 days after the
4344	initial transaction of insurance under such business name, file
4345	with the department or office, on forms adopted by the
4346	department or commission and furnished by the department or
4347	officeit, a written statement of the firm, corporate, or
4348	business name being so used, the address of any office or
4349	offices or places of business making use of such name, and the
4350	name and social security number of each officer and director of
4351	the corporation and of each individual associated in such firm
4352	or corporation as to the insurance transactions thereof or in
4353	the use of such business name.
4354	(2) In the event of any change of such name, or of any of
4355	the officers and directors, or of any of such addresses, or in
4356	the personnel so associated, written notice of such change must
4357	be filed with the department or officewithin 30 days by or on
4358	behalf of those licensees terminating any such firm, corporate,
4359	or business name or continuing to operate thereunder.
4360	Section 75. Section 626.551, Florida Statutes, is amended
4361	to read:
4362	626.551 Notice of change of address, name.--Every licensee
4363	shall notify the department or officein writing within 60 days
4364	after a change of name, residence address, principal business
4365	street address, or mailing address. Any licensed agent who has
4366	moved his or her residence from this state shall have his or her
4367	license and all appointments immediately terminated by the
4368	department or office. Failure to notify the department or office
4369	within the required time period shall result in a fine not to
4370	exceed $250 for the first offense and, for subsequent offenses,
4371	a fine of not less than $500 or suspension or revocation of the
4372	license pursuant to s. 626.611 or s. 626.621.
4373	Section 76. Subsections (1) and (2) of section 626.561,
4374	Florida Statutes, are amended to read:
4375	626.561 Reporting and accounting for funds.--
4376	(1) All premiums, return premiums, or other funds
4377	belonging to insurers or others received by an agent, customer
4378	representative, or adjuster in transactions under his or her
4379	license are trust funds received by the licensee in a fiduciary
4380	capacity. An agent shall keep the funds belonging to each
4381	insurer for which he or she is not appointed, other than a
4382	surplus lines insurer, in a separate account so as to allow the
4383	department or officeto properly audit such funds. The licensee
4384	in the applicable regular course of business shall account for
4385	and pay the same to the insurer, insured, or other person
4386	entitled thereto.
4387	(2) The licensee shall keep and make available to the
4388	department or officebooks, accounts, and records as will enable
4389	the department or officeto determine whether such licensee is
4390	complying with the provisions of this code. Every licensee shall
4391	preserve books, accounts, and records pertaining to a premium
4392	payment for at least 3 years after payment; provided, however,
4393	the preservation of records by computer or photographic
4394	reproductions or records in photographic form shall constitute
4395	compliance with this requirement. All other records shall be
4396	maintained in accordance with s. 626.748. The 3-year
4397	requirement shall not apply to insurance binders when no policy
4398	is ultimately issued and no premium is collected.
4399	Section 77. Section 626.591, Florida Statutes, is amended
4400	to read:
4401	626.591 Penalty for violation of s. 626.581.--
4402	(1) If any insurer oragent is found by the department to
4403	be in violation of s. 626.581, the department may, in its
4404	discretion, suspend or revoke the insurer's certificate of
4405	authority and the agent's license. If any insurer is found by
4406	the office to be in violation of s. 626.581, the office may, in
4407	its discretion, suspend or revoke the insurer's certificate of
4408	authority.
4409	(2)Any such suspension or revocation shall be for a
4410	period of not less than 6 months, and the insurer or agent shall
4411	not subsequently be authorized or licensed to transact insurance
4412	unless the office ordepartment is satisfied that the insurer or
4413	agent will not again violate any of the provisions of s.
4414	626.581.
4415	Section 78. Subsection (1) of section 626.592, Florida
4416	Statutes, is amended to read:
4417	626.592 Primary agents.--
4418	(1) Each person operating an insurance agency and each
4419	location of a multiple location agency shall designate a primary
4420	agent for each insurance agency location and shall file the name
4421	of the person so designated, and the address of the insurance
4422	agency location where he or she is primary agent, with the
4423	department of Insurance, on a form approved by the department.
4424	The designation of the primary agent may be changed at the
4425	option of the agency, and any change shall be effective upon
4426	notification to the department. Notice of change must be sent to
4427	the department within 30 days after such change.
4428	Section 79. Section 626.601, Florida Statutes, is amended
4429	to read:
4430	626.601 Improper conduct; inquiry; fingerprinting.--
4431	(1) The department or officemay, upon its own motion or
4432	upon a written complaint signed by any interested person and
4433	filed with the department or office, inquire into any alleged
4434	improper conduct of any licensed agent, adjuster, service
4435	representative, managing general agent, customer representative,
4436	title insurance agent, title insurance agency, continuing
4437	education course provider, instructor, school official, or
4438	monitor group under this code. The department or officemay
4439	thereafter initiate an investigation of any such licensee if it
4440	has reasonable cause to believe that the licensee has violated
4441	any provision of the insurance code. During the course of its
4442	investigation, the department or officeshall contact the
4443	licensee being investigated unless it determines that contacting
4444	such person could jeopardize the successful completion of the
4445	investigation or cause injury to the public.
4446	(2) In the investigation by the department or officeof
4447	the alleged misconduct, the licensee shall, whenever so required
4448	by the department or office, cause his or her books and records
4449	to be open for inspection for the purpose of such inquiries.
4450	(3) The complaints against any licensee may be informally
4451	alleged and need not be in any such language as is necessary to
4452	charge a crime on an indictment or information.
4453	(4) The expense for any hearings or investigations under
4454	this law, as well as the fees and mileage of witnesses, may be
4455	paid out of the appropriate fund.
4456	(5) If the department or office, after investigation, has
4457	reason to believe that a licensee may have been found guilty of
4458	or pleaded guilty or nolo contendere to a felony or a crime
4459	related to the business of insurance in this or any other state
4460	or jurisdiction, the department or officemay require the
4461	licensee to file with the department or officea complete set of
4462	his or her fingerprints, which shall be accompanied by the
4463	fingerprint processing fee set forth in s. 624.501. The
4464	fingerprints shall be certified by an authorized law enforcement
4465	officer.
4466	(6) The complaint and any information obtained pursuant to
4467	the investigation by the department or officeare confidential
4468	and are exempt from the provisions of s. 119.07, unless the
4469	department or officefiles a formal administrative complaint,
4470	emergency order, or consent order against the licensee. Nothing
4471	in this subsection shall be construed to prevent the department
4472	or officefrom disclosing the complaint or such information as
4473	it deems necessary to conduct the investigation, to update the
4474	complainant as to the status and outcome of the complaint, or to
4475	share such information with any law enforcement agency.
4476	Section 80. Section 626.611, Florida Statutes, is amended
4477	to read:
4478	626.611 Grounds for compulsory refusal, suspension, or
4479	revocation of agent's, title agency's, adjuster's, customer
4480	representative's, service representative's, or managing general
4481	agent's license or appointment.--The department or officeshall
4482	deny an application for, suspend, revoke, or refuse to renew or
4483	continue the license or appointment of any applicant, agent,
4484	title agency, adjuster, customer representative, service
4485	representative, or managing general agent, and it shall suspend
4486	or revoke the eligibility to hold a license or appointment of
4487	any such person, if it finds that as to the applicant, licensee,
4488	or appointee any one or more of the following applicable grounds
4489	exist:
4490	(1) Lack of one or more of the qualifications for the
4491	license or appointment as specified in this code.
4492	(2) Material misstatement, misrepresentation, or fraud in
4493	obtaining the license or appointment or in attempting to obtain
4494	the license or appointment.
4495	(3) Failure to pass to the satisfaction of the department
4496	or officeany examination required under this code.
4497	(4) If the license or appointment is willfully used, or to
4498	be used, to circumvent any of the requirements or prohibitions
4499	of this code.
4500	(5) Willful misrepresentation of any insurance policy or
4501	annuity contract or willful deception with regard to any such
4502	policy or contract, done either in person or by any form of
4503	dissemination of information or advertising.
4504	(6) If, as an adjuster, or agent licensed and appointed to
4505	adjust claims under this code, he or she has materially
4506	misrepresented to an insured or other interested party the terms
4507	and coverage of an insurance contract with intent and for the
4508	purpose of effecting settlement of claim for loss or damage or
4509	benefit under such contract on less favorable terms than those
4510	provided in and contemplated by the contract.
4511	(7) Demonstrated lack of fitness or trustworthiness to
4512	engage in the business of insurance.
4513	(8) Demonstrated lack of reasonably adequate knowledge and
4514	technical competence to engage in the transactions authorized by
4515	the license or appointment.
4516	(9) Fraudulent or dishonest practices in the conduct of
4517	business under the license or appointment.
4518	(10) Misappropriation, conversion, or unlawful withholding
4519	of moneys belonging to insurers or insureds or beneficiaries or
4520	to others and received in conduct of business under the license
4521	or appointment.
4522	(11) Unlawfully rebating, attempting to unlawfully rebate,
4523	or unlawfully dividing or offering to divide his or her
4524	commission with another.
4525	(12) Having obtained or attempted to obtain, or having
4526	used or using, a license or appointment as agent or customer
4527	representative for the purpose of soliciting or handling
4528	"controlled business" as defined in s. 626.730 with respect to
4529	general lines agents, s. 626.784 with respect to life agents,
4530	and s. 626.830 with respect to health agents.
4531	(13) Willful failure to comply with, or willful violation
4532	of, any proper order or rule of the department, commission, or
4533	officeor willful violation of any provision of this code.
4534	(14) Having been found guilty of or having pleaded guilty
4535	or nolo contendere to a felony or a crime punishable by
4536	imprisonment of 1 year or more under the law of the United
4537	States of America or of any state thereof or under the law of
4538	any other country which involves moral turpitude, without regard
4539	to whether a judgment of conviction has been entered by the
4540	court having jurisdiction of such cases.
4541	(15) Fraudulent or dishonest practice in submitting or
4542	aiding or abetting any person in the submission of an
4543	application for workers' compensation coverage under chapter 440
4544	containing false or misleading information as to employee
4545	payroll or classification for the purpose of avoiding or
4546	reducing the amount of premium due for such coverage.
4547	(16) Sale of an unregistered security that was required to
4548	be registered, pursuant to chapter 517.
4549	Section 81. Section 626.621, Florida Statutes, is amended
4550	to read:
4551	626.621 Grounds for discretionary refusal, suspension, or
4552	revocation of agent's, adjuster's, customer representative's,
4553	service representative's, or managing general agent's license or
4554	appointment.--The department or officemay, in its discretion,
4555	deny an application for, suspend, revoke, or refuse to renew or
4556	continue the license or appointment of any applicant, agent,
4557	adjuster, customer representative, service representative, or
4558	managing general agent, and it may suspend or revoke the
4559	eligibility to hold a license or appointment of any such person,
4560	if it finds that as to the applicant, licensee, or appointee any
4561	one or more of the following applicable grounds exist under
4562	circumstances for which such denial, suspension, revocation, or
4563	refusal is not mandatory under s. 626.611:
4564	(1) Any cause for which issuance of the license or
4565	appointment could have been refused had it then existed and been
4566	known to the department or office.
4567	(2) Violation of any provision of this code or of any
4568	other law applicable to the business of insurance in the course
4569	of dealing under the license or appointment.
4570	(3) Violation of any lawful order or rule of the
4571	department, commission, or office.
4572	(4) Failure or refusal, upon demand, to pay over to any
4573	insurer he or she represents or has represented any money coming
4574	into his or her hands belonging to the insurer.
4575	(5) Violation of the provision against twisting, as
4576	defined in s. 626.9541(1)(l).
4577	(6) In the conduct of business under the license or
4578	appointment, engaging in unfair methods of competition or in
4579	unfair or deceptive acts or practices, as prohibited under part
4580	IX of this chapter, or having otherwise shown himself or herself
4581	to be a source of injury or loss to the public or detrimental to
4582	the public interest.
4583	(7) Willful overinsurance of any property or health
4584	insurance risk.
4585	(8) Having been found guilty of or having pleaded guilty
4586	or nolo contendere to a felony or a crime punishable by
4587	imprisonment of 1 year or more under the law of the United
4588	States of America or of any state thereof or under the law of
4589	any other country, without regard to whether a judgment of
4590	conviction has been entered by the court having jurisdiction of
4591	such cases.
4592	(9) If a life agent, violation of the code of ethics.
4593	(10) Cheating on an examination required for licensure or
4594	violating test center or examination procedures published
4595	orally, in writing, or electronically at the test site by
4596	authorized representatives of the examination program
4597	administrator. Communication of test center and examination
4598	procedures must be clearly established and documented.
4599	(11) Failure to inform the department or officein writing
4600	within 30 days after pleading guilty or nolo contendere to, or
4601	being convicted or found guilty of, any felony or a crime
4602	punishable by imprisonment of 1 year or more under the law of
4603	the United States or of any state thereof, or under the law of
4604	any other country without regard to whether a judgment of
4605	conviction has been entered by the court having jurisdiction of
4606	the case.
4607	(12) Knowingly aiding, assisting, procuring, advising, or
4608	abetting any person in the violation of or to violate a
4609	provision of the insurance code or any order or rule of the
4610	department, commission, or office.
4611	Section 82. Section 626.631, Florida Statutes, is amended
4612	to read:
4613	626.631 Procedure for refusal, suspension, or revocation
4614	of license.--
4615	(1) If any licensee is convicted by a court of a violation
4616	of this code or a felony, the licenses and appointments of such
4617	person shall be immediately revoked by the department or office.
4618	The licensee may subsequently request a hearing pursuant to ss.
4619	120.569 and 120.57, and the department or officeshall expedite
4620	any such requested hearing. The sole issue at such hearing
4621	shall be whether the revocation should be rescinded because such
4622	person was not in fact convicted of a violation of this code or
4623	a felony.
4624	(2) The papers, documents, reports, or evidence of the
4625	department or officerelative to a hearing for revocation or
4626	suspension of a license or appointment pursuant to the
4627	provisions of this chapter and chapter 120 are confidential and
4628	exempt from the provisions of s. 119.07(1) until after the same
4629	have been published at the hearing. However, such papers,
4630	documents, reports, or items of evidence are subject to
4631	discovery in a hearing for revocation or suspension of a license
4632	or appointment.
4633	Section 83. Subsections (1) and (2) of section 626.641,
4634	Florida Statutes, are amended to read:
4635	626.641 Duration of suspension or revocation.--
4636	(1) The department or officeshall, in its order
4637	suspending a license or appointment or in its order suspending
4638	the eligibility of a person to hold or apply for such license or
4639	appointment, specify the period during which the suspension is
4640	to be in effect; but such period shall not exceed 2 years. The
4641	license, appointment, or eligibility shall remain suspended
4642	during the period so specified, subject, however, to any
4643	rescission or modification of the order by the department or
4644	office, or modification or reversal thereof by the court, prior
4645	to expiration of the suspension period. A license, appointment,
4646	or eligibility which has been suspended shall not be reinstated
4647	except upon request for such reinstatement; but the department
4648	or officeshall not grant such reinstatement if it finds that
4649	the circumstance or circumstances for which the license,
4650	appointment, or eligibility was suspended still exist or are
4651	likely to recur.
4652	(2) No person or appointee under any license or
4653	appointment revoked by the department or office, nor any person
4654	whose eligibility to hold same has been revoked by the
4655	department or office, shall have the right to apply for another
4656	license or appointment under this code within 2 years from the
4657	effective date of such revocation or, if judicial review of such
4658	revocation is sought, within 2 years from the date of final
4659	court order or decree affirming the revocation. The department
4660	or officeshall not, however, grant a new license or appointment
4661	or reinstate eligibility to hold such license or appointment if
4662	it finds that the circumstance or circumstances for which the
4663	eligibility was revoked or for which the previous license or
4664	appointment was revoked still exist or are likely to recur; if
4665	an individual's license as agent or customer representative or
4666	eligibility to hold same has been revoked upon the ground
4667	specified in s. 626.611(12), the department or officeshall
4668	refuse to grant or issue any new license or appointment so
4669	applied for.
4670	Section 84. Subsection (2) of section 626.661, Florida
4671	Statutes, is amended to read:
4672	626.661 Surrender of license.--
4673	(2) This section shall not be deemed to require the
4674	surrender to the department or officeof any license unless such
4675	surrender has been requested by the department or office.
4676	Section 85. Section 626.681, Florida Statutes, is amended
4677	to read:
4678	626.681 Administrative fine in lieu of or in addition to
4679	suspension, revocation, or refusal of license, appointment, or
4680	disapproval.--
4681	(1) Except as to insurance agencies, if the department or
4682	officefinds that one or more grounds exist for the suspension,
4683	revocation, or refusal to issue, renew, or continue any license
4684	or appointment issued under this chapter, or disapproval of a
4685	continuing education course provider, instructor, school
4686	official, or monitor groups, the department or officemay, in
4687	its discretion, in lieu of or in addition to such suspension or
4688	revocation, or in lieu of such refusal, or disapproval, and
4689	except on a second offense or when such suspension, revocation,
4690	or refusal is mandatory, impose upon the licensee, appointee,
4691	course provider, instructor, school official, or monitor group
4692	an administrative penalty in an amount up to $500 or, if the
4693	department or officehas found willful misconduct or willful
4694	violation on the part of the licensee, appointee, course
4695	provider, instructor, school official, or monitor group up to
4696	$3,500. The administrative penalty may, in the discretion of the
4697	department or office, be augmented by an amount equal to any
4698	commissions received by or accruing to the credit of the
4699	licensee or appointee in connection with any transaction as to
4700	which the grounds for suspension, revocation, or refusal
4701	related.
4702	(2) With respect to insurance agencies, if the department
4703	finds that one or more grounds exist for the suspension,
4704	revocation, or refusal to issue, renew, or continue any license
4705	issued under this chapter, the department may, in its
4706	discretion, in lieu of or in addition to such suspension or
4707	revocation, or in lieu of such refusal, impose upon the licensee
4708	an administrative penalty in an amount not to exceed $10,000 per
4709	violation. The administrative penalty may, in the discretion of
4710	the department, be augmented by an amount equal to any
4711	commissions received by or accruing to the credit of the
4712	licensee in connection with any transaction as to which the
4713	grounds for suspension, revocation, or refusal related.
4714	(3) The department or officemay allow the licensee,
4715	appointee, or continuing education course provider, instructor,
4716	school official, or monitor group a reasonable period, not to
4717	exceed 30 days, within which to pay to the department or office
4718	the amount of the penalty so imposed. If the licensee,
4719	appointee, course provider, instructor, school official, or
4720	monitor group fails to pay the penalty in its entirety to the
4721	department or officewithin the period so allowed, the license,
4722	appointments, approval, or status of that person shall stand
4723	suspended or revoked or issuance, renewal, or continuation shall
4724	be refused, as the case may be, upon expiration of such period.
4725	Section 86. Section 626.691, Florida Statutes, is amended
4726	to read:
4727	626.691 Probation.--
4728	(1) If the department or officefinds that one or more
4729	grounds exist for the suspension, revocation, or refusal to
4730	renew or continue any license or appointment issued under this
4731	part, the department or officemay, in its discretion, except
4732	when an administrative fine is not permissible under s. 626.681
4733	or when such suspension, revocation, or refusal is mandatory, in
4734	lieu of or in addition to such suspension or revocation, or in
4735	lieu of such refusal, or in connection with any administrative
4736	monetary penalty imposed under s. 626.681, place the offending
4737	licensee or appointee on probation for a period, not to exceed 2
4738	years, as specified by the department or officein its order.
4739	(2) As a condition to such probation or in connection
4740	therewith, the department or officemay specify in its order
4741	reasonable terms and conditions to be fulfilled by the
4742	probationer during the probation period. If during the
4743	probation period the department or officehas good cause to
4744	believe that the probationer has violated a term or condition,
4745	it shall suspend, revoke, or refuse to issue, renew, or continue
4746	the license or appointment of the probationer, as upon the
4747	original grounds referred to in subsection (1).
4748	Section 87. Section 626.692, Florida Statutes, is amended
4749	to read:
4750	626.692 Restitution.--If any ground exists for the
4751	suspension, revocation, or refusal of a license or appointment,
4752	the department or officemay, in addition to any other penalty
4753	authorized under this chapter, order the licensee to pay
4754	restitution to any person who has been deprived of money by the
4755	licensee's misappropriation, conversion, or unlawful withholding
4756	of moneys belonging to insurers, insureds, beneficiaries, or
4757	others. In no instance shall the amount of restitution required
4758	to be paid under this section exceed the amount of money
4759	misappropriated, converted, or unlawfully withheld. Nothing in
4760	this section limits or restricts a person's right to seek other
4761	remedies as provided for by law.
4762	Section 88. Section 626.7315, Florida Statutes, is amended
4763	to read:
4764	626.7315 Prohibition against the unlicensed transaction of
4765	general lines insurance.--With respect to any line of authority
4766	as defined in s. 626.015(6)(7), no individual shall, unless
4767	licensed as a general lines agent:
4768	(1) Solicit insurance or procure applications therefor;
4769	(2) In this state, receive or issue a receipt for any
4770	money on account of or for any insurer, or receive or issue a
4771	receipt for money from other persons to be transmitted to any
4772	insurer for a policy, contract, or certificate of insurance or
4773	any renewal thereof, even though the policy, certificate, or
4774	contract is not signed by him or her as agent or representative
4775	of the insurer;
4776	(3) Directly or indirectly represent himself or herself to
4777	be an agent of any insurer or as an agent, to collect or forward
4778	any insurance premium, or to solicit, negotiate, effect,
4779	procure, receive, deliver, or forward, directly or indirectly,
4780	any insurance contract or renewal thereof or any endorsement
4781	relating to an insurance contract, or attempt to effect the
4782	same, of property or insurable business activities or interests,
4783	located in this state;
4784	(4) In this state, engage or hold himself or herself out
4785	as engaging in the business of analyzing or abstracting
4786	insurance policies or of counseling or advising or giving
4787	opinions, other than as a licensed attorney at law, relative to
4788	insurance or insurance contracts, for fee, commission, or other
4789	compensation, other than as a salaried bona fide full-time
4790	employee so counseling and advising his or her employer relative
4791	to the insurance interests of the employer and of the
4792	subsidiaries or business affiliates of the employer;
4793	(5) In any way, directly or indirectly, make or cause to
4794	be made, or attempt to make or cause to be made, any contract of
4795	insurance for or on account of any insurer;
4796	(6) Solicit, negotiate, or in any way, directly or
4797	indirectly, effect insurance contracts, if a member of a
4798	partnership or association, or a stockholder, officer, or agent
4799	of a corporation which holds an agency appointment from any
4800	insurer; or
4801	(7) Receive or transmit applications for suretyship, or
4802	receive for delivery bonds founded on applications forwarded
4803	from this state, or otherwise procure suretyship to be effected
4804	by a surety insurer upon the bonds of persons in this state or
4805	upon bonds given to persons in this state.
4806	Section 89. Subsection (3) of section 626.732, Florida
4807	Statutes, is amended to read:
4808	626.732 Requirement as to knowledge, experience, or
4809	instruction.--
4810	(3) An individual who was or became qualified to sit for
4811	an agent's, customer representative's, or adjuster's examination
4812	at or during the time he or she was employed by the department
4813	or officeand who, while so employed, was employed in
4814	responsible insurance duties as a full-time bona fide employee
4815	shall be permitted to take an examination if application for
4816	such examination is made within 90 days after the date of
4817	termination of his or her employment with the department or
4818	office.
4819	Section 90. Section 626.742, Florida Statutes, is amended
4820	to read:
4821	626.742 Nonresident agents; service of process.--
4822	(1) Each licensed nonresident agent shall appoint the
4823	Chief Financial OfficerInsurance Commissioner and Treasureras
4824	his or her attorney to receive service of legal process issued
4825	against the agent in this state, upon causes of action arising
4826	within this state out of transactions under the agent's license
4827	and appointment. Service upon the Chief Financial Officer
4828	Insurance Commissioner and Treasureras attorney shall
4829	constitute effective legal service upon the agent.
4830	(2) The appointment of the Chief Financial Officer
4831	Insurance Commissioner and Treasurerfor service of process
4832	shall be irrevocable for as long as there could be any cause of
4833	action against the agent arising out of his or her insurance
4834	transactions in this state.
4835	(3) Duplicate copies of such legal process against such
4836	agent shall be served upon the Chief Financial OfficerInsurance
4837	Commissioner and Treasurerby a person competent to serve a
4838	summons.
4839	(4) Upon receiving such service, the Chief Financial
4840	OfficerInsurance Commissioner and Treasurershall forthwith
4841	send one of the copies of the process, by registered mail with
4842	return receipt requested, to the defendant agent at his or her
4843	last address of record with the department.
4844	(5) The Chief Financial OfficerInsurance Commissioner and
4845	Treasurershall keep a record of the day and hour of service
4846	upon him or her of all such legal process.
4847	Section 91. Subsections (4) and (7) of section 626.7451,
4848	Florida Statutes, are amended to read:
4849	626.7451 Managing general agents; required contract
4850	provisions.--No person acting in the capacity of a managing
4851	general agent shall place business with an insurer unless there
4852	is in force a written contract between the parties which sets
4853	forth the responsibility for a particular function, specifies
4854	the division of responsibilities, and contains the following
4855	minimum provisions:
4856	(4) Separate records of business written by the managing
4857	general agent shall be maintained unless the managing general
4858	agent is a controlled or controlling person. The insurer shall
4859	have access and the right to copy all accounts and records
4860	related to its business in a form usable by the insurer, and the
4861	department and officeshall have access to all books, bank
4862	accounts, and records of the managing general agent in a form
4863	usable to the department and office. The records shall be
4864	retained according to s. 626.561.
4865	(7) If the contract permits the managing general agent to
4866	settle claims on behalf of the insurer:
4867	(a) All claims must be reported to the company in a timely
4868	manner and all claims must be adjusted by properly licensed
4869	persons.
4870	(b) Notice shall be sent by the managing general agent to
4871	the insurer as soon as it becomes known that the claim:
4872	1. Exceeds the limit set by the insurer;
4873	2. Involves a coverage dispute;
4874	3. Exceeds the managing general agent's claims settlement
4875	authority;
4876	4. Is open for more than 6 months; or
4877	5. Is closed by payment of an amount set by the office
4878	departmentor an amount set by the insurer, whichever is less.
4879	(c) All claims files shall be the joint property of the
4880	insurer and managing general agent. However, upon an order of
4881	liquidation of the insurer the claims and related application
4882	files shall become the sole property of the insurer or its
4883	estate. The managing general agent shall have reasonable access
4884	to and the right to copy the files on a timely basis.
4885	(d) Any settlement authority granted to the managing
4886	general agent may be terminated for cause upon the insurer's
4887	written notice to the managing general agent or upon the
4888	termination of the contract. The insurer may suspend the
4889	settlement authority during the pendency of any dispute
4890	regarding the cause for termination.
4891
4892	For the purposes of this section and ss. 626.7453 and 626.7454,
4893	the term "controlling person" or "controlling" has the meaning
4894	set forth in s. 625.012(5)(b)1., and the term "controlled
4895	person" or "controlled" has the meaning set forth in s.
4896	625.012(5)(b)2.
4897	Section 92. Subsections (1), (5), and (6) of section
4898	626.7454, Florida Statutes, are amended to read:
4899	626.7454 Managing general agents; duties of insurers.--
4900	(1) The insurer shall have on file for each managing
4901	general agent with which it has done business an independent
4902	financial examination in a form acceptable to the office
4903	department.
4904	(5) Within 30 days after entering into or terminating a
4905	contract with a managing general agent, the insurer shall
4906	provide written notification of the appointment or termination
4907	to the department and office. Notices of appointment of a
4908	managing general agent shall include a statement of duties which
4909	the applicant is expected to perform on behalf of the insurer,
4910	the lines of insurance for which the applicant is to be
4911	authorized to act, and any other information the department or
4912	officemay request.
4913	(6) An insurer shall review its books and records on a
4914	quarterly basis to determine if any producer has become a
4915	managing general agent as defined in s. 626.015. If the insurer
4916	determines that a producer has become a managing general agent,
4917	the insurer shall promptly notify the producer and the
4918	department and officeof such determination and the insurer and
4919	producer must fully comply with the provisions of this section
4920	and ss. 626.7451, 626.7452, and 626.7453 within 30 days after
4921	such determination.
4922
4923
4924	Subsections (1), (3), and (4) do not apply to a managing
4925	general agent that is a controlled or controlling person.
4926	Section 93. Subsections (6), (7), and (8) of section
4927	626.7491, Florida Statutes, are amended to read:
4928	626.7491 Business transacted with producer controlled
4929	property and casualty insurer.--
4930	(6) AUDIT COMMITTEE.--Every controlled insurer shall have
4931	an audit committee of the board of directors composed of
4932	independent directors. The audit committee shall annually meet
4933	with management, the insurer's independent certified public
4934	accountants, and an independent casualty actuary or other
4935	independent loss reserve specialist acceptable to the office
4936	departmentto review the adequacy of the insurer's loss
4937	reserves.
4938	(7) REPORTING REQUIREMENTS.--
4939	(a) In addition to any other required loss reserve
4940	certification, the controlled insurer shall, on April 1 of each
4941	year, file with the officedepartmentthe opinion of an
4942	independent casualty actuary, or such other independent loss
4943	reserve specialist acceptable to the officedepartment,
4944	reporting loss ratios for each line of business written and
4945	attesting to the adequacy of loss reserves established for
4946	losses incurred and outstanding as of the year end, including
4947	incurred but not reported losses, on business placed by the
4948	producer.
4949	(b) The controlled insurer shall annually report to the
4950	officedepartmentthe amount of commissions paid to the
4951	producer, the percentage such amount represents of the net
4952	premiums written, and comparable amounts and percentages paid to
4953	noncontrolling producers for placements of the same kinds of
4954	insurance.
4955	(8) PENALTIES.--
4956	(a) If the department believes that the controlling
4957	producer or any other person has not materially complied with
4958	this section, or any rule adopted or order issued hereunder, the
4959	department may order the controlling producer to cease placing
4960	business with the controlled insurer.
4961	(b) If, due to such material noncompliance, the controlled
4962	insurer or any policyholder thereof has suffered any loss or
4963	damage, the department or officemay maintain a civil action or
4964	intervene in an action brought by or on behalf of the insurer or
4965	policyholder for recovery of compensatory damages for the
4966	benefit of the insurer or policyholder or other appropriate
4967	relief.
4968	(c) If an order for liquidation or rehabilitation of the
4969	controlled insurer has been entered pursuant to chapter 631 and
4970	the receiver appointed under such order believes that the
4971	controlling producer or any other person has not materially
4972	complied with this section or any rule adopted or order issued
4973	hereunder and the insurer has suffered any loss or damage
4974	therefrom, the receiver may maintain a civil action for recovery
4975	of damages or other appropriate sanctions for the benefit of the
4976	insurer.
4977	(d) Nothing contained in this section shall affect the
4978	right of the department or officeto impose any other penalties
4979	provided for in the Florida Insurance Code.
4980	(e) Nothing contained in this section is intended to or
4981	shall in any manner alter or affect the rights of policyholders,
4982	claimants, creditors, or other third parties.
4983	Section 94. Paragraph (e) of subsection (3) and
4984	subsections (11) and (12) of section 626.7492, Florida Statutes,
4985	are amended to read:
4986	626.7492 Reinsurance intermediaries.--
4987	(3) LICENSURE.--
4988	(e) If the applicant for a reinsurance intermediary
4989	license is a nonresident, the applicant, as a condition
4990	precedent to receiving or holding a license, must designate the
4991	Chief Financial OfficerInsurance Commissioneras agent for
4992	service of process in the manner, and with the same legal
4993	effect, provided for by this section for designation of service
4994	of process upon unauthorized insurers. Such applicant shall also
4995	furnish the department with the name and address of a resident
4996	of this state upon whom notices or orders of the department or
4997	process affecting the nonresident reinsurance intermediary may
4998	be served. The licensee shall promptly notify the department in
4999	writing of each change in its designated agent for service of
5000	process, and the change shall not become effective until
5001	acknowledged by the department.
5002	(11) PENALTIES AND LIABILITIES.--
5003	(a) A reinsurance intermediary found by the department, or
5004	an insurer, or reinsurer found by the office,departmentto be
5005	in violation of any provision of this section must:
5006	1. For each separate violation pay a penalty in an amount
5007	not to exceed $5,000;
5008	2. Be subject to revocation or suspension of its license;
5009	and
5010	3. If a violation was committed by the reinsurance
5011	intermediary, the reinsurance intermediary must make restitution
5012	to the insurer, reinsurer, rehabilitator, or liquidator of the
5013	insurer or reinsurer for the net losses incurred by the insurer
5014	or reinsurer attributable to the violation.
5015	(b) Nothing contained in this section shall affect the
5016	right of the office ordepartment to impose any other penalties
5017	provided in the Florida Insurance Code.
5018	(c) Nothing contained in this section is intended to or
5019	shall in any manner limit or restrict the rights of
5020	policyholders, claimants, creditors, or other third parties or
5021	confer any rights to these persons.
5022	(12) No insurer or reinsurer may continue to use the
5023	services of a reinsurance intermediary on or after April 8,
5024	1992, unless such use is in compliance with this section.
5025	Section 95. Subsection (5) of section 626.752, Florida
5026	Statutes, is amended to read:
5027	626.752 Exchange of business.--
5028	(5) Within 15 days after the last day of each month, any
5029	insurer accepting business under this section shall report to
5030	the department the name, address, telephone number, and social
5031	security number of each agent from which the insurer received
5032	more than 24 personal lines risks during the calendar year,
5033	except for risks being removed from the Citizens Property
5034	Insurance CorporationResidential Property and Casualty Joint
5035	Underwriting Associationand placed with that insurer by a
5036	brokering agent. Once the insurer has reported pursuant to this
5037	subsection an agent's name to the department, additional reports
5038	on the same agent shall not be required. However, the fee set
5039	forth in s. 624.501 shall be paid for the agent by the insurer
5040	for each year until the insurer notifies the department that the
5041	insurer is no longer accepting business from the agent pursuant
5042	to this section. The insurer may require that the agent
5043	reimburse the insurer for the fee.
5044	Section 96. Subsection (2) of section 626.7845, Florida
5045	Statutes, is amended to read:
5046	626.7845 Prohibition against unlicensed transaction of
5047	life insurance.--
5048	(2) Except as provided in s. 626.112(6), with respect to
5049	any line of authority specified in s. 626.015(11)(12), no
5050	individual shall, unless licensed as a life agent:
5051	(a) Solicit insurance or annuities or procure
5052	applications; or
5053	(b) In this state, engage or hold himself or herself out
5054	as engaging in the business of analyzing or abstracting
5055	insurance policies or of counseling or advising or giving
5056	opinions to persons relative to insurance or insurance contracts
5057	other than:
5058	1. As a consulting actuary advising an insurer; or
5059	2. As to the counseling and advising of labor unions,
5060	associations, trustees, employers, or other business entities,
5061	the subsidiaries and affiliates of each, relative to their
5062	interests and those of their members or employees under
5063	insurance benefit plans.
5064	Section 97. Section 626.7851, Florida Statutes, is amended
5065	to read:
5066	626.7851 Requirement as to knowledge, experience, or
5067	instruction.--No applicant for a license as a life agent, except
5068	for a chartered life underwriter (CLU), shall be qualified or
5069	licensed unless within the 4 years immediately preceding the
5070	date the application for a license is filed with the department
5071	he or she has:
5072	(1) Successfully completed 40 hours of classroom courses
5073	in insurance satisfactory to the department at a school or
5074	college, or extension division thereof, or other authorized
5075	course of study, approved by the department. Courses must
5076	include instruction on the subject matter of unauthorized
5077	entities engaging in the business of insurance, to include the
5078	Florida Nonprofit Multiple-Employer Welfare Arrangement Act and
5079	the Employee Retirement Income Security Act, 29 U.S.C. ss. 1001
5080	et seq., as it relates to the provision of life insurance by
5081	employers to their employees and the regulation thereof;
5082	(2) Successfully completed a correspondence course in
5083	insurance satisfactory to the department and regularly offered
5084	by accredited institutions of higher learning in this state,
5085	approved by the department. Courses must include instruction on
5086	the subject matter of unauthorized entities engaging in the
5087	business of insurance, to include the Florida Nonprofit
5088	Multiple-Employer Welfare Arrangement Act and the Employee
5089	Retirement Income Security Act, 29 U.S.C. ss. 1001 et seq., as
5090	it relates to the provision of life insurance by employers to
5091	their employees and the regulation thereof;
5092	(3) Held an active license in life, or life and health,
5093	insurance in another state. This provision may not be utilized
5094	unless the other state grants reciprocal treatment to licensees
5095	formerly licensed in Florida; or
5096	(4) Been employed by the department or officefor at least
5097	1 year, full time in life or life and health insurance
5098	regulatory matters and who was not terminated for cause, and
5099	application for examination is made within 90 days after the
5100	date of termination of his or her employment with the department
5101	or office.
5102	Section 98. Section 626.8305, Florida Statutes, is amended
5103	to read:
5104	626.8305 Prohibition against the unlicensed transaction of
5105	health insurance.--Except as provided in s. 626.112(6), with
5106	respect to any line of authority specified in s. 626.015(7)(8),
5107	no individual shall, unless licensed as a health agent:
5108	(1) Solicit insurance or procure applications; or
5109	(2) In this state, engage or hold himself or herself out
5110	as engaging in the business of analyzing or abstracting
5111	insurance policies or of counseling or advising or giving
5112	opinions to persons relative to insurance contracts other than:
5113	(a) As a consulting actuary advising insurers; or
5114	(b) As to the counseling and advising of labor unions,
5115	associations, trustees, employers, or other business entities,
5116	the subsidiaries and affiliates of each, relative to their
5117	interests and those of their members or employees under
5118	insurance benefit plans.
5119	Section 99. Subsection (4) of section 626.8311, Florida
5120	Statutes, is amended to read:
5121	626.8311 Requirement as to knowledge, experience, or
5122	instruction.--No applicant for a license as a health agent,
5123	except for a chartered life underwriter (CLU), shall be
5124	qualified or licensed unless within the 4 years immediately
5125	preceding the date the application for license is filed with the
5126	department he or she has:
5127	(4) Been employed by the department or officefor at least
5128	1 year, full time in health insurance regulatory matters and who
5129	was not terminated for cause, and application for examination is
5130	made within 90 days after the date of termination of his or her
5131	employment with the department or office.
5132	Section 100. Subsection (1) of section 626.8427, Florida
5133	Statutes, is amended to read:
5134	626.8427 Number of applications for licensure required;
5135	exemption; effect of expiration of license.--
5136	(1) After a license as a title insurance agent has been
5137	issued to a title insurance agent, the agent is not required to
5138	file another license application for a similar license,
5139	irrespective of the number of insurers to be represented by the
5140	agent, unless:
5141	(a) The agent is specifically ordered by the department to
5142	complete a new application; or
5143	(b) During any period of 48 months since the filing of the
5144	original license application, the agent was not appointed,
5145	unless in the case of individuals the failure to be so appointed
5146	was due to military service, in which event the period within
5147	which a new application is not required may, in the discretion
5148	of the department of Insurance, be extended for 12 months
5149	following the date of discharge from military service if the
5150	military service does not exceed 3 years, but in no event shall
5151	the period be extended under this clause for a period of more
5152	than 6 years from the date of filing the original application.
5153	Section 101. Subsections (1) and (3) of section 626.8463,
5154	Florida Statutes, are amended to read:
5155	626.8463 Witnesses and evidence.--
5156	(1) As to the subject of any examination, investigation,
5157	or hearing being conducted by him or her under s. 624.5015, ss.
5158	626.8417-626.847, or s. 627.791, an examiner appointed by the
5159	department or officeof Insurancemay administer oaths, examine
5160	and cross-examine witnesses, and receive oral and documentary
5161	evidence and shall have the power to subpoena witnesses, compel
5162	their attendance and testimony, and require by subpoena the
5163	production of books, papers, records, files, correspondence,
5164	documents, or other evidence which the examiner deems relevant
5165	to the inquiry.
5166	(3) If a person refuses to comply with any such subpoena
5167	or to testify as to any matter concerning which the person may
5168	be lawfully interrogated, the circuit court in and for Leon
5169	County, or the county in which such examination, investigation,
5170	or hearing is being conducted, or the county in which such
5171	person resides, upon application by the department or office,
5172	may issue an order requiring such person to comply with the
5173	subpoena and to testify. A person who fails to obey such an
5174	order of the court may be punished by the court for contempt.
5175	Section 102. Section 626.8467, Florida Statutes, is
5176	amended to read:
5177	626.8467 Testimony compelled; immunity from prosecution.--
5178	(1) If a person asks to be excused from attending or
5179	testifying or from producing any books, papers, records,
5180	contracts, documents, or other evidence in connection with any
5181	examination, hearing, or investigation being conducted under s.
5182	624.5015, ss. 626.8417-626.847, or s. 627.791 by the department
5183	or officeor its examiner on the ground that the testimony or
5184	evidence required of the person may tend to incriminate him or
5185	her or subject him or her to a penalty or forfeiture and
5186	notwithstanding is directed to give such testimony or produce
5187	such evidence, the person must, if so directed by the Department
5188	of Financial ServicesInsuranceand the Department of Legal
5189	Affairs or by the office and the Department of Legal Affairs,
5190	nonetheless comply with such direction, but he or she shall not
5191	thereafter be prosecuted or subjected to any penalty or
5192	forfeiture for or on account of any transaction, matter, or
5193	thing concerning which he or she may have so testified or
5194	produced evidence, and no testimony so given or evidence
5195	produced shall be received against the person upon any criminal
5196	action, investigation, or proceeding. However, a person so
5197	testifying shall not be exempt from prosecution or punishment
5198	for any perjury committed by him or her in such testimony, and
5199	the testimony or evidence so given or produced shall be
5200	admissible against him or her upon any criminal action,
5201	investigation, or proceeding concerning such perjury; and such
5202	person shall not be exempt from the refusal, suspension, or
5203	revocation of any license or appointment, permission, or
5204	authority conferred or to be conferred pursuant to s. 624.5015,
5205	ss. 626.8417-626.847, or s. 627.791.
5206	(2) Any such person may execute, acknowledge, and file
5207	within the office of the Department of Financial Services or
5208	the office, as appropriate,Insurancea statement expressly
5209	waiving such immunity or privilege with respect to any
5210	transaction, matter, or thing specified in the statement, and
5211	thereupon the testimony of such person or such evidence in
5212	relation to such transaction, matter, or thing may be received
5213	or produced before any judge or justice, court, tribunal, or
5214	grand jury or otherwise and, if so received or produced, such
5215	person shall not be entitled to any immunity or privilege on
5216	account of any testimony he or she may so give or evidence so
5217	produced.
5218	Section 103. Section 626.847, Florida Statutes, is amended
5219	to read:
5220	626.847 Penalty for refusal to testify.--A person who
5221	refuses or fails, without lawful cause, to testify relative to
5222	the affairs of any title insurer or other person when subpoenaed
5223	under s. 626.8463 and requested by the department or officeof
5224	Insuranceto so testify is guilty of a misdemeanor of the second
5225	degree and, upon conviction, is punishable as provided in s.
5226	775.082 or s. 775.083.
5227	Section 104. Subsection (3) of section 626.8473, Florida
5228	Statutes, is amended to read:
5229	626.8473 Escrow; trust fund.--
5230	(3) All funds received by a title insurance agent to be
5231	held in trust shall be immediately placed in a financial
5232	institution that is located within this state and is a member of
5233	the Federal Deposit Insurance Corporation or the National Credit
5234	Union Share Insurance Fund. These funds shall be invested in an
5235	escrow account in accordance with the investment requirements
5236	and standards established for deposits and investments of state
5237	funds in s. 17.5718.10, where the funds shall be kept until
5238	disbursement thereof is properly authorized.
5239	Section 105. Section 626.8582, Florida Statutes, is
5240	amended to read:
5241	626.8582 "Nonresident public adjuster" defined.--A
5242	"nonresident public adjuster" is a person who:
5243	(1) Is not a resident of this state;
5244	(2) Is a currently licensed public adjuster in his or her
5245	state of residence for the type or kinds of insurance for which
5246	the licensee intends to adjust claims in this state or, if a
5247	resident of a state that does not license public adjusters, has
5248	passed the office'sdepartment'sadjuster examination as
5249	prescribed in s. 626.8732(1)(b); and
5250	(3) Is a self-employed public adjuster or associated with
5251	or employed by a public adjusting firm or other public adjuster.
5252	Section 106. Section 626.8584, Florida Statutes, is
5253	amended to read:
5254	626.8584 "Nonresident independent adjuster" defined.--A
5255	"nonresident independent adjuster" is a person who:
5256	(1) Is not a resident of this state;
5257	(2) Is a currently licensed independent adjuster in his or
5258	her state of residence for the type or kinds of insurance for
5259	which the licensee intends to adjust claims in this state or, if
5260	a resident of a state that does not license independent
5261	adjusters, has passed the office'sdepartment'sadjuster
5262	examination as prescribed in s. 626.8734(1)(b); and
5263	(3) Is a self-employed independent adjuster or associated
5264	with or employed by an independent adjusting firm or other
5265	independent adjuster.
5266	Section 107. Section 626.859, Florida Statutes, is amended
5267	to read:
5268	626.859 "Catastrophe" or "emergency" adjuster defined.--A
5269	"catastrophe" or "emergency" adjuster is a person who is not a
5270	licensed adjuster under this part, but who has been designated
5271	and certified to the officedepartmentby insurers as qualified
5272	to adjust claims, losses, or damages under policies or contracts
5273	of insurance issued by such insurer, and whom the office
5274	departmentmay license, in the event of a catastrophe or
5275	emergency, for the purposes and under the conditions which the
5276	officedepartmentshall fix and for the period of the emergency
5277	as the officedepartmentshall determine, to adjust claims,
5278	losses, or damages under the policies of insurance issued by the
5279	insurers.
5280	Section 108. Subsection (2) of section 626.861, Florida
5281	Statutes, is amended to read:
5282	626.861 Insurer's officers, insurer's employees,
5283	reciprocal insurer's representatives; adjustments by.--
5284	(2) If any such officer, employee, attorney, or agent in
5285	connection with the adjustment of any such claim, loss, or
5286	damage engages in any of the misconduct described in or
5287	contemplated by s. 626.611(6), the officedepartmentmay suspend
5288	or revoke the insurer's certificate of authority.
5289	Section 109. Subsection (2) of section 626.863, Florida
5290	Statutes, is amended to read:
5291	626.863 Licensed independent adjusters required; insurers'
5292	responsibility.--
5293	(2) Before referring any claim or loss, the insurer shall
5294	ascertain from the officedepartmentwhether the proposed
5295	independent adjuster is currently licensed and appointed as
5296	such. Having once ascertained that a particular person is so
5297	licensed and appointed, the insurer may assume that he or she
5298	will continue to be so licensed and appointed until the insurer
5299	has knowledge, or receives information from the office
5300	department, to the contrary.
5301	Section 110. Section 626.865, Florida Statutes, is amended
5302	to read:
5303	626.865 Public adjuster's qualifications, bond.--
5304	(1) The officedepartmentshall issue a license to an
5305	applicant for a public adjuster's license upon determining that
5306	the applicant has paid the applicable fees specified in s.
5307	624.501 and possesses the following qualifications:
5308	(a) Is a natural person at least 18 years of age.
5309	(b) Is a bona fide resident of this state.
5310	(c) Is trustworthy and has such business reputation as
5311	would reasonably assure that the applicant will conduct his or
5312	her business as insurance adjuster fairly and in good faith and
5313	without detriment to the public.
5314	(d) Has had sufficient experience, training, or
5315	instruction concerning the adjusting of damages or losses under
5316	insurance contracts, other than life and annuity contracts, is
5317	sufficiently informed as to the terms and effects of the
5318	provisions of those types of insurance contracts, and possesses
5319	adequate knowledge of the laws of this state relating to such
5320	contracts as to enable and qualify him or her to engage in the
5321	business of insurance adjuster fairly and without injury to the
5322	public or any member thereof with whom the applicant may have
5323	business as a public adjuster.
5324	(e) Has passed any required written examination.
5325	(2) At the time of application for license as a public
5326	adjuster, the applicant shall file with the officedepartmenta
5327	bond executed and issued by a surety insurer authorized to
5328	transact such business in this state, in the amount of $50,000,
5329	conditioned for the faithful performance of his or her duties as
5330	a public adjuster under the license applied for. The bond shall
5331	be in favor of the officedepartmentand shall specifically
5332	authorize recovery by the officedepartmentof the damages
5333	sustained in case the licensee is guilty of fraud or unfair
5334	practices in connection with his or her business as public
5335	adjuster. The aggregate liability of the surety for all such
5336	damages shall in no event exceed the amount of the bond. Such
5337	bond shall not be terminated unless at least 30 days' written
5338	notice is given to the licensee and filed with the office
5339	department.
5340	Section 111. Section 626.866, Florida Statutes, is amended
5341	to read:
5342	626.866 Independent adjuster's qualifications.--The office
5343	departmentshall issue a license to an applicant for an
5344	independent adjuster's license upon determining that the
5345	applicable license fee specified in s. 624.501 has been paid and
5346	that the applicant possesses the following qualifications:
5347	(1) Is a natural person at least 18 years of age.
5348	(2) Is a bona fide resident of this state.
5349	(3) Is trustworthy and has such business reputation as
5350	would reasonably assure that the applicant will conduct his or
5351	her business as insurance adjuster fairly and in good faith and
5352	without detriment to the public.
5353	(4) Has had sufficient experience, training, or
5354	instruction concerning the adjusting of damage or loss under
5355	insurance contracts, other than life and annuity contracts, is
5356	sufficiently informed as to the terms and the effects of the
5357	provisions of such types of contracts, and possesses adequate
5358	knowledge of the insurance laws of this state relating to such
5359	contracts as to enable and qualify him or her to engage in the
5360	business of insurance adjuster fairly and without injury to the
5361	public or any member thereof with whom he or she may have
5362	relations as an insurance adjuster and to adjust all claims in
5363	accordance with the policy or contract and the insurance laws of
5364	this state.
5365	(5) Has passed any required written examination.
5366	Section 112. Section 626.867, Florida Statutes, is amended
5367	to read:
5368	626.867 Company employee adjuster's qualifications.--The
5369	officedepartmentshall issue a license to an applicant for a
5370	company employee adjuster's license upon determining that the
5371	applicable license fee specified in s. 624.501 has been paid and
5372	that the applicant possesses the following qualifications:
5373	(1) Is a natural person at least 18 years of age.
5374	(2) Is a bona fide resident of this state.
5375	(3) Is trustworthy and has such business reputation as
5376	would reasonably assure that the applicant will conduct his or
5377	her business as insurance adjuster fairly and in good faith and
5378	without detriment to the public.
5379	(4) Has had sufficient experience, training, or
5380	instruction concerning the adjusting of damage or loss of risks
5381	described in his or her application, is sufficiently informed as
5382	to the terms and the effects of the provisions of insurance
5383	contracts covering such risks, and possesses adequate knowledge
5384	of the insurance laws of this state relating to such insurance
5385	contracts as to enable and qualify him or her to engage in such
5386	business as insurance adjuster fairly and without injury to the
5387	public or any member thereof with whom he or she may have
5388	relations as an insurance adjuster and to adjust all claims in
5389	accordance with the policy or contract and the insurance laws of
5390	this state.
5391	(5) Has passed any required written examination.
5392	Section 113. Subsection (5) of section 626.869, Florida
5393	Statutes, is amended to read:
5394	626.869 License, adjusters.--
5395	(5) Any person holding a license for 24 consecutive months
5396	or longer and who engages in adjusting workers' compensation
5397	insurance must, beginning in their birth month and every 2 years
5398	thereafter, have completed 24 hours of courses, 2 hours of which
5399	relate to ethics, in subjects designed to inform the licensee
5400	regarding the current workers' compensation laws of this state,
5401	so as to enable him or her to engage in business as a workers'
5402	compensation insurance adjuster fairly and without injury to the
5403	public and to adjust all claims in accordance with the policy or
5404	contract and the workers' compensation laws of this state. In
5405	order to qualify as an eligible course under this subsection,
5406	the course must:
5407	(a) Have a course outline approved by the office
5408	department.
5409	(b) Be taught at a school training facility or other
5410	location approved by the officedepartment.
5411	(c) Be taught by instructors with at least 5 years of
5412	experience in the area of workers' compensation, general lines
5413	of insurance, or other persons approved by the office
5414	department. However, a member of The Florida Bar is exempt from
5415	the 5 years' experience requirement.
5416	(d) Furnish the attendee a certificate of completion. The
5417	course provider shall send a roster to the officedepartmentin
5418	a format prescribed by the commissiondepartment.
5419	Section 114. Section 626.8695, Florida Statutes, is
5420	amended to read:
5421	626.8695 Primary adjuster.--
5422	(1) Each person operating an adjusting firm and each
5423	location of a multiple location adjusting firm must designate a
5424	primary adjuster for each such firm or location and must file
5425	with the officedepartmentthe name of such primary adjuster and
5426	the address of the firm or location where he or she is the
5427	primary adjuster, on a form approved by the commission
5428	department. The designation of the primary adjuster may be
5429	changed at the option of the adjusting firm. Any such change is
5430	effective upon notification to the officedepartment. Notice of
5431	change must be sent to the officedepartmentwithin 30 days
5432	after such change.
5433	(2)(a) For purposes of this section, a "primary adjuster"
5434	is the licensed adjuster who is responsible for the hiring and
5435	supervision of all individuals within an adjusting firm location
5436	who deal with the public and who acts in the capacity of a
5437	public adjuster as defined in s. 626.854, or an independent
5438	adjuster as defined in s. 626.855. An adjuster may be
5439	designated as a primary adjuster for only one adjusting firm
5440	location.
5441	(b) For purposes of this section, an "adjusting firm" is a
5442	location where an independent or public adjuster is engaged in
5443	the business of insurance.
5444	(3) The officedepartmentmay suspend or revoke the
5445	license of the primary adjuster if the adjusting firm employs
5446	any person who has had a license denied or any person whose
5447	license is currently suspended or revoked. However, if a person
5448	has been denied a license for failure to pass a required
5449	examination, he or she may be employed to perform clerical or
5450	administrative functions for which licensure is not required.
5451	(4) The primary adjuster in an unincorporated adjusting
5452	firm, or the primary adjuster in an incorporated adjusting firm
5453	in which no officer, director, or stockholder is an adjuster, is
5454	responsible and accountable for the acts of salaried employees
5455	under his or her direct supervision and control while acting on
5456	behalf of the adjusting firm. Nothing in this section renders
5457	any person criminally liable or subject to any disciplinary
5458	proceedings for any act unless the person personally committed
5459	or knew or should have known of the act and of the facts
5460	constituting a violation of this code.
5461	(5) The officedepartmentmay suspend or revoke the
5462	license of any adjuster who is employed by a person whose
5463	license is currently suspended or revoked.
5464	(6) An adjusting firm location may not conduct the
5465	business of insurance unless a primary adjuster is designated.
5466	Failure of the person operating the adjusting firm to designate
5467	a primary adjuster for the firm, or for each location, as
5468	applicable, on a form prescribed by the commissiondepartment
5469	within 30 days after inception of the firm or change of primary
5470	adjuster designation, constitutes grounds for requiring the
5471	adjusting firm to obtain an adjusting firm license pursuant to
5472	s. 626.8696.
5473	(7) Any adjusting firm may request, on a form prescribed
5474	by the commissiondepartment, verification from the office
5475	departmentof any person's current licensure status. If a
5476	request is mailed to the officedepartmentwithin 5 working days
5477	after the date an adjuster is hired, and the officedepartment
5478	subsequently notifies the adjusting firm that an employee's
5479	license is currently suspended, revoked, or has been denied, the
5480	license of the primary adjuster shall not be revoked or
5481	suspended if the unlicensed person is immediately dismissed from
5482	employment as an adjuster with the firm.
5483	Section 115. Subsections (1) and (5) of section 626.8696,
5484	Florida Statutes, are amended to read:
5485	626.8696 Application for adjusting firm license.--
5486	(1) The application for an adjusting firm license must
5487	include:
5488	(a) The name of each majority owner, partner, officer, and
5489	director of the adjusting firm.
5490	(b) The resident address of each person required to be
5491	listed in the application under paragraph (a).
5492	(c) The name of the adjusting firm and its principal
5493	business address.
5494	(d) The location of each adjusting firm office and the
5495	name under which each office conducts or will conduct business.
5496	(e) Any additional information which the commission
5497	departmentmay require.
5498	(5) An adjusting firm required to be licensed pursuant to
5499	s. 626.8695 must remain so licensed for a period of 3 years from
5500	the date of licensure, unless the license is suspended or
5501	revoked. The officedepartmentmay suspend or revoke the
5502	adjusting firm's authority to do business for activities
5503	occurring during the time the firm is licensed, regardless of
5504	whether the licensing period has terminated.
5505	Section 116. Section 626.8697, Florida Statutes, is
5506	amended to read:
5507	626.8697 Grounds for refusal, suspension, or revocation of
5508	adjusting firm license.--
5509	(1) The officedepartmentshall deny, suspend, revoke, or
5510	refuse to continue the license of any adjusting firm if it
5511	finds, as to any adjusting firm or as to any majority owner,
5512	partner, manager, director, officer, or other person who manages
5513	or controls the firm, that any of the following grounds exist:
5514	(a) Lack by the firm of one or more of the qualifications
5515	for the license as specified in this code.
5516	(b) Material misstatement, misrepresentation, or fraud in
5517	obtaining the license or in attempting to obtain the license.
5518	(2) The officedepartmentmay, in its discretion, deny,
5519	suspend, revoke, or refuse to continue the license of any
5520	adjusting firm if it finds that any of the following applicable
5521	grounds exist with respect to the firm or any owner, partner,
5522	manager, director, officer, or other person who is otherwise
5523	involved in the operation of the firm:
5524	(a) Any cause for which issuance of the license could have
5525	been refused had it then existed and been known to the office
5526	department.
5527	(b) Violation of any provision of this code or of any
5528	other law applicable to the business of insurance.
5529	(c) Violation of any order or rule of the office or
5530	commissiondepartment.
5531	(d) An owner, partner, manager, director, officer, or
5532	other person who manages or controls the firm having been found
5533	guilty of or having pleaded guilty or nolo contendere to a
5534	felony or a crime punishable by imprisonment of 1 year or more
5535	under the laws of the United States or of any state or under the
5536	laws of any other country, without regard to whether
5537	adjudication was made or withheld by the court.
5538	(e) Failure to inform the officedepartmentin writing
5539	within 30 days after a pleading by an owner, partner, manager,
5540	director, officer, or other person managing or controlling the
5541	firm of guilty or nolo contendere to, or being convicted or
5542	found guilty of, any felony or a crime punishable by
5543	imprisonment of 1 year or more under the laws of the United
5544	States or of any state, or under the laws of any other country,
5545	without regard to whether adjudication was made or withheld by
5546	the court.
5547	(f) Knowingly aiding, assisting, procuring, advising, or
5548	abetting any person in the violation of or to violate a
5549	provision of the insurance code or any order or rule of the
5550	office or commissiondepartment.
5551	(g) Knowingly employing any individual in a managerial
5552	capacity or in a capacity dealing with the public who is under
5553	an order of revocation or suspension issued by the office
5554	department.
5555	(h) Committing any of the following acts with such a
5556	frequency as to have made the operation of the adjusting firm
5557	hazardous to the insurance-buying public or other persons:
5558	1. Misappropriation, conversion, or unlawful or
5559	unreasonable withholding of moneys belonging to insurers or
5560	insureds or beneficiaries or claimants or to others and received
5561	in the conduct of business under the license.
5562	2. Misrepresentation or deception with regard to the
5563	business of insurance, dissemination of information, or
5564	advertising.
5565	3. Demonstrated lack of fitness or trustworthiness to
5566	engage in the business of insurance adjusting arising out of
5567	activities related to insurance adjusting or the adjusting firm.
5568	(i) Failure to appoint a primary adjuster.
5569	(3) In lieu of discretionary refusal, suspension, or
5570	revocation of an adjusting firm's license, the officedepartment
5571	may impose an administrative penalty of up to $1,000 for each
5572	violation or ground provided under this section, not to exceed
5573	an aggregate amount of $10,000 for all violations or grounds.
5574	(4) If any adjusting firm, having been licensed,
5575	thereafter has such license revoked or suspended, the firm shall
5576	terminate all adjusting activities while the license is revoked
5577	or suspended.
5578	Section 117. Section 626.8698, Florida Statutes, is
5579	amended to read:
5580	626.8698 Disciplinary guidelines for public
5581	adjusters.--The officedepartmentmay deny, suspend, or revoke
5582	the license of a public adjuster, and administer a fine not to
5583	exceed $5,000 per act, for any of the following:
5584	(1) Violating any provision of this chapter or a rule or
5585	order of the office or commissiondepartment;
5586	(2) Receiving payment or anything of value as a result of
5587	an unfair or deceptive practice;
5588	(3) Receiving or accepting any fee, kickback, or other
5589	thing of value pursuant to any agreement or understanding, oral
5590	or otherwise; entering into a split-fee arrangement with another
5591	person who is not a public adjuster; or being otherwise paid or
5592	accepting payment for services that have not been performed;
5593	(4) Violating s. 316.066 or s. 817.234;
5594	(5) Soliciting or otherwise taking advantage of a person
5595	who is vulnerable, emotional, or otherwise upset as the result
5596	of a trauma, accident, or other similar occurrence; or
5597	(6) Violating any ethical rule of the commission
5598	department.
5599	Section 118. Section 626.870, Florida Statutes, is amended
5600	to read:
5601	626.870 Application for license.--
5602	(1) Application for a license under this part shall be
5603	made as provided in s. 626.171 and related sections of this
5604	code.
5605	(2) The commissiondepartmentshall so prepare the form of
5606	the application as to elicit and require from the applicant the
5607	information necessary to enable the officedepartmentto
5608	determine whether the applicant possesses the qualifications
5609	prerequisite to issuance of the license to the applicant.
5610	(3) The commissiondepartmentmay, in its discretion,
5611	require that the application be supplemented by the certificate
5612	or affidavit of such person or persons as it deems necessary for
5613	its determination of the applicant's residence, business
5614	reputation, and reputation for trustworthiness. The commission
5615	department shall prescribe and the officemay furnish the forms
5616	for such certificates and affidavits.
5617	Section 119. Section 626.871, Florida Statutes, is amended
5618	to read:
5619	626.871 Reappointment after military service.--The office
5620	departmentmay, without requiring a further written examination,
5621	issue an appointment as an adjuster to a formerly licensed and
5622	appointed adjuster of this state who held a current adjuster's
5623	appointment at the time of entering service in the Armed Forces
5624	of the United States, subject to the following conditions:
5625	(1) The period of military service must not have been in
5626	excess of 3 years;
5627	(2) The application for the appointment must be filed with
5628	the officedepartmentand the applicable fee paid, within 12
5629	months following the date of honorable discharge of the
5630	applicant from the military service; and
5631	(3) The new appointment will be of the same type and class
5632	as that currently effective at the time the applicant entered
5633	military service; but, if such type and class of appointment is
5634	not being currently issued under this code, the new appointment
5635	shall be of that type and class or classes most closely
5636	resembling those of the former appointment.
5637	Section 120. Subsections (1) and (5) of section 626.872,
5638	Florida Statutes, are amended to read:
5639	626.872 Temporary license.--
5640	(1) The officedepartmentmay, in its discretion, issue a
5641	temporary license as an independent adjuster or as a company
5642	employee adjuster, subject to the following conditions:
5643	(a) The applicant must be an employee of an adjuster
5644	currently licensed by the officedepartment, an employee of an
5645	authorized insurer, or an employee of an established adjusting
5646	firm or corporation which is supervised by a currently licensed
5647	independent adjuster.
5648	(b) The application must be accompanied by a certificate
5649	of employment and a report as to the applicant's integrity and
5650	moral character on a form prescribed by the commission
5651	departmentand executed by the employer.
5652	(c) The applicant must be a natural person of at least 18
5653	years of age, must be a bona fide resident of this state, must
5654	be trustworthy, and must have such business reputation as would
5655	reasonably assure that the applicant will conduct his or her
5656	business as an adjuster fairly and in good faith and without
5657	detriment to the public.
5658	(d) The applicant's employer is responsible for the
5659	adjustment acts of any licensee under this section.
5660	(e) The applicable license fee specified must be paid
5661	before issuance of the temporary license.
5662	(f) The temporary license shall be effective for a period
5663	of 1 year, but subject to earlier termination at the request of
5664	the employer, or if the licensee fails to take an examination as
5665	an independent adjuster or company employee adjuster within 6
5666	months after issuance of the temporary license, or if suspended
5667	or revoked by the officedepartment.
5668	(5) The officedepartmentshall not issue a temporary
5669	license as an independent adjuster or as a company employee
5670	adjuster to any individual who has ever held such a license in
5671	this state.
5672	Section 121. Subsection (1) of section 626.873, Florida
5673	Statutes, is amended to read:
5674	626.873 Nonresident company employee adjusters.--
5675	(1) The officedepartmentshall, upon application
5676	therefor, issue a license to an applicant for a nonresident
5677	adjuster's license upon determining that the applicant has paid
5678	the applicable license fees required under s. 624.501 and:
5679	(a) Is a currently licensed insurance adjuster in his or
5680	her home state, if such state requires a license.
5681	(b) Is an employee of an insurer, or a wholly owned
5682	subsidiary of an insurer, admitted to do business in this state.
5683	(c) Has filed a certificate or letter of authorization
5684	from the insurance department of his or her home state, if such
5685	state requires an adjuster to be licensed, stating that he or
5686	she holds a current license or authorization to adjust insurance
5687	losses. Such certificate or authorization must be signed by the
5688	insurance commissioner, or his or her deputy, of the adjuster's
5689	home state and must reflect whether or not the adjuster has ever
5690	had his or her license or authorization in the adjuster's home
5691	state suspended or revoked and, if such is the case, the reason
5692	for such action.
5693	Section 122. Section 626.8732, Florida Statutes, is
5694	amended to read:
5695	626.8732 Nonresident public adjuster's qualifications,
5696	bond.--
5697	(1) The officedepartmentshall, upon application
5698	therefor, issue a license to an applicant for a nonresident
5699	public adjuster's license upon determining that the applicant
5700	has paid the applicable license fees required under s. 624.501
5701	and:
5702	(a) Is a natural person at least 18 years of age.
5703	(b) Has passed to the satisfaction of the office
5704	departmenta written Florida public adjuster's examination of
5705	the scope prescribed in s. 626.241(6); however, the requirement
5706	for such an examination does not apply to any of the following:
5707	1. An applicant who is licensed as a resident public
5708	adjuster in his or her state of residence, when that state
5709	requires the passing of a written examination in order to obtain
5710	the license and a reciprocal agreement with the appropriate
5711	official of that state has been entered into by the office
5712	department; or
5713	2. An applicant who is licensed as a nonresident public
5714	adjuster in a state other than his or her state of residence
5715	when the state of licensure requires the passing of a written
5716	examination in order to obtain the license and a reciprocal
5717	agreement with the appropriate official of the state of
5718	licensure has been entered into by the officedepartment.
5719	(c) Is self-employed as a public adjuster or associated
5720	with or employed by a public adjusting firm or other public
5721	adjuster. Applicants licensed as nonresident public adjusters
5722	under this section must be appointed as such in accordance with
5723	the provisions of ss. 626.112 and 626.451. Appointment fees in
5724	the amount specified in s. 624.501 must be paid to the office
5725	departmentin advance. The appointment of a nonresident public
5726	adjuster shall continue in force until suspended, revoked, or
5727	otherwise terminated, but subject to biennial renewal or
5728	continuation by the licensee in accordance with procedures
5729	prescribed in s. 626.381 for licensees in general.
5730	(d) Is trustworthy and has such business reputation as
5731	would reasonably assure that he or she will conduct his or her
5732	business as a nonresident public adjuster fairly and in good
5733	faith and without detriment to the public.
5734	(e) Has had sufficient experience, training, or
5735	instruction concerning the adjusting of damages or losses under
5736	insurance contracts, other than life and annuity contracts; is
5737	sufficiently informed as to the terms and effects of the
5738	provisions of those types of insurance contracts; and possesses
5739	adequate knowledge of the laws of this state relating to such
5740	contracts as to enable and qualify him or her to engage in the
5741	business of insurance adjuster fairly and without injury to the
5742	public or any member thereof with whom he or she may have
5743	business as a public adjuster.
5744	(2) The applicant shall furnish the following with his or
5745	her application:
5746	(a) A complete set of his or her fingerprints. The
5747	applicant's fingerprints must be certified by an authorized law
5748	enforcement officer. The officedepartmentmay not authorize an
5749	applicant to take the required examination or issue a
5750	nonresident public adjuster's license to the applicant until the
5751	officedepartmenthas received a report from the Florida
5752	Department of Law Enforcement and the Federal Bureau of
5753	Investigation relative to the existence or nonexistence of a
5754	criminal history report based on the applicant's fingerprints.
5755	(b) If currently licensed as a resident public adjuster in
5756	the applicant's state of residence, a certificate or letter of
5757	authorization from the licensing authority of the applicant's
5758	state of residence, stating that the applicant holds a current
5759	or comparable license to act as a public adjuster. The
5760	certificate or letter of authorization must be signed by the
5761	insurance commissioner or his or her deputy or the appropriate
5762	licensing official and must disclose whether the adjuster has
5763	ever had any license or eligibility to hold any license
5764	declined, denied, suspended, revoked, or placed on probation or
5765	whether an administrative fine or penalty has been levied
5766	against the adjuster and, if so, the reason for the action.
5767	(c) If the applicant's state of residence does not require
5768	licensure as a public adjuster and the applicant has been
5769	licensed as a resident insurance adjuster, agent, broker, or
5770	other insurance representative in his or her state of residence
5771	or any other state within the past 3 years, a certificate or
5772	letter of authorization from the licensing authority stating
5773	that the applicant holds or has held a license to act as such an
5774	insurance adjuster, agent, or other insurance representative.
5775	The certificate or letter of authorization must be signed by the
5776	insurance commissioner or his or her deputy or the appropriate
5777	licensing official and must disclose whether or not the
5778	adjuster, agent, or other insurance representative has ever had
5779	any license or eligibility to hold any license declined, denied,
5780	suspended, revoked, or placed on probation or whether an
5781	administrative fine or penalty has been levied against the
5782	adjuster and, if so, the reason for the action.
5783	(3) At the time of application for license as a
5784	nonresident public adjuster, the applicant shall file with the
5785	officedepartmenta bond executed and issued by a surety insurer
5786	authorized to transact surety business in this state, in the
5787	amount of $50,000, conditioned for the faithful performance of
5788	his or her duties as a nonresident public adjuster under the
5789	license applied for. The bond must be in favor of the office
5790	department and must specifically authorize recovery by the
5791	officedepartmentof the damages sustained if the licensee
5792	commits fraud or unfair practices in connection with his or her
5793	business as nonresident public adjuster. The aggregate liability
5794	of the surety for all the damages may not exceed the amount of
5795	the bond. The bond may not be terminated unless at least 30
5796	days' written notice is given to the licensee and filed with the
5797	officedepartment.
5798	(4) The usual and customary records pertaining to
5799	transactions under the license of a nonresident public adjuster
5800	must be retained for at least 3 years after completion of the
5801	adjustment and must be made available in this state to the
5802	officedepartmentupon request. The failure of a nonresident
5803	public adjuster to properly maintain records and make them
5804	available to the officedepartmentupon request constitutes
5805	grounds for the immediate suspension of the license issued under
5806	this section.
5807	(5) After licensure as a nonresident public adjuster, as a
5808	condition of doing business in this state, the licensee must
5809	annually on or before January 1, on a form prescribed by the
5810	commissiondepartment, submit an affidavit certifying that the
5811	licensee is familiar with and understands the insurance code and
5812	rules adopted thereunder and the provisions of the contracts
5813	negotiated or to be negotiated. Compliance with this filing
5814	requirement is a condition precedent to the issuance,
5815	continuation, reinstatement, or renewal of a nonresident public
5816	adjuster's appointment.
5817	Section 123. Subsections (1), (3), and (4) of section
5818	626.8734, Florida Statutes, are amended to read:
5819	626.8734 Nonresident independent adjuster's
5820	qualifications.--
5821	(1) The officedepartmentshall, upon application
5822	therefor, issue a license to an applicant for a nonresident
5823	independent adjuster's license upon determining that the
5824	applicant has paid the applicable license fees required under s.
5825	624.501 and:
5826	(a) Is a natural person at least 18 years of age.
5827	(b) Has passed to the satisfaction of the office
5828	departmenta written Florida independent adjuster's examination
5829	of the scope prescribed in s. 626.241(6); however, the
5830	requirement for the examination does not apply to any of the
5831	following:
5832	1. An applicant who is licensed as a resident independent
5833	adjuster in his or her state of residence when that state
5834	requires the passing of a written examination in order to obtain
5835	the license and a reciprocal agreement with the appropriate
5836	official of that state has been entered into by the office
5837	department; or
5838	2. An applicant who is licensed as a nonresident
5839	independent adjuster in a state other than his or her state of
5840	residence when the state of licensure requires the passing of a
5841	written examination in order to obtain the license and a
5842	reciprocal agreement with the appropriate official of the state
5843	of licensure has been entered into by the officedepartment.
5844	(c) Is self-employed or associated with or employed by an
5845	independent adjusting firm or other independent adjuster.
5846	Applicants licensed as nonresident independent adjusters under
5847	this section must be appointed as such in accordance with the
5848	provisions of ss. 626.112 and 626.451. Appointment fees in the
5849	amount specified in s. 624.501 must be paid to the office
5850	departmentin advance. The appointment of a nonresident
5851	independent adjuster shall continue in force until suspended,
5852	revoked, or otherwise terminated, but subject to biennial
5853	renewal or continuation by the licensee in accordance with
5854	procedures prescribed in s. 626.381 for licensees in general.
5855	(d) Is trustworthy and has such business reputation as
5856	would reasonably assure that he or she will conduct his or her
5857	business as a nonresident independent adjuster fairly and in
5858	good faith and without detriment to the public.
5859	(e) Has had sufficient experience, training, or
5860	instruction concerning the adjusting of damages or losses under
5861	insurance contracts, other than life and annuity contracts; is
5862	sufficiently informed as to the terms and effects of the
5863	provisions of those types of insurance contracts; and possesses
5864	adequate knowledge of the laws of this state relating to such
5865	contracts as to enable and qualify him or her to engage in the
5866	business of insurance adjuster fairly and without injury to the
5867	public or any member thereof with whom he or she may have
5868	business as an independent adjuster.
5869	(3) The usual and customary records pertaining to
5870	transactions under the license of a nonresident independent
5871	adjuster must be retained for at least 3 years after completion
5872	of the adjustment and must be made available in this state to
5873	the officedepartmentupon request. The failure of a nonresident
5874	independent adjuster to properly maintain records and make them
5875	available to the officedepartmentupon request constitutes
5876	grounds for the immediate suspension of the license issued under
5877	this section.
5878	(4) After licensure as a nonresident independent adjuster,
5879	as a condition of doing business in this state, the licensee
5880	must annually on or before January 1, on a form prescribed by
5881	the commissiondepartment, submit an affidavit certifying that
5882	the licensee is familiar with and understands the insurance laws
5883	and administrative rules of this state and the provisions of the
5884	contracts negotiated or to be negotiated. Compliance with this
5885	filing requirement is a condition precedent to the issuance,
5886	continuation, reinstatement, or renewal of a nonresident
5887	independent adjuster's appointment.
5888	Section 124. Section 626.8736, Florida Statutes, is
5889	amended to read:
5890	626.8736 Nonresident independent or public adjusters;
5891	service of process.--
5892	(1) Each licensed nonresident independent or public
5893	adjuster shall appoint the Chief Financial OfficerInsurance
5894	Commissioner and Treasurerand his or her successors in office
5895	as his or her attorney to receive service of legal process
5896	issued against the nonresident independent or public adjuster in
5897	this state, upon causes of action arising within this state out
5898	of transactions under his license and appointment. Service upon
5899	the Chief Financial OfficerInsurance Commissioner and Treasurer
5900	as attorney shall constitute effective legal service upon the
5901	nonresident independent or public adjuster.
5902	(2) The appointment of the Chief Financial Officer
5903	Insurance Commissioner and Treasurerfor service of process
5904	shall be irrevocable for as long as there could be any cause of
5905	action against the nonresident independent or public adjuster
5906	arising out of his or her insurance transactions in this state.
5907	(3) Duplicate copies of legal process against the
5908	nonresident independent or public adjuster shall be served upon
5909	the Chief Financial OfficerInsurance Commissioner and Treasurer
5910	by a person competent to serve a summons.
5911	(4) Upon receiving the service, the Chief Financial
5912	OfficerInsurance Commissioner and Treasurershall forthwith
5913	send one of the copies of the process, by registered mail with
5914	return receipt requested, to the defendant nonresident
5915	independent or public adjuster at his or her last address of
5916	record with the officedepartment.
5917	(5) The Chief Financial OfficerInsurance Commissioner and
5918	Treasurershall keep a record of the day and hour of service
5919	upon him or her of all legal process received under this
5920	section.
5921	Section 125. Section 626.8738, Florida Statutes, is
5922	amended to read:
5923	626.8738 Penalty for violation.--In addition to any other
5924	remedy imposed pursuant to this code, any person who acts as a
5925	resident or nonresident public adjuster or holds himself or
5926	herself out to be a public adjuster to adjust claims in this
5927	state, without being licensed by the officedepartmentas a
5928	public adjuster and appointed as a public adjuster, commits a
5929	felony of the third degree, punishable as provided in s.
5930	775.082, s. 775.083, or s. 775.084. Each act in violation of
5931	this section constitutes a separate offense.
5932	Section 126. Section 626.874, Florida Statutes, is amended
5933	to read:
5934	626.874 Catastrophe or emergency adjusters.--
5935	(1) In the event of a catastrophe or emergency, the office
5936	departmentmay issue a license, for the purposes and under the
5937	conditions which it shall fix and for the period of emergency as
5938	it shall determine, to persons who are residents or nonresidents
5939	of this state and who are not licensed adjusters under this part
5940	but who have been designated and certified to it as qualified to
5941	act as adjusters by independent resident adjusters or by an
5942	authorized insurer or by a licensed general lines agent to
5943	adjust claims, losses, or damages under policies or contracts of
5944	insurance issued by such insurers. The fee for the license
5945	shall be as provided in s. 624.501(12)(c).
5946	(2) If any person not a licensed adjuster who has been
5947	permitted to adjust such losses, claims, or damages under the
5948	conditions and circumstances set forth in subsection (1),
5949	engages in any of the misconduct described in or contemplated by
5950	ss. 626.611 and 626.621, the officedepartment, without notice
5951	and hearing, shall be authorized to issue its order denying such
5952	person the privileges granted under this section; and thereafter
5953	it shall be unlawful for any such person to adjust any such
5954	losses, claims, or damages in this state.
5955	Section 127. Section 626.878, Florida Statutes, is amended
5956	to read:
5957	626.878 Rules; code of ethics.--An adjuster shall
5958	subscribe to the code of ethics specified in the rules of the
5959	commissiondepartment.
5960	Section 128. Paragraphs (d) and (m) of subsection (1) of
5961	section 626.88, Florida Statutes, are amended to read:
5962	626.88 Definitions of "administrator" and "insurer".--
5963	(1) For the purposes of this part, an "administrator" is
5964	any person who directly or indirectly solicits or effects
5965	coverage of, collects charges or premiums from, or adjusts or
5966	settles claims on residents of this state in connection with
5967	authorized commercial self-insurance funds or with insured or
5968	self-insured programs which provide life or health insurance
5969	coverage or coverage of any other expenses described in s.
5970	624.33(1) or any person who, through a health care risk contract
5971	as defined in s. 641.234 with an insurer or health maintenance
5972	organization, provides billing and collection services to health
5973	insurers and health maintenance organizations on behalf of
5974	health care providers, other than any of the following persons:
5975	(d) A health care services plan, health maintenance
5976	organization, professional service plan corporation, or person
5977	in the business of providing continuing care, possessing a valid
5978	certificate of authority issued by the officedepartment, and
5979	the sales representatives thereof, if the activities of such
5980	entity are limited to the activities permitted under the
5981	certificate of authority.
5982	(m) A person approved by the department of Insurancewho
5983	administers only self-insured workers' compensation plans.
5984
5985
5986	A person who provides billing and collection services to health
5987	insurers and health maintenance organizations on behalf of
5988	health care providers shall comply with the provisions of ss.
5989	627.6131, 641.3155, and 641.51(4).
5990	Section 129. Section 626.8805, Florida Statutes, is
5991	amended to read:
5992	626.8805 Certificate of authority to act as
5993	administrator.--
5994	(1) It is unlawful for any person to act as or hold
5995	himself or herself out to be an administrator in this state
5996	without a valid certificate of authority issued by the office
5997	departmentpursuant to ss. 626.88-626.894. To qualify for and
5998	hold authority to act as an administrator in this state, an
5999	administrator must otherwise be in compliance with this code and
6000	with its organizational agreement. The failure of any person to
6001	hold such a certificate while acting as an administrator shall
6002	subject such person to a fine of not less than $5,000 or more
6003	than $10,000 for each violation.
6004	(2) The administrator shall file with the office
6005	departmentan application for a certificate of authority upon a
6006	form to be adopted by the commission and furnished by the office
6007	department, which application shall include or have attached the
6008	following information and documents:
6009	(a) All basic organizational documents of the
6010	administrator, such as the articles of incorporation, articles
6011	of association, partnership agreement, trade name certificate,
6012	trust agreement, shareholder agreement, and other applicable
6013	documents, and all amendments to those documents.
6014	(b) The bylaws, rules, and regulations or similar
6015	documents regulating the conduct or the internal affairs of the
6016	administrator.
6017	(c) The names, addresses, official positions, and
6018	professional qualifications of the individuals who are
6019	responsible for the conduct of the affairs of the administrator,
6020	including all members of the board of directors, board of
6021	trustees, executive committee, or other governing board or
6022	committee, the principal officers in the case of a corporation,
6023	the partners or members in the case of a partnership or
6024	association, and any other person who exercises control or
6025	influence over the affairs of the administrator.
6026	(d) Annual statements or reports for the 3 most recent
6027	years, or such other information as the officedepartmentmay
6028	require in order to review the current financial condition of
6029	the applicant.
6030	(e) If the applicant is not currently acting as an
6031	administrator, a statement of the amounts and sources of the
6032	funds available for organization expenses and the proposed
6033	arrangements for reimbursement and compensation of incorporators
6034	or other principals.
6035	(3) The applicant shall make available for inspection by
6036	the officedepartmentcopies of all contracts with insurers or
6037	other persons utilizing the services of the administrator.
6038	(4) The officedepartmentshall not issue a certificate of
6039	authority if it determines that the administrator or any
6040	principal thereof is not competent, trustworthy, financially
6041	responsible, or of good personal and business reputation or has
6042	had an insurance license denied for cause by any state.
6043	(5) A certificate of authority issued under this section
6044	shall remain valid, unless suspended or revoked by the office
6045	department, so long as the certificateholder continues in
6046	business in this state.
6047	(6) A certificate of authority issued under this section
6048	shall indicate that the administrator is authorized to
6049	administer commercial self-insurance funds or life and health
6050	programs or both, except that a certificate of authority issued
6051	prior to October 1, 1988, does not authorize the administration
6052	of commercial self-insurance funds.
6053	Section 130. Section 626.8809, Florida Statutes, is
6054	amended to read:
6055	626.8809 Fidelity bond.--An administrator shall have and
6056	keep in full force and effect a fidelity bond equal to at least
6057	10 percent of the amount of the funds handled or managed
6058	annually by the administrator. However, the officedepartment
6059	may not require a bond greater than $500,000 unless the office
6060	department, after due notice to all interested parties and
6061	opportunity for hearing and after consideration of the record,
6062	requires an amount in excess of $500,000 but not more than 10
6063	percent of the amount of the funds handled or managed annually
6064	by the administrator.
6065	Section 131. Section 626.8814, Florida Statutes, is
6066	amended to read:
6067	626.8814 Disclosure of ownership or affiliation.--Each
6068	administrator shall identify to the officedepartmentany
6069	ownership interest or affiliation of any kind with any insurance
6070	company responsible for providing benefits directly or through
6071	reinsurance to any plan for which the administrator provides
6072	administrative services.
6073	Section 132. Subsection (2) of section 626.884, Florida
6074	Statutes, is amended to read:
6075	626.884 Maintenance of records by administrator; access;
6076	confidentiality.--
6077	(2) The officedepartmentshall have access to books and
6078	records maintained by the administrator for the purpose of
6079	examination, audit, and inspection. Information contained in
6080	such books and records is confidential and exempt from the
6081	provisions of s. 119.07(1) if the disclosure of such information
6082	would reveal a trade secret as defined in s. 688.002. However,
6083	the officedepartmentmay use such information in any proceeding
6084	instituted against the administrator.
6085	Section 133. Subsections (1) and (3) of section 626.89,
6086	Florida Statutes, are amended to read:
6087	626.89 Annual financial statement and filing fee; notice
6088	of change of ownership.--
6089	(1) Each authorized administrator shall file with the
6090	officedepartmenta full and true statement of its financial
6091	condition, transactions, and affairs. The statement shall be
6092	filed annually on or before March 1 or within such extension of
6093	time therefor as the officedepartmentfor good cause may have
6094	granted and shall be for the preceding calendar year. The
6095	statement shall be in such form and contain such matters as the
6096	commissiondepartmentprescribes and shall be verified by at
6097	least two officers of such administrator.
6098	(3) In addition, the administrator shall immediately
6099	notify the officedepartmentof any material change in its
6100	ownership.
6101	Section 134. Section 626.891, Florida Statutes, is amended
6102	to read:
6103	626.891 Grounds for suspension or revocation of
6104	certificate of authority.--
6105	(1) The certificate of authority of an administrator shall
6106	be suspended or revoked if the officedepartmentdetermines that
6107	the administrator:
6108	(a) Is in an unsound financial condition;
6109	(b) Has used or is using such methods or practices in the
6110	conduct of its business so as to render its further transaction
6111	of business in this state hazardous or injurious to insured
6112	persons or the public; or
6113	(c) Has failed to pay any judgment rendered against it in
6114	this state within 60 days after the judgment has become final.
6115	(2) The officedepartmentmay, in its discretion, suspend
6116	or revoke the certificate of authority of an administrator if it
6117	finds that the administrator:
6118	(a) Has violated any lawful rule or order of the
6119	commission or officedepartmentor any provision of this
6120	chapter;
6121	(b) Has refused to be examined or to produce its accounts,
6122	records, and files for examination, or if any of its officers
6123	has refused to give information with respect to its affairs or
6124	has refused to perform any other legal obligation as to such
6125	examination, when required by the officedepartment;
6126	(c) Has, without just cause, refused to pay proper claims
6127	or perform services arising under its contracts or has, without
6128	just cause, compelled insured persons to accept less than the
6129	amount due them or to employ attorneys or bring suit against the
6130	administrator to secure full payment or settlement of such
6131	claims;
6132	(d) Is or was affiliated with and under the same general
6133	management or interlocking directorate or ownership as another
6134	administrator which transacts business in this state without
6135	having a certificate of authority;
6136	(e) At any time fails to meet any qualification for which
6137	issuance of the certificate could have been refused had such
6138	failure then existed and been known to the officedepartment;
6139	(f) Has been convicted of, or has entered a plea of guilty
6140	or nolo contendere to, a felony relating to the business of
6141	insurance or insurance administration in this state or in any
6142	other state without regard to whether adjudication was withheld;
6143	or
6144	(g) Is under suspension or revocation in another state.
6145	(3) The officedepartmentmay, pursuant to s. 120.60, in
6146	its discretion and without advance notice or hearing thereon,
6147	immediately suspend the certificate of any administrator if it
6148	finds that one or more of the following circumstances exist:
6149	(a) The administrator is insolvent or impaired.
6150	(b) The fidelity bond required by s. 626.8809 is not
6151	maintained.
6152	(c) A proceeding for receivership, conservatorship,
6153	rehabilitation, or other delinquency proceeding regarding the
6154	administrator has been commenced in any state.
6155	(d) The financial condition or business practices of the
6156	administrator otherwise pose an imminent threat to the public
6157	health, safety, or welfare of the residents of this state.
6158	(4) The violation of this part by any insurer shall be a
6159	ground for suspension or revocation of the certificate of
6160	authority of that insurer in this state.
6161	Section 135. Section 626.892, Florida Statutes, is amended
6162	to read:
6163	626.892 Order of suspension or revocation of certificate
6164	of authority; notice.--
6165	(1) The suspension or revocation of a certificate of
6166	authority of an administrator shall be effected by order of the
6167	officedepartmentmailed to the administrator by registered or
6168	certified mail.
6169	(2) In its discretion, the officedepartmentmay cause
6170	notice of any such revocation or suspension to be published in
6171	one or more newspapers of general circulation published in this
6172	state.
6173	Section 136. Subsections (1), (3), and (4) of section
6174	626.894, Florida Statutes, are amended to read:
6175	626.894 Administrative fine in lieu of suspension or
6176	revocation.--
6177	(1) If the officedepartmentfinds that one or more
6178	grounds exist for the suspension or revocation of a certificate
6179	of authority issued under this part, the officedepartmentmay,
6180	in lieu of such suspension or revocation, impose a fine upon the
6181	administrator.
6182	(3) With respect to any knowing and willful violation of a
6183	lawful order or rule of the office or commissiondepartmentor a
6184	provision of this part, the officedepartmentmay impose a fine
6185	upon the administrator in an amount not to exceed $5,000 for
6186	each such violation. In no event may such fine exceed an
6187	aggregate amount of $25,000 for all knowing and willful
6188	violations arising out of the same action. In addition to such
6189	fine, the administrator shall make restitution when due in
6190	accordance with the provisions of subsection (2).
6191	(4) The failure of an administrator to make restitution
6192	when due as required under this section constitutes a willful
6193	violation of this part. However, if an administrator in good
6194	faith is uncertain as to whether any restitution is due or as to
6195	the amount of restitution due, it shall promptly notify the
6196	officedepartmentof the circumstances; and the failure to make
6197	restitution pending a determination of whether restitution is
6198	due or the amount of restitution due will not constitute a
6199	violation of this part.
6200	Section 137. Section 626.895, Florida Statutes, is amended
6201	to read:
6202	626.895 Definition of "service company" or "service
6203	agent".--For the purpose of this part, a "service company" is
6204	any business entity which has met all the requirements of ss.
6205	626.895-626.899, which does not control funds, and which has
6206	obtained officedepartmentapproval to contract with self-
6207	insurers or multiple-employer welfare arrangements for the
6208	purpose of providing all or any part of the services necessary
6209	to establish and maintain a multiple-employer welfare
6210	arrangement as defined in s. 624.437(1). The term "service
6211	agent" is synonymous with the term "service company" as used in
6212	this part.
6213	Section 138. Subsection (3) of section 626.896, Florida
6214	Statutes, is amended to read:
6215	626.896 Servicing requirements for self-insurers and
6216	multiple-employer welfare arrangements.--
6217	(3) It is the responsibility of the self-insurer or
6218	multiple-employer welfare arrangement to notify the office
6219	departmentwithin 90 days of changing its method of fulfilling
6220	its servicing requirements from those which were previously
6221	filed with the officedepartment.
6222	Section 139. Subsection (2) of section 626.897, Florida
6223	Statutes, is amended to read:
6224	626.897 Application for authorization to act as service
6225	company; bond.--
6226	(2) Any business desiring to act as a service company for
6227	individual self-insurers or multiple-employer welfare
6228	arrangements shall be approved by the officedepartment. Any
6229	business acting as a service company prior to October 1, 1983,
6230	will be approved as a service company upon complying with the
6231	filing requirements of this section and s. 626.898. The failure
6232	of any person to obtain such approval while acting as a service
6233	company shall subject such person to a fine of not less than
6234	$5,000 or more than $10,000 for each violation.
6235	Section 140. Subsections (3) and (10) of section 626.898,
6236	Florida Statutes, are amended to read:
6237	626.898 Requirements for retaining authorization as
6238	service company; recertification.--
6239	(3)(a) Each service company shall maintain at one or more
6240	locations within this state copies of all contracts with each
6241	self-insurer or multiple-employer welfare arrangement that it
6242	services and records relating thereto which are sufficient in
6243	type and quantity to verify the accuracy and completeness of all
6244	reports and documents submitted to the officedepartment
6245	pursuant to this part. In the event that the service company has
6246	its records distributed in multiple locations, it shall inform
6247	the officedepartmentas to the location of each type of record,
6248	as well as the location of specific records for the self-
6249	insurers or multiple-employer welfare arrangements it services.
6250	(b) These records shall be open to inspection by
6251	representatives of the officedepartmentduring regular business
6252	hours. All records shall be retained according to the schedule
6253	adopted by the commissiondepartmentfor similar documents. The
6254	location of these records shall be made known to the office
6255	departmentas necessary.
6256	(10) Each service company shall identify to the office
6257	departmentany ownership interest or affiliation of any kind
6258	with any insurance company responsible directly or through
6259	reinsurance for providing benefits to any plan for which it
6260	provides services.
6261	Section 141. Section 626.899, Florida Statutes, is amended
6262	to read:
6263	626.899 Withdrawal of authorization as service
6264	company.--The failure to comply with any provision of ss.
6265	626.895-626.899 or with any rule or any order of the commission
6266	or officedepartmentwithin the time prescribed shall be
6267	considered good cause for withdrawal of the certificate of
6268	approval. The officedepartmentshall by registered or
6269	certified mail give to the service company prior written notice
6270	of such withdrawal. The service company shall have 30 days from
6271	the date of mailing to request a hearing. The failure to
6272	request a hearing within the time prescribed shall result in the
6273	withdrawal becoming effective 45 days from the date of mailing
6274	of the original notice. In no event shall the withdrawal of the
6275	certificate of approval be effective prior to the date upon
6276	which a hearing, if requested, is scheduled. Copies of such
6277	notice of withdrawal of a certificate of approval shall be
6278	furnished by the officedepartmentto each self-funded program
6279	serviced.
6280	Section 142. Subsection (4) of section 626.901, Florida
6281	Statutes, is amended to read:
6282	626.901 Representing or aiding unauthorized insurer
6283	prohibited.--
6284	(4) This section does not apply to:
6285	(a) Matters authorized to be done by the officedepartment
6286	under the Unauthorized Insurers Process Law, ss. 626.904-
6287	626.912.
6288	(b) Surplus lines insurance when written pursuant to the
6289	Surplus Lines Law, ss. 626.913-626.937.
6290	(c) Transactions as to which a certificate of authority is
6291	not required of an insurer, as stated in s. 624.402.
6292	(d) Independently procured coverage written pursuant to s.
6293	626.938.
6294	Section 143. Section 626.906, Florida Statutes, is amended
6295	to read:
6296	626.906 Acts constituting Chief Financial Officer
6297	Insurance Commissioner and Treasureras process agent.--Any of
6298	the following acts in this state, effected by mail or otherwise,
6299	by an unauthorized foreign insurer, alien insurer, or person
6300	representing or aiding such an insurer is equivalent to and
6301	shall constitute an appointment by such insurer or person
6302	representing or aiding such insurer of the Chief Financial
6303	OfficerInsurance Commissioner and Treasurer, and his or her
6304	successor or successors in office,to be its true and lawful
6305	attorney, upon whom may be served all lawful process in any
6306	action, suit, or proceeding instituted by or on behalf of an
6307	insured or beneficiary, arising out of any such contract of
6308	insurance; and any such act shall be signification of the
6309	insurer's or person's agreement that such service of process is
6310	of the same legal force and validity as personal service of
6311	process in this state upon such insurer or person representing
6312	or aiding such insurer:
6313	(1) The issuance or delivery of contracts of insurance to
6314	residents of this state or to corporations authorized to do
6315	business therein;
6316	(2) The solicitation of applications for such contracts;
6317	(3) The collection of premiums, membership fees,
6318	assessments, or other considerations for such contracts; or
6319	(4) Any other transaction of insurance.
6320	Section 144. Subsection (1) of section 626.907, Florida
6321	Statutes, is amended to read:
6322	626.907 Service of process; judgment by default.--
6323	(1) Service of process upon an insurer or person
6324	representing or aiding such insurer pursuant to s. 626.906 shall
6325	be made by delivering to and leaving with the Chief Financial
6326	OfficerInsurance Commissioner and Treasureror some person in
6327	apparent charge of his or her office two copies thereof. The
6328	Chief Financial OfficerInsurance Commissioner and Treasurer
6329	shall forthwith mail by registered mail one of the copies of
6330	such process to the defendant at the defendant's last known
6331	principal place of business and shall keep a record of all
6332	process so served upon him or her. The service of process is
6333	sufficient, provided notice of such service and a copy of the
6334	process are sent within 10 days thereafter by registered mail by
6335	plaintiff or plaintiff's attorney to the defendant at the
6336	defendant's last known principal place of business, and the
6337	defendant's receipt, or receipt issued by the post office with
6338	which the letter is registered, showing the name of the sender
6339	of the letter and the name and address of the person to whom the
6340	letter is addressed, and the affidavit of the plaintiff or
6341	plaintiff's attorney showing a compliance herewith are filed
6342	with the clerk of the court in which the action is pending on or
6343	before the date the defendant is required to appear, or within
6344	such further time as the court may allow.
6345	Section 145. Section 626.909, Florida Statutes, is amended
6346	to read:
6347	626.909 Jurisdiction of office anddepartment; service of
6348	process on Secretary of State.--
6349	(1) The Legislature hereby declares that it is a subject
6350	of concern that the purpose of the Unauthorized Insurers Process
6351	Law as expressed in s. 626.905 may be denied by the possibility
6352	that the right of service of process provided for in that law
6353	may be restricted only to those actions, suits, or proceedings
6354	brought by insureds or beneficiaries. It therefore declares that
6355	it is the intent of s. 626.905 that it is the obligation and
6356	duty of the state to protect its residents and also proceed
6357	under this law through the office ordepartment in the courts of
6358	this state. It further declares that it is also the intent of
6359	the Legislature to subject unauthorized insurers and persons
6360	representing or aiding such insurers to the jurisdiction of the
6361	office ordepartment in proceedings, examinations, or hearings
6362	before it as provided for in this code.
6363	(2) In addition to the procedure for service of process on
6364	unauthorized insurers or persons representing or aiding such
6365	insurers contained in ss. 626.906 and 626.907, the office or
6366	department shall have the right to bring any action, suit, or
6367	proceeding in the name of the state or conduct any proceeding,
6368	examination, or hearing provided for in this code against any
6369	unauthorized insurer or person representing or aiding such
6370	insurer for violation of any lawful order of the office or
6371	department or any provision of this code, specifically including
6372	but not limited to the regulation of trade practices provided
6373	for in part IX of this chapter, if the insurer or person
6374	representing or aiding such insurer transacts insurance in this
6375	state as defined in ss. 624.10 and 626.906 and the insurer does
6376	not transact such business under a subsisting certificate of
6377	authority as required by s. 624.401. In the event the
6378	transaction of business is done by mail, the venue of the act is
6379	at the point where the matter transmitted by mail is delivered
6380	and takes effect.
6381	(3) In addition to the right of action, suit, or
6382	proceeding authorized by subsection (2), the office or
6383	department shall have the right to bring a civil action in the
6384	name of the state, as parens patriae on behalf of any insured,
6385	beneficiary of any insured, claimant or dependent, or any other
6386	person or class of persons injured as a result of the
6387	transaction of any insurance business as defined in s. 626.906
6388	by any unauthorized insurer, as defined in s. 624.09 who is also
6389	an ineligible insurer as set forth in ss. 626.917 and 626.918,
6390	or any person who represents or aids any unauthorized insurer,
6391	in violation of s. 626.901, to recover actual damages on behalf
6392	of individuals who were residents at the time the transaction
6393	occurred and the cost of such suit, including a reasonable
6394	attorney's fee. The court shall exclude from the amount of
6395	monetary relief awarded in such action any amount of monetary
6396	relief which duplicates amounts which have been awarded for the
6397	same injury.
6398	(4) Transaction of business in this state, as so defined,
6399	by any unauthorized insurer or person representing or aiding
6400	such insurer shall be deemed consent by the insurer or person
6401	representing or aiding such insurer to the jurisdiction of the
6402	office ordepartment in proceedings, examinations, and hearings
6403	before it as provided for in this code and shall constitute an
6404	irrevocable appointment by the insurer or person representing or
6405	aiding such insurer of the Secretary of State and his or her
6406	successor or successors in office as its true and lawful
6407	attorney upon whom may be served all lawful process in any
6408	action, suit, or proceeding in any court by the office or
6409	department or by the state and upon whom may be served all
6410	notices and orders of the office ordepartment arising out of
6411	any such transaction of business; and such transaction of
6412	business shall constitute the agreement of the insurer or person
6413	representing or aiding such insurer that any such process
6414	against it or any such notice or order which is so served shall
6415	be of the same legal force and validity as if served personally
6416	within this state on the insurer or person representing or
6417	aiding such insurer. Service of process shall be in accordance
6418	with and in the same manner as now provided for service of
6419	process upon nonresidents under the provision of s. 48.161, and
6420	service of process shall also be valid if made as provided in s.
6421	626.907(2).
6422	(5) No plaintiff shall be entitled to a judgment by
6423	default or a decree pro confesso under this section until the
6424	expiration of 30 days after date of the filing of the affidavit
6425	of compliance.
6426	(6) Nothing in this section shall limit or abridge the
6427	right to serve any process, notice, orders, or demand upon the
6428	insurer or person representing or aiding such insurer in any
6429	other manner now or hereafter permitted by law.
6430	(7) Nothing in this section shall apply as to surplus
6431	lines insurance when written pursuant to the Surplus Lines Law,
6432	ss. 626.913-626.937, or as to transactions as to which a
6433	certificate of authority is not required of the insurer, as
6434	stated in s. 624.402.
6435	Section 146. Section 626.910, Florida Statutes, is amended
6436	to read:
6437	626.910 Penalty for violation by unauthorized insurers and
6438	persons representing or aiding such insurers.--Any unauthorized
6439	insurer or person representing or aiding such insurer
6440	transacting insurance in this state and subject to service of
6441	process as referred to in s. 626.909 shall forfeit and pay to
6442	the state a civil penalty of not more than $1,000 for each
6443	nonwillful violation, or not more than $10,000 for each willful
6444	violation, of any lawful order of the office ordepartment or
6445	any provision of this code.
6446	Section 147. Section 626.912, Florida Statutes, is amended
6447	to read:
6448	626.912 Exemptions from ss. 626.904-626.911.--The
6449	provisions of ss. 626.904-626.911 do not apply to any action,
6450	suit, or proceeding against any unauthorized foreign insurer,
6451	alien insurer, or person representing or aiding such an insurer
6452	arising out of any contract of insurance:
6453	(1) Covering reinsurance, wet marine and transportation,
6454	commercial aircraft, or railway insurance risks;
6455	(2) Against legal liability arising out of the ownership,
6456	operation, or maintenance of any property having a permanent
6457	situs outside this state;
6458	(3) Against loss of or damage to any property having a
6459	permanent situs outside this state; or
6460	(4) Issued under and in accordance with the Surplus Lines
6461	Law, when such insurer or person representing or aiding such
6462	insurer enters a general appearance or when such contract of
6463	insurance contains a provision designating the Chief Financial
6464	OfficerInsurance Commissioner and Treasurer and his or her
6465	successor or successors inoffice or designating a Florida
6466	resident agent to be the true and lawful attorney of such
6467	unauthorized insurer or person representing or aiding such
6468	insurer upon whom may be served all lawful process in any
6469	action, suit, or proceeding instituted by or on behalf of an
6470	insured or person representing or aiding such insurer or
6471	beneficiary arising out of any such contract of insurance; and
6472	service of process effected on such Chief Financial Officer
6473	Insurance Commissioner and Treasurer, his or her successor or
6474	successors in office,or such resident agent shall be deemed to
6475	confer complete jurisdiction over such unauthorized insurer or
6476	person representing or aiding such insurer in such action.
6477	Section 148. Subsection (2) of section 626.914, Florida
6478	Statutes, is amended to read:
6479	626.914 Definitions.--As used in this Surplus Lines Law,
6480	the term:
6481	(2) "Eligible surplus lines insurer" means an unauthorized
6482	insurer which has been made eligible by the officedepartmentto
6483	issue insurance coverage under this Surplus Lines Law.
6484	Section 149. Subsections (1) and (2) of section 626.916,
6485	Florida Statutes, are amended to read:
6486	626.916 Eligibility for export.--
6487	(1) No insurance coverage shall be eligible for export
6488	unless it meets all of the following conditions:
6489	(a) The full amount of insurance required must not be
6490	procurable, after a diligent effort has been made by the
6491	producing agent to do so, from among the insurers authorized to
6492	transact and actually writing that kind and class of insurance
6493	in this state, and the amount of insurance exported shall be
6494	only the excess over the amount so procurable from authorized
6495	insurers. Surplus lines agents must verify that a diligent
6496	effort has been made by requiring a properly documented
6497	statement of diligent effort from the retail or producing agent.
6498	However, to be in compliance with the diligent effort
6499	requirement, the surplus lines agent's reliance must be
6500	reasonable under the particular circumstances surrounding the
6501	export of that particular risk. Reasonableness shall be assessed
6502	by taking into account factors which include, but are not
6503	limited to, a regularly conducted program of verification of the
6504	information provided by the retail or producing agent.
6505	Declinations must be documented on a risk-by-risk basis. If it
6506	is not possible to obtain the full amount of insurance required
6507	by layering the risk, it is permissible to export the full
6508	amount.
6509	(b) The premium rate at which the coverage is exported
6510	shall not be lower than that rate applicable, if any, in actual
6511	and current use by a majority of the authorized insurers for the
6512	same coverage on a similar risk.
6513	(c) The policy or contract form under which the insurance
6514	is exported shall not be more favorable to the insured as to the
6515	coverage or rate than under similar contracts on file and in
6516	actual current use in this state by the majority of authorized
6517	insurers actually writing similar coverages on similar risks;
6518	except that a coverage may be exported under a unique form of
6519	policy designed for use with respect to a particular subject of
6520	insurance if a copy of such form is filed with the office
6521	departmentby the surplus lines agent desiring to use the same
6522	and is subject to the disapproval of the officedepartment
6523	within 10 days of filing such form exclusive of Saturdays,
6524	Sundays, and legal holidays if it finds that the use of such
6525	special form is not reasonably necessary for the principal
6526	purposes of the coverage or that its use would be contrary to
6527	the purposes of this Surplus Lines Law with respect to the
6528	reasonable protection of authorized insurers from unwarranted
6529	competition by unauthorized insurers.
6530	(d) Except as to extended coverage in connection with fire
6531	insurance policies and except as to windstorm insurance, the
6532	policy or contract under which the insurance is exported shall
6533	not provide for deductible amounts, in determining the existence
6534	or extent of the insurer's liability, other than those available
6535	under similar policies or contracts in actual and current use by
6536	one or more authorized insurers.
6537	(2) The commissiondepartment may by rulerules and
6538	regulationsdeclare eligible for export generally, and
6539	notwithstanding the provisions of paragraphs (a), (b), (c), and
6540	(d) of subsection (1), any class or classes of insurance
6541	coverage or risk for which it finds, after a hearing, that there
6542	is no reasonable or adequate market among authorized insurers.
6543	Any such rules and regulationsshall continue in effect during
6544	the existence of the conditions upon which predicated, but
6545	subject to termination by the commissiondepartment.
6546	Section 150. Subsection (1) of section 626.917, Florida
6547	Statutes, is amended to read:
6548	626.917 Eligibility for export; wet marine and
6549	transportation, aviation risks.--
6550	(1) Insurance coverage of wet marine and transportation
6551	risks, as defined in this code in s. 624.607(2), or aviation
6552	risks, including airport and products liability incidental
6553	thereto and hangarkeeper's liability, may be exported under the
6554	following conditions:
6555	(a) The insurance must be placed only by or through a
6556	licensed Florida surplus lines agent; and
6557	(b) The insurer must be one made eligible by the office
6558	departmentspecifically for such coverages, based upon
6559	information furnished by the insurer and indicating that the
6560	insurer is well able to meet its financial obligations.
6561	Section 151. Section 626.918, Florida Statutes, is amended
6562	to read:
6563	626.918 Eligible surplus lines insurers.--
6564	(1) No surplus lines agent shall place any coverage with
6565	any unauthorized insurer which is not then an eligible surplus
6566	lines insurer, except as permitted under subsections (5) and
6567	(6).
6568	(2) No unauthorized insurer shall be or become an eligible
6569	surplus lines insurer unless made eligible by the office
6570	departmentin accordance with the following conditions:
6571	(a) Eligibility of the insurer must be requested in
6572	writing by the Florida Surplus Lines Service Office;
6573	(b) The insurer must be currently an authorized insurer in
6574	the state or country of its domicile as to the kind or kinds of
6575	insurance proposed to be so placed and must have been such an
6576	insurer for not less than the 3 years next preceding or must be
6577	the wholly owned subsidiary of such authorized insurer or must
6578	be the wholly owned subsidiary of an already eligible surplus
6579	lines insurer as to the kind or kinds of insurance proposed for
6580	a period of not less than the 3 years next preceding. However,
6581	the officedepartmentmay waive the 3-year requirement if the
6582	insurer provides a product or service not readily available to
6583	the consumers of this state or has operated successfully for a
6584	period of at least 1 year next preceding and has capital and
6585	surplus of not less than $25 million;
6586	(c) Before granting eligibility, the requesting surplus
6587	lines agent or the insurer shall furnish the officedepartment
6588	with a duly authenticated copy of its current annual financial
6589	statement in the English language and with all monetary values
6590	therein expressed in United States dollars, at an exchange rate
6591	(in the case of statements originally made in the currencies of
6592	other countries) then-current and shown in the statement, and
6593	with such additional information relative to the insurer as the
6594	officedepartmentmay request;
6595	(d)1. The insurer must have and maintain surplus as to
6596	policyholders of not less than $15 million; in addition, an
6597	alien insurer must also have and maintain in the United States a
6598	trust fund for the protection of all its policyholders in the
6599	United States under terms deemed by the officedepartmentto be
6600	reasonably adequate, in an amount not less than $5.4 million.
6601	Any such surplus as to policyholders or trust fund shall be
6602	represented by investments consisting of eligible investments
6603	for like funds of like domestic insurers under part II of
6604	chapter 625 provided, however, that in the case of an alien
6605	insurance company, any such surplus as to policyholders may be
6606	represented by investments permitted by the domestic regulator
6607	of such alien insurance company if such investments are
6608	substantially similar in terms of quality, liquidity, and
6609	security to eligible investments for like funds of like domestic
6610	insurers under part II of chapter 625;
6611	2. For those surplus lines insurers that were eligible on
6612	January 1, 1994, and that maintained their eligibility
6613	thereafter, the required surplus as to policyholders shall be:
6614	a. On December 31, 1994, and until December 30, 1995, $2.5
6615	million.
6616	b. On December 31, 1995, and until December 30, 1996, $3.5
6617	million.
6618	c. On December 31, 1996, and until December 30, 1997, $4.5
6619	million.
6620	d. On December 31, 1997, and until December 30, 1998, $5.5
6621	million.
6622	e. On December 31, 1998, and until December 30, 1999, $6.5
6623	million.
6624	f. On December 31, 1999, and until December 30, 2000, $8
6625	million.
6626	g. On December 31, 2000, and until December 30, 2001, $9.5
6627	million.
6628	h. On December 31, 2001, and until December 30, 2002, $11
6629	million.
6630	i. On December 31, 2002, and until December 30, 2003, $13
6631	million.
6632	j. On December 31, 2003, and thereafter, $15 million.
6633	3. The capital and surplus requirements as set forth in
6634	subparagraph 2. do not apply in the case of an insurance
6635	exchange created by the laws of individual states, where the
6636	exchange maintains capital and surplus pursuant to the
6637	requirements of that state, or maintains capital and surplus in
6638	an amount not less than $50 million in the aggregate. For an
6639	insurance exchange which maintains funds in the amount of at
6640	least $12 million for the protection of all insurance exchange
6641	policyholders, each individual syndicate shall maintain minimum
6642	capital and surplus in an amount not less than $3 million. If
6643	the insurance exchange does not maintain funds in the amount of
6644	at least $12 million for the protection of all insurance
6645	exchange policyholders, each individual syndicate shall meet the
6646	minimum capital and surplus requirements set forth in
6647	subparagraph 2.;
6648	4. A surplus lines insurer which is a member of an
6649	insurance holding company that includes a member which is a
6650	Florida domestic insurer as set forth in its holding company
6651	registration statement, as set forth in s. 628.801 and rules
6652	adopted thereunder, may elect to maintain surplus as to
6653	policyholders in an amount equal to the requirements of s.
6654	624.408, subject to the requirement that the surplus lines
6655	insurer shall at all times be in compliance with the
6656	requirements of chapter 625.
6657
6658
6659	The election shall be submitted to the officedepartmentand
6660	shall be effective upon the office'sdepartment'sbeing
6661	satisfied that the requirements of subparagraph 4. have been
6662	met. The initial date of election shall be the date of office
6663	departmentapproval. The election approval application shall be
6664	on a form adopted by commissiondepartment rule. The office
6665	departmentmay approve an election form submitted pursuant to
6666	subparagraph 4. only if it was on file with the former
6667	Department of Insurancebefore February 28, 1998;
6668	(e) The insurer must be of good reputation as to the
6669	providing of service to its policyholders and the payment of
6670	losses and claims;
6671	(f) The insurer must be eligible, as for authority to
6672	transact insurance in this state, under s. 624.404(3); and
6673	(g) This subsection does not apply as to unauthorized
6674	insurers made eligible under s. 626.917 as to wet marine and
6675	aviation risks.
6676	(3) The officedepartmentshall from time to time publish
6677	a list of all currently eligible surplus lines insurers and
6678	shall mail a copy thereof to each licensed surplus lines agent
6679	at his or her office of record with the officedepartment.
6680	(4) This section shall not be deemed to cast upon the
6681	officedepartmentany duty or responsibility to determine the
6682	actual financial condition or claims practices of any
6683	unauthorized insurer; and the status of eligibility, if granted
6684	by the officedepartment, shall indicate only that the insurer
6685	appears to be sound financially and to have satisfactory claims
6686	practices and that the officedepartmenthas no credible
6687	evidence to the contrary.
6688	(5) When it appears that any particular insurance risk
6689	which is eligible for export, but on which insurance coverage,
6690	in whole or in part, is not procurable from the eligible surplus
6691	lines insurers, after a search of eligible surplus lines
6692	insurers, then the surplus lines agent may file a supplemental
6693	signed statement setting forth such facts and advising the
6694	officedepartmentthat such part of the risk as shall be
6695	unprocurable, as aforesaid, is being placed with named
6696	unauthorized insurers, in the amounts and percentages set forth
6697	in the statement. Such named unauthorized insurer shall,
6698	however, before accepting any risk in this state, deposit with
6699	the department cash or securities acceptable to the office and
6700	department of the market value of $50,000 for each individual
6701	risk, contract, or certificate, which deposit shall be held by
6702	the department for the benefit of Florida policyholders only;
6703	and the surplus lines agent shall procure from such unauthorized
6704	insurer and file with the officedepartmenta certified copy of
6705	its statement of condition as of the close of the last calendar
6706	year. If such statement reveals, including both capital and
6707	surplus, net assets of at least that amount required for
6708	licensure of a domestic insurer, then the surplus lines agent
6709	may proceed to consummate such contract of insurance. Whenever
6710	any insurance risk, or any part thereof, is placed with an
6711	unauthorized insurer, as provided herein, the policy, binder, or
6712	cover note shall contain a statement signed by the insured and
6713	the agent with the following notation: "The insured is aware
6714	that certain insurers participating in this risk have not been
6715	approved to transact business in Florida nor have they been
6716	declared eligible as surplus lines insurers by the Office of
6717	Insurance RegulationDepartment of Insuranceof Florida. The
6718	placing of such insurance by a duly licensed surplus lines agent
6719	in Florida shall not be construed as approval of such insurer by
6720	the Office of Insurance RegulationDepartment of Insuranceof
6721	Florida. Consequently, the insured is aware that the insured
6722	has severely limited the assistance available under the
6723	insurance laws of Florida. The insured is further aware that he
6724	or she may be charged a reasonable per policy fee, as provided
6725	in s. 626.916(4), Florida Statutes, for each policy certified
6726	for export." All other provisions of this code shall apply to
6727	such placement the same as if such risks were placed with an
6728	eligible surplus lines insurer.
6729	(6) When any particular insurance risk subject to
6730	subsection (5) is eligible for placement with an unauthorized
6731	insurer and not more than 12.5 percent of the risk is so
6732	subject, the officeDepartment of Insurancemay, at its
6733	discretion, permit the agent to obtain from the insured a signed
6734	statement as indicated in subsection (5). All other provisions
6735	of this code apply to such placement the same as if such risks
6736	were placed with an eligible surplus lines insurer.
6737	Section 152. Section 626.919, Florida Statutes, is amended
6738	to read:
6739	626.919 Withdrawal of eligibility; surplus lines
6740	insurer.--
6741	(1) If at any time the officedepartmenthas reason to
6742	believe that any unauthorized insurer then on the list of
6743	eligible surplus lines insurers is insolvent or in unsound
6744	financial condition, or does not make reasonable prompt payment
6745	of just losses and claims in this state, or that it is no longer
6746	eligible under the conditions therefor provided in s. 626.918,
6747	it shall withdraw the eligibility of the insurer to insure
6748	surplus lines risks in this state.
6749	(2) If the officedepartmentfinds that an insurer
6750	currently eligible as a surplus lines insurer has willfully
6751	violated the laws of this state or a rule of the commission
6752	department, it may, in its discretion, withdraw the eligibility
6753	of the insurer to insure surplus lines risks in this state.
6754	(3) The officedepartmentshall promptly mail notice of
6755	all such withdrawals of eligibility to each surplus lines agent
6756	at his or her address of record with the department.
6757	Section 153. Subsection (8) of section 626.921, Florida
6758	Statutes, is amended to read:
6759	626.921 Florida Surplus Lines Service Office.--
6760	(8)(a) Information furnished to the department under s.
6761	626.923 or contained in the records subject to examination by
6762	the department under s. 626.930 is confidential and exempt from
6763	the provisions of s. 119.07(1) and s. 24(a), Art. I of the State
6764	Constitution if the disclosure of the information would reveal
6765	information specific to a particular policy or policyholder.
6766	The exemption does not apply to any proceeding instituted by the
6767	department or officeagainst an agent or insurer.
6768	(b) Information furnished to the Florida Surplus Lines
6769	Service Office under the Surplus Lines Law is confidential and
6770	exempt from the provisions of s. 119.07(1) and s. 24(a), Art. I
6771	of the State Constitution if the disclosure of the information
6772	would reveal information specific to a particular policy or
6773	policyholder. This exemption does not prevent the disclosure of
6774	any information by the Florida Surplus Lines Service Office to
6775	the department, but the exemption applies to records obtained by
6776	the department from the Florida Surplus Lines Service Office.
6777	The exemption does not apply to any proceeding instituted by the
6778	department or officeagainst an agent or insurer. This paragraph
6779	is subject to the Open Government Sunset Review Act of 1995 in
6780	accordance with s. 119.15, and shall stand repealed on October
6781	2, 2006, unless reviewed and saved from repeal through
6782	reenactment by the Legislature.
6783	Section 154. Subsection (5) of section 626.931, Florida
6784	Statutes, is amended to read:
6785	626.931 Agent affidavit and insurer reporting
6786	requirements.--
6787	(5) The department mayInsurance Commissioner shall have
6788	the authority towaive the filing requirements described in
6789	subsections(3) and (4).
6790	Section 155. Subsections (2) and (5) of section 626.932,
6791	Florida Statutes, are amended to read:
6792	626.932 Surplus lines tax.--
6793	(2)(a) The surplus lines agent shall make payable to the
6794	department of Insurancethe tax related to each calendar
6795	quarter's business as reported to the Florida Surplus Lines
6796	Service Office, and remit the tax to the Florida Surplus Lines
6797	Service Office at the same time as provided for the filing of
6798	the quarterly affidavit, under s. 626.931. The Florida Surplus
6799	Lines Service Office shall forward to the department the taxes
6800	and any interest collected pursuant to paragraph (b), within 10
6801	days of receipt.
6802	(b) The agent shall pay interest on the amount of any
6803	delinquent tax due, at the rate of 9 percent per year,
6804	compounded annually, beginning the day the amount becomes
6805	delinquent.
6806	(5) The department shall deposit 55 percent of all taxes
6807	collected under this section to the credit of the Insurance
6808	Commissioner'sRegulatory Trust Fund. Forty-five percent of all
6809	taxes collected under this section shall be deposited into the
6810	General Revenue Fund.
6811	Section 156. Section 626.936, Florida Statutes, is amended
6812	to read:
6813	626.936 Failure to file reports or pay tax or service fee;
6814	administrative penalty.--
6815	(1) Any licensed surplus lines agent who neglects to file
6816	a report or an affidavit in the form and within the time
6817	required or provided for in the Surplus Lines Law may be fined
6818	up to $50 per day for each day the neglect continues, beginning
6819	the day after the report or affidavit was due until the date the
6820	report or affidavit is received. All sums collected under this
6821	section shall be deposited into the Insurance Commissioner's
6822	Regulatory Trust Fund.
6823	(2) Any licensed surplus lines agent who neglects to pay
6824	the taxes or service fees as required under the Surplus Lines
6825	Law and within the time required may be fined up to $500 per day
6826	for each day the failure to pay continues, beginning the day
6827	after the tax or service fees were due. The agent shall pay
6828	interest on the amount of any delinquent tax due, at the rate of
6829	9 percent per year, compounded annually, beginning the day the
6830	amount becomes delinquent. The department shall deposit all
6831	sums collected under this section into the Insurance
6832	Commissioner'sRegulatory Trust Fund.
6833	Section 157. Section 626.9361, Florida Statutes, is
6834	amended to read:
6835	626.9361 Failure to file report; administrative
6836	penalty.--Any eligible surplus lines insurer who fails to file a
6837	report in the form and within the time required or provided for
6838	in the Surplus Lines Law may be fined up to $500 per day for
6839	each day such failure continues, beginning the day after the
6840	report was due, until the date the report is received. Failure
6841	to file a report may also result in withdrawal of eligibility as
6842	a surplus lines insurer in this state. All sums collected by the
6843	department under this section shall be deposited into the
6844	Insurance Commissioner'sRegulatory Trust Fund.
6845	Section 158. Subsections (2), (3), and (4) of section
6846	626.937, Florida Statutes, are amended to read:
6847	626.937 Actions against insurer; service of process.--
6848	(2) The unauthorized insurer accepting the risk or issuing
6849	the policy shall be deemed thereby to have authorized service of
6850	process against it in the manner and to the effect as provided
6851	in this section, and to have appointed the Chief Financial
6852	OfficerInsurance Commissioner and Treasureras its agent for
6853	service of process issuing upon any cause of action arising in
6854	this state under any such policy, contract, or insurance.
6855	(3) Each unauthorized insurer requesting eligibility
6856	pursuant to s. 626.918 shall file with the department its
6857	appointment of the Chief Financial OfficerInsurance
6858	Commissioner and Treasurer and his or her successors in office,
6859	on a form as furnished by the department, as its attorney to
6860	receive service of all legal process issued against it in any
6861	civil action or proceeding in this state, and agreeing that
6862	process so served shall be valid and binding upon the insurer.
6863	The appointment shall be irrevocable, shall bind the insurer and
6864	any successor in interest as to the assets or liabilities of the
6865	insurer, and shall remain in effect as long as there is
6866	outstanding in this state any obligation or liability of the
6867	insurer resulting from its insurance transactions therein.
6868	(4) At the time of such appointment of the Chief Financial
6869	OfficerInsurance Commissioner and Treasureras its process
6870	agent, the insurer shall file with the department designation of
6871	the name and address of the person to whom process against it
6872	served upon the Chief Financial OfficerInsurance Commissioner
6873	and Treasureris to be forwarded. The insurer may change the
6874	designation at any time by a new filing.
6875	Section 159. Subsections (3) and (7) of section 626.938,
6876	Florida Statutes, are amended to read:
6877	626.938 Report and tax of independently procured
6878	coverages.--
6879	(3) For the general support of the government of this
6880	state, there is levied upon the obligation, chose in action, or
6881	right represented by the premium charged for such insurance a
6882	tax at the rate of 5 percent of the gross amount of such premium
6883	and a 0.3 percent service fee pursuant to s. 626.9325. The
6884	insured shall withhold the amount of the tax and service fee
6885	from the amount of premium charged by and otherwise payable to
6886	the insurer for such insurance. Within 30 days after the
6887	insurance is procured, continued, or renewed, and simultaneously
6888	with the filing of the report provided for in subsection (1)
6889	with the Florida Surplus Lines Service Office, the insured shall
6890	make payable to the department of Insurancethe amount of the
6891	tax and make payable to the Florida Surplus Lines Service Office
6892	the amount of the service fee. The insured shall remit the tax
6893	and the service fee to the Florida Surplus Lines Service Office.
6894	The Florida Surplus Lines Service Office shall forward to the
6895	department the taxes, and any interest collected pursuant to
6896	subsection (5), within 10 days after receipt.
6897	(7) The department shall deposit 55 percent of all taxes
6898	and interest collected under this section to the credit of the
6899	Insurance Commissioner'sRegulatory Trust Fund. Forty-five
6900	percent of all taxes and interest collected under this section
6901	shall be deposited into the General Revenue Fund.
6902	Section 160. Section 626.9511, Florida Statutes, is
6903	amended to read:
6904	626.9511 Definitions.--When used in this part:
6905	(1) "Person" means any individual, corporation,
6906	association, partnership, reciprocal exchange, interinsurer,
6907	Lloyds insurer, fraternal benefit society, or business trust or
6908	any entity involved in the business of insurance.
6909	(2) "Department" means the Department of Insurance of this
6910	state.
6911	(2)(3)"Insurance policy" or "insurance contract" means a
6912	written contract of, or a written agreement for or effecting,
6913	insurance, or the certificate thereof, by whatever name called,
6914	and includes all clauses, riders, endorsements, and papers which
6915	are a part thereof.
6916	Section 161. Paragraphs (h), (o), (w), and (aa) of
6917	subsection (1) of section 626.9541, Florida Statutes, are
6918	amended to read:
6919	626.9541 Unfair methods of competition and unfair or
6920	deceptive acts or practices defined.--
6921	(1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE
6922	ACTS.--The following are defined as unfair methods of
6923	competition and unfair or deceptive acts or practices:
6924	(h) Unlawful rebates.--
6925	1. Except as otherwise expressly provided by law, or in an
6926	applicable filing with the officedepartment, knowingly:
6927	a. Permitting, or offering to make, or making, any
6928	contract or agreement as to such contract other than as plainly
6929	expressed in the insurance contract issued thereon;
6930	b. Paying, allowing, or giving, or offering to pay, allow,
6931	or give, directly or indirectly, as inducement to such insurance
6932	contract, any unlawful rebate of premiums payable on the
6933	contract, any special favor or advantage in the dividends or
6934	other benefits thereon, or any valuable consideration or
6935	inducement whatever not specified in the contract;
6936	c. Giving, selling, or purchasing, or offering to give,
6937	sell, or purchase, as inducement to such insurance contract or
6938	in connection therewith, any stocks, bonds, or other securities
6939	of any insurance company or other corporation, association, or
6940	partnership, or any dividends or profits accrued thereon, or
6941	anything of value whatsoever not specified in the insurance
6942	contract.
6943	2. Nothing in paragraph (g) or subparagraph 1. of this
6944	paragraph shall be construed as including within the definition
6945	of discrimination or unlawful rebates:
6946	a. In the case of any contract of life insurance or life
6947	annuity, paying bonuses to all policyholders or otherwise
6948	abating their premiums in whole or in part out of surplus
6949	accumulated from nonparticipating insurance; provided that any
6950	such bonuses or abatement of premiums is fair and equitable to
6951	all policyholders and for the best interests of the company and
6952	its policyholders.
6953	b. In the case of life insurance policies issued on the
6954	industrial debit plan, making allowance to policyholders who
6955	have continuously for a specified period made premium payments
6956	directly to an office of the insurer in an amount which fairly
6957	represents the saving in collection expenses.
6958	c. Readjustment of the rate of premium for a group
6959	insurance policy based on the loss or expense thereunder, at the
6960	end of the first or any subsequent policy year of insurance
6961	thereunder, which may be made retroactive only for such policy
6962	year.
6963	d. Issuance of life insurance policies or annuity
6964	contracts at rates less than the usual rates of premiums for
6965	such policies or contracts, as group insurance or employee
6966	insurance as defined in this code.
6967	e. Issuing life or disability insurance policies on a
6968	salary savings, bank draft, preauthorized check, payroll
6969	deduction, or other similar plan at a reduced rate reasonably
6970	related to the savings made by the use of such plan.
6971	3.a. No title insurer, or any member, employee, attorney,
6972	agent, agency, or solicitor thereof, shall pay, allow, or give,
6973	or offer to pay, allow, or give, directly or indirectly, as
6974	inducement to title insurance, or after such insurance has been
6975	effected, any rebate or abatement of the agent's, agency's, or
6976	title insurer's share of the premium or any charge for related
6977	title services below the cost for providing such services, or
6978	provide any special favor or advantage, or any monetary
6979	consideration or inducement whatever. Nothing herein contained
6980	shall preclude an abatement in an attorney's fee charged for
6981	legal services.
6982	b. Nothing in this subparagraph shall be construed as
6983	prohibiting the payment of fees to attorneys at law duly
6984	licensed to practice law in the courts of this state, for
6985	professional services, or as prohibiting the payment of earned
6986	portions of the premium to duly appointed agents or agencies who
6987	actually perform services for the title insurer.
6988	c. No insured named in a policy, or any other person
6989	directly or indirectly connected with the transaction involving
6990	the issuance of such policy, including, but not limited to, any
6991	mortgage broker, real estate broker, builder, or attorney, any
6992	employee, agent, agency, or representative thereof, or any other
6993	person whatsoever, shall knowingly receive or accept, directly
6994	or indirectly, any rebate or abatement of said charge, or any
6995	monetary consideration or inducement, other than as set forth in
6996	sub-subparagraph b.
6997	(o) Illegal dealings in premiums; excess or reduced
6998	charges for insurance.--
6999	1. Knowingly collecting any sum as a premium or charge for
7000	insurance, which is not then provided, or is not in due course
7001	to be provided, subject to acceptance of the risk by the
7002	insurer, by an insurance policy issued by an insurer as
7003	permitted by this code.
7004	2. Knowingly collecting as a premium or charge for
7005	insurance any sum in excess of or less than the premium or
7006	charge applicable to such insurance, in accordance with the
7007	applicable classifications and rates as filed with and approved
7008	by the officedepartment, and as specified in the policy; or, in
7009	cases when classifications, premiums, or rates are not required
7010	by this code to be so filed and approved, premiums and charges
7011	in excess of or less than those specified in the policy and as
7012	fixed by the insurer. This provision shall not be deemed to
7013	prohibit the charging and collection, by surplus lines agents
7014	licensed under part VIII of this chapter, of the amount of
7015	applicable state and federal taxes, or fees as authorized by s.
7016	626.916(4), in addition to the premium required by the insurer
7017	or the charging and collection, by licensed agents, of the exact
7018	amount of any discount or other such fee charged by a credit
7019	card facility in connection with the use of a credit card, as
7020	authorized by subparagraph (q)3., in addition to the premium
7021	required by the insurer. This subparagraph shall not be
7022	construed to prohibit collection of a premium for a universal
7023	life or a variable or indeterminate value insurance policy made
7024	in accordance with the terms of the contract.
7025	3.a. Imposing or requesting an additional premium for a
7026	policy of motor vehicle liability, personal injury protection,
7027	medical payment, or collision insurance or any combination
7028	thereof or refusing to renew the policy solely because the
7029	insured was involved in a motor vehicle accident unless the
7030	insurer's file contains information from which the insurer in
7031	good faith determines that the insured was substantially at
7032	fault in the accident.
7033	b. An insurer which imposes and collects such a surcharge
7034	or which refuses to renew such policy shall, in conjunction with
7035	the notice of premium due or notice of nonrenewal, notify the
7036	named insured that he or she is entitled to reimbursement of
7037	such amount or renewal of the policy under the conditions listed
7038	below and will subsequently reimburse him or her or renew the
7039	policy, if the named insured demonstrates that the operator
7040	involved in the accident was:
7041	(I) Lawfully parked;
7042	(II) Reimbursed by, or on behalf of, a person responsible
7043	for the accident or has a judgment against such person;
7044	(III) Struck in the rear by another vehicle headed in the
7045	same direction and was not convicted of a moving traffic
7046	violation in connection with the accident;
7047	(IV) Hit by a "hit-and-run" driver, if the accident was
7048	reported to the proper authorities within 24 hours after
7049	discovering the accident;
7050	(V) Not convicted of a moving traffic violation in
7051	connection with the accident, but the operator of the other
7052	automobile involved in such accident was convicted of a moving
7053	traffic violation;
7054	(VI) Finally adjudicated not to be liable by a court of
7055	competent jurisdiction;
7056	(VII) In receipt of a traffic citation which was dismissed
7057	or nolle prossed; or
7058	(VIII) Not at fault as evidenced by a written statement
7059	from the insured establishing facts demonstrating lack of fault
7060	which are not rebutted by information in the insurer's file from
7061	which the insurer in good faith determines that the insured was
7062	substantially at fault.
7063	c. In addition to the other provisions of this
7064	subparagraph, an insurer may not fail to renew a policy if the
7065	insured has had only one accident in which he or she was at
7066	fault within the current 3-year period. However, an insurer may
7067	nonrenew a policy for reasons other than accidents in accordance
7068	with s. 627.728. This subparagraph does not prohibit nonrenewal
7069	of a policy under which the insured has had three or more
7070	accidents, regardless of fault, during the most recent 3-year
7071	period.
7072	4. Imposing or requesting an additional premium for, or
7073	refusing to renew, a policy for motor vehicle insurance solely
7074	because the insured committed a noncriminal traffic infraction
7075	as described in s. 318.14 unless the infraction is:
7076	a. A second infraction committed within an 18-month
7077	period, or a third or subsequent infraction committed within a
7078	36-month period.
7079	b. A violation of s. 316.183, when such violation is a
7080	result of exceeding the lawful speed limit by more than 15 miles
7081	per hour.
7082	5. Upon the request of the insured, the insurer and
7083	licensed agent shall supply to the insured the complete proof of
7084	fault or other criteria which justifies the additional charge or
7085	cancellation.
7086	6. No insurer shall impose or request an additional
7087	premium for motor vehicle insurance, cancel or refuse to issue a
7088	policy, or refuse to renew a policy because the insured or the
7089	applicant is a handicapped or physically disabled person, so
7090	long as such handicap or physical disability does not
7091	substantially impair such person's mechanically assisted driving
7092	ability.
7093	7. No insurer may cancel or otherwise terminate any
7094	insurance contract or coverage, or require execution of a
7095	consent to rate endorsement, during the stated policy term for
7096	the purpose of offering to issue, or issuing, a similar or
7097	identical contract or coverage to the same insured with the same
7098	exposure at a higher premium rate or continuing an existing
7099	contract or coverage with the same exposure at an increased
7100	premium.
7101	8. No insurer may issue a nonrenewal notice on any
7102	insurance contract or coverage, or require execution of a
7103	consent to rate endorsement, for the purpose of offering to
7104	issue, or issuing, a similar or identical contract or coverage
7105	to the same insured at a higher premium rate or continuing an
7106	existing contract or coverage at an increased premium without
7107	meeting any applicable notice requirements.
7108	9. No insurer shall, with respect to premiums charged for
7109	motor vehicle insurance, unfairly discriminate solely on the
7110	basis of age, sex, marital status, or scholastic achievement.
7111	10. Imposing or requesting an additional premium for motor
7112	vehicle comprehensive or uninsured motorist coverage solely
7113	because the insured was involved in a motor vehicle accident or
7114	was convicted of a moving traffic violation.
7115	11. No insurer shall cancel or issue a nonrenewal notice
7116	on any insurance policy or contract without complying with any
7117	applicable cancellation or nonrenewal provision required under
7118	the Florida Insurance Code.
7119	12. No insurer shall impose or request an additional
7120	premium, cancel a policy, or issue a nonrenewal notice on any
7121	insurance policy or contract because of any traffic infraction
7122	when adjudication has been withheld and no points have been
7123	assessed pursuant to s. 318.14(9) and (10). However, this
7124	subparagraph does not apply to traffic infractions involving
7125	accidents in which the insurer has incurred a loss due to the
7126	fault of the insured.
7127	(w) Soliciting or accepting new or renewal insurance risks
7128	by insolvent or impaired insurer prohibited; penalty.--
7129	1. Whether or not delinquency proceedings as to the
7130	insurer have been or are to be initiated, but while such
7131	insolvency or impairment exists, no director or officer of an
7132	insurer, except with the written permission of the office
7133	Department of Insurance, shall authorize or permit the insurer
7134	to solicit or accept new or renewal insurance risks in this
7135	state after such director or officer knew, or reasonably should
7136	have known, that the insurer was insolvent or impaired.
7137	"Impaired" includes impairment of capital or surplus, as defined
7138	in s. 631.011(12) and (13).
7139	2. Any such director or officer, upon conviction of a
7140	violation of this paragraph, is guilty of a felony of the third
7141	degree, punishable as provided in s. 775.082, s. 775.083, or s.
7142	775.084.
7143	(aa) Churning.--
7144	1. Churning is the practice whereby policy values in an
7145	existing life insurance policy or annuity contract, including,
7146	but not limited to, cash, loan values, or dividend values, and
7147	in any riders to that policy or contract, are utilized to
7148	purchase another insurance policy or annuity contract with that
7149	same insurer for the purpose of earning additional premiums,
7150	fees, commissions, or other compensation:
7151	a. Without an objectively reasonable basis for believing
7152	that the replacement or extraction will result in an actual and
7153	demonstrable benefit to the policyholder;
7154	b. In a fashion that is fraudulent, deceptive, or
7155	otherwise misleading or that involves a deceptive omission;
7156	c. Effective October 1, 1995,When the applicant is not
7157	informed that the policy values including cash values,
7158	dividends, and other assets of the existing policy or contract
7159	will be reduced, forfeited, or utilized in the purchase of the
7160	replacing or additional policy or contract, if this is the case;
7161	or
7162	d. Effective October 1, 1995,Without informing the
7163	applicant that the replacing or additional policy or contract
7164	will not be a paid-up policy or that additional premiums will be
7165	due, if this is the case.
7166
7167
7168	Churning by an insurer or an agent is an unfair method of
7169	competition and an unfair or deceptive act or practice.
7170	2. Effective October 1, 1995,Each insurer shall comply
7171	with sub-subparagraphs 1.c. and 1.d. by disclosing to the
7172	applicant at the time of the offer on a form designed and
7173	adopted by rule by the commissiondepartmentif, how, and the
7174	extent to which the policy or contract values (including cash
7175	value, dividends, and other assets) of a previously issued
7176	policy or contract will be used to purchase a replacing or
7177	additional policy or contract with the same insurer. The form
7178	shall include disclosure of the premium, the death benefit of
7179	the proposed replacing or additional policy, and the date when
7180	the policy values of the existing policy or contract will be
7181	insufficient to pay the premiums of the replacing or additional
7182	policy or contract.
7183	3. Effective October 1, 1995,Each insurer shall adopt
7184	written procedures to reasonably avoid churning of policies or
7185	contracts that it has issued, and failure to adopt written
7186	procedures sufficient to reasonably avoid churning shall be an
7187	unfair method of competition and an unfair or deceptive act or
7188	practice.
7189	Section 162. Subsections (3), (5), (7), (8), (10), and
7190	(11) of section 626.9543, Florida Statutes, are amended to read:
7191	626.9543 Holocaust victims.--
7192	(3) DEFINITIONS.--For the purpose of this section, the
7193	term:
7194	(a) "Department" means the Department of Insurance.
7195	(a)(b)"Holocaust victim" means any person who lost his or
7196	her life or property as a result of discriminatory laws,
7197	policies, or actions targeted against discrete groups of persons
7198	between 1920 and 1945, inclusive, in Nazi Germany, areas
7199	occupied by Nazi Germany, or countries allied with Nazi Germany.
7200	(b)(c)"Insurance policy" means, but is not limited to,
7201	life insurance, property insurance, or education policies.
7202	(c)(d)"Legal relationship" means any parent, subsidiary,
7203	or affiliated company with an insurer doing business in this
7204	state.
7205	(d)(e)"Proceeds" means the face or other payout value of
7206	policies and annuities plus reasonable interest to date of
7207	payments without diminution for wartime or immediate postwar
7208	currency devaluation.
7209	(5) PROOF OF A CLAIM.--Any insurer doing business in this
7210	state, in receipt of a claim from a Holocaust victim or from a
7211	beneficiary, descendant, or heir of a Holocaust victim, shall:
7212	(a) Diligently and expeditiously investigate all such
7213	claims.
7214	(b) Allow such claimants to meet a reasonable, not unduly
7215	restrictive, standard of proof to substantiate a claim, pursuant
7216	to standards established by rule of the commissiondepartment.
7217	(c) Permit claims irrespective of any statute of
7218	limitations or notice requirements imposed by any insurance
7219	policy issued, provided the claim is submitted within 10 years
7220	after the effective date of this section.
7221	(7) REPORTS FROM INSURERS.--Any insurer doing business in
7222	this state shall have an affirmative duty to ascertain to the
7223	extent possible and report to the officedepartmentwithin 90
7224	days after the effective date of this section and annually
7225	thereafter all efforts made and results of such efforts to
7226	ascertain:
7227	(a) Any legal relationship with an international insurer
7228	that issued an insurance policy to a Holocaust victim between
7229	1920 and 1945, inclusive.
7230	(b) The number and total value of such policies.
7231	(c) Any claim filed by a Holocaust victim, his or her
7232	beneficiary, heir, or descendant that has been paid, denied
7233	payment, or is pending.
7234	(d) Attempts made by the insurer to locate the
7235	beneficiaries of any such policies for which no claim of
7236	benefits has been made.
7237	(e) An explanation of any denial or pending payment of a
7238	claim to a Holocaust victim, his or her beneficiary, heir, or
7239	descendant.
7240	(8) REPORTS TO THE LEGISLATURE.--The office anddepartment
7241	shall jointlyreport to the Legislature 1 year after the
7242	effective date of this section and annually thereafter:
7243	(a) The number of insurers doing business in this state
7244	which have a legal relationship with an international insurer
7245	that could have issued a policy to a Holocaust victim between
7246	1920 and 1945, inclusive.
7247	(b) A list of all claims paid, denied, or pending to a
7248	Holocaust victim, his or her beneficiary, heir, or descendant.
7249	(c) A summary of the length of time for the processing and
7250	disposition of a claim by the insurer.
7251	(10) PRIVATE RIGHT OF ACTION.--An action to recover
7252	damages caused by a violation of this section must be commenced
7253	within 5 years after the cause of action has accrued. Any
7254	person who shall sustain damages by the reason of a violation of
7255	this section shall recover threefold the actual damages
7256	sustained thereby, as well as costs not exceeding $50,000, and
7257	reasonable attorneys' fees. At or before the commencement of
7258	any civil action by a party, notice thereof shall be served upon
7259	the officedepartment.
7260	(11) RULES.--The commissiondepartment, by rule, shall
7261	provide for the implementation of the provisions of this section
7262	by establishing procedures and related forms for facilitating,
7263	monitoring, and verifying compliance with this section and for
7264	the establishment of a restitution program for Holocaust
7265	victims, survivors, and their heirs and beneficiaries.
7266	Section 163. Section 626.9545, Florida Statutes, is
7267	amended to read:
7268	626.9545 Improper charge identification incentive
7269	program.--No section or provision of the Florida Insurance Code
7270	shall be construed as prohibiting an insurer from establishing a
7271	financial incentive program for remunerating a policyholder or
7272	an insured person with a selected percentage or stated portion
7273	of any health care charge identified by the policyholder or the
7274	insured person as an error or overcharge if the health care
7275	charge is recovered by the insurer. The financial incentive
7276	program shall be written and shall be available for inspection
7277	by the officedepartment.
7278	Section 164. Subsection (5) of section 626.9551, Florida
7279	Statutes, is amended to read:
7280	626.9551 Favored agent or insurer; coercion of debtors.--
7281	(5) The department or officemay investigate the affairs
7282	of any person to whom this section applies to determine whether
7283	such person has violated this section. If a violation of this
7284	section is found to have been committed knowingly, the person in
7285	violation shall be subject to the same procedures and penalties
7286	as provided in ss. 626.9571, 626.9581, 626.9591, and 626.9601.
7287	Section 165. Section 626.9561, Florida Statutes, is
7288	amended to read:
7289	626.9561 Power of department and office.--The department
7290	and office shall each have power within its respective
7291	regulatory jurisdictionto examine and investigate the affairs
7292	of every person involved in the business of insurance in this
7293	state in order to determine whether such person has been or is
7294	engaged in any unfair method of competition or in any unfair or
7295	deceptive act or practice prohibited by s. 626.9521, and shall
7296	each have the powers and duties specified in ss. 626.9571-
7297	626.9601 in connection therewith.
7298	Section 166. Section 626.9571, Florida Statutes, is
7299	amended to read:
7300	626.9571 Defined practices; hearings, witnesses,
7301	appearances, production of books and service of process.--
7302	(1) Whenever the department or officehas reason to
7303	believe that any person has engaged, or is engaging, in this
7304	state in any unfair method of competition or any unfair or
7305	deceptive act or practice as defined in s. 626.9541 or s.
7306	626.9551 or is engaging in the business of insurance without
7307	being properly licensed as required by this code and that a
7308	proceeding by it in respect thereto would be to the interest of
7309	the public, it shall conduct or cause to have conducted a
7310	hearing in accordance with chapter 120.
7311	(2) The department or office, a duly empowered hearing
7312	officer, or an administrative law judge shall, during the
7313	conduct of such hearing, have those powers enumerated in s.
7314	120.569; however, the penalties for failure to comply with a
7315	subpoena or with an order directing discovery shall be limited
7316	to a fine not to exceed $1,000 per violation.
7317	(3) Statements of charges, notices, and orders under this
7318	act may be served by anyone duly authorized by the department or
7319	office, either in the manner provided by law for service of
7320	process in civil actions or by certifying and mailing a copy
7321	thereof to the person affected by such statement, notice, order,
7322	or other process at his or her or its residence or principal
7323	office or place of business. The verified return by the person
7324	so serving such statement, notice, order, or other process,
7325	setting forth the manner of the service, shall be proof of the
7326	same, and the return postcard receipt for such statement,
7327	notice, order, or other process, certified and mailed as
7328	aforesaid, shall be proof of service of the same.
7329	Section 167. Section 626.9581, Florida Statutes, is
7330	amended to read:
7331	626.9581 Cease and desist and penalty orders.--After the
7332	hearing provided in s. 626.9571, the department or officeshall
7333	enter a final order in accordance with s. 120.569. If it is
7334	determined that the person charged has engaged in an unfair or
7335	deceptive act or practice or the unlawful transaction of
7336	insurance, the department or officeshall also issue an order
7337	requiring the violator to cease and desist from engaging in such
7338	method of competition, act, or practice or the unlawful
7339	transaction of insurance. Further, if the act or practice is a
7340	violation of s. 626.9541 or s. 626.9551, the department or
7341	officemay, at its discretion, order any one or more of the
7342	following:
7343	(1) Suspension or revocation of the person's certificate
7344	of authority, license, or eligibility for any certificate of
7345	authority or license, if he or she knew, or reasonably should
7346	have known, he or she was in violation of this act.
7347	(2) Such other relief as may be provided in the insurance
7348	code.
7349	Section 168. Section 626.9591, Florida Statutes, is
7350	amended to read:
7351	626.9591 Appeals from the department or office.--Any
7352	person subject to an order of the department or officeunder s.
7353	626.9581 or s. 626.9601 may obtain a review of such order by
7354	filing an appeal therefrom in accordance with the provisions and
7355	procedures for appeal from the orders of the department or
7356	officein general under s. 120.68.
7357	Section 169. Section 626.9601, Florida Statutes, is
7358	amended to read:
7359	626.9601 Penalty for violation of cease and desist
7360	orders.--Any person who violates a cease and desist order of the
7361	department or officeunder s. 626.9581 while such order is in
7362	effect, after notice and hearing as provided in s. 626.9571,
7363	shall be subject, at the discretion of the department or office,
7364	to any one or more of the following:
7365	(1) A monetary penalty of not more than $50,000 as to all
7366	matters determined in such hearing.
7367	(2) Suspension or revocation of such person's certificate
7368	of authority, license, or eligibility to hold such certificate
7369	of authority or license.
7370	(3) Such other relief as may be provided in the insurance
7371	code.
7372	Section 170. Section 626.9611, Florida Statutes, is
7373	amended to read:
7374	626.9611 Rules.--The department or commissionmay, in
7375	accordance with chapter 120, adoptpromulgatereasonable rules
7376	as are necessary or proper to identify specific methods of
7377	competition or acts or practices which are prohibited by s.
7378	626.9541 or s. 626.9551, but the rules shall not enlarge upon or
7379	extend the provisions of ss. 626.9541 and 626.9551.
7380	Section 171. Section 626.9621, Florida Statutes, is
7381	amended to read:
7382	626.9621 Provisions of part additional to existing
7383	law.--The powers vested in the department, commission, and
7384	officeby this part shall be additional to any other powers to
7385	enforce any penalties, fines, or forfeitures authorized by law.
7386	Section 172. Section 626.9631, Florida Statutes, is
7387	amended to read:
7388	626.9631 Civil liability.--The provisions of this part are
7389	cumulative to rights under the general civil and common law, and
7390	no action of the department, commission, or officeshall
7391	abrogate such rights to damages or other relief in any court.
7392	Section 173. Subsection (1) of section 626.9641, Florida
7393	Statutes, is amended to read:
7394	626.9641 Policyholders, bill of rights.--
7395	(1) The principles expressed in the following statements
7396	shall serve as standards to be followed by the department,
7397	commission, and office in exercising theiritspowers and
7398	duties, in exercising administrative discretion, in dispensing
7399	administrative interpretations of the law, and in adopting
7400	promulgatingrules:
7401	(a) Policyholders shall have the right to competitive
7402	pricing practices and marketing methods that enable them to
7403	determine the best value among comparable policies.
7404	(b) Policyholders shall have the right to obtain
7405	comprehensive coverage.
7406	(c) Policyholders shall have the right to insurance
7407	advertising and other selling approaches that provide accurate
7408	and balanced information on the benefits and limitations of a
7409	policy.
7410	(d) Policyholders shall have a right to an insurance
7411	company that is financially stable.
7412	(e) Policyholders shall have the right to be serviced by a
7413	competent, honest insurance agent or broker.
7414	(f) Policyholders shall have the right to a readable
7415	policy.
7416	(g) Policyholders shall have the right to an insurance
7417	company that provides an economic delivery of coverage and that
7418	tries to prevent losses.
7419	(h) Policyholders shall have the right to a balanced and
7420	positive regulation by the department, commission, and office.
7421	Section 174. Section 626.9651, Florida Statutes, is
7422	amended to read:
7423	626.9651 Privacy.--The department and commission shall
7424	eachadopt rules consistent with other provisions of the Florida
7425	Insurance Code to govern the use of a consumer's nonpublic
7426	personal financial and health information. These rules must be
7427	based on, consistent with, and not more restrictive than the
7428	Privacy of Consumer Financial and Health Information Regulation,
7429	adopted September 26, 2000, by the National Association of
7430	Insurance Commissioners; however, the rules must permit the use
7431	and disclosure of nonpublic personal health information for
7432	scientific, medical, or public policy research, in accordance
7433	with federal law. In addition, these rules must be consistent
7434	with, and not more restrictive than, the standards contained in
7435	Title V of the Gramm-Leach-Bliley Act of 1999, Pub. L. No. 106-
7436	102. If the officedepartmentdetermines that a health insurer
7437	or health maintenance organization is in compliance with, or is
7438	actively undertaking compliance with, the consumer privacy
7439	protection rules adopted by the United States Department of
7440	Health and Human Services, in conformance with the Health
7441	Insurance Portability and Affordability Act, that health insurer
7442	or health maintenance organization is in compliance with this
7443	section.
7444	Section 175. Paragraph (e) of subsection (4) and
7445	subsections (5) and (9) of section 626.989, Florida Statutes,
7446	are amended to read:
7447	626.989 Investigation by department or Division of
7448	Insurance Fraud; compliance; immunity; confidential information;
7449	reports to division; division investigator's power of arrest.--
7450	(4)
7451	(e) The Chief Financial OfficerInsurance Commissionerand
7452	any employee or agent of the department, commission, office,or
7453	division, when acting without malice and in the absence of fraud
7454	or bad faith, is not subject to civil liability for libel,
7455	slander, or any other relevant tort, and no civil cause of
7456	action of any nature exists against such person by virtue of the
7457	execution of official activities or duties of the department,
7458	commission, or officeunder this section or by virtue of the
7459	publication of any report or bulletin related to the official
7460	activities or duties of the department,or division, commission,
7461	or officeunder this section.
7462	(5) The office's and thedepartment's papers, documents,
7463	reports, or evidence relative to the subject of an investigation
7464	under this section are confidential and exempt from the
7465	provisions of s. 119.07(1) until such investigation is completed
7466	or ceases to be active. For purposes of this subsection, an
7467	investigation is considered "active" while the investigation is
7468	being conducted by the office ordepartment with a reasonable,
7469	good faith belief that it could lead to the filing of
7470	administrative, civil, or criminal proceedings. An investigation
7471	does not cease to be active if the office ordepartment is
7472	proceeding with reasonable dispatch and has a good faith belief
7473	that action could be initiated by the office ordepartment or
7474	other administrative or law enforcement agency. After an
7475	investigation is completed or ceases to be active, portions of
7476	records relating to the investigation shall remain exempt from
7477	the provisions of s. 119.07(1) if disclosure would:
7478	(a) Jeopardize the integrity of another active
7479	investigation;
7480	(b) Impair the safety and soundness of an insurer;
7481	(c) Reveal personal financial information;
7482	(d) Reveal the identity of a confidential source;
7483	(e) Defame or cause unwarranted damage to the good name or
7484	reputation of an individual or jeopardize the safety of an
7485	individual; or
7486	(f) Reveal investigative techniques or procedures.
7487	Further, such papers, documents, reports, or evidence relative
7488	to the subject of an investigation under this section shall not
7489	be subject to discovery until the investigation is completed or
7490	ceases to be active. Office, department,or division
7491	investigators shall not be subject to subpoena in civil actions
7492	by any court of this state to testify concerning any matter of
7493	which they have knowledge pursuant to a pending insurance fraud
7494	investigation by the division.
7495	(9) In recognition of the complementary roles of
7496	investigating instances of workers' compensation fraud and
7497	enforcing compliance with the workers' compensation coverage
7498	requirements under chapter 440, the department of Insuranceis
7499	directed to prepare and submit a joint performance report to the
7500	President of the Senate and the Speaker of the House of
7501	Representatives by November 1, 2003, and then by November 1
7502	every 3 years thereafter, describing the results obtained in
7503	achieving compliance with the workers' compensation coverage
7504	requirements and reducing the incidence of workers' compensation
7505	fraud.
7506	Section 176. Subsection (1) of section 626.9892, Florida
7507	Statutes, is amended to read:
7508	626.9892 Anti-Fraud Reward Program; reporting of insurance
7509	fraud.--
7510	(1) The Anti-Fraud Reward Program is hereby established
7511	within the department, to be funded from the Insurance
7512	Commissioner'sRegulatory Trust Fund.
7513	Section 177. Paragraph (k) of subsection (5) of section
7514	626.99, Florida Statutes, is amended to read:
7515	626.99 Life insurance solicitation.--
7516	(5) GENERAL RULES RELATING TO SOLICITATION.--
7517	(k) If an appropriately licensed agent proposes to replace
7518	a life insurance policy or an in-force annuity with a registered
7519	securities product, preapplication notice requirements to the
7520	departmentshall not apply.
7521	Section 178. Section 626.9911, Florida Statutes, is
7522	amended to read:
7523	626.9911 Definitions.--As used in this act, the term:
7524	(1) "Department" means the Department of Insurance.
7525	(1)(2)"Independent third-party trustee or escrow agent"
7526	means an attorney, certified public accountant, financial
7527	institution, or other person providing escrow services under the
7528	authority of a regulatory body. The term does not include any
7529	person associated, affiliated, or under common control with a
7530	viatical settlement provider or viatical settlement broker.
7531	(2)(3)"Person" has the meaning specified in s. 1.01.
7532	(3)(4)"Viatical settlement broker" means a person who, on
7533	behalf of a viator and for a fee, commission, or other valuable
7534	consideration, offers or attempts to negotiate viatical
7535	settlement contracts between a viator resident in this state and
7536	one or more viatical settlement providers. Notwithstanding the
7537	manner in which the viatical settlement broker is compensated, a
7538	viatical settlement broker is deemed to represent only the
7539	viator and owes a fiduciary duty to the viator to act according
7540	to the viator's instructions and in the best interest of the
7541	viator. The term does not include an attorney, licensed
7542	Certified Public Accountant, or investment adviser lawfully
7543	registered with the department of Banking and Financeunder
7544	chapter 517, who is retained to represent the viator and whose
7545	compensation is paid directly by or at the direction and on
7546	behalf of the viator.
7547	(4)(5)"Viatical settlement contract" means a written
7548	agreement entered into between a viatical settlement provider,
7549	or its related provider trust, and a viator. The viatical
7550	settlement contract includes an agreement to transfer ownership
7551	or change the beneficiary designation of a life insurance policy
7552	at a later date, regardless of the date that compensation is
7553	paid to the viator. The agreement must establish the terms
7554	under which the viatical settlement provider will pay
7555	compensation or anything of value, which compensation or value
7556	is less than the expected death benefit of the insurance policy
7557	or certificate, in return for the viator's assignment, transfer,
7558	sale, devise, or bequest of the death benefit or ownership of
7559	all or a portion of the insurance policy or certificate of
7560	insurance to the viatical settlement provider. A viatical
7561	settlement contract also includes a contract for a loan or other
7562	financial transaction secured primarily by an individual or
7563	group life insurance policy, other than a loan by a life
7564	insurance company pursuant to the terms of the life insurance
7565	contract, or a loan secured by the cash value of a policy.
7566	(5)(6)"Viatical settlement provider" means a person who,
7567	in this state, from this state, or with a resident of this
7568	state, effectuates a viatical settlement contract. The term
7569	does not include:
7570	(a) Any bank, savings bank, savings and loan association,
7571	credit union, or other licensed lending institution that takes
7572	an assignment of a life insurance policy as collateral for a
7573	loan.;
7574	(b) A life and health insurer that has lawfully issued a
7575	life insurance policy that provides accelerated benefits to
7576	terminally ill policyholders or certificateholders.; or
7577	(c) Any natural person who enters into no more than one
7578	viatical settlement contract with a viator in 1 calendar year,
7579	unless such natural person has previously been licensed under
7580	this act or is currently licensed under this act.
7581	(d) A trust that meets the definition of a "related
7582	provider trust."
7583	(e) A viator in this state.
7584	(f) A viatical settlement purchaser.
7585	(g) A financing entity.
7586	(6)(7)"Viator" means the owner of a life insurance policy
7587	or a certificateholder under a group policy who enters or seeks
7588	to enter into a viatical settlement contract. This term does not
7589	include a viatical settlement purchaser or a viatical settlement
7590	provider or any person acquiring a policy or interest in a
7591	policy from a viatical settlement provider, nor does it include
7592	an independent third-party trustee or escrow agent.
7593	(7)(8)"Related provider trust" means a titling trust or
7594	other trust established by a licensed viatical settlement
7595	provider or financing entity for the sole purpose of holding the
7596	ownership or beneficial interest in purchased policies in
7597	connection with a financing transaction. The trust must have a
7598	written agreement with a licensed viatical settlement provider
7599	or financing entity under which the licensed viatical settlement
7600	provider or financing entity is responsible for insuring
7601	compliance with all statutory and regulatory requirements and
7602	under which the trust agrees to make all records and files
7603	relating to viatical settlement transactions available to the
7604	officedepartmentas if those records and files were maintained
7605	directly by the licensed viatical settlement provider. This term
7606	does not include an independent third-party trustee or escrow
7607	agent or a trust that does not enter into agreements with a
7608	viator. A related provider trust shall be subject to all
7609	provisions of this act that apply to the viatical settlement
7610	provider who established the related provider trust, except s.
7611	626.9912, which shall not be applicable. A viatical settlement
7612	provider may establish no more than one related provider trust,
7613	and the sole trustee of such related provider trust shall be the
7614	viatical settlement provider licensed under s. 626.9912. The
7615	name of the licensed viatical settlement provider shall be
7616	included within the name of the related provider trust.
7617	(8)(9)"Viatical settlement purchase agreement" means a
7618	contract or agreement, entered into by a viatical settlement
7619	purchaser, to which the viator is not a party, to purchase a
7620	life insurance policy or an interest in a life insurance policy,
7621	which is entered into for the purpose of deriving an economic
7622	benefit. The term also includes purchases made by viatical
7623	settlement purchasers from any person other than the provider
7624	who effectuated the viatical settlement contract.
7625	(9)(10)"Viatical settlement purchaser" means a person who
7626	gives a sum of money as consideration for a life insurance
7627	policy or an equitable or legal interest in the death benefits
7628	of a life insurance policy that has been or will be the subject
7629	of a viatical settlement contract, for the purpose of deriving
7630	an economic benefit, including purchases made from any person
7631	other than the provider who effectuated the viatical settlement
7632	contract or an entity affiliated with the provider. The term
7633	does not include a licensee under this part, an accredited
7634	investor as defined in Rule 501, Regulation D of the Securities
7635	Act Rules, or a qualified institutional buyer as defined by Rule
7636	144(a) of the Federal Securities Act, a special purpose entity,
7637	a financing entity, or a contingency insurer. The above
7638	references to Rule 501, Regulation D and Rule 144(a) of the
7639	Federal Securities Act are used strictly for defining purposes
7640	and shall not be interpreted in any other manner. Any person who
7641	claims to be an accredited investor shall sign an affidavit
7642	stating that he or she is an accredited investor, the basis of
7643	that claim, and that he or she understands that as an accredited
7644	investor he or she will not be entitled to certain protections
7645	of the Viatical Settlement Act. This affidavit must be kept with
7646	other documents required to be maintained by this act.
7647	(10)(11)"Viatical settlement sales agent" means a person
7648	other than a licensed viatical settlement provider who arranges
7649	the purchase through a viatical settlement purchase agreement of
7650	a life insurance policy or an interest in a life insurance
7651	policy.
7652	(11)(12)"Viaticated policy" means a life insurance
7653	policy, or a certificate under a group policy, which is the
7654	subject of a viatical settlement contract.
7655	(12)(13)"Related form" means any form, created by or on
7656	behalf of a licensee, which a viator or viatical settlement
7657	purchaser is required to sign or initial. The forms include, but
7658	are not limited to, a power of attorney, a release of medical
7659	information form, a suitability questionnaire, a disclosure
7660	document, or any addendum, schedule, or amendment to a viatical
7661	settlement contract or viatical settlement purchase agreement
7662	considered necessary by a provider to effectuate a viatical
7663	settlement transaction.
7664	(13)(14)"Special purpose entity" means an entity
7665	established by a licensed viatical settlement provider or by a
7666	financing entity, which may be a corporation, partnership,
7667	trust, limited liability company, or other similar entity formed
7668	solely to provide, either directly or indirectly, access to
7669	institutional capital markets to a viatical settlement provider
7670	or financing entity. A special purpose entity shall not enter
7671	into a viatical settlement contract or a viatical settlement
7672	purchase agreement.
7673	(14)(15)"Financing entity" means an underwriter,
7674	placement agent, lender, purchaser of securities, or purchaser
7675	of a policy or certificate from a viatical settlement provider,
7676	credit enhancer, or any entity that has direct ownership in a
7677	policy or certificate that is the subject of a viatical
7678	settlement contract, but whose principal activity related to the
7679	transaction is providing funds or credit enhancement to effect
7680	the viatical settlement or the purchase of one or more viatical
7681	policies and who has an agreement in writing with one or more
7682	licensed viatical settlement providers to finance the
7683	acquisition of viatical settlement contracts. The term does not
7684	include a nonaccredited investor, a viatical settlement
7685	purchaser, or other natural person. A financing entity may not
7686	enter into a viatical settlement contract.
7687	Section 179. Section 626.9912, Florida Statutes, is
7688	amended to read:
7689	626.9912 Viatical settlement provider license required;
7690	application for license.--
7691	(1) A person may not perform the functions of a viatical
7692	settlement provider as defined in this act or enter into or
7693	solicit a viatical settlement contract without first having
7694	obtained a license from the officedepartment.
7695	(2) Application for a viatical settlement provider license
7696	must be made to the officedepartmentby the applicant on a form
7697	prescribed by the commissiondepartment, under oath and signed
7698	by the applicant. The application must be accompanied by a fee
7699	of $500. If the applicant is a corporation, the application must
7700	be under oath and signed by the president and the secretary of
7701	the corporation.
7702	(3) In the application, the applicant must provide all of
7703	the following:
7704	(a) The applicant's full name, age, residence address, and
7705	business address, and all occupations engaged in by the
7706	applicant during the 5 years preceding the date of the
7707	application.
7708	(b) A copy of the applicant's basic organizational
7709	documents, if any, including the articles of incorporation,
7710	articles of association, partnership agreement, trust agreement,
7711	or other similar documents, together with all amendments to such
7712	documents.
7713	(c) Copies of all bylaws, rules, regulations, or similar
7714	documents regulating the conduct of the applicant's internal
7715	affairs.
7716	(d) A list showing the name, business and residence
7717	addresses, and official position of each individual who is
7718	responsible for conduct of the applicant's affairs, including,
7719	but not limited to, any member of the applicant's board of
7720	directors, board of trustees, executive committee, or other
7721	governing board or committee and any other person or entity
7722	owning or having the right to acquire 10 percent or more of the
7723	voting securities of the applicant.
7724	(e) With respect to each individual identified under
7725	paragraph (d):
7726	1. A sworn biographical statement on forms adopted by the
7727	commission and supplied by the officedepartment.
7728	2. A set of fingerprints on forms prescribed by the
7729	commissiondepartment, certified by a law enforcement officer,
7730	and accompanied by the fingerprinting fee specified in s.
7731	624.501.
7732	3. Authority for release of information relating to the
7733	investigation of the individual's background.
7734	(f) All applications, viatical settlement contract forms,
7735	viatical settlement purchase agreement forms, escrow forms, and
7736	other related forms proposed to be used by the applicant.
7737	(g) Such other information as the commission or office
7738	departmentdeems necessary to determine that the applicant and
7739	the individuals identified under paragraph (d) are competent and
7740	trustworthy and can lawfully and successfully act as a viatical
7741	settlement provider.
7742	(4) The officedepartmentmay not issue a license to an
7743	entity other than a natural person if it is not satisfied that
7744	all officers, directors, employees, stockholders, partners, and
7745	any other persons who exercise or have the ability to exercise
7746	effective control of the entity or who have the ability to
7747	influence the transaction of business by the entity meet the
7748	standards of this act and have not violated any provision of
7749	this act or rules of the commissiondepartmentrelated to the
7750	business of viatical settlement contracts or viatical settlement
7751	purchase agreements.
7752	(5) Upon the filing of a sworn application and the payment
7753	of the license fee, the officedepartmentshall investigate each
7754	applicant and may issue the applicant a license if the office
7755	departmentfinds that the applicant:
7756	(a) Has provided a detailed plan of operation.
7757	(b) Is competent and trustworthy and intends to act in
7758	good faith in the business authorized by the license applied
7759	for.
7760	(c) Has a good business reputation and has had experience,
7761	training, or education that qualifies the applicant to conduct
7762	the business authorized by the license applied for.
7763	(d) If the applicant is a corporation, is a corporation
7764	incorporated under the laws of this state, or is a foreign
7765	corporation authorized to transact business in this state.
7766	(e) Has designated the Chief Financial OfficerInsurance
7767	Commissioner and Treasureras its agent for service of process.
7768	(f) Has made the deposit required by s. 626.9913(3).
7769	Section 180. Subsections (2) and (3) of section 626.9913,
7770	Florida Statutes, are amended to read:
7771	626.9913 Viatical settlement provider license continuance;
7772	annual report; fees; deposit.--
7773	(2) Annually, on or before March 1, the viatical
7774	settlement provider licensee shall file a statement containing
7775	information the commissiondepartmentrequires and shall pay to
7776	the officedepartmenta license fee in the amount of $500. A
7777	viatical settlement provider shall include in all statements
7778	filed with the officedepartmentall information requested by
7779	the officedepartmentregarding a related provider trust
7780	established by the viatical settlement provider. The office
7781	departmentmay require more frequent reporting. Failure to
7782	timely file the annual statement or to timely pay the license
7783	fee is grounds for immediate suspension of the license.
7784	(3) A viatical settlement provider licensee must deposit
7785	and maintain deposited in trust with the department securities
7786	eligible for deposit under s. 625.52, having at all times a
7787	value of not less than $100,000. As an alternative to meeting
7788	the $100,000 deposit requirement, the provider may deposit and
7789	maintain deposited in trust with the department such securities
7790	in the amount of $25,000 and post with the officedepartmenta
7791	surety bond acceptable to the officedepartmentin the amount of
7792	$75,000.
7793	Section 181. Section 626.9914, Florida Statutes, is
7794	amended to read:
7795	626.9914 Suspension, revocation, or nonrenewal of viatical
7796	settlement provider license; grounds; administrative fine.--
7797	(1) The officedepartmentshall suspend, revoke, or refuse
7798	to renew the license of any viatical settlement provider if the
7799	officedepartmentfinds that the licensee:
7800	(a) Has made a misrepresentation in the application for
7801	the license;
7802	(b) Has engaged in fraudulent or dishonest practices, or
7803	otherwise has been shown to be untrustworthy or incompetent to
7804	act as a viatical settlement provider;
7805	(c) Demonstrates a pattern of unreasonable payments to
7806	viators;
7807	(d) Has been found guilty of, or has pleaded guilty or
7808	nolo contendere to, any felony, or a misdemeanor involving fraud
7809	or moral turpitude, regardless of whether a judgment of
7810	conviction has been entered by the court;
7811	(e) Has issued viatical settlement contracts that have not
7812	been approved pursuant to this act;
7813	(f) Has failed to honor contractual obligations related to
7814	the business of viatical settlement contracts;
7815	(g) Deals in bad faith with viators;
7816	(h) Has violated any provision of the insurance code or of
7817	this act;
7818	(i) Employs any person who materially influences the
7819	licensee's conduct and who fails to meet the requirements of
7820	this act; or
7821	(j) No longer meets the requirements for initial
7822	licensure.
7823	(2) The officedepartmentmay, in lieu of or in addition
7824	to any suspension or revocation, assess an administrative fine
7825	not to exceed $2,500 for each nonwillful violation or $10,000
7826	for each willful violation by a viatical settlement provider
7827	licensee. The officedepartmentmay also place a viatical
7828	settlement provider licensee on probation for a period not to
7829	exceed 2 years.
7830	(3) If an employee of a viatical settlement provider
7831	violates any provision of this act, the officedepartmentmay
7832	take disciplinary action against such employee as if the
7833	employee were licensed under this act, including suspending or
7834	otherwise prohibiting the employee from performing the functions
7835	of a viatical settlement provider or viatical settlement broker
7836	as defined in this act.
7837	(4) If a viatical settlement provider establishes a
7838	related provider trust as permitted by this act, the viatical
7839	settlement provider shall be liable and responsible for the
7840	performance of all obligations of the related provider trust
7841	under all viatical settlement contracts entered into by the
7842	related provider trust, and for the compliance of the related
7843	provider trust with all provisions of this act. Any violation of
7844	this act by the related provider trust shall be deemed a
7845	violation of this act by the viatical settlement provider as
7846	well as the related provider trust. If the related provider
7847	trust violates any provisions of this act, the officedepartment
7848	may exercise all remedies set forth in this act for such
7849	violations against the viatical settlement provider, as well as
7850	the related provider trust.
7851	Section 182. Subsections (1), (2), and (4) of section
7852	626.9915, Florida Statutes, are amended to read:
7853	626.9915 Effect of suspension or revocation of viatical
7854	settlement provider license; duration of suspension;
7855	reinstatement.--
7856	(1) When its license is suspended or revoked, the provider
7857	must proceed, immediately following the effective date of the
7858	suspension or revocation, to conclude the affairs it is
7859	transacting under its license. The provider may not solicit,
7860	negotiate, advertise, or effectuate new contracts. The office
7861	departmentretains jurisdiction over the provider until all
7862	contracts have been fulfilled or canceled or have expired. A
7863	provider whose license is suspended or revoked may continue to
7864	maintain and service viaticated policies subject to the approval
7865	of the officedepartment.
7866	(2) The suspension of the license of a viatical settlement
7867	provider licensee may be for such period, not to exceed 2 years,
7868	as determined by the officedepartment. The officedepartment
7869	may shorten, rescind, or modify the suspension.
7870	(4) If, upon expiration of the suspension order, the
7871	license has not otherwise been terminated, the officedepartment
7872	must reinstate the license only upon written request by the
7873	suspended licensee unless the officedepartmentfinds that the
7874	grounds giving rise to the suspension have not been removed or
7875	that the licensee is otherwise not in compliance with the
7876	requirements of this act. The officedepartmentshall give the
7877	licensee notice of its findings no later than 90 days after
7878	receipt of the request or upon expiration of the suspension
7879	order, whichever occurs later. If a license is not reinstated
7880	pursuant to the procedures set forth in this subsection, it
7881	expires at the end of the suspension or on the date it otherwise
7882	would have expired, whichever is sooner.
7883	Section 183. Subsections (7), (8), and (9) of section
7884	626.9916, Florida Statutes, are amended to read:
7885	626.9916 Viatical settlement broker license required;
7886	application for license.--
7887	(7) Upon the filing of a sworn application and the payment
7888	of the license fee and all other applicable fees under this act,
7889	the department shall investigate each applicant and may issue
7890	the applicant a license if the department finds that the
7891	applicant:
7892	(a) Is competent and trustworthy and intends to act in
7893	good faith in the business authorized by the license applied
7894	for.
7895	(b) Has a good business reputation and has had experience,
7896	training, or education that qualifies the applicant to conduct
7897	the business authorized by the license applied for.
7898	(c) Except with respect to applicants for nonresident
7899	licenses, is a bona fide resident of this state and actually
7900	resides in this state at least 180 days a year. If an applicant
7901	holds a similar license or an insurance agent's or broker's
7902	license in another state at the time of applying for a license
7903	under this section, the applicant may be found to meet the
7904	residency requirement of this paragraph only after he or she
7905	furnishes a letter of clearance satisfactory to the department
7906	or other proof that the applicant's resident licenses have been
7907	canceled or changed to nonresident status and that the applicant
7908	is in good standing with the licensing authority.
7909	(d) Is a corporation, a corporation incorporated under the
7910	laws of this state, or a foreign corporation authorized to
7911	transact business in this state.
7912	(e) Has designated the Chief Financial OfficerInsurance
7913	Commissioner and Treasureras its agent for service of process.
7914	(8) An applicant for a nonresident viatical settlement
7915	broker license must, in addition to designating the Chief
7916	Financial OfficerInsurance Commissioner and Treasureras agent
7917	for service of process as required by this section, also furnish
7918	the department with the name and address of a resident of this
7919	state upon whom notices or orders of the department or process
7920	affecting the applicant or licensee may be served. After
7921	issuance of the license, the licensee must also notify the
7922	department of change of the person to receive such notices,
7923	orders, or process; such change is not effective until
7924	acknowledged by the department.
7925	(9) Beginning July 1, 1997,The department may, by rule,
7926	specify experience, educational, or other training standards
7927	required for licensure under this section.
7928	Section 184. Section 626.9919, Florida Statutes, is
7929	amended to read:
7930	626.9919 Notice of change of licensee address or
7931	name.--Each viatical settlement provider licensee, viatical
7932	settlement broker licensee, and viatical settlement sales agent
7933	licensee must provide the office or department, as applicable,
7934	at least 30 days' advance notice of any change in the licensee's
7935	name, residence address, principal business address, or mailing
7936	address.
7937	Section 185. Section 626.9921, Florida Statutes, is
7938	amended to read:
7939	626.9921 Filing of forms; required procedures; approval.--
7940	(1) A viatical settlement contract form, viatical
7941	settlement purchase agreement form, escrow form, or related form
7942	may be used in this state only after the form has been filed
7943	with the officedepartmentand only after the form has been
7944	approved by the officedepartment.
7945	(2) The viatical settlement contract form, viatical
7946	settlement purchase agreement form, escrow form, or related form
7947	must be filed with the officedepartmentat least 60 days before
7948	its use. The form is considered approved on the 60th day after
7949	its date of filing unless it has been previously disapproved by
7950	the officedepartment. The officedepartmentmust disapprove a
7951	viatical settlement contract form, viatical settlement purchase
7952	agreement form, escrow form, or related form that is
7953	unreasonable, contrary to the public interest, discriminatory,
7954	or misleading or unfair to the viator or the purchaser.
7955	(3) If a viatical settlement provider elects to use a
7956	related provider trust in accordance with this act, the viatical
7957	settlement provider shall file notice of its intention to use a
7958	related provider trust with the officedepartment, including a
7959	copy of the trust agreement of the related provider trust. The
7960	organizational documents of the trust must be submitted to and
7961	approved by the officedepartmentbefore the transacting of
7962	business by the trust.
7963	(4) The commissiondepartmentmay adopt, by rule,
7964	standardized forms to be used by licensees, at the licensee's
7965	option in place of separately approved forms.
7966	Section 186. Section 626.9922, Florida Statutes, is
7967	amended to read:
7968	626.9922 Examination.--
7969	(1) The office ordepartment may examine the business and
7970	affairs of any of its respective licensees or applicants
7971	licensee or applicant for a license. The office ordepartment
7972	may order any suchlicensee or applicant to produce any records,
7973	books, files, advertising and solicitation materials, or other
7974	information and may take statements under oath to determine
7975	whether the licensee or applicant is in violation of the law or
7976	is acting contrary to the public interest. The expenses
7977	incurred in conducting any examination or investigation must be
7978	paid by the licensee or applicant. Examinations and
7979	investigations must be conducted as provided in chapter 624, and
7980	licensees are subject to all applicable provisions of the
7981	insurance code.
7982	(2) All accounts, books and records, documents, files,
7983	contracts, and other information relating to all transactions of
7984	viatical settlement contracts or viatical settlement purchase
7985	agreements must be maintained by the licensee for a period of at
7986	least 3 years after the death of the insured and must be
7987	available to the office ordepartment for inspection during
7988	reasonable business hours.
7989	(3) All such records or accurate copies of such records
7990	must be maintained at the licensee's home office. As used in
7991	this section, the term "home office" means the principal place
7992	of business and any other single storage facility, the street
7993	address of which shall be disclosed to the office ordepartment
7994	within 20 days after its initial use, or within 20 days of the
7995	effective date of this subsection.
7996	(4) The originals of records required to be maintained
7997	under this section must be made available to the office or
7998	department for examination at the office's ordepartment's
7999	request.
8000	Section 187. Subsection (2) of section 626.99235, Florida
8001	Statutes, is amended to read:
8002	626.99235 Disclosures to viatical settlement purchasers;
8003	misrepresentations.--
8004	(2) The viatical settlement provider and the viatical
8005	settlement sales agent, themselves or through another person,
8006	shall provide in writing the following disclosures to any
8007	viatical settlement purchaser or purchaser prospect:
8008	(a) That the return represented as being available under
8009	the viatical settlement purchase agreement is directly tied to
8010	the projected life span of one or more insureds.
8011	(b) If a return is represented, the disclosure shall
8012	indicate the projected life span of the insured or insureds
8013	whose life or lives are tied to the return.
8014	(c) If required by the terms of the viatical settlement
8015	purchase agreement, that the viatical settlement purchaser shall
8016	be responsible for the payment of insurance premiums on the life
8017	of the insured, late or surrender fees, or other costs related
8018	to the life insurance policy on the life of the insured or
8019	insureds which may reduce the return.
8020	(d) The amount of any trust fees, commissions, deductions,
8021	or other expenses, if any, to be charged to the viatical
8022	settlement purchaser.
8023	(e) The name and address of the person responsible for
8024	tracking the insured.
8025	(f) That group policies may contain limitations or caps in
8026	the conversion rights, that additional premiums may have to be
8027	paid if the policy is converted, and that the party responsible
8028	for the payment of such additional premiums shall be identified.
8029	(g) That the life expectancy and rate of return are only
8030	estimates and cannot be guaranteed.
8031	(h) That the purchase of a viatical settlement contract
8032	should not be considered a liquid purchase, since it is
8033	impossible to predict the exact timing of its maturity and the
8034	funds may not be available until the death of the insured.
8035	(i) The name and address of the person with the
8036	responsibility for paying the premium until the death of the
8037	insured.
8038
8039
8040	The written disclosure required under this subsection shall be
8041	conspicuously displayed in any viatical settlement purchase
8042	agreement, and in any solicitation material furnished to the
8043	viatical settlement purchaser by such viatical settlement
8044	provider, related provider trust, or person, and shall be in
8045	contrasting color and in not less than 10-point type or no
8046	smaller than the largest type on the page if larger than 10-
8047	point type. The commission maydepartment is authorized toadopt
8048	by rule the disclosure form to be used. The disclosures need not
8049	be furnished in an invitation to inquire, the objective of which
8050	is to create a desire to inquire further about entering into a
8051	viatical settlement purchase agreement. The invitation to
8052	inquire may not quote rates of return, may not include material
8053	attendant to the execution of any specific viatical settlement
8054	purchase agreement, and may not relate to any specific viator.
8055	Section 188. Section 626.99245, Florida Statutes, is
8056	amended to read:
8057	626.99245 Conflict of regulation of viaticals.--
8058	(1) A viatical settlement provider who from this state
8059	enters into a viatical settlement purchase agreement with a
8060	purchaser who is a resident of another state that has enacted
8061	statutes or adopted regulations governing viatical settlement
8062	purchase agreements, shall be governed in the effectuation of
8063	that viatical settlement purchase agreement by the statutes and
8064	regulations of the purchaser's state of residence. If the state
8065	in which the purchaser is a resident has not enacted statutes or
8066	regulations governing viatical settlement purchase agreements,
8067	the provider shall give the purchaser notice that neither
8068	Florida nor his or her state regulates the transaction upon
8069	which he or she is entering. For transactions in these states,
8070	however, the viatical settlement provider is to maintain all
8071	records required as if the transactions were executed in
8072	Florida. However, the forms used in those states need not be
8073	approved by the officedepartment.
8074	(2) A viatical settlement provider who from this state
8075	enters into a viatical settlement contract with a viator who is
8076	a resident of another state that has enacted statutes or adopted
8077	regulations governing viatical settlement contracts shall be
8078	governed in the effectuation of that viatical settlement
8079	contract by the statutes and regulations of the viator's state
8080	of residence. If the state in which the viator is a resident has
8081	not enacted statutes or regulations governing viatical
8082	settlement agreements, the provider shall give the viator notice
8083	that neither Florida nor his or her state regulates the
8084	transaction upon which he or she is entering. For transactions
8085	in those states, however, the viatical settlement provider is to
8086	maintain all records required as if the transactions were
8087	executed in Florida. The forms used in those states need not be
8088	approved by the officedepartment.
8089	(3) This section does not affect the requirement of ss.
8090	626.9911(5)(6)and 626.9912(1) that a viatical settlement
8091	provider doing business from this state must obtain a viatical
8092	settlement license from the officedepartment. As used in this
8093	subsection, the term "doing business from this state" includes
8094	effectuating viatical settlement contracts and effectuating
8095	viatical settlement purchase agreements from offices in this
8096	state, regardless of the state of residence of the viator or the
8097	viatical settlement purchaser.
8098	Section 189. Section 626.9925, Florida Statutes, is
8099	amended to read:
8100	626.9925 Rules.--The commissiondepartmentmay adopt rules
8101	to administer this act, including rules establishing standards
8102	for evaluating advertising by licensees; rules providing for the
8103	collection of data, for disclosures to viators or purchasers,
8104	and for the reporting of life expectancies; and rules defining
8105	terms used in this act and prescribing recordkeeping
8106	requirements relating to executed viatical settlement contracts
8107	and viatical settlement purchase agreements.
8108	Section 190. Section 626.9926, Florida Statutes, is
8109	amended to read:
8110	626.9926 Rate regulation not authorized.--Nothing in this
8111	act shall be construed to authorize the office ordepartment to
8112	directly or indirectly regulate the amount paid as consideration
8113	for entry into a viatical settlement contract or viatical
8114	settlement purchase agreement.
8115	Section 191. Subsection (2) of section 626.9927, Florida
8116	Statutes, is amended to read:
8117	626.9927 Unfair trade practices; cease and desist;
8118	injunctions; civil remedy.--
8119	(2) In addition to the penalties and other enforcement
8120	provisions of this act, if any person violates this act or any
8121	rule implementing this act, the office or department, as
8122	appropriate,may seek an injunction in the circuit court of the
8123	county where the person resides or has a principal place of
8124	business and may apply for temporary and permanent orders that
8125	the office ordepartment determines necessary to restrain the
8126	person from committing the violation.
8127	Section 192. Section 626.99272, Florida Statutes, is
8128	amended to read:
8129	626.99272 Cease and desist orders and fines.--
8130	(1) The office or department as appropriatemay issue a
8131	cease and desist order upon a person that violates any provision
8132	of this part, any rule or order adopted by the commission,
8133	office, ordepartment, or any written agreement entered into
8134	with the office ordepartment.
8135	(2) When the office ordepartment finds that such an
8136	action presents an immediate danger to the public which requires
8137	an immediate final order, it may issue an emergency cease and
8138	desist order reciting with particularity the facts underlying
8139	such findings. The emergency cease and desist order is effective
8140	immediately upon service of a copy of the order on the
8141	respondent and remains effective for 90 days. If the office or
8142	department begins nonemergency cease and desist proceedings
8143	under subsection(1), the emergency cease and desist order
8144	remains effective, absent an order by an appellate court of
8145	competent jurisdiction pursuant to s. 120.68, until the
8146	conclusion of proceedings under ss. 120.569 and 120.57.
8147	(3) The office ordepartment may impose and collect an
8148	administrative fine not to exceed $10,000 for each nonwillful
8149	violation and $25,000 for each willful violation of any
8150	provision of this part.
8151	Section 193. Section 626.99285, Florida Statutes, is
8152	amended to read:
8153	626.99285 Applicability of insurance code.--In addition to
8154	other applicable provisions cited in the insurance code, the
8155	office or department, as appropriate,has the authority granted
8156	under ss. 624.310, 626.901, and 626.989 to regulate viatical
8157	settlement providers, viatical settlement brokers, viatical
8158	settlement sales agents, viatical settlement contracts, viatical
8159	settlement purchase agreements, and viatical settlement
8160	transactions.
8161	Section 194. Section 626.99295, Florida Statutes, is
8162	amended to read:
8163	626.99295 Grace period.--An unlicensed viatical settlement
8164	provider or viatical settlement broker that was legally
8165	transacting business in this state on June 30, 2000, may
8166	continue to transact such business, in the absence of any orders
8167	by the office, department, or the former Department of Insurance
8168	to the contrary, until the office or department, as applicable,
8169	approves or disapproves the viatical settlement provider's
8170	application for licensure if the viatical settlement provider or
8171	viatical settlement broker filedfiles with the former
8172	department an application for licensure no later than August 1,
8173	2000, and if the viatical settlement provider or viatical
8174	settlement broker complies with all other provisions of this
8175	act. Any form for which former department approval wasis
8176	required under this part must have beenbefiled by August 1,
8177	2000, and may continue to be used until disapproved by the
8178	office ordepartment.
8179	Section 195. Paragraphs (a), (b), and (c) of subsection
8180	(2) and paragraph (c) of subsection(3) of section 627.0628,
8181	Florida Statutes, are amended to read:
8182	627.0628 Florida Commission on Hurricane Loss Projection
8183	Methodology.--
8184	(2) COMMISSION CREATED.--
8185	(a) There is created the Florida Commission on Hurricane
8186	Loss Projection Methodology, which is assigned to the State
8187	Board of Administration. For the purposes of this section, the
8188	term "commission" means the Florida Commission on Hurricane Loss
8189	Projection Methodology.The commission shall be administratively
8190	housed within the State Board of Administration, but it shall
8191	independently exercise the powers and duties specified in this
8192	section.
8193	(b) The commission shall consist of the following 11
8194	members:
8195	1. The insurance consumer advocate.
8196	2. The senior employee of the State Board of
8197	Administration responsible for operationsChief Operating
8198	Officerof the Florida Hurricane Catastrophe Fund.
8199	3. The Executive Director of the Citizens Property
8200	Insurance CorporationResidential Property and Casualty Joint
8201	Underwriting Association.
8202	4. The Director of the Division of Emergency Management of
8203	the Department of Community Affairs.
8204	5. The actuary member of the Florida Hurricane Catastrophe
8205	Fund Advisory Council.
8206	6. Six members appointed by the Chief Financial Officer
8207	Insurance Commissioner, as follows:
8208	a. An employee of the officeDepartment of Insurancewho
8209	is an actuary responsible for property insurance rate filings.
8210	b. An actuary who is employed full time by a property and
8211	casualty insurer which was responsible for at least 1 percent of
8212	the aggregate statewide direct written premium for homeowner's
8213	insurance in the calendar year preceding the member's
8214	appointment to the commission.
8215	c. An expert in insurance finance who is a full time
8216	member of the faculty of the State University System and who has
8217	a background in actuarial science.
8218	d. An expert in statistics who is a full time member of
8219	the faculty of the State University System and who has a
8220	background in insurance.
8221	e. An expert in computer system design who is a full time
8222	member of the faculty of the State University System.
8223	f. An expert in meteorology who is a full time member of
8224	the faculty of the State University System and who specializes
8225	in hurricanes.
8226	(c) Members designated under subparagraphs (b)1.-5. shall
8227	serve on the commission as long as they maintain the respective
8228	offices designated in subparagraphs (b)1.-5. Members appointed
8229	by the Chief Financial OfficerInsurance Commissionerunder
8230	subparagraph (b)6. shall serve on the commission until the end
8231	of the term of office of the Chief Financial OfficerInsurance
8232	Commissioner who appointed them, unless earlier removed by the
8233	Chief Financial OfficerInsurance Commissionerfor cause.
8234	Vacancies on the commission shall be filled in the same manner
8235	as the original appointment.
8236	(3) ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.--
8237	(c) With respect to a rate filing under s. 627.062, an
8238	insurer may employ actuarial methods, principles, standards,
8239	models, or output ranges found by the commission to be accurate
8240	or reliable to determine hurricane loss factors for use in a
8241	rate filing under s. 627.062, which findings and factors are
8242	admissible and relevant in consideration of a rate filing by the
8243	officedepartmentor in any arbitration or administrative or
8244	judicial review.
8245	Section 196. Paragraph (b) of subsection (2) and
8246	subsections (5), (6), and (9) of section 627.0629, Florida
8247	Statutes, are amended to read:
8248	627.0629 Residential property insurance; rate filings.--
8249	(2)
8250	(b) A rate filing for residential property insurance made
8251	more than 150 days after approval by the officedepartmentof a
8252	building code rating factor plan submitted by a statewide rating
8253	organization shall include positive and negative rate factors
8254	that reflect the manner in which building code enforcement in a
8255	particular jurisdiction addresses risk of wind damage. The rate
8256	filing shall include variations from standard rate factors on an
8257	individual basis based on inspection of a particular structure
8258	by a licensed home inspector. If an inspection is requested by
8259	the insured, the insurer may require the insured to pay the
8260	reasonable cost of the inspection. This paragraph applies to
8261	structures constructed or renovated after the implementation of
8262	this paragraph.
8263	(5) In order to provide an appropriate transition period,
8264	an insurer may, in its sole discretion, implement an approved
8265	rate filing for residential property insurance over a period of
8266	years. An insurer electing to phase in its rate filing must
8267	provide an informational notice to the officedepartmentsetting
8268	out its schedule for implementation of the phased-in rate
8269	filing.
8270	(6) An insurer may not write a residential property
8271	insurance policy without providing windstorm coverage or
8272	hurricane coverage as defined in s. 627.4025. This subsection
8273	does not apply with respect to risks located in an area eligible
8274	for coverage under the high-risk account of the Citizens
8275	Property Insurance Corporation pursuant to s. 627.351(6)Florida
8276	Windstorm Underwriting Association under s. 627.351(2).
8277	(9) EVALUATION OF RESIDENTIAL PROPERTY STRUCTURAL
8278	SOUNDNESS.--
8279	(a) It is the intent of the Legislature to provide a
8280	program whereby homeowners may obtain an evaluation of the wind
8281	resistance of their homes with respect to preventing damage from
8282	hurricanes, together with a recommendation of reasonable steps
8283	that may be taken to upgrade their homes to better withstand
8284	hurricane force winds.
8285	(b) To the extent that funds are provided for this purpose
8286	in the General Appropriations Act, the Legislature hereby
8287	authorizes the establishment of a program to be administered by
8288	the Citizens Property Insurance Corporation for homeowners
8289	insured in the high-risk accountFlorida Windstorm Underwriting
8290	Association.
8291	(c) The program shall provide grants to homeowners, for
8292	the purpose of providing homeowner applicants with funds to
8293	conduct an evaluation of the integrity of their homes with
8294	respect to withstanding hurricane force winds, recommendations
8295	to retrofit the homes to better withstand damage from such
8296	winds, and the estimated cost to make the recommended retrofits.
8297	(d) The Department of Community Affairs shall establish by
8298	rule standards to govern the quality of the evaluation, the
8299	quality of the recommendations for retrofitting, the eligibility
8300	of the persons conducting the evaluation, and the selection of
8301	applicants under the program. In establishing the rule, the
8302	Department of Community Affairsshall consult with the advisory
8303	committee to minimize the possibility of fraud or abuse in the
8304	evaluation and retrofitting process, and to ensure that funds
8305	spent by homeowners acting on the recommendations achieve
8306	positive results.
8307	(e) The Citizens Property Insurance CorporationFlorida
8308	Windstorm Underwriting Associationshall identify areas of this
8309	state with the greatest wind risk to residential properties and
8310	recommend annually to the Department of Community Affairs
8311	priority target areas for such evaluations and inclusion with
8312	the associated residential construction mitigation program.
8313	Section 197. Subsections (2) and (3) and paragraphs (a),
8314	(b), (c), (e), (f), and (g) of subsection (4) of section
8315	627.311, Florida Statutes, are amended to read:
8316	627.311 Joint underwriters and joint reinsurers.--
8317	(2) If the officedepartmentfinds that any activity or
8318	practice of any such group, association, or other organization
8319	is unfair or unreasonable or otherwise inconsistent with the
8320	provisions of this chapter, it may issue a written order
8321	specifying in what respects such activity or practice is unfair
8322	or unreasonable or otherwise inconsistent with the provisions of
8323	this chapter, and requiring the discontinuance of such activity
8324	or practice.
8325	(3) The officedepartmentmay, after consultation with
8326	insurers licensed to write automobile insurance in this state,
8327	approve a joint underwriting plan for purposes of equitable
8328	apportionment or sharing among insurers of automobile liability
8329	insurance and other motor vehicle insurance, as an alternate to
8330	the plan required in s. 627.351(1). All insurers authorized to
8331	write automobile insurance in this state shall subscribe to the
8332	plan and participate therein. The plan shall be subject to
8333	continuous review by the officedepartmentwhich may at any time
8334	disapprove the entire plan or any part thereof if it determines
8335	that conditions have changed since prior approval and that in
8336	view of the purposes of the plan changes are warranted. Any
8337	disapproval by the officedepartmentshall be subject to the
8338	provisions of chapter 120. If adopted, the plan and the
8339	association created under the plan:
8340	(a) Must be subject to all provisions of s. 627.351(1),
8341	except apportionment of applicants.
8342	(b) May provide for one or more designated insurers, able
8343	and willing to provide policy and claims service, to act on
8344	behalf of all other insurers to provide insurance for applicants
8345	who are in good faith entitled to, but unable to, procure
8346	insurance through the voluntary insurance market at standard
8347	rates.
8348	(c) Must provide that designated insurers will issue
8349	policies of insurance and provide policyholder and claims
8350	service on behalf of all insurers for the joint underwriting
8351	association.
8352	(d) Must provide for the equitable apportionment among
8353	insurers of losses and expenses incurred.
8354	(e) Must provide that the joint underwriting association
8355	will operate subject to the supervision and approval of a board
8356	of governors consisting of 11 individuals, including 1 who will
8357	be elected as chair. Five members of the board must be appointed
8358	by the Chief Financial OfficerInsurance Commissioner. Two of
8359	the Chief Financial Officer'scommissioner'sappointees must be
8360	chosen from the insurance industry. Any board member appointed
8361	by the Chief Financial OfficerInsurance Commissionermay be
8362	removed and replaced by her or him at any time without cause.
8363	Six members of the board must be appointed by the participating
8364	insurers, two of whom must be from the insurance agents'
8365	associations. All board members, including the chair, must be
8366	appointed to serve for 2-year terms beginning annually on a date
8367	designated by the plan.
8368	(f) Must provide that an agent appointed to a servicing
8369	carrier must be a licensed general lines agent of an insurer
8370	which is authorized to write automobile liability and physical
8371	damage insurance in the state and which is actively writing such
8372	coverage in the county in which the agent is located, or the
8373	immediately adjoining counties, or an agent who places a volume
8374	of other property and casualty insurance in an amount equal to
8375	the premium volume placed with the Florida Joint Underwriting
8376	Association. The officedepartmentmay, however, determine that
8377	an agent may be appointed to a servicing carrier if, after
8378	public hearing, the officedepartmentfinds that consumers in
8379	the agent's operating area would not have adequate and
8380	reasonable access to the purchase of automobile insurance if the
8381	agent were not appointed to a servicing carrier.
8382	(g) Must make available noncancelable coverage as provided
8383	in s. 627.7275(2).
8384	(h) Must provide for the furnishing of a list of insureds
8385	and their mailing addresses upon the request of a member of the
8386	association or an insurance agent licensed to place business
8387	with an association member. The list must indicate whether the
8388	insured is currently receiving a good driver discount from the
8389	association. The plan may charge a reasonable fee to cover the
8390	cost incurred in providing the list.
8391	(i) Must not provide a renewal credit or discount or any
8392	other inducement designed to retain a risk.
8393	(j) Must not provide any other good driver credit or
8394	discount that is not actuarially sound. In addition to other
8395	criteria that the plan may specify, to be eligible for a good
8396	driver credit, an insured must not have any criminal traffic
8397	violations within the most recent 36-month period preceding the
8398	date the discount is received.
8399	(k) Shall have no liability, and no cause of action of any
8400	nature shall arise against, any member insurer or its agents or
8401	employees, agents or employees of the association, members of
8402	the board of governors of the association, the Chief Financial
8403	Officer, or the officedepartmentor its representatives, for
8404	any action taken by them in the performance of their duties or
8405	responsibilities under this subsection. Such immunity does not
8406	apply to actions for or arising out of breach of any contract or
8407	agreement pertaining to insurance, or any willful tort.
8408	(l)1. Shall be subject to the public records requirements
8409	of chapter 119 and the public meeting requirements of s.
8410	286.011. However, the following records of the Florida
8411	Automobile Joint Underwriting Association are confidential and
8412	exempt from s. 119.07(1) and s. 24(a), Art. I of the State
8413	Constitution:
8414	a. Underwriting files, except that a policyholder or an
8415	applicant shall have access to his or her own underwriting
8416	files.
8417	b. Claims files, until termination of all litigation and
8418	settlement of all claims arising out of the same incident,
8419	although portions of the claims files may remain exempt, as
8420	otherwise provided by law. Confidential and exempt claims file
8421	records may be released to other governmental agencies upon
8422	written request and demonstration of need; such records held by
8423	the receiving agency remain confidential and exempt as provided
8424	by this paragraph.
8425	c. Records obtained or generated by an internal auditor
8426	pursuant to a routine audit, until the audit is completed or, if
8427	the audit is conducted as part of an investigation, until the
8428	investigation is closed or ceases to be active. An
8429	investigation is considered "active" while the investigation is
8430	being conducted with a reasonable, good faith belief that it
8431	could lead to the filing of administrative, civil, or criminal
8432	proceedings.
8433	d. Matters reasonably encompassed in privileged attorney-
8434	client communications.
8435	e. Proprietary information licensed to the association
8436	under contract when the contract provides for the
8437	confidentiality of such proprietary information.
8438	f. All information relating to the medical condition or
8439	medical status of an association employee which is not relevant
8440	to the employee's capacity to perform his or her duties, except
8441	as otherwise provided in this paragraph. Information which is
8442	exempt shall include, but is not limited to, information
8443	relating to workers' compensation, insurance benefits, and
8444	retirement or disability benefits.
8445	g. All records relative to an employee's participation in
8446	an employee assistance program designed to assist any employee
8447	who has a behavioral or medical disorder, substance abuse
8448	problem, or emotional difficulty which affects the employee's
8449	job performance, except as otherwise provided in s.
8450	112.0455(11).
8451	h. Information relating to negotiations for financing,
8452	reinsurance, depopulation, or contractual services, until the
8453	conclusion of the negotiations.
8454	i. Minutes of closed meetings regarding underwriting
8455	files, and minutes of closed meetings regarding an open claims
8456	file until termination of all litigation and settlement of all
8457	claims with regard to that claim, except that information
8458	otherwise confidential or exempt by law must be redacted.
8459
8460
8461	When an authorized insurer is considering underwriting a risk
8462	insured by the association, relevant underwriting files and
8463	confidential claims files may be released to the insurer
8464	provided the insurer agrees in writing, notarized and under
8465	oath, to maintain the confidentiality of such files. When a
8466	file is transferred to an insurer, that file is no longer a
8467	public record because it is not held by an agency subject to the
8468	provisions of the public records law. The association may make
8469	the following information obtained from underwriting files and
8470	confidential claims files available to licensed general lines
8471	insurance agents: name, address, and telephone number of the
8472	automobile owner or insured; location of the risk; rating
8473	information; loss history; and policy type. The receiving
8474	licensed general lines insurance agent must retain the
8475	confidentiality of the information received.
8476	2. Portions of meetings of the Florida Automobile Joint
8477	Underwriting Association during which confidential underwriting
8478	files or confidential open claims files are discussed are exempt
8479	from the provisions of s. 286.011 and s. 24(b), Art. I of the
8480	State Constitution. All portions of association meetings which
8481	are closed to the public shall be recorded by a court reporter.
8482	The court reporter shall record the times of commencement and
8483	termination of the meeting, all discussion and proceedings, the
8484	names of all persons present at any time, and the names of all
8485	persons speaking. No portion of any closed meeting shall be off
8486	the record. Subject to the provisions of this paragraph and s.
8487	119.07(2)(a), the court reporter's notes of any closed meeting
8488	shall be retained by the association for a minimum of 5 years.
8489	A copy of the transcript, less any exempt matters, of any closed
8490	meeting during which claims are discussed shall become public as
8491	to individual claims after settlement of the claim.
8492
8493
8494	This paragraph is subject to the Open Government Sunset Review
8495	Act of 1995 in accordance with s. 119.15, and shall stand
8496	repealed on October 2, 2003, unless reviewed and saved from
8497	repeal through reenactment by the Legislature.
8498	(4)(a) Effective upon this act becoming a law, The office
8499	departmentshall, after consultation with insurers, approve a
8500	joint underwriting plan of insurers which shall operate as a
8501	nonprofit entity. For the purposes of this subsection, the term
8502	"insurer" includes group self-insurance funds authorized by s.
8503	624.4621, commercial self-insurance funds authorized by s.
8504	624.462, assessable mutual insurers authorized under s.
8505	628.6011, and insurers licensed to write workers' compensation
8506	and employer's liability insurance in this state. The purpose of
8507	the plan is to provide workers' compensation and employer's
8508	liability insurance to applicants who are required by law to
8509	maintain workers' compensation and employer's liability
8510	insurance and who are in good faith entitled to but who are
8511	unable to purchase such insurance through the voluntary market.
8512	The joint underwriting plan shall issue policies beginning
8513	January 1, 1994.The plan must have actuarially sound rates that
8514	assure that the plan is self-supporting.
8515	(b) The operation of the plan is subject to the
8516	supervision of a 13-member board of governors. The board of
8517	governors shall be comprised of:
8518	1. Five of the 20 domestic insurers, as defined in s.
8519	624.06(1), having the largest voluntary direct premiums written
8520	in this state for workers' compensation and employer's liability
8521	insurance, which shall be elected by those 20 domestic insurers;
8522	2. Five of the 20 foreign insurers as defined in s.
8523	624.06(2) having the largest voluntary direct premiums written
8524	in this state for workers' compensation and employer's liability
8525	insurance, which shall be elected by those 20 foreign insurers;
8526	3. One person, who shall serve as the chair, appointed by
8527	the Chief Financial OfficerInsurance Commissioner;
8528	4. One person appointed by the largest property and
8529	casualty insurance agents' association in this state; and
8530	5. The consumer advocate appointed under s. 627.0613 or
8531	the consumer advocate's designee.
8532
8533
8534	Each board member shall serve a 4-year term and may serve
8535	consecutive terms. No board member shall be an insurer which
8536	provides service to the plan or which has an affiliate which
8537	provides services to the plan or which is serviced by a service
8538	company or third-party administrator which provides services to
8539	the plan or which has an affiliate which provides services to
8540	the plan. The minutes, audits, and procedures of the board of
8541	governors are subject to chapter 119.
8542	(c) The operation of the plan shall be governed by a plan
8543	of operation that is prepared at the direction of the board of
8544	governors. The plan of operation may be changed at any time by
8545	the board of governors or upon request of the officedepartment.
8546	The plan of operation and all changes thereto are subject to the
8547	approval of the officedepartment. The plan of operation shall:
8548	1. Authorize the board to engage in the activities
8549	necessary to implement this subsection, including, but not
8550	limited to, borrowing money.
8551	2. Develop criteria for eligibility for coverage by the
8552	plan, including, but not limited to, documented rejection by at
8553	least two insurers which reasonably assures that insureds
8554	covered under the plan are unable to acquire coverage in the
8555	voluntary market. Any insured may voluntarily elect to accept
8556	coverage from an insurer for a premium equal to or greater than
8557	the plan premium if the insurer writing the coverage adheres to
8558	the provisions of s. 627.171.
8559	3. Require notice from the agent to the insured at the
8560	time of the application for coverage that the application is for
8561	coverage with the plan and that coverage may be available
8562	through an insurer, group self-insurers' fund, commercial self-
8563	insurance fund, or assessable mutual insurer through another
8564	agent at a lower cost.
8565	4. Establish programs to encourage insurers to provide
8566	coverage to applicants of the plan in the voluntary market and
8567	to insureds of the plan, including, but not limited to:
8568	a. Establishing procedures for an insurer to use in
8569	notifying the plan of the insurer's desire to provide coverage
8570	to applicants to the plan or existing insureds of the plan and
8571	in describing the types of risks in which the insurer is
8572	interested. The description of the desired risks must be on a
8573	form developed by the plan.
8574	b. Developing forms and procedures that provide an insurer
8575	with the information necessary to determine whether the insurer
8576	wants to write particular applicants to the plan or insureds of
8577	the plan.
8578	c. Developing procedures for notice to the plan and the
8579	applicant to the plan or insured of the plan that an insurer
8580	will insure the applicant or the insured of the plan, and notice
8581	of the cost of the coverage offered; and developing procedures
8582	for the selection of an insuring entity by the applicant or
8583	insured of the plan.
8584	d. Provide for a market-assistance plan to assist in the
8585	placement of employers. All applications for coverage in the
8586	plan received 45 days before the effective date for coverage
8587	shall be processed through the market-assistance plan. A market-
8588	assistance plan specifically designed to serve the needs of
8589	small good policyholders as defined by the board must be
8590	finalized by January 1, 1994.
8591	5. Provide for policy and claims services to the insureds
8592	of the plan of the nature and quality provided for insureds in
8593	the voluntary market.
8594	6. Provide for the review of applications for coverage
8595	with the plan for reasonableness and accuracy, using any
8596	available historic information regarding the insured.
8597	7. Provide for procedures for auditing insureds of the
8598	plan which are based on reasonable business judgment and are
8599	designed to maximize the likelihood that the plan will collect
8600	the appropriate premiums.
8601	8. Authorize the plan to terminate the coverage of and
8602	refuse future coverage for any insured that submits a fraudulent
8603	application to the plan or provides fraudulent or grossly
8604	erroneous records to the plan or to any service provider of the
8605	plan in conjunction with the activities of the plan.
8606	9. Establish service standards for agents who submit
8607	business to the plan.
8608	10. Establish criteria and procedures to prohibit any
8609	agent who does not adhere to the established service standards
8610	from placing business with the plan or receiving, directly or
8611	indirectly, any commissions for business placed with the plan.
8612	11. Provide for the establishment of reasonable safety
8613	programs for all insureds in the plan.
8614	12. Authorize the plan to terminate the coverage of and
8615	refuse future coverage to any insured who fails to pay premiums
8616	or surcharges when due; who, at the time of application, is
8617	delinquent in payments of workers' compensation or employer's
8618	liability insurance premiums or surcharges owed to an insurer,
8619	group self-insurers' fund, commercial self-insurance fund, or
8620	assessable mutual insurer licensed to write such coverage in
8621	this state; or who refuses to substantially comply with any
8622	safety programs recommended by the plan.
8623	13. Authorize the board of governors to provide the
8624	services required by the plan through staff employed by the
8625	plan, through reasonably compensated service providers who
8626	contract with the plan to provide services as specified by the
8627	board of governors, or through a combination of employees and
8628	service providers.
8629	14. Provide for service standards for service providers,
8630	methods of determining adherence to those service standards,
8631	incentives and disincentives for service, and procedures for
8632	terminating contracts for service providers that fail to adhere
8633	to service standards.
8634	15. Provide procedures for selecting service providers and
8635	standards for qualification as a service provider that
8636	reasonably assure that any service provider selected will
8637	continue to operate as an ongoing concern and is capable of
8638	providing the specified services in the manner required.
8639	16. Provide for reasonable accounting and data-reporting
8640	practices.
8641	17. Provide for annual review of costs associated with the
8642	administration and servicing of the policies issued by the plan
8643	to determine alternatives by which costs can be reduced.
8644	18. Authorize the acquisition of such excess insurance or
8645	reinsurance as is consistent with the purposes of the plan.
8646	19. Provide for an annual report to the officedepartment
8647	on a date specified by the officedepartmentand containing such
8648	information as the officedepartmentreasonably requires.
8649	20. Establish multiple rating plans for various
8650	classifications of risk which reflect risk of loss, hazard
8651	grade, actual losses, size of premium, and compliance with loss
8652	control. At least one of such plans must be a preferred-rating
8653	plan to accommodate small-premium policyholders with good
8654	experience as defined in sub-subparagraph 22.a.
8655	21. Establish agent commission schedules.
8656	22. Establish three subplans as follows:
8657	a. Subplan "A" must include those insureds whose annual
8658	premium does not exceed $2,500 and who have neither incurred any
8659	lost-time claims nor incurred medical-only claims exceeding 50
8660	percent of their premium for the immediate 2 years.
8661	b. Subplan "B" must include insureds that are employers
8662	identified by the board of governors as high-risk employers due
8663	solely to the nature of the operations being performed by those
8664	insureds and for whom no market exists in the voluntary market,
8665	and whose experience modifications are less than 1.00.
8666	c. Subplan "C" must include all other insureds within the
8667	plan.
8668	(e) The plan shall establish and use its rates and rating
8669	plans, and the plan may establish and use changes in rating
8670	plans at any time, but no more frequently than two times per any
8671	rating class for any calendar year. By December 1, 1993, and
8672	December 1 of each year thereafter, the board shall establish
8673	and use actuarially sound rates for use by the plan to assure
8674	that the plan is self-funding while those rates are in effect.
8675	Such rates and rating plans must be filed with the office
8676	departmentwithin 30 calendar days after their effective dates,
8677	and shall be considered a "use and file" filing. Any disapproval
8678	by the officedepartmentmust have an effective date that is at
8679	least 60 days from the date of disapproval of the rates and
8680	rating plan and must have prospective effect only. The plan may
8681	not be subject to any order by the officedepartmentto return
8682	to policyholders any portion of the rates disapproved by the
8683	officedepartment. The officedepartmentmay not disapprove any
8684	rates or rating plans unless it demonstrates that such rates and
8685	rating plans are excessive, inadequate, or unfairly
8686	discriminatory.
8687	(f) No later than June 1 of each year, the plan shall
8688	obtain an independent actuarial certification of the results of
8689	the operations of the plan for prior years, and shall furnish a
8690	copy of the certification to the officedepartment. If, after
8691	the effective date of the plan, the projected ultimate incurred
8692	losses and expenses and dividends for prior years exceed
8693	collected premiums, accrued net investment income, and prior
8694	assessments for prior years, the certification is subject to
8695	review and approval by the officedepartmentbefore it becomes
8696	final.
8697	(g) Whenever a deficit exists, the plan shall, within 90
8698	days, provide the officedepartmentwith a program to eliminate
8699	the deficit within a reasonable time. The deficit may be funded
8700	through increased premiums charged to insureds of the plan for
8701	subsequent years, through the use of policyholder surplus
8702	attributable to any year, and through assessments on insureds in
8703	the plan if the plan uses assessable policies.
8704	Section 198. Section 627.3111, Florida Statutes, is
8705	amended to read:
8706	627.3111 Public records exemption.--All bank account
8707	numbers and debit, charge, and credit card numbers, and all
8708	other personal financial and health information of a consumer
8709	held by the department or officeof Insurance or theirits
8710	service providers or agents, relating to a consumer's complaint
8711	or inquiry regarding a matter or activity regulated under the
8712	Florida Insurance Code, are confidential and exempt from s.
8713	119.07(1) and s. 24(a), Art. I of the State Constitution. For
8714	the purpose of this section, the term "consumer" includes but is
8715	not limited to a prospective purchaser, purchaser, or
8716	beneficiary of, or applicant for, any product or service
8717	regulated under the Florida Insurance Code, and a family member
8718	or dependent of a consumer, a subscriber under a group policy,
8719	or a policyholder. This information shall be redacted from
8720	records that contain nonexempt information prior to disclosure.
8721	This exemption applies to information made confidential and
8722	exempt by this section held by the department or officeof
8723	Insurance or theiritsservice providers or agents before, on,
8724	or after the effective date of this exemption. Such confidential
8725	and exempt information may be disclosed to another governmental
8726	entity, if disclosure is necessary for the receiving entity to
8727	perform its duties and responsibilities, and may be disclosed to
8728	the National Association of Insurance Commissioners. The
8729	receiving governmental entity and the association must maintain
8730	the confidential and exempt status of such information. The
8731	information made confidential and exempt by this section may be
8732	used in a criminal, civil, or administrative proceeding so long
8733	as the confidential and exempt status of such information is
8734	maintained. This exemption does not include the name and address
8735	of an inquirer or complainant to the department or officeor the
8736	name of an insurer or other regulated entity which is the
8737	subject of the inquiry or complaint. This section is subject to
8738	the Open Government Sunset Review Act of 1995 in accordance with
8739	s. 119.15 and shall stand repealed on October 2, 2007, unless
8740	reviewed and saved from repeal through reenactment by the
8741	Legislature.
8742	Section 199. Subsection (1), paragraphs (a) and (c) of
8743	subsection (3), paragraphs (a), (c), and (d) of subsection (4),
8744	and subsections (5) and (6) of section 627.351, Florida
8745	Statutes, are amended, and paragraph (f) is added to subsection
8746	(2) of that section to read:
8747	627.351 Insurance risk apportionment plans.--
8748	(1) MOTOR VEHICLE INSURANCE RISK
8749	APPORTIONMENT.--Agreements may be made among casualty and surety
8750	insurers with respect to the equitable apportionment among them
8751	of insurance which may be afforded applicants who are in good
8752	faith entitled to, but are unable to, procure such insurance
8753	through ordinary methods, and such insurers may agree among
8754	themselves on the use of reasonable rate modifications for such
8755	insurance. Such agreements and rate modifications shall be
8756	subject to the approval of the officedepartment. The office
8757	departmentshall, after consultation with the insurers licensed
8758	to write automobile liability insurance in this state, adopt a
8759	reasonable plan or plans for the equitable apportionment among
8760	such insurers of applicants for such insurance who are in good
8761	faith entitled to, but are unable to, procure such insurance
8762	through ordinary methods, and, when such plan has been adopted,
8763	all such insurers shall subscribe thereto and shall participate
8764	therein. Such plan or plans shall include rules for
8765	classification of risks and rates therefor. The plan or plans
8766	shall make available noncancelable coverage as provided in s.
8767	627.7275(2). Any insured placed with the plan shall be notified
8768	of the fact that insurance coverage is being afforded through
8769	the plan and not through the private market, and such
8770	notification shall be given in writing within 10 days of such
8771	placement. To assure that plan rates are made adequate to pay
8772	claims and expenses, insurers shall develop a means of obtaining
8773	loss and expense experience at least annually, and the plan
8774	shall file such experience, when available, with the office
8775	departmentin sufficient detail to make a determination of rate
8776	adequacy. Prior to the filing of such experience with the office
8777	department, the plan shall poll each member insurer as to the
8778	need for an actuary who is a member of the Casualty Actuarial
8779	Society and who is not affiliated with the plan's statistical
8780	agent to certify the plan's rate adequacy. If a majority of
8781	those insurers responding indicate a need for such
8782	certification, the plan shall include the certification as part
8783	of its experience filing. Such experience shall be filed with
8784	the officedepartmentnot more than 9 months following the end
8785	of the annual statistical period under review, together with a
8786	rate filing based on said experience. The officedepartment
8787	shall initiate proceedings to disapprove the rate and so notify
8788	the plan or shall finalize its review within 60 days of receipt
8789	of the filing. Notification to the plan by the officedepartment
8790	of its preliminary findings, which include a point of entry to
8791	the plan pursuant to chapter 120, shall toll the 60-day period
8792	during any such proceedings and subsequent judicial review. The
8793	rate shall be deemed approved if the officedepartmentdoes not
8794	issue notice to the plan of its preliminary findings within 60
8795	days of the filing. In addition to provisions for claims and
8796	expenses, the ratemaking formula shall include a factor for
8797	projected claims trending and 5 percent for contingencies. In no
8798	instance shall the formula include a renewal discount for plan
8799	insureds. However, the plan shall reunderwrite each insured on
8800	an annual basis, based upon all applicable rating factors
8801	approved by the officedepartment. Trend factors shall not be
8802	found to be inappropriate if not in excess of trend factors
8803	normally used in the development of residual market rates by the
8804	appropriate licensed rating organization. Each application for
8805	coverage in the plan shall include, in boldfaced 12-point type
8806	immediately preceding the applicant's signature, the following
8807	statement:
8808
8809	"THIS INSURANCE IS BEING AFFORDED THROUGH THE FLORIDA JOINT
8810	UNDERWRITING ASSOCIATION AND NOT THROUGH THE PRIVATE MARKET.
8811	PLEASE BE ADVISED THAT COVERAGE WITH A PRIVATE INSURER MAY BE
8812	AVAILABLE FROM ANOTHER AGENT AT A LOWER COST. AGENT AND COMPANY
8813	LISTINGS ARE AVAILABLE IN THE LOCAL YELLOW PAGES."
8814
8815	The plan shall annually report to the officedepartmentthe
8816	number and percentage of plan insureds who are not surcharged
8817	due to their driving record.
8818	(2) WINDSTORM INSURANCE RISK APPORTIONMENT.--
8819	(f) As used in this subsection, the term "department"
8820	means the former Department of Insurance.
8821	(3) POLITICAL SUBDIVISION; CASUALTY INSURANCE RISK
8822	APPORTIONMENT.--
8823	(a) The officedepartmentshall, after consultation with
8824	the casualty insurers licensed in this state, adopt a plan or
8825	plans for the equitable apportionment among them of casualty
8826	insurance coverage which may be afforded political subdivisions
8827	which are in good faith entitled to, but are unable to, procure
8828	such coverage through the voluntary market at standard rates or
8829	through a statutorily approved plan authorized by the office
8830	department. The officedepartmentmay adopt a joint underwriting
8831	plan which shall provide for one or more designated insurers
8832	able and willing to provide policyholder and claims service,
8833	including the issuance of insurance policies, to act on behalf
8834	of all other insurers required to participate in the joint
8835	underwriting plan. Any joint underwriting plan adopted shall
8836	provide for the equitable apportionment of any profits realized,
8837	or of losses and expenses incurred, among participating
8838	insurers. The plan shall include, but shall not be limited to:
8839	1. Rules for the classification of risks and rates which
8840	reflect the past loss experience and prospective loss experience
8841	in different geographic areas.
8842	2. A rating plan which reasonably reflects the prior
8843	claims experience of the insureds.
8844	3. Excess coverage by insurers if the officeInsurance
8845	Commissioner, in itshis or herdiscretion, requires such
8846	coverage by insurers participating in the joint underwriting
8847	plan.
8848	(c) Any deficit sustained under the plan shall first be
8849	recovered through a premium contingency assessment.
8850	Concurrently, the rates for insureds shall be adjusted for the
8851	next year so as to be actuarially sound in conformance with
8852	rules adopted byof the commissiondepartment.
8853	(4) MEDICAL MALPRACTICE RISK APPORTIONMENT.--
8854	(a) The officedepartmentshall, after consultation with
8855	insurers as set forth in paragraph (b), adopt a joint
8856	underwriting plan as set forth in paragraph (d).
8857	(c) The Joint Underwriting Association shall operate
8858	subject to the supervision and approval of a board of governors
8859	consisting of representatives of five of the insurers
8860	participating in the Joint Underwriting Association, an attorney
8861	to be named by The Florida Bar, a physician to be named by the
8862	Florida Medical Association, a dentist to be named by the
8863	Florida Dental Association, and a hospital representative to be
8864	named by the Florida Hospital Association. The board of
8865	governors shall choose, during the first meeting of the board
8866	after June 30 of each year, one of its members to serve as chair
8867	of the board and another member to serve as vice chair of the
8868	board. There shall be no liability on the part of, and no cause
8869	of action of any nature shall arise against, any member insurer,
8870	self-insurer, or its agents or employees, the Joint Underwriting
8871	Association or its agents or employees, members of the board of
8872	governors, or the officedepartmentor its representatives for
8873	any action taken by them in the performance of their powers and
8874	duties under this subsection.
8875	(d) The plan shall provide coverage for claims arising out
8876	of the rendering of, or failure to render, medical care or
8877	services and, in the case of health care facilities, coverage
8878	for bodily injury or property damage to the person or property
8879	of any patient arising out of the insured's activities, in
8880	appropriate policy forms for all health care providers as
8881	defined in paragraph (h). The plan shall include, but shall not
8882	be limited to:
8883	1. Classifications of risks and rates which reflect past
8884	and prospective loss and expense experience in different areas
8885	of practice and in different geographical areas. To assure that
8886	plan rates are adequate to pay claims and expenses, the Joint
8887	Underwriting Association shall develop a means of obtaining loss
8888	and expense experience; and the plan shall file such experience,
8889	when available, with the officedepartmentin sufficient detail
8890	to make a determination of rate adequacy. Within 60 days after a
8891	rate filing, the officedepartmentshall approve such rates or
8892	rate revisions as are fully supported by the filing. In addition
8893	to provisions for claims and expenses, the ratemaking formula
8894	may include a factor for projected claims trending and a margin
8895	for contingencies. The use of trend factors shall not be found
8896	to be inappropriate.
8897	2. A rating plan which reasonably recognizes the prior
8898	claims experience of insureds.
8899	3. Provisions as to rates for:
8900	a. Insureds who are retired or semiretired.
8901	b. The estates of deceased insureds.
8902	c. Part-time professionals.
8903	4. Protection in an amount not to exceed $250,000 per
8904	claim, $750,000 annual aggregate for health care providers other
8905	than hospitals and in an amount not to exceed $1.5 million per
8906	claim, $5 million annual aggregate for hospitals. Such coverage
8907	for health care providers other than hospitals shall be
8908	available as primary coverage and as excess coverage for the
8909	layer of coverage between the primary coverage and the total
8910	limits of $250,000 per claim, $750,000 annual aggregate. The
8911	plan shall also provide tail coverage in these amounts to
8912	insureds whose claims-made coverage with another insurer or
8913	trust has or will be terminated. Such tail coverage shall
8914	provide coverage for incidents that occurred during the claims-
8915	made policy period for which a claim is made after the policy
8916	period.
8917	5. A risk management program for insureds of the
8918	association. This program shall include, but not be limited to:
8919	investigation and analysis of frequency, severity, and causes of
8920	adverse or untoward medical injuries; development of measures to
8921	control these injuries; systematic reporting of medical
8922	incidents; investigation and analysis of patient complaints; and
8923	auditing of association members to assure implementation of this
8924	program. The plan may refuse to insure any insured who refuses
8925	or fails to comply with the risk management program implemented
8926	by the association. Prior to cancellation or refusal to renew
8927	an insured, the association shall provide the insured 60 days'
8928	notice of intent to cancel or nonrenew and shall further notify
8929	the insured of any action which must be taken to be in
8930	compliance with the risk management program.
8931	(5) PROPERTY AND CASUALTY INSURANCE RISK
8932	APPORTIONMENT.--The commissiondepartmentshall adopt by rule a
8933	joint underwriting plan to equitably apportion among insurers
8934	authorized in this state to write property insurance as defined
8935	in s. 624.604 or casualty insurance as defined in s. 624.605,
8936	the underwriting of one or more classes of property insurance or
8937	casualty insurance, except for the types of insurance that are
8938	included within property insurance or casualty insurance for
8939	which an equitable apportionment plan, assigned risk plan, or
8940	joint underwriting plan is authorized under s. 627.311 or
8941	subsection (1), subsection (2), subsection(3), subsection (4),
8942	or subsection (6) and except for risks eligible for flood
8943	insurance written through the federal flood insurance program to
8944	persons with risks eligible under subparagraph (a)1. and who are
8945	in good faith entitled to, but are unable to, obtain such
8946	property or casualty insurance coverage, including excess
8947	coverage, through the voluntary market. For purposes of this
8948	subsection, an adequate level of coverage means that coverage
8949	which is required by state law or by responsible or prudent
8950	business practices. The Joint Underwriting Association shall not
8951	be required to provide coverage for any type of risk for which
8952	there are no insurers providing similar coverage in this state.
8953	The officedepartmentmay designate one or more participating
8954	insurers who agree to provide policyholder and claims service,
8955	including the issuance of policies, on behalf of the
8956	participating insurers.
8957	(a) The plan shall provide:
8958	1. A means of establishing eligibility of a risk for
8959	obtaining insurance through the plan, which provides that:
8960	a. A risk shall be eligible for such property insurance or
8961	casualty insurance as is required by Florida law if the
8962	insurance is unavailable in the voluntary market, including the
8963	market assistance program and the surplus lines market.
8964	b. A commercial risk not eligible under sub-subparagraph
8965	a. shall be eligible for property or casualty insurance if:
8966	(I) The insurance is unavailable in the voluntary market,
8967	including the market assistance plan and the surplus lines
8968	market;
8969	(II) Failure to secure the insurance would substantially
8970	impair the ability of the entity to conduct its affairs; and
8971	(III) The risk is not determined by the Risk Underwriting
8972	Committee to be uninsurable.
8973	c. In the event the Federal Government terminates the
8974	Federal Crime Insurance Program established under 44 C.F.R. ss.
8975	80-83, Florida commercial and residential risks previously
8976	insured under the federal program shall be eligible under the
8977	plan.
8978	d.(I) In the event a risk is eligible under this paragraph
8979	and in the event the market assistance plan receives a minimum
8980	of 100 applications for coverage within a 3-month period, or 200
8981	applications for coverage within a 1-year period or less, for a
8982	given class of risk contained in the classification system
8983	defined in the plan of operation of the Joint Underwriting
8984	Association, and unless the market assistance plan provides a
8985	quotation for at least 80 percent of such applicants, such
8986	classification shall immediately be eligible for coverage in the
8987	Joint Underwriting Association.
8988	(II) Any market assistance plan application which is
8989	rejected because an individual risk is so hazardous as to be
8990	practically uninsurable, considering whether the likelihood of a
8991	loss for such a risk is substantially higher than for other
8992	risks of the same class due to individual risk characteristics,
8993	prior loss experience, unwillingness to cooperate with a prior
8994	insurer, physical characteristics and physical location shall
8995	not be included in the minimum percentage calculation provided
8996	above. In the event that there is any legal or administrative
8997	challenge to a determination by the officedepartmentthat the
8998	conditions of this subparagraph have been met for eligibility
8999	for coverage in the Joint Underwriting Association for a given
9000	classification, any eligible risk may obtain coverage during the
9001	pendency of any such challenge.
9002	e. In order to qualify as a quotation for the purpose of
9003	meeting the minimum percentage calculation in this subparagraph,
9004	the quoted premium must meet the following criteria:
9005	(I) In the case of an admitted carrier, the quoted premium
9006	must not exceed the premium available for a given classification
9007	currently in use by the Joint Underwriting Association or the
9008	premium developed by using the rates and rating plans on file
9009	with the officedepartmentby the quoting insurer, whichever is
9010	greater.
9011	(II) In the case of an authorized surplus lines insurer,
9012	the quoted premium must not exceed the premium available for a
9013	given classification currently in use by the Joint Underwriting
9014	Association by more than 25 percent, after consideration of any
9015	individual risk surcharge or credit.
9016	f. Any agent who falsely certifies the unavailability of
9017	coverage as provided by sub-subparagraphs a. and b., is subject
9018	to the penalties provided in s. 626.611.
9019	2. A means for the equitable apportionment of profits or
9020	losses and expenses among participating insurers.
9021	3. Rules for the classification of risks and rates which
9022	reflect the past and prospective loss experience.
9023	4. A rating plan which reasonably reflects the prior
9024	claims experience of the insureds. Such rating plan shall
9025	include at least two levels of rates for risks that have
9026	favorable loss experience and risks that have unfavorable loss
9027	experience, as established by the plan.
9028	5. Reasonable limits to available amounts of insurance.
9029	Such limits may not be less than the amounts of insurance
9030	required of eligible risks by Florida law.
9031	6. Risk management requirements for insurance where such
9032	requirements are reasonable and are expected to reduce losses.
9033	7. Deductibles as may be necessary to meet the needs of
9034	insureds.
9035	8. Policy forms which are consistent with the forms in use
9036	by the majority of the insurers providing coverage in the
9037	voluntary market for the coverage requested by the applicant.
9038	9. A means to remove risks from the plan once such risks
9039	no longer meet the eligibility requirements of this paragraph.
9040	For this purpose, the plan shall include the following
9041	requirements: At each 6-month interval after the activation of
9042	any class of insureds, the board of governors or its designated
9043	committee shall review the number of applications to the market
9044	assistance plan for that class. If, based on these latest
9045	numbers, at least 90 percent of such applications have been
9046	provided a quotation, the Joint Underwriting Association shall
9047	cease underwriting new applications for such class within 30
9048	days, and notification of this decision shall be sent to the
9049	officeInsurance Commissioner, the major agents' associations,
9050	and the board of directors of the market assistance plan. A
9051	quotation for the purpose of this subparagraph shall meet the
9052	same criteria for a quotation as provided in sub-subparagraph
9053	1.esub-subparagraph d. All policies which were previously
9054	written for that class shall continue in force until their
9055	normal expiration date, at which time, subject to the required
9056	timely notification of nonrenewal by the Joint Underwriting
9057	Association, the insured may then elect to reapply to the Joint
9058	Underwriting Association according to the requirements of
9059	eligibility. If, upon reapplication, those previously insured
9060	Joint Underwriting Association risks meet the eligibility
9061	requirements, the Joint Underwriting Association shall provide
9062	the coverage requested.
9063	10. A means for providing credits to insurers against any
9064	deficit assessment levied pursuant to paragraph (c), for risks
9065	voluntarily written through the market assistance plan by such
9066	insurers.
9067	11. That the Joint Underwriting Association shall operate
9068	subject to the supervision and approval of a board of governors
9069	consisting of 13 individuals appointed by the Chief Financial
9070	OfficerInsurance Commissioner, and shall have an executive or
9071	underwriting committee. At least four of the members shall be
9072	representatives of insurance trade associations as follows: one
9073	member from the American Insurance Association, one member from
9074	the Alliance of American Insurers, one member from the National
9075	Association of Independent Insurers, and one member from an
9076	unaffiliated insurer writing coverage on a national basis. Two
9077	representatives shall be from two of the statewide agents'
9078	associations. Each board member shall be appointed to serve for
9079	2-year terms beginning on a date designated by the plan and
9080	shall serve at the pleasure of the Chief Financial Officer
9081	commissioner. Members may be reappointed for subsequent terms.
9082	(b) Rates used by the Joint Underwriting Association shall
9083	be actuarially sound. To the extent applicable, the rate
9084	standards set forth in s. 627.062 shall be considered by the
9085	officedepartmentin establishing rates to be used by the joint
9086	underwriting plan. The initial rate level shall be determined
9087	using the rates, rules, rating plans, and classifications
9088	contained in the most current Insurance Services Office (ISO)
9089	filing with the officedepartmentor the filing of other
9090	licensed rating organizations with an additional increment of 25
9091	percent of premium. For any type of coverage or classification
9092	which lends itself to manual rating for which the Insurance
9093	Services Office or another licensed rating organization does not
9094	file or publish a rate, the Joint Underwriting Association shall
9095	file and use an initial rate based on the average current market
9096	rate. The initial rate level for the rate plan shall also be
9097	subject to an experience and schedule rating plan which may
9098	produce a maximum of 25 percent debits or credits. For any risk
9099	which does not lend itself to manual rating and for which no
9100	rate has been promulgated under the rate plan, the board shall
9101	develop and file with the officecommissioner, subject to its
9102	his or herapproval, appropriate criteria and factors for rating
9103	the individual risk. Such criteria and factors shall include,
9104	but not be limited to, loss rating plans, composite rating
9105	plans, and unique and unusual risk rating plans. The initial
9106	rates required under this paragraph shall be adjusted in
9107	conformity with future filings by the Insurance Services Office
9108	with the officedepartmentand shall remain in effect until such
9109	time as the Joint Underwriting Association has sufficient data
9110	as to independently justify an actuarially sound change in such
9111	rates.
9112	(c)1. In the event an underwriting deficit exists for any
9113	policy year the plan is in effect, any surplus which has accrued
9114	from previous years and is not projected within reasonable
9115	actuarial certainty to be needed for payment for claims in the
9116	year the surplus arose shall be used to offset the deficit to
9117	the extent available.
9118	2. As to any remaining deficit, the board of governors of
9119	the Joint Underwriting Association shall levy and collect an
9120	assessment in an amount sufficient to offset such deficit. Such
9121	assessment shall be levied against the insurers participating in
9122	the plan during the year giving rise to the assessment. Any
9123	assessments against insurers for the lines of property and
9124	casualty insurance issued to commercial risks shall be recovered
9125	from the participating insurers in the proportion that the net
9126	direct premium of each insurer for commercial risks written
9127	during the preceding calendar year bears to the aggregate net
9128	direct premium written for commercial risks by all members of
9129	the plan for the lines of insurance included in the plan. Any
9130	assessments against insurers for the lines of property and
9131	casualty insurance issued to personal risks eligible under sub-
9132	subparagraph (a)1.a. or sub-subparagraph (a)1.c. shall be
9133	recovered from the participating insurers in the proportion that
9134	the net direct premium of each insurer for personal risks
9135	written during the preceding calendar year bears to the
9136	aggregate net direct premium written for personal risks by all
9137	members of the plan for the lines of insurance included in the
9138	plan.
9139	3. The board shall take all reasonable and prudent steps
9140	necessary to collect the amount of assessment due from each
9141	participating insurer and policyholder, including, if prudent,
9142	filing suit to collect such assessment. If the board is unable
9143	to collect an assessment from any insurer, the uncollected
9144	assessments shall be levied as an additional assessment against
9145	the participating insurers and any participating insurer
9146	required to pay an additional assessment as a result of such
9147	failure to pay shall have a cause of action against such
9148	nonpaying insurer.
9149	4. Any funds or entitlements that the state may be
9150	eligible to receive by virtue of the Federal Government's
9151	termination of the Federal Crime Insurance Program referenced in
9152	sub-subparagraph (a)1.c. may be used under the plan to offset
9153	any subsequent underwriting deficits that may occur from risks
9154	previously insured with the Federal Crime Insurance Program.
9155	5. Assessments shall be included as an appropriate factor
9156	in the making of rates as provided in s. 627.3512.
9157	6.a. The Legislature finds that the potential for
9158	unlimited assessments under this paragraph may induce insurers
9159	to attempt to reduce their writings in the voluntary market, and
9160	that such actions would worsen the availability problems that
9161	the association was created to remedy. It is the intent of the
9162	Legislature that insurers remain fully responsible for covering
9163	any deficits of the association; however, it is also the intent
9164	of the Legislature to provide a means by which assessment
9165	liabilities may be amortized over a period of years.
9166	b. The total amount of deficit assessments under this
9167	paragraph with respect to any year may not exceed 10 percent of
9168	the statewide total gross written premium for all insurers for
9169	the coverages referred to in the introductory language of this
9170	subsection for the prior year, except that if the deficit with
9171	respect to any plan year exceeds such amount and bonds are
9172	issued under sub-subparagraph c. to defray the deficit, the
9173	total amount of assessments with respect to such deficit may not
9174	in any year exceed 10 percent of the deficit, or such lesser
9175	percentage as is sufficient to retire the bonds as determined by
9176	the board, and shall continue annually until the bonds are
9177	retired.
9178	c. The governing body of any unit of local government, any
9179	residents or businesses of which are insured by the association,
9180	may issue bonds as defined in s. 125.013 or s. 166.101 from time
9181	to time to fund an assistance program, in conjunction with the
9182	association, for the purpose of defraying deficits of the
9183	association. Revenue bonds may not be issued until validated
9184	pursuant to chapter 75, unless a state of emergency is declared
9185	by executive order or proclamation of the Governor pursuant to
9186	s. 252.36 making such findings as are necessary to determine
9187	that it is in the best interests of, and necessary for, the
9188	protection of the public health, safety, and general welfare of
9189	residents of this state and the protection and preservation of
9190	the economic stability of insurers operating in this state, and
9191	declaring it an essential public purpose to permit certain
9192	municipalities or counties to issue such bonds as will provide
9193	relief to claimants and policyholders of the joint underwriting
9194	association and insurers responsible for apportionment of
9195	association losses. The unit of local government shall enter
9196	into such contracts with the association as are necessary to
9197	carry out this paragraph. Any bonds issued under this sub-
9198	subparagraph shall be payable from and secured by moneys
9199	received by the association from assessments under this
9200	paragraph, and assigned and pledged to or on behalf of the unit
9201	of local government for the benefit of the holders of such
9202	bonds. The funds, credit, property, and taxing power of the
9203	state or of the unit of local government shall not be pledged
9204	for the payment of such bonds. If any of the bonds remain unsold
9205	60 days after issuance, the officedepartmentshall require all
9206	insurers subject to assessment to purchase the bonds, which
9207	shall be treated as admitted assets; each insurer shall be
9208	required to purchase that percentage of the unsold portion of
9209	the bond issue that equals the insurer's relative share of
9210	assessment liability under this subsection. An insurer shall not
9211	be required to purchase the bonds to the extent that the office
9212	departmentdetermines that the purchase would endanger or impair
9213	the solvency of the insurer.
9214	7. The plan shall provide for the deferment, in whole or
9215	in part, of the assessment of an insurer if the office
9216	departmentfinds that payment of the assessment would endanger
9217	or impair the solvency of the insurer. In the event an
9218	assessment against an insurer is deferred in whole or in part,
9219	the amount by which such assessment is deferred may be assessed
9220	against the other member insurers in a manner consistent with
9221	the basis for assessments set forth in subparagraph 2.
9222	(d) Upon adoption of the plan, all insurers authorized in
9223	this state to underwrite property or casualty insurance shall
9224	participate in the plan.
9225	(e) A Risk Underwriting Committee of the Joint
9226	Underwriting Association composed of three members experienced
9227	in evaluating insurance risks is created to review risks
9228	rejected by the voluntary market for which application is made
9229	for insurance through the joint underwriting plan. The committee
9230	shall consist of a representative of the market assistance plan
9231	created under s. 627.3515, a member selected by the insurers
9232	participating in the Joint Underwriting Association, and a
9233	member named by the Chief Financial OfficerInsurance
9234	Commissioner. The Risk Underwriting Committee shall appoint such
9235	advisory committees as are provided for in the plan and are
9236	necessary to conduct its functions. The salaries and expenses of
9237	the members of the Risk Underwriting Committee and its advisory
9238	committees shall be paid by the joint underwriting plan. The
9239	plan approved by the officedepartmentshall establish criteria
9240	and procedures for use by the Risk Underwriting Committee for
9241	determining whether an individual risk is so hazardous as to be
9242	uninsurable. In making this determination and in establishing
9243	the criteria and procedures, the following shall be considered:
9244	1. Whether the likelihood of a loss for the individual
9245	risk is substantially higher than for other risks of the same
9246	class; and
9247	2. Whether the uncertainty associated with the individual
9248	risk is such that an appropriate premium cannot be determined.
9249
9250
9251	The acceptance or rejection of a risk by the underwriting
9252	committee shall be construed as the private placement of
9253	insurance, and the provisions of chapter 120 shall not apply.
9254	(f) There shall be no liability on the part of, and no
9255	cause of action of any nature shall arise against, any member
9256	insurer or its agents or employees, the Florida Property and
9257	Casualty Joint Underwriting Association or its agents or
9258	employees, members of the board of governors, the Chief
9259	Financial Officer, or the officedepartmentor its
9260	representatives for any action taken by them in the performance
9261	of their duties under this subsection. Such immunity does not
9262	apply to actions for breach of any contract or agreement
9263	pertaining to insurance, or any other willful tort.
9264	(6) CITIZENS PROPERTY INSURANCE CORPORATION.--
9265	(a)1. The Legislature finds that actual and threatened
9266	catastrophic losses to property in this state from hurricanes
9267	have caused insurers to be unwilling or unable to provide
9268	property insurance coverage to the extent sought and needed. It
9269	is in the public interest and a public purpose to assist in
9270	assuring that property in the state is insured so as to
9271	facilitate the remediation, reconstruction, and replacement of
9272	damaged or destroyed property in order to reduce or avoid the
9273	negative effects otherwise resulting to the public health,
9274	safety, and welfare; to the economy of the state; and to the
9275	revenues of the state and local governments needed to provide
9276	for the public welfare. It is necessary, therefore, to provide
9277	property insurance to applicants who are in good faith entitled
9278	to procure insurance through the voluntary market but are unable
9279	to do so. The Legislature intends by this subsection that
9280	property insurance be provided and that it continues, as long as
9281	necessary, through an entity organized to achieve efficiencies
9282	and economies, all toward the achievement of the foregoing
9283	public purposes. Because it is essential for the corporation to
9284	have the maximum financial resources to pay claims following a
9285	catastrophic hurricane, it is the intent of the Legislature that
9286	the income of the corporation be exempt from federal income
9287	taxation and that interest on the debt obligations issued by the
9288	corporation be exempt from federal income taxation.
9289	2. The Residential Property and Casualty Joint
9290	Underwriting Association originally created by this statute
9291	shall be known, as of July 1, 2002, as the Citizens Property
9292	Insurance Corporation. The corporation shall provide insurance
9293	for residential and commercial property, for applicants who are
9294	in good faith entitled, but are unable, to procure insurance
9295	through the voluntary market. The corporation shall operate
9296	pursuant to a plan of operation approved by order of the office
9297	department. The plan is subject to continuous review by the
9298	officedepartment. The officedepartmentmay, by order, withdraw
9299	approval of all or part of a plan if the officedepartment
9300	determines that conditions have changed since approval was
9301	granted and that the purposes of the plan require changes in the
9302	plan. For the purposes of this subsection, residential coverage
9303	includes both personal lines residential coverage, which
9304	consists of the type of coverage provided by homeowner's, mobile
9305	home owner's, dwelling, tenant's, condominium unit owner's, and
9306	similar policies, and commercial lines residential coverage,
9307	which consists of the type of coverage provided by condominium
9308	association, apartment building, and similar policies.
9309	(b)1. All insurers authorized to write one or more subject
9310	lines of business in this state are subject to assessment by the
9311	corporation and, for the purposes of this subsection, are
9312	referred to collectively as "assessable insurers." Insurers
9313	writing one or more subject lines of business in this state
9314	pursuant to part VIII of chapter 626 are not assessable
9315	insurers, but insureds who procure one or more subject lines of
9316	business in this state pursuant to part VIII of chapter 626 are
9317	subject to assessment by the corporation and are referred to
9318	collectively as "assessable insureds." An authorized insurer's
9319	assessment liability shall begin on the first day of the
9320	calendar year following the year in which the insurer was issued
9321	a certificate of authority to transact insurance for subject
9322	lines of business in this state and shall terminate 1 year after
9323	the end of the first calendar year during which the insurer no
9324	longer holds a certificate of authority to transact insurance
9325	for subject lines of business in this state.
9326	2.a. All revenues, assets, liabilities, losses, and
9327	expenses of the corporation shall be divided into three separate
9328	accounts as follows:
9329	(I) A personal lines account for personal residential
9330	policies issued by the corporation or issued by the Residential
9331	Property and Casualty Joint Underwriting Association and renewed
9332	by the corporation that provide comprehensive, multiperil
9333	coverage on risks that are not located in areas eligible for
9334	coverage in the Florida Windstorm Underwriting Association as
9335	those areas were defined on January 1, 2002 and for such
9336	policies that do not provide coverage for the peril of wind on
9337	risks that are located in such areas;
9338	(II) A commercial lines account for commercial residential
9339	policies issued by the corporation or issued by the Residential
9340	Property and Casualty Joint Underwriting Association and renewed
9341	by the corporation that provide coverage for basic property
9342	perils on risks that are not located in areas eligible for
9343	coverage in the Florida Windstorm Underwriting Association as
9344	those areas were defined on January 1, 2002, and for such
9345	policies that do not provide coverage for the peril of wind on
9346	risks that are located in such areas; and
9347	(III) A high-risk account for personal residential
9348	policies and commercial residential and commercial
9349	nonresidential property policies issued by the corporation or
9350	transferred to the corporation that provide coverage for the
9351	peril of wind on risks that are located in areas eligible for
9352	coverage in the Florida Windstorm Underwriting Association as
9353	those areas were defined on January 1, 2002. The high-risk
9354	account must also include quota share primary insurance under
9355	subparagraph (c)2. The area eligible for coverage under the
9356	high-risk account also includes the area within Port Canaveral,
9357	which is bordered on the south by the City of Cape Canaveral,
9358	bordered on the west by the Banana River, and bordered on the
9359	north by Federal Government property. The officedepartmentmay
9360	remove territory from the area eligible for wind-only and quota
9361	share coverage if, after a public hearing, the officedepartment
9362	finds that authorized insurers in the voluntary market are
9363	willing and able to write sufficient amounts of personal and
9364	commercial residential coverage for all perils in the territory,
9365	including coverage for the peril of wind, such that risks
9366	covered by wind-only policies in the removed territory could be
9367	issued a policy by the corporation in either the personal lines
9368	or commercial lines account without a significant increase in
9369	the corporation's probable maximum loss in such account. Removal
9370	of territory from the area eligible for wind-only or quota share
9371	coverage does not alter the assignment of wind coverage written
9372	in such areas to the high-risk account.
9373	b. The three separate accounts must be maintained as long
9374	as financing obligations entered into by the Florida Windstorm
9375	Underwriting Association or Residential Property and Casualty
9376	Joint Underwriting Association are outstanding, in accordance
9377	with the terms of the corresponding financing documents. When
9378	the financing obligations are no longer outstanding, in
9379	accordance with the terms of the corresponding financing
9380	documents, the corporation may use a single account for all
9381	revenues, assets, liabilities, losses, and expenses of the
9382	corporation.
9383	c. Creditors of the Residential Property and Casualty
9384	Joint Underwriting Association shall have a claim against, and
9385	recourse to, the accounts referred to in sub-sub-subparagraphs
9386	a.(I) and (II) and shall have no claim against, or recourse to,
9387	the account referred to in sub-sub-subparagraph a.(III).
9388	Creditors of the Florida Windstorm Underwriting Association
9389	shall have a claim against, and recourse to, the account
9390	referred to in sub-sub-subparagraph a.(III) and shall have no
9391	claim against, or recourse to, the accounts referred to in sub-
9392	sub-subparagraphs a.(I) and (II).
9393	d. Revenues, assets, liabilities, losses, and expenses not
9394	attributable to particular accounts shall be prorated among the
9395	accounts.
9396	e. The Legislature finds that the revenues of the
9397	corporation are revenues that are necessary to meet the
9398	requirements set forth in documents authorizing the issuance of
9399	bonds under this subsection.
9400	f. No part of the income of the corporation may inure to
9401	the benefit of any private person.
9402	3. With respect to a deficit in an account:
9403	a. When the deficit incurred in a particular calendar year
9404	is not greater than 10 percent of the aggregate statewide direct
9405	written premium for the subject lines of business for the prior
9406	calendar year, the entire deficit shall be recovered through
9407	regular assessments of assessable insurers under paragraph (g)
9408	and assessable insureds.
9409	b. When the deficit incurred in a particular calendar year
9410	exceeds 10 percent of the aggregate statewide direct written
9411	premium for the subject lines of business for the prior calendar
9412	year, the corporation shall levy regular assessments on
9413	assessable insurers under paragraph (g) and on assessable
9414	insureds in an amount equal to the greater of 10 percent of the
9415	deficit or 10 percent of the aggregate statewide direct written
9416	premium for the subject lines of business for the prior calendar
9417	year. Any remaining deficit shall be recovered through emergency
9418	assessments under sub-subparagraph d.
9419	c. Each assessable insurer's share of the amount being
9420	assessed under sub-subparagraph a. or sub-subparagraph b. shall
9421	be in the proportion that the assessable insurer's direct
9422	written premium for the subject lines of business for the year
9423	preceding the assessment bears to the aggregate statewide direct
9424	written premium for the subject lines of business for that year.
9425	The assessment percentage applicable to each assessable insured
9426	is the ratio of the amount being assessed under sub-subparagraph
9427	a. or sub-subparagraph b. to the aggregate statewide direct
9428	written premium for the subject lines of business for the prior
9429	year. Assessments levied by the corporation on assessable
9430	insurers under sub-subparagraphs a. and b. shall be paid as
9431	required by the corporation's plan of operation and paragraph
9432	(g). Assessments levied by the corporation on assessable
9433	insureds under sub-subparagraphs a. and b. shall be collected by
9434	the surplus lines agent at the time the surplus lines agent
9435	collects the surplus lines tax required by s. 626.932 and shall
9436	be paid to the Florida Surplus Lines Service Office at the time
9437	the surplus lines agent pays the surplus lines tax to the
9438	Florida Surplus Lines Service Office. Upon receipt of regular
9439	assessments from surplus lines agents, the Florida Surplus Lines
9440	Service Office shall transfer the assessments directly to the
9441	corporation as determined by the corporation.
9442	d. Upon a determination by the board of governors that a
9443	deficit in an account exceeds the amount that will be recovered
9444	through regular assessments under sub-subparagraph a. or sub-
9445	subparagraph b., the board shall levy, after verification by the
9446	officedepartment, emergency assessments, for as many years as
9447	necessary to cover the deficits, to be collected by assessable
9448	insurers and the corporation and collected from assessable
9449	insureds upon issuance or renewal of policies for subject lines
9450	of business, excluding National Flood Insurance policies. The
9451	amount of the emergency assessment collected in a particular
9452	year shall be a uniform percentage of that year's direct written
9453	premium for subject lines of business and all accounts of the
9454	corporation, excluding National Flood Insurance Program policy
9455	premiums, as annually determined by the board and verified by
9456	the officedepartment. The officedepartmentshall verify the
9457	arithmetic calculations involved in the board's determination
9458	within 30 days after receipt of the information on which the
9459	determination was based. Notwithstanding any other provision of
9460	law, the corporation and each assessable insurer that writes
9461	subject lines of business shall collect emergency assessments
9462	from its policyholders without such obligation being affected by
9463	any credit, limitation, exemption, or deferment. Emergency
9464	assessments levied by the corporation on assessable insureds
9465	shall be collected by the surplus lines agent at the time the
9466	surplus lines agent collects the surplus lines tax required by
9467	s. 626.932 and shall be paid to the Florida Surplus Lines
9468	Service Office at the time the surplus lines agent pays the
9469	surplus lines tax to the Florida Surplus Lines Service Office.
9470	The emergency assessments so collected shall be transferred
9471	directly to the corporation on a periodic basis as determined by
9472	the corporation and shall be held by the corporation solely in
9473	the applicable account. The aggregate amount of emergency
9474	assessments levied for an account under this sub-subparagraph in
9475	any calendar year may not exceed the greater of 10 percent of
9476	the amount needed to cover the original deficit, plus interest,
9477	fees, commissions, required reserves, and other costs associated
9478	with financing of the original deficit, or 10 percent of the
9479	aggregate statewide direct written premium for subject lines of
9480	business and for all accounts of the corporation for the prior
9481	year, plus interest, fees, commissions, required reserves, and
9482	other costs associated with financing the original deficit.
9483	e. The corporation may pledge the proceeds of assessments,
9484	projected recoveries from the Florida Hurricane Catastrophe
9485	Fund, other insurance and reinsurance recoverables, market
9486	equalization surcharges and other surcharges, and other funds
9487	available to the corporation as the source of revenue for and to
9488	secure bonds issued under paragraph (g), bonds or other
9489	indebtedness issued under subparagraph (c)3., or lines of credit
9490	or other financing mechanisms issued or created under this
9491	subsection, or to retire any other debt incurred as a result of
9492	deficits or events giving rise to deficits, or in any other way
9493	that the board determines will efficiently recover such
9494	deficits. The purpose of the lines of credit or other financing
9495	mechanisms is to provide additional resources to assist the
9496	corporation in covering claims and expenses attributable to a
9497	catastrophe. As used in this subsection, the term "assessments"
9498	includes regular assessments under sub-subparagraph a., sub-
9499	subparagraph b., or subparagraph (g)1. and emergency assessments
9500	under sub-subparagraph d. Emergency assessments collected under
9501	sub-subparagraph d. are not part of an insurer's rates, are not
9502	premium, and are not subject to premium tax, fees, or
9503	commissions; however, failure to pay the emergency assessment
9504	shall be treated as failure to pay premium. The emergency
9505	assessments under sub-subparagraph d. shall continue as long as
9506	any bonds issued or other indebtedness incurred with respect to
9507	a deficit for which the assessment was imposed remain
9508	outstanding, unless adequate provision has been made for the
9509	payment of such bonds or other indebtedness pursuant to the
9510	documents governing such bonds or other indebtedness.
9511	f. As used in this subsection, the term "subject lines of
9512	business" means insurance written by assessable insurers or
9513	procured by assessable insureds on real or personal property, as
9514	defined in s. 624.604, including insurance for fire, industrial
9515	fire, allied lines, farmowners multiperil, homeowners
9516	multiperil, commercial multiperil, and mobile homes, and
9517	including liability coverage on all such insurance, but
9518	excluding inland marine as defined in s. 624.607(3) and
9519	excluding vehicle insurance as defined in s. 624.605(1) other
9520	than insurance on mobile homes used as permanent dwellings.
9521	g. The Florida Surplus Lines Service Office shall
9522	determine annually the aggregate statewide written premium in
9523	subject lines of business procured by assessable insureds and
9524	shall report that information to the corporation in a form and
9525	at a time the corporation specifies to ensure that the
9526	corporation can meet the requirements of this subsection and the
9527	corporation's financing obligations.
9528	h. The Florida Surplus Lines Service Office shall verify
9529	the proper application by surplus lines agents of assessment
9530	percentages for regular assessments and emergency assessments
9531	levied under this subparagraph on assessable insureds and shall
9532	assist the corporation in ensuring the accurate, timely
9533	collection and payment of assessments by surplus lines agents as
9534	required by the corporation.
9535	(c) The plan of operation of the corporation:
9536	1. Must provide for adoption of residential property and
9537	casualty insurance policy forms and commercial residential and
9538	nonresidential property insurance forms, which forms must be
9539	approved by the officedepartmentprior to use. The corporation
9540	shall adopt the following policy forms:
9541	a. Standard personal lines policy forms that are
9542	comprehensive multiperil policies providing full coverage of a
9543	residential property equivalent to the coverage provided in the
9544	private insurance market under an HO-3, HO-4, or HO-6 policy.
9545	b. Basic personal lines policy forms that are policies
9546	similar to an HO-8 policy or a dwelling fire policy that provide
9547	coverage meeting the requirements of the secondary mortgage
9548	market, but which coverage is more limited than the coverage
9549	under a standard policy.
9550	c. Commercial lines residential policy forms that are
9551	generally similar to the basic perils of full coverage
9552	obtainable for commercial residential structures in the admitted
9553	voluntary market.
9554	d. Personal lines and commercial lines residential
9555	property insurance forms that cover the peril of wind only. The
9556	forms are applicable only to residential properties located in
9557	areas eligible for coverage under the high-risk account referred
9558	to in sub-subparagraph (b)2.a.
9559	e. Commercial lines nonresidential property insurance
9560	forms that cover the peril of wind only. The forms are
9561	applicable only to nonresidential properties located in areas
9562	eligible for coverage under the high-risk account referred to in
9563	sub-subparagraph (b)2.a.
9564	2.a. Must provide that the corporation adopt a program in
9565	which the corporation and authorized insurers enter into quota
9566	share primary insurance agreements for hurricane coverage, as
9567	defined in s. 627.4025(2)(a), for eligible risks, and adopt
9568	property insurance forms for eligible risks which cover the
9569	peril of wind only. As used in this subsection, the term:
9570	(I) "Quota share primary insurance" means an arrangement
9571	in which the primary hurricane coverage of an eligible risk is
9572	provided in specified percentages by the corporation and an
9573	authorized insurer. The corporation and authorized insurer are
9574	each solely responsible for a specified percentage of hurricane
9575	coverage of an eligible risk as set forth in a quota share
9576	primary insurance agreement between the corporation and an
9577	authorized insurer and the insurance contract. The
9578	responsibility of the corporation or authorized insurer to pay
9579	its specified percentage of hurricane losses of an eligible
9580	risk, as set forth in the quota share primary insurance
9581	agreement, may not be altered by the inability of the other
9582	party to the agreement to pay its specified percentage of
9583	hurricane losses. Eligible risks that are provided hurricane
9584	coverage through a quota share primary insurance arrangement
9585	must be provided policy forms that set forth the obligations of
9586	the corporation and authorized insurer under the arrangement,
9587	clearly specify the percentages of quota share primary insurance
9588	provided by the corporation and authorized insurer, and
9589	conspicuously and clearly state that neither the authorized
9590	insurer nor the corporation may be held responsible beyond its
9591	specified percentage of coverage of hurricane losses.
9592	(II) "Eligible risks" means personal lines residential and
9593	commercial lines residential risks that meet the underwriting
9594	criteria of the corporation and are located in areas that were
9595	eligible for coverage by the Florida Windstorm Underwriting
9596	Association on January 1, 2002.
9597	b. The corporation may enter into quota share primary
9598	insurance agreements with authorized insurers at corporation
9599	coverage levels of 90 percent and 50 percent.
9600	c. If the corporation determines that additional coverage
9601	levels are necessary to maximize participation in quota share
9602	primary insurance agreements by authorized insurers, the
9603	corporation may establish additional coverage levels. However,
9604	the corporation's quota share primary insurance coverage level
9605	may not exceed 90 percent.
9606	d. Any quota share primary insurance agreement entered
9607	into between an authorized insurer and the corporation must
9608	provide for a uniform specified percentage of coverage of
9609	hurricane losses, by county or territory as set forth by the
9610	corporation board, for all eligible risks of the authorized
9611	insurer covered under the quota share primary insurance
9612	agreement.
9613	e. Any quota share primary insurance agreement entered
9614	into between an authorized insurer and the corporation is
9615	subject to review and approval by the officedepartment.
9616	However, such agreement shall be authorized only as to insurance
9617	contracts entered into between an authorized insurer and an
9618	insured who is already insured by the corporation for wind
9619	coverage.
9620	f. For all eligible risks covered under quota share
9621	primary insurance agreements, the exposure and coverage levels
9622	for both the corporation and authorized insurers shall be
9623	reported by the corporation to the Florida Hurricane Catastrophe
9624	Fund. For all policies of eligible risks covered under quota
9625	share primary insurance agreements, the corporation and the
9626	authorized insurer shall maintain complete and accurate records
9627	for the purpose of exposure and loss reimbursement audits as
9628	required by Florida Hurricane Catastrophe Fund rules. The
9629	corporation and the authorized insurer shall each maintain
9630	duplicate copies of policy declaration pages and supporting
9631	claims documents.
9632	g. The corporation board shall establish in its plan of
9633	operation standards for quota share agreements which ensure that
9634	there is no discriminatory application among insurers as to the
9635	terms of quota share agreements, pricing of quota share
9636	agreements, incentive provisions if any, and consideration paid
9637	for servicing policies or adjusting claims.
9638	h. The quota share primary insurance agreement between the
9639	corporation and an authorized insurer must set forth the
9640	specific terms under which coverage is provided, including, but
9641	not limited to, the sale and servicing of policies issued under
9642	the agreement by the insurance agent of the authorized insurer
9643	producing the business, the reporting of information concerning
9644	eligible risks, the payment of premium to the corporation, and
9645	arrangements for the adjustment and payment of hurricane claims
9646	incurred on eligible risks by the claims adjuster and personnel
9647	of the authorized insurer. Entering into a quota sharing
9648	insurance agreement between the corporation and an authorized
9649	insurer shall be voluntary and at the discretion of the
9650	authorized insurer.
9651	3. May provide that the corporation may employ or
9652	otherwise contract with individuals or other entities to provide
9653	administrative or professional services that may be appropriate
9654	to effectuate the plan. The corporation shall have the power to
9655	borrow funds, by issuing bonds or by incurring other
9656	indebtedness, and shall have other powers reasonably necessary
9657	to effectuate the requirements of this subsection. The
9658	corporation may, but is not required to, seek judicial
9659	validation of its bonds or other indebtedness under chapter 75.
9660	The corporation may issue bonds or incur other indebtedness, or
9661	have bonds issued on its behalf by a unit of local government
9662	pursuant to subparagraph(g)2., in the absence of a hurricane or
9663	other weather-related event, upon a determination by the
9664	corporation, subject to approval by the officedepartment, that
9665	such action would enable it to efficiently meet the financial
9666	obligations of the corporation and that such financings are
9667	reasonably necessary to effectuate the requirements of this
9668	subsection. The corporation is authorized to take all actions
9669	needed to facilitate tax-free status for any such bonds or
9670	indebtedness, including formation of trusts or other affiliated
9671	entities. The corporation shall have the authority to pledge
9672	assessments, projected recoveries from the Florida Hurricane
9673	Catastrophe Fund, other reinsurance recoverables, market
9674	equalization and other surcharges, and other funds available to
9675	the corporation as security for bonds or other indebtedness. In
9676	recognition of s. 10, Art. I of the State Constitution,
9677	prohibiting the impairment of obligations of contracts, it is
9678	the intent of the Legislature that no action be taken whose
9679	purpose is to impair any bond indenture or financing agreement
9680	or any revenue source committed by contract to such bond or
9681	other indebtedness.
9682	4.a.Must require that the corporation operate subject to
9683	the supervision and approval of a board of governors consisting
9684	of 7 individuals who are residents of this state, from different
9685	geographical areas of this state, appointed by the Chief
9686	Financial OfficerTreasurer. The Chief Financial Officer
9687	Treasurershall designate one of the appointees as chair. All
9688	board members serve at the pleasure of the Chief Financial
9689	OfficerTreasurer. All board members, including the chair, must
9690	be appointed to serve for 3-year terms beginning annually on a
9691	date designated by the plan. Any board vacancy shall be filled
9692	for the unexpired term by the Chief Financial OfficerTreasurer.
9693	The Chief Financial OfficerTreasurershall appoint a technical
9694	advisory group to provide information and advice to the board of
9695	governors in connection with the board's duties under this
9696	subsection. The executive director and senior managers of the
9697	corporation shall be engaged by the Chief Financial Officer
9698	Treasurer and serve at the pleasure of the Chief Financial
9699	OfficerTreasurer. The executive director is responsible for
9700	employing other staff as the corporation may require, subject to
9701	review and concurrence by the Office of the Chief Financial
9702	OfficerTreasurer.
9703	b. To ensure the effective and efficient implementation of
9704	this subsection, the Treasurer shall appoint the board of
9705	governors by July 1, 2002. The board of governors shall work in
9706	conjunction with the Residential Property Insurance Market
9707	Coordinating Council to address appropriate organizational,
9708	operational, and financial matters relating to the corporation.
9709	In addition, after consultation with the Residential Property
9710	Insurance Market Coordinating Council, the bond trustees and
9711	rating agencies, the Treasurer may postpone for a period not to
9712	exceed 180 days after the effective date, the implementation of
9713	the corporation or the implementation of one or more of the
9714	provisions relating to transfer of Florida Windstorm
9715	Underwriting Association policies, obligations, rights, assets,
9716	and liabilities into the high-risk accounts and such other
9717	provisions that may be affected thereby if the Treasurer
9718	determines that postponement is necessary:
9719	(I) Due to emergency conditions;
9720	(II) To ensure the effective and efficient implementation
9721	of the corporation's operations; or
9722	(III) To maintain existing financing arrangements without
9723	a material adverse effect on the creditors of the Residential
9724	Property and Casualty Joint Underwriting Association or the
9725	Florida Windstorm Underwriting Association.
9726	5. Must provide a procedure for determining the
9727	eligibility of a risk for coverage, as follows:
9728	a. Subject to the provisions of s. 627.3517, with respect
9729	to personal lines residential risks, if the risk is offered
9730	coverage from an authorized insurer at the insurer's approved
9731	rate under either a standard policy including wind coverage or,
9732	if consistent with the insurer's underwriting rules as filed
9733	with the officedepartment, a basic policy including wind
9734	coverage, the risk is not eligible for any policy issued by the
9735	corporationassociation. If the risk is not able to obtain any
9736	such offer, the risk is eligible for either a standard policy
9737	including wind coverage or a basic policy including wind
9738	coverage issued by the corporationassociation; however, if the
9739	risk could not be insured under a standard policy including wind
9740	coverage regardless of market conditions, the risk shall be
9741	eligible for a basic policy including wind coverage unless
9742	rejected under subparagraph 8. The corporationassociationshall
9743	determine the type of policy to be provided on the basis of
9744	objective standards specified in the underwriting manual and
9745	based on generally accepted underwriting practices.
9746	(I) If the risk accepts an offer of coverage through the
9747	market assistance plan or an offer of coverage through a
9748	mechanism established by the corporationassociationbefore a
9749	policy is issued to the risk by the corporationassociationor
9750	during the first 30 days of coverage by the corporation
9751	association, and the producing agent who submitted the
9752	application to the plan or to the corporationassociationis not
9753	currently appointed by the insurer, the insurer shall:
9754	(A) Pay to the producing agent of record of the policy,
9755	for the first year, an amount that is the greater of the
9756	insurer's usual and customary commission for the type of policy
9757	written or a fee equal to the usual and customary commission of
9758	the corporationassociation; or
9759	(B) Offer to allow the producing agent of record of the
9760	policy to continue servicing the policy for a period of not less
9761	than 1 year and offer to pay the agent the greater of the
9762	insurer's or the corporation'sassociation'susual and customary
9763	commission for the type of policy written.
9764
9765
9766	If the producing agent is unwilling or unable to accept
9767	appointment, the new insurer shall pay the agent in accordance
9768	with sub-sub-sub-subparagraph (A).
9769	(II) When the corporationassociationenters into a
9770	contractual agreement for a take-out plan, the producing agent
9771	of record of the corporationassociationpolicy is entitled to
9772	retain any unearned commission on the policy, and the insurer
9773	shall:
9774	(A) Pay to the producing agent of record of the
9775	corporationassociationpolicy, for the first year, an amount
9776	that is the greater of the insurer's usual and customary
9777	commission for the type of policy written or a fee equal to the
9778	usual and customary commission of the corporationassociation;
9779	or
9780	(B) Offer to allow the producing agent of record of the
9781	corporationassociationpolicy to continue servicing the policy
9782	for a period of not less than 1 year and offer to pay the agent
9783	the greater of the insurer's or the corporation'sassociation's
9784	usual and customary commission for the type of policy written.
9785
9786
9787	If the producing agent is unwilling or unable to accept
9788	appointment, the new insurer shall pay the agent in accordance
9789	with sub-sub-sub-subparagraph (A).
9790	b. With respect to commercial lines residential risks, if
9791	the risk is offered coverage under a policy including wind
9792	coverage from an authorized insurer at its approved rate, the
9793	risk is not eligible for any policy issued by the corporation
9794	association. If the risk is not able to obtain any such offer,
9795	the risk is eligible for a policy including wind coverage issued
9796	by the corporationassociation.
9797	(I) If the risk accepts an offer of coverage through the
9798	market assistance plan or an offer of coverage through a
9799	mechanism established by the corporationassociationbefore a
9800	policy is issued to the risk by the corporationassociationor
9801	during the first 30 days of coverage by the corporation
9802	association, and the producing agent who submitted the
9803	application to the plan or the corporationassociationis not
9804	currently appointed by the insurer, the insurer shall:
9805	(A) Pay to the producing agent of record of the policy,
9806	for the first year, an amount that is the greater of the
9807	insurer's usual and customary commission for the type of policy
9808	written or a fee equal to the usual and customary commission of
9809	the corporationassociation; or
9810	(B) Offer to allow the producing agent of record of the
9811	policy to continue servicing the policy for a period of not less
9812	than 1 year and offer to pay the agent the greater of the
9813	insurer's or the corporation'sassociation'susual and customary
9814	commission for the type of policy written.
9815
9816
9817	If the producing agent is unwilling or unable to accept
9818	appointment, the new insurer shall pay the agent in accordance
9819	with sub-sub-sub-subparagraph (A).
9820	(II) When the corporationassociationenters into a
9821	contractual agreement for a take-out plan, the producing agent
9822	of record of the corporationassociationpolicy is entitled to
9823	retain any unearned commission on the policy, and the insurer
9824	shall:
9825	(A) Pay to the producing agent of record of the
9826	corporationassociationpolicy, for the first year, an amount
9827	that is the greater of the insurer's usual and customary
9828	commission for the type of policy written or a fee equal to the
9829	usual and customary commission of the corporationassociation;
9830	or
9831	(B) Offer to allow the producing agent of record of the
9832	corporationassociationpolicy to continue servicing the policy
9833	for a period of not less than 1 year and offer to pay the agent
9834	the greater of the insurer's or the corporation'sassociation's
9835	usual and customary commission for the type of policy written.
9836
9837
9838	If the producing agent is unwilling or unable to accept
9839	appointment, the new insurer shall pay the agent in accordance
9840	with sub-sub-sub-subparagraph (A).
9841	c. This subparagraph does not require the association to
9842	provide wind coverage or hurricane coverage in any area in which
9843	such coverage is available through the Florida Windstorm
9844	Underwriting Association.
9845	6. Must include rules for classifications of risks and
9846	rates therefor.
9847	7. Must provide that if premium and investment income for
9848	an account attributable to a particular calendar year are in
9849	excess of projected losses and expenses for the account
9850	attributable to that year, such excess shall be held in surplus
9851	in the account. Such surplus shall be available to defray
9852	deficits in that account as to future years and shall be used
9853	for that purpose prior to assessing assessable insurers and
9854	assessable insureds as to any calendar year.
9855	8. Must provide objective criteria and procedures to be
9856	uniformly applied for all applicants in determining whether an
9857	individual risk is so hazardous as to be uninsurable. In making
9858	this determination and in establishing the criteria and
9859	procedures, the following shall be considered:
9860	a. Whether the likelihood of a loss for the individual
9861	risk is substantially higher than for other risks of the same
9862	class; and
9863	b. Whether the uncertainty associated with the individual
9864	risk is such that an appropriate premium cannot be determined.
9865
9866
9867	The acceptance or rejection of a risk by the corporation shall
9868	be construed as the private placement of insurance, and the
9869	provisions of chapter 120 shall not apply.
9870	9. Must provide that the corporation shall make its best
9871	efforts to procure catastrophe reinsurance at reasonable rates,
9872	as determined by the board of governors.
9873	10. Must provide that in the event of regular deficit
9874	assessments under sub-subparagraph (b)3.a. or sub-subparagraph
9875	(b)3.b., in the personal lines account, the commercial lines
9876	residential account, or the high-risk account, the corporation
9877	shall levy upon corporation policyholders in its next rate
9878	filing, or by a separate rate filing solely for this purpose, a
9879	market equalization surcharge arising from a regular assessment
9880	in such account in a percentage equal to the total amount of
9881	such regular assessments divided by the aggregate statewide
9882	direct written premium for subject lines of business for the
9883	prior calendar year. Market equalization surcharges under this
9884	subparagraph are not considered premium and are not subject to
9885	commissions, fees, or premium taxes; however, failure to pay a
9886	market equalization surcharge shall be treated as failure to pay
9887	premium.
9888	11. The policies issued by the corporation must provide
9889	that, if the corporation or the market assistance plan obtains
9890	an offer from an authorized insurer to cover the risk at its
9891	approved rates, the risk is no longer eligible for renewal
9892	through the corporation.
9893	12. Corporation policies and applications must include a
9894	notice that the corporation policy could, under this section, be
9895	replaced with a policy issued by an authorized insurer that does
9896	not provide coverage identical to the coverage provided by the
9897	corporation. The notice shall also specify that acceptance of
9898	corporation coverage creates a conclusive presumption that the
9899	applicant or policyholder is aware of this potential.
9900	13. May establish, subject to approval by the office
9901	department, different eligibility requirements and operational
9902	procedures for any line or type of coverage for any specified
9903	county or area if the board determines that such changes to the
9904	eligibility requirements and operational procedures are
9905	justified due to the voluntary market being sufficiently stable
9906	and competitive in such area or for such line or type of
9907	coverage and that consumers who, in good faith, are unable to
9908	obtain insurance through the voluntary market through ordinary
9909	methods would continue to have access to coverage from the
9910	corporation. When coverage is sought in connection with a real
9911	property transfer, such requirements and procedures shall not
9912	provide for an effective date of coverage later than the date of
9913	the closing of the transfer as established by the transferor,
9914	the transferee, and, if applicable, the lender.
9915	14. Must provide that, with respect to the high-risk
9916	account, any assessable insurer with a surplus as to
9917	policyholders of $25 million or less writing 25 percent or more
9918	of its total countrywide property insurance premiums in this
9919	state may petition the officedepartment, within the first 90
9920	days of each calendar year, to qualify as a limited
9921	apportionment company. In no event shall a limited apportionment
9922	company be required to participate in the portion of any
9923	assessment, within the high-risk account, pursuant to sub-
9924	subparagraph (b)3.a. or sub-subparagraph (b)3.b. in the
9925	aggregate which exceeds $50 million after payment of available
9926	high-risk account funds in any calendar year. However, a limited
9927	apportionment company shall collect from its policyholders any
9928	emergency assessment imposed under sub-subparagraph (b)3.d. The
9929	plan shall provide that, if the officedepartmentdetermines
9930	that any regular assessment will result in an impairment of the
9931	surplus of a limited apportionment company, the office
9932	departmentmay direct that all or part of such assessment be
9933	deferred as provided in subparagraph (g)4. However, there shall
9934	be no limitation or deferment of an emergency assessment to be
9935	collected from policyholders under sub-subparagraph(b)3.d.
9936	15. Must provide that the corporation appoint as its
9937	licensed agents only those agents who also hold an appointment
9938	as defined in s. 626.104 with an insurer who at the time of the
9939	agent's initial appointment by the corporation is authorized to
9940	write and is actually writing personal lines residential
9941	property coverage, commercial residential property coverage, or
9942	commercial nonresidential property coverage within the state.
9943	(d)1. It is the intent of the Legislature that the rates
9944	for coverage provided by the corporation be actuarially sound
9945	and not competitive with approved rates charged in the admitted
9946	voluntary market, so that the corporation functions as a
9947	residual market mechanism to provide insurance only when the
9948	insurance cannot be procured in the voluntary market. Rates
9949	shall include an appropriate catastrophe loading factor that
9950	reflects the actual catastrophic exposure of the corporation.
9951	2. For each county, the average rates of the corporation
9952	for each line of business for personal lines residential
9953	policies excluding rates for wind-only policies shall be no
9954	lower than the average rates charged by the insurer that had the
9955	highest average rate in that county among the 20 insurers with
9956	the greatest total direct written premium in the state for that
9957	line of business in the preceding year, except that with respect
9958	to mobile home coverages, the average rates of the corporation
9959	shall be no lower than the average rates charged by the insurer
9960	that had the highest average rate in that county among the 5
9961	insurers with the greatest total written premium for mobile home
9962	owner's policies in the state in the preceding year.
9963	3. Rates for personal lines residential wind-only policies
9964	must be actuarially sound and not competitive with approved
9965	rates charged by authorized insurers. However, for personal
9966	lines residential wind-only policies issued or renewed between
9967	July 1, 2002, and June 30, 2003, the maximum premium increase
9968	must be no greater than 10 percent of the Florida Windstorm
9969	Underwriting Association premium for that policy in effect on
9970	June 30, 2002, as adjusted for coverage changes and seasonal
9971	occupancy surcharges. The personal lines residential wind-only
9972	rates for the corporation effective July 1, 2003, must be based
9973	on a rate filing by the corporation which establishes rates
9974	which are actuarially sound and not competitive with approved
9975	rates charged by authorized insurers. Corporation rate manuals
9976	shall include a rate surcharge for seasonal occupancy. To
9977	ensure that personal lines residential wind-only rates effective
9978	on or after July 1, 2003, are not competitive with approved
9979	rates charged by authorized insurers, the officedepartment, by
9980	March 1 of each year, shall provide the corporation, for each
9981	county in which there are geographical areas in which personal
9982	lines residential wind-only policies may be issued, the average
9983	rates charged by the insurer that had the highest average rate
9984	in that county for wind coverage in that insurer's rating
9985	territories which most closely approximate the geographical area
9986	in that county in which personal lines residential wind-only
9987	policies may be written by the corporation. The average rates
9988	provided must be from an insurer among the 20 insurers with the
9989	greatest total direct written premium in the state for personal
9990	lines residential property insurance for the preceding year.
9991	With respect to mobile homes, the five insurers with the
9992	greatest total written premium for that line of business in the
9993	preceding year shall be used. The corporation shall certify to
9994	the officedepartmentthat its average personal lines
9995	residential wind-only rates are no lower in each county than the
9996	average rates provided by the officedepartment. The commission
9997	maydepartment is authorized toadopt rules to establish
9998	reporting requirements to obtain the necessary wind-only rate
9999	information from insurers to implement this provision.
10000	4. Rates for commercial lines coverage shall not be
10001	subject to the requirements of subparagraph 2., but shall be
10002	subject to all other requirements of this paragraph and s.
10003	627.062.
10004	5. Nothing in this paragraph shall require or allow the
10005	corporation to adopt a rate that is inadequate under s. 627.062.
10006	6. The corporation shall make a rate filing at least once
10007	a year, but no more often than quarterly.
10008	7. In addition to the rates otherwise determined pursuant
10009	to this paragraph, the corporation shall impose and collect an
10010	amount equal to the premium tax provided for in s. 624.509 to
10011	augment the financial resources of the corporation.
10012	(e) If coverage in an account is deactivated pursuant to
10013	paragraph (f), coverage through the corporation shall be
10014	reactivated by order of the officedepartmentonly under one of
10015	the following circumstances:
10016	1. If the market assistance plan receives a minimum of 100
10017	applications for coverage within a 3-month period, or 200
10018	applications for coverage within a 1-year period or less for
10019	residential coverage, unless the market assistance plan provides
10020	a quotation from admitted carriers at their filed rates for at
10021	least 90 percent of such applicants. Any market assistance plan
10022	application that is rejected because an individual risk is so
10023	hazardous as to be uninsurable using the criteria specified in
10024	subparagraph (c)8. shall not be included in the minimum
10025	percentage calculation provided herein. In the event that there
10026	is a legal or administrative challenge to a determination by the
10027	officedepartmentthat the conditions of this subparagraph have
10028	been met for eligibility for coverage in the corporation, any
10029	eligible risk may obtain coverage during the pendency of such
10030	challenge.
10031	2. In response to a state of emergency declared by the
10032	Governor under s. 252.36, the officedepartmentmay activate
10033	coverage by order for the period of the emergency upon a finding
10034	by the officedepartmentthat the emergency significantly
10035	affects the availability of residential property insurance.
10036	(f)1. The corporation shall file with the office
10037	departmentquarterly statements of financial condition, an
10038	annual statement of financial condition, and audited financial
10039	statements in the manner prescribed by law. In addition, the
10040	corporation shall report to the officedepartmentmonthly on the
10041	types, premium, exposure, and distribution by county of its
10042	policies in force, and shall submit other reports as the office
10043	departmentrequires to carry out its oversight of the
10044	corporation.
10045	2. The activities of the corporation shall be reviewed at
10046	least annually by the officedepartmentto determine whether
10047	coverage shall be deactivated in an account on the basis that
10048	the conditions giving rise to its activation no longer exist.
10049	(g)1. The corporation shall certify to the office
10050	departmentits needs for annual assessments as to a particular
10051	calendar year, and for any interim assessments that it deems to
10052	be necessary to sustain operations as to a particular year
10053	pending the receipt of annual assessments. Upon verification,
10054	the officedepartmentshall approve such certification, and the
10055	corporation shall levy such annual or interim assessments. Such
10056	assessments shall be prorated as provided in paragraph (b). The
10057	corporation shall take all reasonable and prudent steps
10058	necessary to collect the amount of assessment due from each
10059	assessable insurer, including, if prudent, filing suit to
10060	collect such assessment. If the corporation is unable to collect
10061	an assessment from any assessable insurer, the uncollected
10062	assessments shall be levied as an additional assessment against
10063	the assessable insurers and any assessable insurer required to
10064	pay an additional assessment as a result of such failure to pay
10065	shall have a cause of action against such nonpaying assessable
10066	insurer. Assessments shall be included as an appropriate factor
10067	in the making of rates. The failure of a surplus lines agent to
10068	collect and remit any regular or emergency assessment levied by
10069	the corporation is considered to be a violation of s. 626.936
10070	and subjects the surplus lines agent to the penalties provided
10071	in that section.
10072	2. The governing body of any unit of local government, any
10073	residents of which are insured by the corporation, may issue
10074	bonds as defined in s. 125.013 or s. 166.101 from time to time
10075	to fund an assistance program, in conjunction with the
10076	corporation, for the purpose of defraying deficits of the
10077	corporation. In order to avoid needless and indiscriminate
10078	proliferation, duplication, and fragmentation of such assistance
10079	programs, any unit of local government, any residents of which
10080	are insured by the corporation, may provide for the payment of
10081	losses, regardless of whether or not the losses occurred within
10082	or outside of the territorial jurisdiction of the local
10083	government. Revenue bonds under this subparagraph may not be
10084	issued until validated pursuant to chapter 75, unless a state of
10085	emergency is declared by executive order or proclamation of the
10086	Governor pursuant to s. 252.36 making such findings as are
10087	necessary to determine that it is in the best interests of, and
10088	necessary for, the protection of the public health, safety, and
10089	general welfare of residents of this state and declaring it an
10090	essential public purpose to permit certain municipalities or
10091	counties to issue such bonds as will permit relief to claimants
10092	and policyholders of the corporation. Any such unit of local
10093	government may enter into such contracts with the corporation
10094	and with any other entity created pursuant to this subsection as
10095	are necessary to carry out this paragraph. Any bonds issued
10096	under this subparagraph shall be payable from and secured by
10097	moneys received by the corporation from emergency assessments
10098	under sub-subparagraph (b)3.d., and assigned and pledged to or
10099	on behalf of the unit of local government for the benefit of the
10100	holders of such bonds. The funds, credit, property, and taxing
10101	power of the state or of the unit of local government shall not
10102	be pledged for the payment of such bonds. If any of the bonds
10103	remain unsold 60 days after issuance, the officedepartment
10104	shall require all insurers subject to assessment to purchase the
10105	bonds, which shall be treated as admitted assets; each insurer
10106	shall be required to purchase that percentage of the unsold
10107	portion of the bond issue that equals the insurer's relative
10108	share of assessment liability under this subsection. An insurer
10109	shall not be required to purchase the bonds to the extent that
10110	the officedepartmentdetermines that the purchase would
10111	endanger or impair the solvency of the insurer.
10112	3.a. The corporation shall adopt one or more programs
10113	subject to approval by the officedepartmentfor the reduction
10114	of both new and renewal writings in the corporation. The
10115	corporation may consider any prudent and not unfairly
10116	discriminatory approach to reducing corporation writings, and
10117	may adopt a credit against assessment liability or other
10118	liability that provides an incentive for insurers to take risks
10119	out of the corporation and to keep risks out of the corporation
10120	by maintaining or increasing voluntary writings in counties or
10121	areas in which corporation risks are highly concentrated and a
10122	program to provide a formula under which an insurer voluntarily
10123	taking risks out of the corporation by maintaining or increasing
10124	voluntary writings will be relieved wholly or partially from
10125	assessments under sub-subparagraphs (b)3.a. and b. When the
10126	corporation enters into a contractual agreement for a take-out
10127	plan, the producing agent of record of the corporation policy is
10128	entitled to retain any unearned commission on such policy, and
10129	the insurer shall either:
10130	(I) Pay to the producing agent of record of the policy,
10131	for the first year, an amount which is the greater of the
10132	insurer's usual and customary commission for the type of policy
10133	written or a policy fee equal to the usual and customary
10134	commission of the corporation; or
10135	(II) Offer to allow the producing agent of record of the
10136	policy to continue servicing the policy for a period of not less
10137	than 1 year and offer to pay the agent the insurer's usual and
10138	customary commission for the type of policy written. If the
10139	producing agent is unwilling or unable to accept appointment by
10140	the new insurer, the new insurer shall pay the agent in
10141	accordance with sub-sub-subparagraph (I).
10142	b. Any credit or exemption from regular assessments
10143	adopted under this subparagraph shall last no longer than the 3
10144	years following the cancellation or expiration of the policy by
10145	the corporation. With the approval of the officedepartment, the
10146	board may extend such credits for an additional year if the
10147	insurer guarantees an additional year of renewability for all
10148	policies removed from the corporation, or for 2 additional years
10149	if the insurer guarantees 2 additional years of renewability for
10150	all policies so removed.
10151	c. There shall be no credit, limitation, exemption, or
10152	deferment from emergency assessments to be collected from
10153	policyholders pursuant to sub-subparagraph (b)3.d.
10154	4. The plan shall provide for the deferment, in whole or
10155	in part, of the assessment of an assessable insurer, other than
10156	an emergency assessment collected from policyholders pursuant to
10157	sub-subparagraph (b)3.d., if the officedepartmentfinds that
10158	payment of the assessment would endanger or impair the solvency
10159	of the insurer. In the event an assessment against an assessable
10160	insurer is deferred in whole or in part, the amount by which
10161	such assessment is deferred may be assessed against the other
10162	assessable insurers in a manner consistent with the basis for
10163	assessments set forth in paragraph (b).
10164	(h) Nothing in this subsection shall be construed to
10165	preclude the issuance of residential property insurance coverage
10166	pursuant to part VIII of chapter 626.
10167	(i) There shall be no liability on the part of, and no
10168	cause of action of any nature shall arise against, any
10169	assessable insurer or its agents or employees, the corporation
10170	or its agents or employees, members of the board of governors or
10171	their respective designees at a board meeting, corporation
10172	committee members, or the officedepartmentor its
10173	representatives, for any action taken by them in the performance
10174	of their duties or responsibilities under this subsection. Such
10175	immunity does not apply to:
10176	1. Any of the foregoing persons or entities for any
10177	willful tort;
10178	2. The corporation or its producing agents for breach of
10179	any contract or agreement pertaining to insurance coverage;
10180	3. The corporation with respect to issuance or payment of
10181	debt; or
10182	4. Any assessable insurer with respect to any action to
10183	enforce an assessable insurer's obligations to the corporation
10184	under this subsection.
10185	(j) For the purposes of s. 199.183(1), the corporation
10186	shall be considered a political subdivision of the state and
10187	shall be exempt from the corporate income tax. The premiums,
10188	assessments, investment income, and other revenue of the
10189	corporation are funds received for providing property insurance
10190	coverage as required by this subsection, paying claims for
10191	Florida citizens insured by the corporation, securing and
10192	repaying debt obligations issued by the corporation, and
10193	conducting all other activities of the corporation, and shall
10194	not be considered taxes, fees, licenses, or charges for services
10195	imposed by the Legislature on individuals, businesses, or
10196	agencies outside state government. Bonds and other debt
10197	obligations issued by or on behalf of the corporation are not to
10198	be considered "state bonds" within the meaning of s.
10199	215.58(8)(10). The corporation is not subject to the procurement
10200	provisions of chapter 287, and policies and decisions of the
10201	corporation relating to incurring debt, levying of assessments
10202	and the sale, issuance, continuation, terms and claims under
10203	corporation policies, and all services relating thereto, are not
10204	subject to the provisions of chapter 120. The corporation is not
10205	required to obtain or to hold a certificate of authority issued
10206	by the officedepartment, nor is it required to participate as a
10207	member insurer of the Florida Insurance Guaranty Association.
10208	However, the corporation is required to pay, in the same manner
10209	as an authorized insurer, assessments pledged by the Florida
10210	Insurance Guaranty Association to secure bonds issued or other
10211	indebtedness incurred to pay covered claims arising from insurer
10212	insolvencies caused by, or proximately related to, hurricane
10213	losses. It is the intent of the Legislature that the tax
10214	exemptions provided in this paragraph will augment the financial
10215	resources of the corporation to better enable the corporation to
10216	fulfill its public purposes. Any bonds issued by the
10217	corporation, their transfer, and the income therefrom, including
10218	any profit made on the sale thereof, shall at all times be free
10219	from taxation of every kind by the state and any political
10220	subdivision or local unit or other instrumentality thereof;
10221	however, this exemption does not apply to any tax imposed by
10222	chapter 220chapter 200on interest, income, or profits on debt
10223	obligations owned by corporations other than the corporation.
10224	(k) Upon a determination by the officedepartmentthat the
10225	conditions giving rise to the establishment and activation of
10226	the corporation no longer exist, the corporation is dissolved.
10227	Upon dissolution, the assets of the corporationassociation
10228	shall be applied first to pay all debts, liabilities, and
10229	obligations of the corporation, including the establishment of
10230	reasonable reserves for any contingent liabilities or
10231	obligations, and all remaining assets of the corporation shall
10232	become property of the state and be deposited in the Florida
10233	Hurricane Catastrophe Fund. However, no dissolution shall take
10234	effect as long as the corporation has bonds or other financial
10235	obligations outstanding unless adequate provision has been made
10236	for the payment of the bonds or other financial obligations
10237	pursuant to the documents authorizing the issuance of the bonds
10238	or other financial obligations.
10239	(l)1. Effective July 1, 2002, policies of the Residential
10240	Property and Casualty Joint Underwriting Association shall
10241	become policies of the corporation. All obligations, rights,
10242	assets and liabilities of the Residential Property and Casualty
10243	Joint Underwriting Association, including bonds, note and debt
10244	obligations, and the financing documents pertaining to them
10245	become those of the corporation as of July 1, 2002. The
10246	corporation is not required to issue endorsements or
10247	certificates of assumption to insureds during the remaining term
10248	of in-force transferred policies.
10249	2. Effective July 1, 2002, policies of the Florida
10250	Windstorm Underwriting Association are transferred to the
10251	corporation and shall become policies of the corporation. All
10252	obligations, rights, assets, and liabilities of the Florida
10253	Windstorm Underwriting Association, including bonds, note, and
10254	debt obligations, and the financing documents pertaining to them
10255	are transferred to and assumed by the corporation on July 1,
10256	2002. The corporation is not required to issue endorsement or
10257	certificates of assumption to insureds during the remaining term
10258	of in-force transferred policies.
10259	3. The Florida Windstorm Underwriting Association and the
10260	Residential Property and Casualty Joint Underwriting Association
10261	shall take all actions as may be proper to further evidence the
10262	transfers and shall provide the documents and instruments of
10263	further assurance as may reasonably be requested by the
10264	corporation for that purpose. The corporation shall execute
10265	assumptions and instruments as the trustees or other parties to
10266	the financing documents of the Florida Windstorm Underwriting
10267	Association or the Residential Property and Casualty Joint
10268	Underwriting Association may reasonably request to further
10269	evidence the transfers and assumptions, which transfers and
10270	assumptions, however, are effective on the date provided under
10271	this paragraph whether or not, and regardless of the date on
10272	which, the assumptions or instruments are executed by the
10273	corporation. Subject to the relevant financing documents
10274	pertaining to their outstanding bonds, notes, indebtedness, or
10275	other financing obligations, the moneys, investments,
10276	receivables, choses in action, and other intangibles of the
10277	Florida Windstorm Underwriting Association shall be credited to
10278	the high-risk account of the corporation, and those of the
10279	personal lines residential coverage account and the commercial
10280	lines residential coverage account of the Residential Property
10281	and Casualty Joint Underwriting Association shall be credited to
10282	the personal lines account and the commercial lines account,
10283	respectively, of the corporation.
10284	4. Effective July 1, 2002, a new applicant for property
10285	insurance coverage who would otherwise have been eligible for
10286	coverage in the Florida Windstorm Underwriting Association is
10287	eligible for coverage from the corporation as provided in this
10288	subsection.
10289	5. The transfer of all policies, obligations, rights,
10290	assets, and liabilities from the Florida Windstorm Underwriting
10291	Association to the corporation and the renaming of the
10292	Residential Property and Casualty Joint Underwriting Association
10293	as the corporation shall in no way affect the coverage with
10294	respect to covered policies as defined in s. 215.555(2)(c)
10295	provided to these entities by the Florida Hurricane Catastrophe
10296	Fund. The coverage provided by the Florida Hurricane Catastrophe
10297	Fund to the Florida Windstorm Underwriting Association based on
10298	its exposures as of June 30, 2002, and each June 30 thereafter
10299	shall be redesignated as coverage for the high-risk account of
10300	the corporation. Notwithstanding any other provision of law, the
10301	coverage provided by the Florida Hurricane Catastrophe Fund to
10302	the Residential Property and Casualty Joint Underwriting
10303	Association based on its exposures as of June 30, 2002, and each
10304	June 30 thereafter shall be transferred to the personal lines
10305	account and the commercial lines account of the corporation.
10306	Notwithstanding any other provision of law, the high-risk
10307	account shall be treated, for all Florida Hurricane Catastrophe
10308	Fund purposes, as if it were a separate participating insurer
10309	with its own exposures, reimbursement premium, and loss
10310	reimbursement. Likewise, the personal lines and commercial lines
10311	accounts shall be viewed together, for all Florida Hurricane
10312	Catastrophe Fund purposes, as if the two accounts were one and
10313	represent a single, separate participating insurer with its own
10314	exposures, reimbursement premium, and loss reimbursement. The
10315	coverage provided by the Florida Hurricane Catastrophe Fund to
10316	the corporation shall constitute and operate as a full transfer
10317	of coverage from the Florida Windstorm Underwriting Association
10318	and Residential Property and Casualty Joint Underwriting to the
10319	corporation.
10320	(m) Notwithstanding any other provision of law:
10321	1. The pledge or sale of, the lien upon, and the security
10322	interest in any rights, revenues, or other assets of the
10323	corporation created or purported to be created pursuant to any
10324	financing documents to secure any bonds or other indebtedness of
10325	the corporation shall be and remain valid and enforceable,
10326	notwithstanding the commencement of and during the continuation
10327	of, and after, any rehabilitation, insolvency, liquidation,
10328	bankruptcy, receivership, conservatorship, reorganization, or
10329	similar proceeding against the corporation under the laws of
10330	this state.
10331	2. No such proceeding shall relieve the corporation of its
10332	obligation, or otherwise affect its ability to perform its
10333	obligation, to continue to collect, or levy and collect,
10334	assessments, market equalization or other surcharges under
10335	subparagraph (c)10., or any other rights, revenues, or other
10336	assets of the corporation pledged pursuant to any financing
10337	documents.
10338	3. Each such pledge or sale of, lien upon, and security
10339	interest in, including the priority of such pledge, lien, or
10340	security interest, any such assessments, market equalization or
10341	other surcharges, or other rights, revenues, or other assets
10342	which are collected, or levied and collected, after the
10343	commencement of and during the pendency of, or after, any such
10344	proceeding shall continue unaffected by such proceeding. As
10345	used in this subsection, the term "financing documents" means
10346	any agreement or agreements, instrument or instruments, or other
10347	document or documents now existing or hereafter created
10348	evidencing any bonds or other indebtedness of the corporation or
10349	pursuant to which any such bonds or other indebtedness has been
10350	or may be issued and pursuant to which any rights, revenues, or
10351	other assets of the corporation are pledged or sold to secure
10352	the repayment of such bonds or indebtedness, together with the
10353	payment of interest on such bonds or such indebtedness, or the
10354	payment of any other obligation or financial product, as defined
10355	in the plan of operation of the corporation related to such
10356	bonds or indebtedness.
10357	4. Any such pledge or sale of assessments, revenues,
10358	contract rights, or other rights or assets of the corporation
10359	shall constitute a lien and security interest, or sale, as the
10360	case may be, that is immediately effective and attaches to such
10361	assessments, revenues, or contract rights or other rights or
10362	assets, whether or not imposed or collected at the time the
10363	pledge or sale is made. Any such pledge or sale is effective,
10364	valid, binding, and enforceable against the corporation or other
10365	entity making such pledge or sale, and valid and binding against
10366	and superior to any competing claims or obligations owed to any
10367	other person or entity, including policyholders in this state,
10368	asserting rights in any such assessments, revenues, or contract
10369	rights or other rights or assets to the extent set forth in and
10370	in accordance with the terms of the pledge or sale contained in
10371	the applicable financing documents, whether or not any such
10372	person or entity has notice of such pledge or sale and without
10373	the need for any physical delivery, recordation, filing, or
10374	other action.
10375	(n)1. The following records of the corporation are
10376	confidential and exempt from the provisions of s. 119.07(1) and
10377	s. 24(a), Art. I of the State Constitution:
10378	a. Underwriting files, except that a policyholder or an
10379	applicant shall have access to his or her own underwriting
10380	files.
10381	b. Claims files, until termination of all litigation and
10382	settlement of all claims arising out of the same incident,
10383	although portions of the claims files may remain exempt, as
10384	otherwise provided by law. Confidential and exempt claims file
10385	records may be released to other governmental agencies upon
10386	written request and demonstration of need; such records held by
10387	the receiving agency remain confidential and exempt as provided
10388	for herein.
10389	c. Records obtained or generated by an internal auditor
10390	pursuant to a routine audit, until the audit is completed, or if
10391	the audit is conducted as part of an investigation, until the
10392	investigation is closed or ceases to be active. An
10393	investigation is considered "active" while the investigation is
10394	being conducted with a reasonable, good faith belief that it
10395	could lead to the filing of administrative, civil, or criminal
10396	proceedings.
10397	d. Matters reasonably encompassed in privileged attorney-
10398	client communications.
10399	e. Proprietary information licensed to the corporation
10400	under contract and the contract provides for the confidentiality
10401	of such proprietary information.
10402	f. All information relating to the medical condition or
10403	medical status of a corporation employee which is not relevant
10404	to the employee's capacity to perform his or her duties, except
10405	as otherwise provided in this paragraph. Information which is
10406	exempt shall include, but is not limited to, information
10407	relating to workers' compensation, insurance benefits, and
10408	retirement or disability benefits.
10409	g. Upon an employee's entrance into the employee
10410	assistance program, a program to assist any employee who has a
10411	behavioral or medical disorder, substance abuse problem, or
10412	emotional difficulty which affects the employee's job
10413	performance, all records relative to that participation shall be
10414	confidential and exempt from the provisions of s. 119.07(1) and
10415	s. 24(a), Art. I of the State Constitution, except as otherwise
10416	provided in s. 112.0455(11).
10417	h. Information relating to negotiations for financing,
10418	reinsurance, depopulation, or contractual services, until the
10419	conclusion of the negotiations.
10420	i. Minutes of closed meetings regarding underwriting
10421	files, and minutes of closed meetings regarding an open claims
10422	file until termination of all litigation and settlement of all
10423	claims with regard to that claim, except that information
10424	otherwise confidential or exempt by law will be redacted.
10425
10426
10427	When an authorized insurer is considering underwriting a risk
10428	insured by the corporation, relevant underwriting files and
10429	confidential claims files may be released to the insurer
10430	provided the insurer agrees in writing, notarized and under
10431	oath, to maintain the confidentiality of such files. When a
10432	file is transferred to an insurer that file is no longer a
10433	public record because it is not held by an agency subject to the
10434	provisions of the public records law. Underwriting files and
10435	confidential claims files may also be released to staff of and
10436	the board of governors of the market assistance plan established
10437	pursuant to s. 627.3515, who must retain the confidentiality of
10438	such files, except such files may be released to authorized
10439	insurers that are considering assuming the risks to which the
10440	files apply, provided the insurer agrees in writing, notarized
10441	and under oath, to maintain the confidentiality of such files.
10442	Finally, the corporation or the board or staff of the market
10443	assistance plan may make the following information obtained from
10444	underwriting files and confidential claims files available to
10445	licensed general lines insurance agents: name, address, and
10446	telephone number of the residential property owner or insured;
10447	location of the risk; rating information; loss history; and
10448	policy type. The receiving licensed general lines insurance
10449	agent must retain the confidentiality of the information
10450	received.
10451	2. Portions of meetings of the corporation are exempt from
10452	the provisions of s. 286.011 and s. 24(b), Art. I of the State
10453	Constitution wherein confidential underwriting files or
10454	confidential open claims files are discussed. All portions of
10455	corporation meetings which are closed to the public shall be
10456	recorded by a court reporter. The court reporter shall record
10457	the times of commencement and termination of the meeting, all
10458	discussion and proceedings, the names of all persons present at
10459	any time, and the names of all persons speaking. No portion of
10460	any closed meeting shall be off the record. Subject to the
10461	provisions hereof and s. 119.07(2)(a), the court reporter's
10462	notes of any closed meeting shall be retained by the corporation
10463	for a minimum of 5 years. A copy of the transcript, less any
10464	exempt matters, of any closed meeting wherein claims are
10465	discussed shall become public as to individual claims after
10466	settlement of the claim.
10467	(o) It is the intent of the Legislature that the
10468	amendments to this subsection enacted in 2002 should, over time,
10469	reduce the probable maximum windstorm losses in the residual
10470	markets and should reduce the potential assessments to be levied
10471	on property insurers and policyholders statewide. In
10472	furtherance of this intent:
10473	1. The board shall, on or before February 1 of each year,
10474	provide a report to the President of the Senate and the Speaker
10475	of the House of Representatives showing the reduction or
10476	increase in the 100-year probable maximum loss attributable to
10477	wind-only coverages and the quota share program under this
10478	subsection combined, as compared to the benchmark 100-year
10479	probable maximum loss of the Florida Windstorm Underwriting
10480	Association. For purposes of this paragraph, the benchmark 100-
10481	year probable maximum loss of the Florida Windstorm Underwriting
10482	Association shall be the calculation dated February 2001 and
10483	based on November 30, 2000, exposures. In order to ensure
10484	comparability of data, the board shall use the same methods for
10485	calculating its probable maximum loss as were used to calculate
10486	the benchmark probable maximum loss.
10487	2. Beginning February 1, 2007, if the report under
10488	subparagraph 1. for any year indicates that the 100-year
10489	probable maximum loss attributable to wind-only coverages and
10490	the quota share program combined does not reflect a reduction of
10491	at least 25 percent from the benchmark, the board shall reduce
10492	the boundaries of the high-risk area eligible for wind-only
10493	coverages under this subsection in a manner calculated to reduce
10494	such probable maximum loss to an amount at least 25 percent
10495	below the benchmark.
10496	3. Beginning February 1, 2012, if the report under
10497	subparagraph 1. for any year indicates that the 100-year
10498	probable maximum loss attributable to wind-only coverages and
10499	the quota share program combined does not reflect a reduction of
10500	at least 50 percent from the benchmark, the boundaries of the
10501	high-risk area eligible for wind-only coverages under this
10502	subsection shall be reduced by the elimination of any area that
10503	is not seaward of a line 1,000 feet inland from the Intracoastal
10504	Waterway.
10505	(p) In enacting the provisions of this section, the
10506	Legislature recognizes that both the Florida Windstorm
10507	Underwriting Association and the Residential Property and
10508	Casualty Joint Underwriting Association have entered into
10509	financing arrangements that obligate each entity to service its
10510	debts and maintain the capacity to repay funds secured under
10511	these financing arrangements. It is the intent of the
10512	Legislature that nothing in this section be construed to
10513	compromise, diminish, or interfere with the rights of creditors
10514	under such financing arrangements. It is further the intent of
10515	the Legislature to preserve the obligations of the Florida
10516	Windstorm Underwriting Association and Residential Property and
10517	Casualty Joint Underwriting Association with regard to
10518	outstanding financing arrangements, with such obligations
10519	passing entirely and unchanged to the corporation and,
10520	specifically, to the applicable account of the corporation. So
10521	long as any bonds, notes, indebtedness, or other financing
10522	obligations of the Florida Windstorm Underwriting Association or
10523	the Residential Property and Casualty Joint Underwriting
10524	Association are outstanding, under the terms of the financing
10525	documents pertaining to them, the governing board of the
10526	corporation shall have and shall exercise the authority to levy,
10527	charge, collect, and receive all premiums, assessments,
10528	surcharges, charges, revenues, and receipts that the
10529	associations had authority to levy, charge, collect, or receive
10530	under the provisions of subsection (2) and this subsection,
10531	respectively, as they existed on January 1, 2002, to provide
10532	moneys, without exercise of the authority provided by this
10533	subsection, in at least the amounts, and by the times, as would
10534	be provided under those former provisions of subsection (2) or
10535	this subsection, respectively, so that the value, amount, and
10536	collectability of any assets, revenues, or revenue source
10537	pledged or committed to, or any lien thereon securing such
10538	outstanding bonds, notes, indebtedness, or other financing
10539	obligations will not be diminished, impaired, or adversely
10540	affected by the amendments made by this act and to permit
10541	compliance with all provisions of financing documents pertaining
10542	to such bonds, notes, indebtedness, or other financing
10543	obligations, or the security or credit enhancement for them, and
10544	any reference in this subsection to bonds, notes, indebtedness,
10545	financing obligations, or similar obligations, of the
10546	corporation shall include like instruments or contracts of the
10547	Florida Windstorm Underwriting Association and the Residential
10548	Property and Casualty Joint Underwriting Association to the
10549	extent not inconsistent with the provisions of the financing
10550	documents pertaining to them.
10551	(q) Effective January 7, 2003, any reference in this
10552	subsection to the Treasurer shall be deemed to be a reference to
10553	the Chief Financial Officer and any reference to the Department
10554	of Insurance shall be deemed to be a reference to the Department
10555	of Insurance and Financial Services or other successor to the
10556	Department of Insurance specified by law.
10557	(q)(r)The corporation shall not require the securing of
10558	flood insurance as a condition of coverage if the insured or
10559	applicant executes a form approved by the officedepartment
10560	affirming that flood insurance is not provided by the
10561	corporation and that if flood insurance is not secured by the
10562	applicant or insured in addition to coverage by the corporation,
10563	the risk will not be covered for flood damage. A corporation
10564	policyholder electing not to secure flood insurance and
10565	executing a form as provided herein making a claim for water
10566	damage against the corporation shall have the burden of proving
10567	the damage was not caused by flooding. Notwithstanding other
10568	provisions of this subsection, the corporation may deny coverage
10569	to an applicant or insured who refuses to execute the form
10570	described herein.
10571	Section 200. Section 627.3511, Florida Statutes, is
10572	amended to read:
10573	627.3511 Depopulation of Citizens Property Insurance
10574	CorporationResidential Property and Casualty Joint Underwriting
10575	Association.--
10576	(1) LEGISLATIVE INTENT.--The Legislature finds that the
10577	public policy of this state requires the maintenance of a
10578	residual market for residential property insurance. It is the
10579	intent of the Legislature to provide a variety of financial
10580	incentives to encourage the replacement of the highest possible
10581	number of Citizens Property Insurance CorporationResidential
10582	Property and Casualty Joint Underwriting Associationpolicies
10583	with policies written by admitted insurers at approved rates.
10584	(2) TAKE-OUT BONUS.--The Citizens Property Insurance
10585	CorporationResidential Property and Casualty Joint Underwriting
10586	Associationshall pay the sum of up to $100 to an insurer for
10587	each risk that the insurer removes from the corporation
10588	association, either by issuance of a policy upon expiration or
10589	cancellation of the corporationassociationpolicy or by
10590	assumption of the corporation'sassociation'sobligations with
10591	respect to an in-force policy. Such payment is subject to
10592	approval of the corporationassociationboard. In order to
10593	qualify for the bonus under this subsection, the take-out plan
10594	must include a minimum of 25,000 policies. Within 30 days after
10595	approval by the board, the officedepartmentmay reject the
10596	insurer's take-out plan and disqualify the insurer from the
10597	bonus, based on the following criteria:
10598	(a) The capacity of the insurer to absorb the policies
10599	proposed to be taken out of the corporationassociationand the
10600	concentration of risks of those policies.
10601	(b) Whether the geographic and risk characteristics of
10602	policies in the proposed take-out plan serve to reduce the
10603	exposure of the corporationassociationsufficiently to justify
10604	the bonus.
10605	(c) Whether coverage for risks to be taken out otherwise
10606	exists in the admitted voluntary market.
10607	(d) The degree to which the take-out bonus is promoting
10608	new capital being allocated by the insurer to Florida
10609	residential property coverage.
10610	(3) EXEMPTION FROM DEFICIT ASSESSMENTS.--
10611	(a) The calculation of an insurer's assessment liability
10612	under s. 627.351(6)(b)3.a. or b. shall, for an insurer that in
10613	any calendar year removes 50,000 or more risks from the Citizens
10614	Property Insurance CorporationResidential Property and Casualty
10615	Joint Underwriting Association, either by issuance of a policy
10616	upon expiration or cancellation of the corporationassociation
10617	policy or by assumption of the corporation'sassociation's
10618	obligations with respect to in-force policies, exclude such
10619	removed policies for the succeeding 3 years, as follows:
10620	1. In the first year following removal of the risks, the
10621	risks are excluded from the calculation to the extent of 100
10622	percent.
10623	2. In the second year following removal of the risks, the
10624	risks are excluded from the calculation to the extent of 75
10625	percent.
10626	3. In the third year following removal of the risks, the
10627	risks are excluded from the calculation to the extent of 50
10628	percent.
10629
10630
10631	If the removal of risks is accomplished through assumption of
10632	obligations with respect to in-force policies, the corporation
10633	associationshall pay to the assuming insurer all unearned
10634	premium with respect to such policies less any policy
10635	acquisition costs agreed to by the corporationassociationand
10636	assuming insurer. The term "policy acquisition costs" is defined
10637	as costs of issuance of the policy by the corporation
10638	associationwhich includes agent commissions, servicing company
10639	fees, and premium tax. This paragraph does not apply to an
10640	insurer that, at any time within 5 years before removing the
10641	risks, had a market share in excess of 0.1 percent of the
10642	statewide aggregate gross direct written premium for any line of
10643	property insurance, or to an affiliate of such an insurer. This
10644	paragraph does not apply unless either at least 40 percent of
10645	the risks removed from the corporationassociationare located
10646	in Dade, Broward, and Palm Beach Counties, or at least 30
10647	percent of the risks removed from the corporationassociation
10648	are located in such counties and an additional 50 percent of the
10649	risks removed from the corporationassociationare located in
10650	other coastal counties.
10651	(b) An insurer that first wrote personal lines residential
10652	property coverage in this state on or after July 1, 1994, is
10653	exempt from regular deficit assessments imposed pursuant to s.
10654	627.351(6)(b)3.a. and b., but not emergency assessments
10655	collected from policyholders pursuant to s. 627.351(6)(b)3.d.,
10656	of the Citizens Property Insurance CorporationResidential
10657	Property and Casualty Joint Underwriting Associationuntil the
10658	earlier of the following:
10659	1. The end of the calendar year in which it first wrote
10660	0.5 percent or more of the statewide aggregate direct written
10661	premium for any line of residential property coverage; or
10662	2. December 31, 1997, or December 31 of the third year in
10663	which it wrote such coverage in this state, whichever is later.
10664	(c) Other than an insurer that is exempt under paragraph
10665	(b), an insurer that in any calendar year increases its total
10666	structure exposure subject to wind coverage by 25 percent or
10667	more over its exposure for the preceding calendar year is, with
10668	respect to that year, exempt from deficit assessments imposed
10669	pursuant to s. 627.351(6)(b)3.a. and b., but not emergency
10670	assessments collected from policyholders pursuant to s.
10671	627.351(6)(b)3.d., of the Citizens Property Insurance
10672	CorporationResidential Property and Casualty Joint Underwriting
10673	Associationattributable to such increase in exposure.
10674	(d) Any exemption or credit from regular assessments
10675	authorized by this section shall last no longer than 3 years
10676	following the cancellation or expiration of the policy by the
10677	corporationassociation. With the approval of the office
10678	department, the board may extend such credits for an additional
10679	year if the insurer guarantees an additional year of
10680	renewability for all policies removed from the corporation
10681	association, or for 2 additional years if the insurer guarantees
10682	2 additional years of renewability for all policies so removed.
10683	(4) AGENT BONUS.--When the corporationResidential
10684	Property and Casualty Joint Underwriting Associationenters into
10685	a contractual agreement for a take-out plan that provides a
10686	bonus to the insurer, the producing agent of record of the
10687	corporationassociationpolicy is entitled to retain any
10688	unearned commission on such policy, and the insurer shall
10689	either:
10690	(a) Pay to the producing agent of record of the
10691	association policy, for the first year, an amount that is the
10692	greater of the insurer's usual and customary commission for the
10693	type of policy written or a fee equal to the usual and customary
10694	commission of the corporationassociation; or
10695	(b) Offer to allow the producing agent of record of the
10696	corporationassociationpolicy to continue servicing the policy
10697	for a period of not less than 1 year and offer to pay the agent
10698	the greater of the insurer's or the corporation'sassociation's
10699	usual and customary commission for the type of policy written.
10700
10701
10702	If the producing agent is unwilling or unable to accept
10703	appointment, the new insurer shall pay the agent in accordance
10704	with paragraph (a). The requirement of this subsection that the
10705	producing agent of record is entitled to retain the unearned
10706	commission on an association policy does not apply to a policy
10707	for which coverage has been provided in the association for 30
10708	days or less or for which a cancellation notice has been issued
10709	pursuant to s. 627.351(6)(c)11. during the first 30 days of
10710	coverage.
10711	(5) APPLICABILITY.--
10712	(a) The take-out bonus provided by subsection (2) and the
10713	exemption from assessment provided by paragraph (3)(a) apply
10714	only if the corporationassociationpolicy is replaced by either
10715	a standard policy including wind coverage or, if consistent with
10716	the insurer's underwriting rules as filed with the office
10717	department, a basic policy including wind coverage; however,
10718	with respect to risks located in areas where coverage through
10719	the high-risk account of the corporationFlorida Windstorm
10720	Underwriting Associationis available, the replacement policy
10721	need not provide wind coverage. The insurer must renew the
10722	replacement policy at approved rates on substantially similar
10723	terms for two additional 1-year terms, unless canceled by the
10724	insurer for a lawful reason other than reduction of hurricane
10725	exposure. If an insurer assumes the corporation'sassociation's
10726	obligations for a policy, it must issue a replacement policy for
10727	a 1-year term upon expiration of the corporationassociation
10728	policy and must renew the replacement policy at approved rates
10729	on substantially similar terms for two additional 1-year terms,
10730	unless canceled by the insurer for a lawful reason other than
10731	reduction of hurricane exposure. For each replacement policy
10732	canceled or nonrenewed by the insurer for any reason during the
10733	3-year coverage period required by this paragraph, the insurer
10734	must remove from the corporationassociationone additional
10735	policy covering a risk similar to the risk covered by the
10736	canceled or nonrenewed policy. In addition to these
10737	requirements, the corporationassociationmust place the bonus
10738	moneys in escrow for a period of 3 years; such moneys may be
10739	released from escrow only to pay claims. A take-out bonus
10740	provided by subsection (2) or subsection (6) shall not be
10741	considered premium income for purposes of taxes and assessments
10742	under the Florida Insurance Code and shall remain the property
10743	of the corporationResidential Property and Casualty Joint
10744	Underwriting Association, subject to the prior security interest
10745	of the insurer under the escrow agreement until it is released
10746	from escrow, and after it is released from escrow it shall be
10747	considered an asset of the insurer and credited to the insurer's
10748	capital and surplus.
10749	(b) It is the intent of the Legislature that an insurer
10750	eligible for the exemption under paragraph (3)(a) establish a
10751	preference in appointment of agents for those agents who lose a
10752	substantial amount of business as a result of risks being
10753	removed from the corporationassociation.
10754	(6) COMMERCIAL RESIDENTIAL TAKE-OUT PLANS.--
10755	(a) The corporationResidential Property and Casualty
10756	Joint Underwriting Associationshall pay a bonus to an insurer
10757	for each commercial residential policy that the insurer removes
10758	from the corporationassociationpursuant to an approved take-
10759	out plan, either by issuance of a new policy upon expiration of
10760	the corporationassociation policy or by assumption of the
10761	corporation'sassociation'sobligations with respect to an in-
10762	force policy. The corporationassociationboard shall determine
10763	the amount of the bonus based on such factors as the coverage
10764	provided, relative hurricane risk, the length of time that the
10765	property has been covered by the corporationassociation, and
10766	the criteria specified in paragraphs (b) and (c). The amount of
10767	the bonus with respect to a particular policy may not exceed 25
10768	percent of the corporation'sassociation's1-year premium for
10769	the policy. Such payment is subject to approval of the
10770	corporationassociationboard. In order to qualify for the bonus
10771	under this subsection, the take-out plan must include policies
10772	reflecting at least $100 million in structure exposure.
10773	(b) In order for a plan to qualify for approval:
10774	1. At least 40 percent of the policies removed from the
10775	corporationassociationunder the plan must be located in Dade,
10776	Broward, and Palm Beach Counties, or at least 30 percent of the
10777	policies removed from the corporationassociationunder the plan
10778	must be located in such counties and an additional 50 percent of
10779	the policies removed from the corporationassociationmust be
10780	located in other coastal counties.
10781	2. The insurer must renew the replacement policy at
10782	approved rates on substantially similar terms for two additional
10783	1-year terms, unless canceled or nonrenewed by the insurer for a
10784	lawful reason other than reduction of hurricane exposure. If an
10785	insurer assumes the corporation'sassociation'sobligations for
10786	a policy, it must issue a replacement policy for a 1-year term
10787	upon expiration of the corporationassociationpolicy and must
10788	renew the replacement policy at approved rates on substantially
10789	similar terms for two additional 1-year terms, unless canceled
10790	by the insurer for a lawful reason other than reduction of
10791	hurricane exposure. For each replacement policy canceled or
10792	nonrenewed by the insurer for any reason during the 3-year
10793	coverage period required by this subparagraph, the insurer must
10794	remove from the corporationassociationone additional policy
10795	covering a risk similar to the risk covered by the canceled or
10796	nonrenewed policy.
10797	(c) A take-out plan is deemed approved unless the office
10798	department, within 120 days after the board votes to recommend
10799	the plan, disapproves the plan based on:
10800	1. The capacity of the insurer to absorb the policies
10801	proposed to be taken out of the corporationassociationand the
10802	concentration of risks of those policies.
10803	2. Whether the geographic and risk characteristics of
10804	policies in the proposed take-out plan serve to reduce the
10805	exposure of the corporationassociationsufficiently to justify
10806	the bonus.
10807	3. Whether coverage for risks to be taken out otherwise
10808	exists in the admitted voluntary market.
10809	4. The degree to which the take-out bonus is promoting new
10810	capital being allocated by the insurer to residential property
10811	coverage in this state.
10812	(d) The calculation of an insurer's regular assessment
10813	liability under s. 627.351(b)3.a. and b., but not emergency
10814	assessments collected from policyholders pursuant to s.
10815	627.351(6)(b)3.d., shall, with respect to commercial residential
10816	policies removed from the corporationassociationunder an
10817	approved take-out plan, exclude such removed policies for the
10818	succeeding 3 years, as follows:
10819	1. In the first year following removal of the policies,
10820	the policies are excluded from the calculation to the extent of
10821	100 percent.
10822	2. In the second year following removal of the policies,
10823	the policies are excluded from the calculation to the extent of
10824	75 percent.
10825	3. In the third year following removal of the policies,
10826	the policies are excluded from the calculation to the extent of
10827	50 percent.
10828	(e) An insurer that first wrote commercial residential
10829	property coverage in this state on or after June 1, 1996, is
10830	exempt from regular assessments under s. 627.351(6)(b)3.a. and
10831	b., but not emergency assessments collected from policyholders
10832	pursuant to s. 627.351(6)(b)3.d., with respect to commercial
10833	residential policies until the earlier of:
10834	1. The end of the calendar year in which such insurer
10835	first wrote 0.5 percent or more of the statewide aggregate
10836	direct written premium for commercial residential property
10837	coverage; or
10838	2. December 31 of the third year in which such insurer
10839	wrote commercial residential property coverage in this state.
10840	(f) An insurer that is not otherwise exempt from regular
10841	assessments under s. 627.351(6)(b)3.a. and b. with respect to
10842	commercial residential policies is, for any calendar year in
10843	which such insurer increased its total commercial residential
10844	hurricane exposure by 25 percent or more over its exposure for
10845	the preceding calendar year, exempt from regular assessments
10846	under s. 627.351(6)(b)3.a. and b., but not emergency assessments
10847	collected from policyholders pursuant to s. 627.351(6)(b)3.d.,
10848	attributable to such increased exposure.
10849	(7) A minority business, which is at least 51 percent
10850	owned by minority persons as described in s. 288.703(3),
10851	desiring to operate or become licensed as a property and
10852	casualty insurer may exempt up to $50 of the escrow requirements
10853	of the take-out bonus, as described in this section. Such
10854	minority business, which has applied for a certificate of
10855	authority to engage in business as a property and casualty
10856	insurer, may simultaneously file the business' proposed take-out
10857	plan, as described in this section, with the corporationto the
10858	Residential Property and Casualty Joint Underwriting
10859	Association.
10860	Section 201. Section 627.3513, Florida Statutes, is
10861	amended to read:
10862	627.3513 Standards for sale of bonds by Citizens Property
10863	Insurance Corporationunderwriting associations.--
10864	(1)(a) The purpose of this section is to provide standards
10865	for the sale of bonds pursuant to s. 627.351(2) and (6).
10866	(b) The term "corporation," as used in this section, means
10867	the Citizens Property Insurance Corporation."Association" or
10868	"associations," for purposes of this section, means the Florida
10869	Windstorm Underwriting Association and the Residential Property
10870	and Casualty Joint Underwriting Association as established
10871	pursuant to s. 627.351(2) and (6), and any corporation or other
10872	entity established pursuant to those subsections.
10873	(2) The plan of operation of the corporationeach
10874	associationshall provide for the selection of financial
10875	services providers and underwriters. Such provisions shall
10876	include the method for publicizing or otherwise providing
10877	reasonable notice to potential financial services providers,
10878	underwriters, and other interested parties, which may include
10879	expedited procedures and methods for emergency situations. The
10880	corporationassociationsshall not engage the services of any
10881	person or firm as a securities broker or bond underwriter that
10882	is not eligible to be engaged by the state under the provisions
10883	of s. 215.684. The corporationassociationsshall make all
10884	selections of financial service providers and managing
10885	underwriters at a noticed public meeting.
10886	(3) The plan of operation of the corporationeach
10887	associationshall provide for any managing underwriter or
10888	financial adviser to provide to the corporationassociationa
10889	disclosure statement containing at least the following
10890	information:
10891	(a) An itemized list setting forth the nature and
10892	estimated amounts of expenses to be incurred by the managing
10893	underwriter in connection with the issuance of such bonds.
10894	Notwithstanding the foregoing, any such list may include an item
10895	for miscellaneous expenses, provided such item includes only
10896	minor items of expense which cannot be easily categorized
10897	elsewhere in the statement.
10898	(b) The names, addresses, and estimated amounts of
10899	compensation of any finders connected with the issuance of the
10900	bonds.
10901	(c) The amount of underwriting spread expected to be
10902	realized and the amount of fees and expenses expected to be paid
10903	to the financial adviser.
10904	(d) Any management fee charged by the managing
10905	underwriter.
10906	(e) Any other fee, bonus, or compensation estimated to be
10907	paid by the managing underwriter in connection with the bond
10908	issue to any person not regularly employed or retained by it.
10909	(f) The name and address of each financial adviser or
10910	managing underwriter, if any, connected with the bond issue.
10911	(g) Any other disclosure which the corporationassociation
10912	may require.
10913	(4)(a) No underwriter, commercial bank, investment banker,
10914	or financial consultant or adviser shall pay any finder any
10915	bonus, fee, or gratuity in connection with the sale of bonds
10916	issued by the corporationassociationunless full disclosure is
10917	made in writing to the corporationassociationprior to or
10918	concurrently with the submission of a purchase proposal for
10919	bonds by the underwriter, commercial bank, investment banker, or
10920	financial consultant or adviser, providing the name and address
10921	of any finder and the amount of bonus, fee, or gratuity paid to
10922	such finder. A violation of this subsection shall not affect the
10923	validity of the bond issue.
10924	(b) As used in this subsection, the term "finder" means a
10925	person who is neither regularly employed by, nor a partner or
10926	officer of, an underwriter, bank, banker, or financial
10927	consultant or adviser and who enters into an understanding with
10928	either the issuer or the managing underwriter, or both, for any
10929	paid or promised compensation or valuable consideration,
10930	directly or indirectly, expressed or implied, to act solely as
10931	an intermediary between such issuer and managing underwriter for
10932	the purpose of influencing any transaction in the purpose of
10933	such bonds.
10934	(5) This section is not intended to restrict or prohibit
10935	the employment of professional services relating to bonds issued
10936	under s. 627.351(6)s. 627.351(2) or (6)or the issuance of
10937	bonds by the corporationassociations.
10938	(6) The failure of the corporationassociationto comply
10939	with one or more provisions of this section shall not affect the
10940	validity of the bond issue; however, the failure of the
10941	corporationeither associationto comply in good faith both with
10942	this section and with the plan as amended shall be a violation
10943	of its plan of operation and a violation of the insurance code.
10944	Section 202. Section 627.3515, Florida Statutes, is
10945	amended to read:
10946	627.3515 Market assistance plan; property and casualty
10947	risks.--
10948	(1) The officedepartmentshall adopt a market assistance
10949	plan to assist in the placement of risks of applicants who are
10950	unable to procure property insurance as defined in s. 624.604 or
10951	casualty insurance as defined in s. 624.605(1)(b), (e), (f),
10952	(g), or (h) from authorized insurers when such insurance is
10953	otherwise generally available from insurers authorized to
10954	transact and actually writing that kind and class of insurance
10955	in this state. Through such measures as are found appropriate by
10956	the board of governors, the market assistance plan shall take
10957	affirmative steps to assist in the removal from the Citizens
10958	Property Insurance CorporationResidential Property and Casualty
10959	Joint Underwriting Associationany risk that can be placed in
10960	the voluntary market. All property and casualty insurers
10961	licensed in this state shall participate in the plan.
10962	(2)(a) Each person serving as a member of the board of
10963	governors of the Citizens Property Insurance Corporation
10964	Residential Property and Casualty Joint Underwriting Association
10965	shall also serve as a member of the board of governors of the
10966	market assistance plan.
10967	(b) The plan shall be funded through payments from the
10968	Citizens Property Insurance CorporationResidential Property and
10969	Casualty Joint Underwriting Associationand annual assessments
10970	of residential property insurers in the amount of $450.
10971	(c) The plan is not required to assist in the placement of
10972	any workers' compensation, employer's liability, malpractice, or
10973	motor vehicle insurance coverage.
10974	Section 203. Subsections (2), (4), and (6), paragraphs (c)
10975	and (h) of subsection (7), and subsection (8) of section
10976	627.357, Florida Statutes, are amended to read:
10977	627.357 Medical malpractice self-insurance.--
10978	(2) A group or association of health care providers
10979	composed of any number of members, is authorized to self-insure
10980	against claims arising out of the rendering of, or failure to
10981	render, medical care or services, or against claims for injury
10982	or death to the insured's patients arising out of the insured's
10983	activities, upon obtaining approval from the officedepartment
10984	and upon complying with the following conditions:
10985	(a) Establishment of a Medical Malpractice Risk Management
10986	Trust Fund to provide coverage against professional medical
10987	malpractice liability.
10988	(b) Employment of professional consultants for loss
10989	prevention and claims management coordination under a risk
10990	management program.
10991	(4) The fund is subject to regulation and investigation by
10992	the officedepartment. The fund is subject to rules of the
10993	commissiondepartmentand to part IX of chapter 626, relating to
10994	trade practices and frauds.
10995	(6) The commissiondepartmentshall adopt rules to
10996	implement this section, including rules that ensure that a trust
10997	fund maintains a sufficient reserve to cover contingent
10998	liabilities under subsection (7) in the event of its
10999	dissolution.
11000	(7)
11001	(c) The trust fund may from time to time assess members of
11002	the fund liable therefor under the terms of their policies and
11003	pursuant to this section. The officedepartmentmay assess the
11004	members in the event of liquidation of the fund.
11005	(h) If the trust fund fails to make an assessment as
11006	required by paragraph(g), the officedepartmentshall order the
11007	fund to do so. If the deficiency is not sufficiently made up
11008	within 60 days after the date of the order, the fund is deemed
11009	insolvent and grounds exist to proceed against the fund as
11010	provided for in part I of chapter 631.
11011	(8) The expense factors associated with rates used by a
11012	fund shall be filed with the officedepartmentat least 30 days
11013	prior to use and may not be used until approved by the office
11014	department. The officedepartmentshall disapprove the rates
11015	unless the filed expense factors associated therewith are
11016	justified and reasonable for the benefits and services provided.
11017	Section 204. Paragraph (a) of subsection (3) of section
11018	627.4236, Florida Statutes, is amended to read:
11019	627.4236 Coverage for bone marrow transplant procedures.--
11020	(3)(a) The Agency for Health Care Administration shall
11021	adopt rules specifying the bone marrow transplant procedures
11022	that are accepted within the appropriate oncological specialty
11023	and are not experimental for purposes of this section. The rules
11024	must be based upon recommendations of an advisory panel
11025	appointed by the secretary of the agency, composed of:
11026	1. One adult oncologist, selected from a list of three
11027	names recommended by the Florida Medical Association;
11028	2. One pediatric oncologist, selected from a list of three
11029	names recommended by the Florida Pediatric Society;
11030	3. One representative of the J. Hillis Miller Health
11031	Center at the University of Florida;
11032	4. One representative of the H. Lee Moffitt Cancer Center
11033	and Research Institute, Inc.;
11034	5. One consumer representative, selected from a list of
11035	three names recommended by the Chief Financial OfficerInsurance
11036	Commissioner;
11037	6. One representative of the Health Insurance Association
11038	of America;
11039	7. Two representatives of health insurers, one of whom
11040	represents the insurer with the largest Florida health insurance
11041	premium volume and one of whom represents the insurer with the
11042	second largest Florida health insurance premium volume; and
11043	8. One representative of the insurer with the largest
11044	Florida small group health insurance premium volume.
11045	Section 205. Paragraphs (a) and (e) of subsection (2),
11046	subsection (3), paragraphs (e), (j), and (k) of subsection (4),
11047	and subsection (6) of section 627.6488, Florida Statutes, are
11048	amended to read:
11049	627.6488 Florida Comprehensive Health Association.--
11050	(2)(a) The association shall operate subject to the
11051	supervision and approval of a three-member board of directors.
11052	The board of directors shall be appointed by the Chief Financial
11053	OfficerInsurance Commissioneras follows:
11054	1. The chair of the board shall be the Chief Financial
11055	OfficerInsurance Commissioneror his or her designee.
11056	2. One representative of policyholders who is not
11057	associated with the medical profession, a hospital, or an
11058	insurer.
11059	3. One representative of insurers.
11060
11061
11062	The administrator or his or her affiliate shall not be a member
11063	of the board. Any board member appointed by the Chief Financial
11064	Officercommissionermay be removed and replaced by him or her
11065	at any time without cause.
11066	(e) There shall be no liability on the part of, and no
11067	cause of action of any nature shall arise against, any member
11068	insurer, or its agents or employees, agents or employees of the
11069	association, members of the board of directors of the
11070	association, or the Chief Financial Officer'sdepartmental
11071	representatives for any act or omission taken by them in the
11072	performance of their powers and duties under this act, unless
11073	such act or omission by such person is in intentional disregard
11074	of the rights of the claimant.
11075	(3) The association shall adopt a plan pursuant to this
11076	act and submit its articles, bylaws, and operating rules to the
11077	officedepartmentfor approval. If the association fails to
11078	adopt such plan and suitable articles, bylaws, and operating
11079	rules within 180 days after the appointment of the board, the
11080	commissiondepartmentshall adopt rules to effectuate the
11081	provisions of this act; and such rules shall remain in effect
11082	until superseded by a plan and articles, bylaws, and operating
11083	rules submitted by the association and approved by the office
11084	department.
11085	(4) The association shall:
11086	(e) Require that all policy forms issued by the
11087	association conform to standard forms developed by the
11088	association. The forms shall be approved by the office
11089	department.
11090	(j) Make a report to the Governor, the officeInsurance
11091	Commissioner, the President of the Senate, the Speaker of the
11092	House of Representatives, and the Minority Leaders of the Senate
11093	and House of Representatives, not later than 45 days after the
11094	close of each calendar quarter, which includes, for the prior
11095	quarter, current data and estimates of net written and earned
11096	premiums, the expenses of administration, and the paid and
11097	incurred losses. The report shall identify any statutorily
11098	mandated program that has not been fully implemented by the
11099	board.
11100	(k) To facilitate preparation of assessments and for other
11101	purposes, the board shall direct preparation of annual audited
11102	financial statements for each calendar year as soon as feasible
11103	following the conclusion of that calendar year, and shall,
11104	within 30 days after rendition of such statements, file with the
11105	officedepartmentthe annual report containing such information
11106	as required by the officedepartmentto be filed on March 1 of
11107	each year.
11108	(6) The officedepartmentshall examine and investigate
11109	the association in the manner provided in part II of chapter
11110	624.
11111	Section 206. Paragraph (a) of subsection (3), paragraphs
11112	(c), (d), (e), and (i) of subsection (5), paragraphs (a) and (b)
11113	of subsection (6), paragraphs (b), (c), and (d) of subsection
11114	(8), paragraphs (a) and (b) of subsection (9), subsection (10),
11115	paragraphs (b), (c), (d), (e), (g), (h), (j), and (m) of
11116	subsection (11), subsection (12), paragraph (i) of subsection
11117	(13), paragraph(a) of subsection (15), and subsection (16) of
11118	section 627.6699, Florida Statutes, are amended to read:
11119	627.6699 Employee Health Care Access Act.--
11120	(3) DEFINITIONS.--As used in this section, the term:
11121	(a) "Actuarial certification" means a written statement,
11122	by a member of the American Academy of Actuaries or another
11123	person acceptable to the officedepartment, that a small
11124	employer carrier is in compliance with subsection (6), based
11125	upon the person's examination, including a review of the
11126	appropriate records and of the actuarial assumptions and methods
11127	used by the carrier in establishing premium rates for applicable
11128	health benefit plans.
11129	(5) AVAILABILITY OF COVERAGE.--
11130	(c) Every small employer carrier must, as a condition of
11131	transacting business in this state:
11132	1. Beginning July 1, 2000,Offer and issue all small
11133	employer health benefit plans on a guaranteed-issue basis to
11134	every eligible small employer, with 2 to 50 eligible employees,
11135	that elects to be covered under such plan, agrees to make the
11136	required premium payments, and satisfies the other provisions of
11137	the plan. A rider for additional or increased benefits may be
11138	medically underwritten and may only be added to the standard
11139	health benefit plan. The increased rate charged for the
11140	additional or increased benefit must be rated in accordance with
11141	this section.
11142	2. Beginning July 1, 2000, and until July 31, 2001, offer
11143	and issue basic and standard small employer health benefit plans
11144	on a guaranteed-issue basis to every eligible small employer
11145	which is eligible for guaranteed renewal, has less than two
11146	eligible employees, is not formed primarily for the purpose of
11147	buying health insurance, elects to be covered under such plan,
11148	agrees to make the required premium payments, and satisfies the
11149	other provisions of the plan. A rider for additional or
11150	increased benefits may be medically underwritten and may be
11151	added only to the standard benefit plan. The increased rate
11152	charged for the additional or increased benefit must be rated in
11153	accordance with this section. For purposes of this subparagraph,
11154	a person, his or her spouse, and his or her dependent children
11155	shall constitute a single eligible employee if that person and
11156	spouse are employed by the same small employer and either one
11157	has a normal work week of less than 25 hours.
11158	2.3. Beginning August 1, 2001,Offer and issue basic and
11159	standard small employer health benefit plans on a guaranteed-
11160	issue basis, during a 31-day open enrollment period of August 1
11161	through August 31 of each year, to every eligible small
11162	employer, with fewer than two eligible employees, which small
11163	employer is not formed primarily for the purpose of buying
11164	health insurance and which elects to be covered under such plan,
11165	agrees to make the required premium payments, and satisfies the
11166	other provisions of the plan. Coverage provided under this
11167	subparagraph shall begin on October 1 of the same year as the
11168	date of enrollment, unless the small employer carrier and the
11169	small employer agree to a different date. A rider for additional
11170	or increased benefits may be medically underwritten and may only
11171	be added to the standard health benefit plan. The increased
11172	rate charged for the additional or increased benefit must be
11173	rated in accordance with this section. For purposes of this
11174	subparagraph, a person, his or her spouse, and his or her
11175	dependent children constitute a single eligible employee if that
11176	person and spouse are employed by the same small employer and
11177	either that person or his or her spouse has a normal work week
11178	of less than 25 hours.
11179	3.4.This paragraph does not limit a carrier's ability to
11180	offer other health benefit plans to small employers if the
11181	standard and basic health benefit plans are offered and
11182	rejected.
11183	(d) A small employer carrier must file with the office
11184	department, in a format and manner prescribed by the committee,
11185	a standard health care plan and a basic health care plan to be
11186	used by the carrier.
11187	(e) The officedepartmentat any time may, after providing
11188	notice and an opportunity for a hearing, disapprove the
11189	continued use by the small employer carrier of the standard or
11190	basic health benefit plan on the grounds that such plan does not
11191	meet the requirements of this section.
11192	(i)1. A small employer carrier need not offer coverage or
11193	accept applications pursuant to paragraph (a):
11194	a. To a small employer if the small employer is not
11195	physically located in an established geographic service area of
11196	the small employer carrier, provided such geographic service
11197	area shall not be less than a county;
11198	b. To an employee if the employee does not work or reside
11199	within an established geographic service area of the small
11200	employer carrier; or
11201	c. To a small employer group within an area in which the
11202	small employer carrier reasonably anticipates, and demonstrates
11203	to the satisfaction of the officedepartment, that it cannot,
11204	within its network of providers, deliver service adequately to
11205	the members of such groups because of obligations to existing
11206	group contract holders and enrollees.
11207	2. A small employer carrier that cannot offer coverage
11208	pursuant to sub-subparagraph 1.c. may not offer coverage in the
11209	applicable area to new cases of employer groups having more than
11210	50 eligible employees or small employer groups until the later
11211	of 180 days following each such refusal or the date on which the
11212	carrier notifies the officedepartmentthat it has regained its
11213	ability to deliver services to small employer groups.
11214	3.a. A small employer carrier may deny health insurance
11215	coverage in the small-group market if the carrier has
11216	demonstrated to the officedepartmentthat:
11217	(I) It does not have the financial reserves necessary to
11218	underwrite additional coverage; and
11219	(II) It is applying this sub-subparagraph uniformly to all
11220	employers in the small-group market in this state consistent
11221	with this section and without regard to the claims experience of
11222	those employers and their employees and their dependents or any
11223	health-status-related factor that relates to such employees and
11224	dependents.
11225	b. A small employer carrier, upon denying health insurance
11226	coverage in connection with health benefit plans in accordance
11227	with sub-subparagraph a., may not offer coverage in connection
11228	with group health benefit plans in the small-group market in
11229	this state for a period of 180 days after the date such coverage
11230	is denied or until the insurer has demonstrated to the office
11231	departmentthat the insurer has sufficient financial reserves to
11232	underwrite additional coverage, whichever is later. The office
11233	departmentmay provide for the application of this sub-
11234	subparagraph on a service-area-specific basis.
11235	4. Beginning in 1994, The commissiondepartmentshall, by
11236	rule, require each small employer carrier to report, on or
11237	before March 1 of each year, its gross annual premiums for all
11238	health benefit plans issued to small employers during the
11239	previous calendar year, and also to report its gross annual
11240	premiums for new, but not renewal, standard and basic health
11241	benefit plans subject to this section issued during the previous
11242	calendar year. No later than May 1 of each year, the office
11243	departmentshall calculate each carrier's percentage of all
11244	small employer group health premiums for the previous calendar
11245	year and shall calculate the aggregate gross annual premiums for
11246	new, but not renewal, standard and basic health benefit plans
11247	for the previous calendar year.
11248	(6) RESTRICTIONS RELATING TO PREMIUM RATES.--
11249	(a) The commissiondepartmentmay, by rule, establish
11250	regulations to administer this section and to assure that rating
11251	practices used by small employer carriers are consistent with
11252	the purpose of this section, including assuring that differences
11253	in rates charged for health benefit plans by small employer
11254	carriers are reasonable and reflect objective differences in
11255	plan design, not including differences due to the nature of the
11256	groups assumed to select particular health benefit plans.
11257	(b) For all small employer health benefit plans that are
11258	subject to this section and are issued by small employer
11259	carriers on or after January 1, 1994, premium rates for health
11260	benefit plans subject to this section are subject to the
11261	following:
11262	1. Small employer carriers must use a modified community
11263	rating methodology in which the premium for each small employer
11264	must be determined solely on the basis of the eligible
11265	employee's and eligible dependent's gender, age, family
11266	composition, tobacco use, or geographic area as determined under
11267	paragraph (5)(j) and in which the premium may be adjusted as
11268	permitted by this paragraph.
11269	2. Rating factors related to age, gender, family
11270	composition, tobacco use, or geographic location may be
11271	developed by each carrier to reflect the carrier's experience.
11272	The factors used by carriers are subject to officedepartment
11273	review and approval.
11274	3. Small employer carriers may not modify the rate for a
11275	small employer for 12 months from the initial issue date or
11276	renewal date, unless the composition of the group changes or
11277	benefits are changed. However, a small employer carrier may
11278	modify the rate one time prior to 12 months after the initial
11279	issue date for a small employer who enrolls under a previously
11280	issued group policy that has a common anniversary date for all
11281	employers covered under the policy if:
11282	a. The carrier discloses to the employer in a clear and
11283	conspicuous manner the date of the first renewal and the fact
11284	that the premium may increase on or after that date.
11285	b. The insurer demonstrates to the officedepartmentthat
11286	efficiencies in administration are achieved and reflected in the
11287	rates charged to small employers covered under the policy.
11288	4. A carrier may issue a group health insurance policy to
11289	a small employer health alliance or other group association with
11290	rates that reflect a premium credit for expense savings
11291	attributable to administrative activities being performed by the
11292	alliance or group association if such expense savings are
11293	specifically documented in the insurer's rate filing and are
11294	approved by the officedepartment. Any such credit may not be
11295	based on different morbidity assumptions or on any other factor
11296	related to the health status or claims experience of any person
11297	covered under the policy. Nothing in this subparagraph exempts
11298	an alliance or group association from licensure for any
11299	activities that require licensure under the insurance code. A
11300	carrier issuing a group health insurance policy to a small
11301	employer health alliance or other group association shall allow
11302	any properly licensed and appointed agent of that carrier to
11303	market and sell the small employer health alliance or other
11304	group association policy. Such agent shall be paid the usual and
11305	customary commission paid to any agent selling the policy.
11306	5. Any adjustments in rates for claims experience, health
11307	status, or duration of coverage may not be charged to individual
11308	employees or dependents. For a small employer's policy, such
11309	adjustments may not result in a rate for the small employer
11310	which deviates more than 15 percent from the carrier's approved
11311	rate. Any such adjustment must be applied uniformly to the rates
11312	charged for all employees and dependents of the small employer.
11313	A small employer carrier may make an adjustment to a small
11314	employer's renewal premium, not to exceed 10 percent annually,
11315	due to the claims experience, health status, or duration of
11316	coverage of the employees or dependents of the small employer.
11317	Semiannually, small group carriers shall report information on
11318	forms adopted by rule by the commissiondepartment, to enable
11319	the officedepartmentto monitor the relationship of aggregate
11320	adjusted premiums actually charged policyholders by each carrier
11321	to the premiums that would have been charged by application of
11322	the carrier's approved modified community rates. If the
11323	aggregate resulting from the application of such adjustment
11324	exceeds the premium that would have been charged by application
11325	of the approved modified community rate by 5 percent for the
11326	current reporting period, the carrier shall limit the
11327	application of such adjustments only to minus adjustments
11328	beginning not more than 60 days after the report is sent to the
11329	officedepartment. For any subsequent reporting period, if the
11330	total aggregate adjusted premium actually charged does not
11331	exceed the premium that would have been charged by application
11332	of the approved modified community rate by 5 percent, the
11333	carrier may apply both plus and minus adjustments. A small
11334	employer carrier may provide a credit to a small employer's
11335	premium based on administrative and acquisition expense
11336	differences resulting from the size of the group. Group size
11337	administrative and acquisition expense factors may be developed
11338	by each carrier to reflect the carrier's experience and are
11339	subject to officedepartmentreview and approval.
11340	6. A small employer carrier rating methodology may include
11341	separate rating categories for one dependent child, for two
11342	dependent children, and for three or more dependent children for
11343	family coverage of employees having a spouse and dependent
11344	children or employees having dependent children only. A small
11345	employer carrier may have fewer, but not greater, numbers of
11346	categories for dependent children than those specified in this
11347	subparagraph.
11348	7. Small employer carriers may not use a composite rating
11349	methodology to rate a small employer with fewer than 10
11350	employees. For the purposes of this subparagraph, a "composite
11351	rating methodology" means a rating methodology that averages the
11352	impact of the rating factors for age and gender in the premiums
11353	charged to all of the employees of a small employer.
11354	8.a. A carrier may separate the experience of small
11355	employer groups with less than 2 eligible employees from the
11356	experience of small employer groups with 2-50 eligible employees
11357	for purposes of determining an alternative modified community
11358	rating.
11359	b. If a carrier separates the experience of small employer
11360	groups as provided in sub-subparagraph a., the rate to be
11361	charged to small employer groups of less than 2 eligible
11362	employees may not exceed 150 percent of the rate determined for
11363	small employer groups of 2-50 eligible employees. However, the
11364	carrier may charge excess losses of the experience pool
11365	consisting of small employer groups with less than 2 eligible
11366	employees to the experience pool consisting of small employer
11367	groups with 2-50 eligible employees so that all losses are
11368	allocated and the 150-percent rate limit on the experience pool
11369	consisting of small employer groups with less than 2 eligible
11370	employees is maintained. Notwithstanding s. 627.411(1), the rate
11371	to be charged to a small employer group of fewer than 2 eligible
11372	employees, insured as of July 1, 2002, may be up to 125 percent
11373	of the rate determined for small employer groups of 2-50
11374	eligible employees for the first annual renewal and 150 percent
11375	for subsequent annual renewals.
11376	(8) MAINTENANCE OF RECORDS.--
11377	(b) Each small employer carrier must file with the office
11378	departmenton or before March 15 of each year an actuarial
11379	certification that the carrier is in compliance with this
11380	section and that the rating methods of the carrier are
11381	actuarially sound. The certification must be in a form and
11382	manner and contain the information prescribed by the commission
11383	department. The carrier must retain a copy of the certification
11384	at its principal place of business.
11385	(c) A small employer carrier must make the information and
11386	documentation described in paragraph (a) available to the office
11387	departmentupon request. The information constitutes
11388	proprietary and trade secret information and may not be
11389	disclosed by the officedepartment to persons outside the office
11390	department, except as agreed to by the carrier or as ordered by
11391	a court of competent jurisdiction.
11392	(d) Each small employer carrier must file with the office
11393	department quarterly an enrollment report as directed by the
11394	officedepartment. Such report shall not constitute proprietary
11395	or trade secret information.
11396	(9) SMALL EMPLOYER CARRIER'S ELECTION TO BECOME A RISK-
11397	ASSUMING CARRIER OR A REINSURING CARRIER.--
11398	(a) A small employer carrier must elect to become either a
11399	risk-assuming carrier or a reinsuring carrier. Each small
11400	employer carrier must make an initial election, binding through
11401	January 1, 1994. The carrier's initial election must be made no
11402	later than October 31, 1992. By October 31, 1993, all small
11403	employer carriers must file a final election, which is binding
11404	for 2 years, from January 1, 1994, through December 31, 1995,
11405	after which an election shall be binding for a period of 5
11406	years. Any carrier that is not a small employer carrier on
11407	October 31, 1992, and intends to become a small employer carrier
11408	after October 31, 1992, must file its designation when it files
11409	the forms and rates it intends to use for small employer group
11410	health insurance; such designation shall be binding for 2 years
11411	after the date of approval of the forms and rates, and any
11412	subsequent designation is binding for 5 years. The office
11413	departmentmay permit a carrier to modify its election at any
11414	time for good cause shown, after a hearing.
11415	(b) The commissiondepartmentshall establish an
11416	application process for small employer carriers seeking to
11417	change their status under this subsection.
11418	(10) ELECTION PROCESS TO BECOME A RISK-ASSUMING CARRIER.--
11419	(a)1. A small employer carrier may become a risk-assuming
11420	carrier by filing with the officedepartmenta designation of
11421	election under subsection (9) in a format and manner prescribed
11422	by the commissiondepartment. The officedepartmentshall
11423	approve the election of a small employer carrier to become a
11424	risk-assuming carrier if the officedepartmentfinds that the
11425	carrier is capable of assuming that status pursuant to the
11426	criteria set forth in paragraph (b).
11427	2. The officedepartmentmust approve or disapprove any
11428	designation as a risk-assuming carrier within 60 days after
11429	filing.
11430	(b) In determining whether to approve an application by a
11431	small employer carrier to become a risk-assuming carrier, the
11432	officedepartmentshall consider:
11433	1. The carrier's financial ability to support the
11434	assumption of the risk of small employer groups.
11435	2. The carrier's history of rating and underwriting small
11436	employer groups.
11437	3. The carrier's commitment to market fairly to all small
11438	employers in the state or its service area, as applicable.
11439	4. The carrier's ability to assume and manage the risk of
11440	enrolling small employer groups without the protection of the
11441	reinsurance program provided in subsection (11).
11442	(c) A small employer carrier that becomes a risk-assuming
11443	carrier pursuant to this subsection is not subject to the
11444	assessment provisions of subsection(11).
11445	(d) The officedepartmentshall provide public notice of a
11446	small employer carrier's designation of election under
11447	subsection(9) to become a risk-assuming carrier and shall
11448	provide at least a 21-day period for public comment prior to
11449	making a decision on the election. The officedepartmentshall
11450	hold a hearing on the election at the request of the carrier.
11451	(e) The officedepartmentmay rescind the approval granted
11452	to a risk-assuming carrier under this subsection if the office
11453	departmentfinds that the carrier no longer meets the criteria
11454	of paragraph (b).
11455	(11) SMALL EMPLOYER HEALTH REINSURANCE PROGRAM.--
11456	(b)1. The program shall operate subject to the supervision
11457	and control of the board.
11458	2. Effective upon this act becoming a law, the board shall
11459	consist of the Chief Financial Officercommissioneror his or
11460	her designee, who shall serve as the chairperson, and 13
11461	additional members who are representatives of carriers and
11462	insurance agents and are appointed by the Chief Financial
11463	Officercommissionerand serve as follows:
11464	a. The Chief Financial Officercommissionershall include
11465	representatives of small employer carriers subject to assessment
11466	under this subsection. If two or more carriers elect to be
11467	risk-assuming carriers, the membership must include at least two
11468	representatives of risk-assuming carriers; if one carrier is
11469	risk-assuming, one member must be a representative of such
11470	carrier. At least one member must be a carrier who is subject
11471	to the assessments, but is not a small employer carrier.
11472	Subject to such restrictions, at least five members shall be
11473	selected from individuals recommended by small employer carriers
11474	pursuant to procedures provided by rule of the commission
11475	department. Three members shall be selected from a list of
11476	health insurance carriers that issue individual health insurance
11477	policies. At least two of the three members selected must be
11478	reinsuring carriers. Two members shall be selected from a list
11479	of insurance agents who are actively engaged in the sale of
11480	health insurance.
11481	b. A member appointed under this subparagraph shall serve
11482	a term of 4 years and shall continue in office until the
11483	member's successor takes office, except that, in order to
11484	provide for staggered terms, the Chief Financial Officer
11485	commissionershall designate two of the initial appointees under
11486	this subparagraph to serve terms of 2 years and shall designate
11487	three of the initial appointees under this subparagraph to serve
11488	terms of 3 years.
11489	3. The Chief Financial Officercommissionermay remove a
11490	member for cause.
11491	4. Vacancies on the board shall be filled in the same
11492	manner as the original appointment for the unexpired portion of
11493	the term.
11494	5. The Chief Financial Officercommissionermay require an
11495	entity that recommends persons for appointment to submit
11496	additional lists of recommended appointees.
11497	(c)1. No later than August 15, 1992,The board shall
11498	submit to the officedepartmenta plan of operation to assure
11499	the fair, reasonable, and equitable administration of the
11500	program. The board may at any time submit to the office
11501	departmentany amendments to the plan that the board finds to be
11502	necessary or suitable.
11503	2. No later than September 15, 1992, The officedepartment
11504	shall, after notice and hearing, approve the plan of operation
11505	if it determines that the plan submitted by the board is
11506	suitable to assure the fair, reasonable, and equitable
11507	administration of the program and provides for the sharing of
11508	program gains and losses equitably and proportionately in
11509	accordance with paragraph (j).
11510	3. The plan of operation, or any amendment thereto,
11511	becomes effective upon written approval of the office
11512	department.
11513	(d) The plan of operation must, among other things:
11514	1. Establish procedures for handling and accounting for
11515	program assets and moneys and for an annual fiscal reporting to
11516	the officedepartment.
11517	2. Establish procedures for selecting an administering
11518	carrier and set forth the powers and duties of the administering
11519	carrier.
11520	3. Establish procedures for reinsuring risks.
11521	4. Establish procedures for collecting assessments from
11522	participating carriers to provide for claims reinsured by the
11523	program and for administrative expenses, other than amounts
11524	payable to the administrative carrier, incurred or estimated to
11525	be incurred during the period for which the assessment is made.
11526	5. Provide for any additional matters at the discretion of
11527	the board.
11528	(e) The board shall recommend to the officedepartment
11529	market conduct requirements and other requirements for carriers
11530	and agents, including requirements relating to:
11531	1. Registration by each carrier with the officedepartment
11532	of its intention to be a small employer carrier under this
11533	section;
11534	2. Publication by the officedepartmentof a list of all
11535	small employer carriers, including a requirement applicable to
11536	agents and carriers that a health benefit plan may not be sold
11537	by a carrier that is not identified as a small employer carrier;
11538	3. The availability of a broadly publicized, toll-free
11539	telephone number for access by small employers to information
11540	concerning this section;
11541	4. Periodic reports by carriers and agents concerning
11542	health benefit plans issued; and
11543	5. Methods concerning periodic demonstration by small
11544	employer carriers and agents that they are marketing or issuing
11545	health benefit plans to small employers.
11546	(g) A reinsuring carrier may reinsure with the program
11547	coverage of an eligible employee of a small employer, or any
11548	dependent of such an employee, subject to each of the following
11549	provisions:
11550	1. With respect to a standard and basic health care plan,
11551	the program must reinsure the level of coverage provided; and,
11552	with respect to any other plan, the program must reinsure the
11553	coverage up to, but not exceeding, the level of coverage
11554	provided under the standard and basic health care plan.
11555	2. Except in the case of a late enrollee, a reinsuring
11556	carrier may reinsure an eligible employee or dependent within 60
11557	days after the commencement of the coverage of the small
11558	employer. A newly employed eligible employee or dependent of a
11559	small employer may be reinsured within 60 days after the
11560	commencement of his or her coverage.
11561	3. A small employer carrier may reinsure an entire
11562	employer group within 60 days after the commencement of the
11563	group's coverage under the plan. The carrier may choose to
11564	reinsure newly eligible employees and dependents of the
11565	reinsured group pursuant to subparagraph 1.
11566	4. The program may not reimburse a participating carrier
11567	with respect to the claims of a reinsured employee or dependent
11568	until the carrier has paid incurred claims of at least $5,000 in
11569	a calendar year for benefits covered by the program. In
11570	addition, the reinsuring carrier shall be responsible for 10
11571	percent of the next $50,000 and 5 percent of the next $100,000
11572	of incurred claims during a calendar year and the program shall
11573	reinsure the remainder.
11574	5. The board annually shall adjust the initial level of
11575	claims and the maximum limit to be retained by the carrier to
11576	reflect increases in costs and utilization within the standard
11577	market for health benefit plans within the state. The adjustment
11578	shall not be less than the annual change in the medical
11579	component of the "Consumer Price Index for All Urban Consumers"
11580	of the Bureau of Labor Statistics of the Department of Labor,
11581	unless the board proposes and the officedepartmentapproves a
11582	lower adjustment factor.
11583	6. A small employer carrier may terminate reinsurance for
11584	all reinsured employees or dependents on any plan anniversary.
11585	7. The premium rate charged for reinsurance by the program
11586	to a health maintenance organization that is approved by the
11587	Secretary of Health and Human Services as a federally qualified
11588	health maintenance organization pursuant to 42 U.S.C. s.
11589	300e(c)(2)(A) and that, as such, is subject to requirements that
11590	limit the amount of risk that may be ceded to the program, which
11591	requirements are more restrictive than subparagraph 4., shall be
11592	reduced by an amount equal to that portion of the risk, if any,
11593	which exceeds the amount set forth in subparagraph 4. which may
11594	not be ceded to the program.
11595	8. The board may consider adjustments to the premium rates
11596	charged for reinsurance by the program for carriers that use
11597	effective cost containment measures, including high-cost case
11598	management, as defined by the board.
11599	9. A reinsuring carrier shall apply its case-management
11600	and claims-handling techniques, including, but not limited to,
11601	utilization review, individual case management, preferred
11602	provider provisions, other managed care provisions or methods of
11603	operation, consistently with both reinsured business and
11604	nonreinsured business.
11605	(h)1. The board, as part of the plan of operation, shall
11606	establish a methodology for determining premium rates to be
11607	charged by the program for reinsuring small employers and
11608	individuals pursuant to this section. The methodology shall
11609	include a system for classification of small employers that
11610	reflects the types of case characteristics commonly used by
11611	small employer carriers in the state. The methodology shall
11612	provide for the development of basic reinsurance premium rates,
11613	which shall be multiplied by the factors set for them in this
11614	paragraph to determine the premium rates for the program. The
11615	basic reinsurance premium rates shall be established by the
11616	board, subject to the approval of the officedepartment, and
11617	shall be set at levels which reasonably approximate gross
11618	premiums charged to small employers by small employer carriers
11619	for health benefit plans with benefits similar to the standard
11620	and basic health benefit plan. The premium rates set by the
11621	board may vary by geographical area, as determined under this
11622	section, to reflect differences in cost. The multiplying
11623	factors must be established as follows:
11624	a. The entire group may be reinsured for a rate that is
11625	1.5 times the rate established by the board.
11626	b. An eligible employee or dependent may be reinsured for
11627	a rate that is 5 times the rate established by the board.
11628	2. The board periodically shall review the methodology
11629	established, including the system of classification and any
11630	rating factors, to assure that it reasonably reflects the claims
11631	experience of the program. The board may propose changes to the
11632	rates which shall be subject to the approval of the office
11633	department.
11634	(j)1. Before March 1 of each calendar year, the board
11635	shall determine and report to the officedepartmentthe program
11636	net loss for the previous year, including administrative
11637	expenses for that year, and the incurred losses for the year,
11638	taking into account investment income and other appropriate
11639	gains and losses.
11640	2. Any net loss for the year shall be recouped by
11641	assessment of the carriers, as follows:
11642	a. The operating losses of the program shall be assessed
11643	in the following order subject to the specified limitations.
11644	The first tier of assessments shall be made against reinsuring
11645	carriers in an amount which shall not exceed 5 percent of each
11646	reinsuring carrier's premiums from health benefit plans covering
11647	small employers. If such assessments have been collected and
11648	additional moneys are needed, the board shall make a second tier
11649	of assessments in an amount which shall not exceed 0.5 percent
11650	of each carrier's health benefit plan premiums. Except as
11651	provided in paragraph (n), risk-assuming carriers are exempt
11652	from all assessments authorized pursuant to this section. The
11653	amount paid by a reinsuring carrier for the first tier of
11654	assessments shall be credited against any additional assessments
11655	made.
11656	b. The board shall equitably assess carriers for operating
11657	losses of the plan based on market share. The board shall
11658	annually assess each carrier a portion of the operating losses
11659	of the plan. The first tier of assessments shall be determined
11660	by multiplying the operating losses by a fraction, the numerator
11661	of which equals the reinsuring carrier's earned premium
11662	pertaining to direct writings of small employer health benefit
11663	plans in the state during the calendar year for which the
11664	assessment is levied, and the denominator of which equals the
11665	total of all such premiums earned by reinsuring carriers in the
11666	state during that calendar year. The second tier of assessments
11667	shall be based on the premiums that all carriers, except risk-
11668	assuming carriers, earned on all health benefit plans written in
11669	this state. The board may levy interim assessments against
11670	carriers to ensure the financial ability of the plan to cover
11671	claims expenses and administrative expenses paid or estimated to
11672	be paid in the operation of the plan for the calendar year prior
11673	to the association's anticipated receipt of annual assessments
11674	for that calendar year. Any interim assessment is due and
11675	payable within 30 days after receipt by a carrier of the interim
11676	assessment notice. Interim assessment payments shall be credited
11677	against the carrier's annual assessment. Health benefit plan
11678	premiums and benefits paid by a carrier that are less than an
11679	amount determined by the board to justify the cost of collection
11680	may not be considered for purposes of determining assessments.
11681	c. Subject to the approval of the officedepartment, the
11682	board shall make an adjustment to the assessment formula for
11683	reinsuring carriers that are approved as federally qualified
11684	health maintenance organizations by the Secretary of Health and
11685	Human Services pursuant to 42 U.S.C. s. 300e(c)(2)(A) to the
11686	extent, if any, that restrictions are placed on them that are
11687	not imposed on other small employer carriers.
11688	3. Before March 1 of each year, the board shall determine
11689	and file with the officedepartmentan estimate of the
11690	assessments needed to fund the losses incurred by the program in
11691	the previous calendar year.
11692	4. If the board determines that the assessments needed to
11693	fund the losses incurred by the program in the previous calendar
11694	year will exceed the amount specified in subparagraph 2., the
11695	board shall evaluate the operation of the program and report its
11696	findings, including any recommendations for changes to the plan
11697	of operation, to the officedepartmentwithin 90 days following
11698	the end of the calendar year in which the losses were incurred.
11699	The evaluation shall include an estimate of future assessments,
11700	the administrative costs of the program, the appropriateness of
11701	the premiums charged and the level of carrier retention under
11702	the program, and the costs of coverage for small employers. If
11703	the board fails to file a report with the officedepartment
11704	within 90 days following the end of the applicable calendar
11705	year, the officedepartmentmay evaluate the operations of the
11706	program and implement such amendments to the plan of operation
11707	the officedepartmentdeems necessary to reduce future losses
11708	and assessments.
11709	5. If assessments exceed the amount of the actual losses
11710	and administrative expenses of the program, the excess shall be
11711	held as interest and used by the board to offset future losses
11712	or to reduce program premiums. As used in this paragraph, the
11713	term "future losses" includes reserves for incurred but not
11714	reported claims.
11715	6. Each carrier's proportion of the assessment shall be
11716	determined annually by the board, based on annual statements and
11717	other reports considered necessary by the board and filed by the
11718	carriers with the board.
11719	7. Provision shall be made in the plan of operation for
11720	the imposition of an interest penalty for late payment of an
11721	assessment.
11722	8. A carrier may seek, from the officecommissioner, a
11723	deferment, in whole or in part, from any assessment made by the
11724	board. The officedepartmentmay defer, in whole or in part,
11725	the assessment of a carrier if, in the opinion of the office
11726	department, the payment of the assessment would place the
11727	carrier in a financially impaired condition. If an assessment
11728	against a carrier is deferred, in whole or in part, the amount
11729	by which the assessment is deferred may be assessed against the
11730	other carriers in a manner consistent with the basis for
11731	assessment set forth in this section. The carrier receiving such
11732	deferment remains liable to the program for the amount deferred
11733	and is prohibited from reinsuring any individuals or groups in
11734	the program if it fails to pay assessments.
11735	(m) The board shall monitor compliance with this section,
11736	including the market conduct of small employer carriers, and
11737	shall report to the officedepartmentany unfair trade practices
11738	and misleading or unfair conduct by a small employer carrier
11739	that has been reported to the board by agents, consumers, or any
11740	other person. The officedepartmentshall investigate all
11741	reports and, upon a finding of noncompliance with this section
11742	or of unfair or misleading practices, shall take action against
11743	the small employer carrier as permitted under the insurance code
11744	or chapter 641. The board is not given investigatory or
11745	regulatory powers, but must forward all reports of cases or
11746	abuse or misrepresentation to the officedepartment.
11747	(12) STANDARD, BASIC, AND LIMITED HEALTH BENEFIT PLANS.--
11748	(a)1. By May 15, 1993, The Chief Financial Officer
11749	commissionershall appoint a health benefit plan committee
11750	composed of four representatives of carriers which shall include
11751	at least two representatives of HMOs, at least one of which is a
11752	staff model HMO, two representatives of agents, four
11753	representatives of small employers, and one employee of a small
11754	employer. The carrier members shall be selected from a list of
11755	individuals recommended by the board. The Chief Financial
11756	Officercommissionermay require the board to submit additional
11757	recommendations of individuals for appointment.
11758	2. The plans shall comply with all of the requirements of
11759	this subsection.
11760	3. The plans must be filed with and approved by the office
11761	departmentprior to issuance or delivery by any small employer
11762	carrier.
11763	4. After approval of the revised health benefit plans, if
11764	the officedepartmentdetermines that modifications to a plan
11765	might be appropriate, the Chief Financial Officercommissioner
11766	shall appoint a new health benefit plan committee in the manner
11767	provided in subparagraph 1. to submit recommended modifications
11768	to the officedepartmentfor approval.
11769	(b)1. Each small employer carrier issuing new health
11770	benefit plans shall offer to any small employer, upon request, a
11771	standard health benefit plan and a basic health benefit plan
11772	that meets the criteria set forth in this section.
11773	2. For purposes of this subsection, the terms "standard
11774	health benefit plan" and "basic health benefit plan" mean
11775	policies or contracts that a small employer carrier offers to
11776	eligible small employers that contain:
11777	a. An exclusion for services that are not medically
11778	necessary or that are not covered preventive health services;
11779	and
11780	b. A procedure for preauthorization by the small employer
11781	carrier, or its designees.
11782	3. A small employer carrier may include the following
11783	managed care provisions in the policy or contract to control
11784	costs:
11785	a. A preferred provider arrangement or exclusive provider
11786	organization or any combination thereof, in which a small
11787	employer carrier enters into a written agreement with the
11788	provider to provide services at specified levels of
11789	reimbursement or to provide reimbursement to specified
11790	providers. Any such written agreement between a provider and a
11791	small employer carrier must contain a provision under which the
11792	parties agree that the insured individual or covered member has
11793	no obligation to make payment for any medical service rendered
11794	by the provider which is determined not to be medically
11795	necessary. A carrier may use preferred provider arrangements or
11796	exclusive provider arrangements to the same extent as allowed in
11797	group products that are not issued to small employers.
11798	b. A procedure for utilization review by the small
11799	employer carrier or its designees.
11800
11801
11802	This subparagraph does not prohibit a small employer carrier
11803	from including in its policy or contract additional managed care
11804	and cost containment provisions, subject to the approval of the
11805	officedepartment, which have potential for controlling costs in
11806	a manner that does not result in inequitable treatment of
11807	insureds or subscribers. The carrier may use such provisions to
11808	the same extent as authorized for group products that are not
11809	issued to small employers.
11810	4. The standard health benefit plan shall include:
11811	a. Coverage for inpatient hospitalization;
11812	b. Coverage for outpatient services;
11813	c. Coverage for newborn children pursuant to s. 627.6575;
11814	d. Coverage for child care supervision services pursuant
11815	to s. 627.6579;
11816	e. Coverage for adopted children upon placement in the
11817	residence pursuant to s. 627.6578;
11818	f. Coverage for mammograms pursuant to s. 627.6613;
11819	g. Coverage for handicapped children pursuant to s.
11820	627.6615;
11821	h. Emergency or urgent care out of the geographic service
11822	area; and
11823	i. Coverage for services provided by a hospice licensed
11824	under s. 400.602 in cases where such coverage would be the most
11825	appropriate and the most cost-effective method for treating a
11826	covered illness.
11827	5. The standard health benefit plan and the basic health
11828	benefit plan may include a schedule of benefit limitations for
11829	specified services and procedures. If the committee develops
11830	such a schedule of benefits limitation for the standard health
11831	benefit plan or the basic health benefit plan, a small employer
11832	carrier offering the plan must offer the employer an option for
11833	increasing the benefit schedule amounts by 4 percent annually.
11834	6. The basic health benefit plan shall include all of the
11835	benefits specified in subparagraph 4.; however, the basic health
11836	benefit plan shall place additional restrictions on the benefits
11837	and utilization and may also impose additional cost containment
11838	measures.
11839	7. Sections 627.419(2), (3), and (4), 627.6574, 627.6612,
11840	627.66121, 627.66122, 627.6616, 627.6618, 627.668, and 627.66911
11841	apply to the standard health benefit plan and to the basic
11842	health benefit plan. However, notwithstanding said provisions,
11843	the plans may specify limits on the number of authorized
11844	treatments, if such limits are reasonable and do not
11845	discriminate against any type of provider.
11846	8. Each small employer carrier that provides for inpatient
11847	and outpatient services by allopathic hospitals may provide as
11848	an option of the insured similar inpatient and outpatient
11849	services by hospitals accredited by the American Osteopathic
11850	Association when such services are available and the osteopathic
11851	hospital agrees to provide the service.
11852	(c) If a small employer rejects, in writing, the standard
11853	health benefit plan and the basic health benefit plan, the small
11854	employer carrier may offer the small employer a limited benefit
11855	policy or contract.
11856	(d)1. Upon offering coverage under a standard health
11857	benefit plan, a basic health benefit plan, or a limited benefit
11858	policy or contract for any small employer, the small employer
11859	carrier shall provide such employer group with a written
11860	statement that contains, at a minimum:
11861	a. An explanation of those mandated benefits and providers
11862	that are not covered by the policy or contract;
11863	b. An explanation of the managed care and cost control
11864	features of the policy or contract, along with all appropriate
11865	mailing addresses and telephone numbers to be used by insureds
11866	in seeking information or authorization; and
11867	c. An explanation of the primary and preventive care
11868	features of the policy or contract.
11869
11870
11871	Such disclosure statement must be presented in a clear and
11872	understandable form and format and must be separate from the
11873	policy or certificate or evidence of coverage provided to the
11874	employer group.
11875	2. Before a small employer carrier issues a standard
11876	health benefit plan, a basic health benefit plan, or a limited
11877	benefit policy or contract, it must obtain from the prospective
11878	policyholder a signed written statement in which the prospective
11879	policyholder:
11880	a. Certifies as to eligibility for coverage under the
11881	standard health benefit plan, basic health benefit plan, or
11882	limited benefit policy or contract;
11883	b. Acknowledges the limited nature of the coverage and an
11884	understanding of the managed care and cost control features of
11885	the policy or contract;
11886	c. Acknowledges that if misrepresentations are made
11887	regarding eligibility for coverage under a standard health
11888	benefit plan, a basic health benefit plan, or a limited benefit
11889	policy or contract, the person making such misrepresentations
11890	forfeits coverage provided by the policy or contract; and
11891	d. If a limited plan is requested, acknowledges that the
11892	prospective policyholder had been offered, at the time of
11893	application for the insurance policy or contract, the
11894	opportunity to purchase any health benefit plan offered by the
11895	carrier and that the prospective policyholder had rejected that
11896	coverage.
11897
11898
11899	A copy of such written statement shall be provided to the
11900	prospective policyholder no later than at the time of delivery
11901	of the policy or contract, and the original of such written
11902	statement shall be retained in the files of the small employer
11903	carrier for the period of time that the policy or contract
11904	remains in effect or for 5 years, whichever period is longer.
11905	3. Any material statement made by an applicant for
11906	coverage under a health benefit plan which falsely certifies as
11907	to the applicant's eligibility for coverage serves as the basis
11908	for terminating coverage under the policy or contract.
11909	4. Each marketing communication that is intended to be
11910	used in the marketing of a health benefit plan in this state
11911	must be submitted for review by the officedepartmentprior to
11912	use and must contain the disclosures stated in this subsection.
11913	(e) A small employer carrier may not use any policy,
11914	contract, form, or rate under this section, including
11915	applications, enrollment forms, policies, contracts,
11916	certificates, evidences of coverage, riders, amendments,
11917	endorsements, and disclosure forms, until the insurer has filed
11918	it with the officedepartment and the officedepartmenthas
11919	approved it under ss. 627.410 and 627.411 and this section.
11920	(13) STANDARDS TO ASSURE FAIR MARKETING.--
11921	(i) The commissiondepartmentmay establish regulations
11922	setting forth additional standards to provide for the fair
11923	marketing and broad availability of health benefit plans to
11924	small employers in this state.
11925	(15) APPLICABILITY OF OTHER STATE LAWS.--
11926	(a) Except as expressly provided in this section, a law
11927	requiring coverage for a specific health care service or
11928	benefit, or a law requiring reimbursement, utilization, or
11929	consideration of a specific category of licensed health care
11930	practitioner, does not apply to a standard or basic health
11931	benefit plan policy or contract or a limited benefit policy or
11932	contract offered or delivered to a small employer unless that
11933	law is made expressly applicable to such policies or contracts.
11934	A law restricting or limiting deductibles, coinsurance,
11935	copayments, or annual or lifetime maximum payments does not
11936	apply to any health plan policy, including a standard or basic
11937	health benefit plan policy or contract, offered or delivered to
11938	a small employer unless such law is made expressly applicable to
11939	such policy or contract. However, every small employer carrier
11940	must offer to eligible small employers the standard benefit plan
11941	and the basic benefit plan, as required by subsection (5), as
11942	such plans have been approved by the officedepartmentpursuant
11943	to subsection (12).
11944	(16) RULEMAKING AUTHORITY.--The commissiondepartmentmay
11945	adopt rules to administer this section, including rules
11946	governing compliance by small employer carriers and small
11947	employers.
11948	Section 207. Section 627.7015, Florida Statutes, is
11949	amended to read:
11950	627.7015 Alternative procedure for resolution of disputed
11951	property insurance claims.--
11952	(1) PURPOSE AND SCOPE.--This section sets forth a
11953	nonadversarial alternative dispute resolution procedure for a
11954	mediated claim resolution conference prompted by the need for
11955	effective, fair, and timely handling of property insurance
11956	claims. There is a particular need for an informal,
11957	nonthreatening forum for helping parties who elect this
11958	procedure to resolve their claims disputes because most
11959	homeowner's insurance policies obligate insureds to participate
11960	in a potentially expensive and time-consuming adversarial
11961	appraisal process prior to litigation. The procedure set forth
11962	in this section is designed to bring the parties together for a
11963	mediated claims settlement conference without any of the
11964	trappings or drawbacks of an adversarial process. Before
11965	resorting to these procedures, insureds and insurers are
11966	encouraged to resolve claims as quickly and fairly as possible.
11967	This section is available with respect to claims under personal
11968	lines policies for all claimants and insurers prior to
11969	commencing the appraisal process, or commencing litigation. If
11970	requested by the insured, participation by legal counsel shall
11971	be permitted. Mediation under this section is also available to
11972	litigants referred to the department by a county court or
11973	circuit court. This section does not apply to commercial
11974	coverages, to private passenger motor vehicle insurance
11975	coverages, or to disputes relating to liability coverages in
11976	policies of property insurance.
11977	(2) At the time a first-party claim within the scope of
11978	this section is filed, the insurer shall notify all first-party
11979	claimants of their right to participate in the mediation program
11980	under this section. The department shall prepare a consumer
11981	information pamphlet for distribution to persons participating
11982	in mediation under this section.
11983	(3) The costs of mediation shall be reasonable, and the
11984	insurer shall bear all of the cost of conducting mediation
11985	conferences, except as otherwise provided in this section. If an
11986	insured fails to appear at the conference, the conference shall
11987	be rescheduled upon the insured's payment of the costs of a
11988	rescheduled conference. If the insurer fails to appear at the
11989	conference, the insurer shall pay the insured's actual cash
11990	expenses incurred in attending the conference if the insurer's
11991	failure to attend was not due to a good cause acceptable to the
11992	department. An insurer will be deemed to have failed to appear
11993	if the insurer's representative lacks authority to settle the
11994	full value of the claim. The insurer shall incur an additional
11995	fee for a rescheduled conference necessitated by the insurer's
11996	failure to appear at a scheduled conference. The fees assessed
11997	by the administrator shall include a charge necessary to defray
11998	the expenses of the department related to its duties under this
11999	section and shall be deposited in the Insurance Commissioner's
12000	Regulatory Trust Fund.
12001	(4) The department shall adopt by rule a property
12002	insurance mediation program to be administered by the department
12003	or its designee. The department may also adopt special rules
12004	which are applicable in cases of an emergency within the state.
12005	The rules shall be modeled after practices and procedures set
12006	forth in mediation rules of procedure adopted by the Supreme
12007	Court. The rules shall provide for:
12008	(a) Reasonable requirement for processing and scheduling
12009	of requests for mediation.
12010	(b) Qualifications of mediators as provided in s. 627.745
12011	and in the Florida Rules of Certified and Court Appointed
12012	Mediators, and for such other individuals as are qualified by
12013	education, training, or experience as the department determines
12014	to be appropriate.
12015	(c) Provisions governing who may attend mediation
12016	conferences.
12017	(d) Selection of mediators.
12018	(e) Criteria for the conduct of mediation conferences.
12019	(f) Right to legal counsel.
12020	(5) All statements made and documents produced at a
12021	mediation conference shall be deemed to be settlement
12022	negotiations in anticipation of litigation within the scope of
12023	s. 90.408. All parties to the mediation must negotiate in good
12024	faith and must have the authority to immediately settle the
12025	claim. Mediators are deemed to be agents of the department and
12026	shall have the immunity from suit provided in s. 44.107.
12027	(6) Mediation is nonbinding; however, if a written
12028	settlement is reached, the insured has 3 business days within
12029	which the insured may rescind the settlement unless the insured
12030	has cashed or deposited any check or draft disbursed to the
12031	insured for the disputed matters as a result of the conference.
12032	If a settlement agreement is reached and is not rescinded, it
12033	shall be binding and act as a release of all specific claims
12034	that were presented in that mediation conference.
12035	(7) If the insurer requests the mediation, and the
12036	mediation results are rejected by either party, the insured
12037	shall not be required to submit to or participate in any
12038	contractual loss appraisal process of the property loss damage
12039	as a precondition to legal action for breach of contract against
12040	the insurer for its failure to pay the policyholder's claims
12041	covered by the policy.
12042	(8) The department may designate an entity or person to
12043	serve as administrator to carry out any of the provisions of
12044	this section and may take this action by means of a written
12045	contract or agreement.
12046	Section 208. Section 627.745, Florida Statutes, is amended
12047	to read:
12048	627.745 Mediation of claims.--
12049	(1)(a) In any claim filed with an insurer for personal
12050	injury in an amount of $10,000 or less or any claim for property
12051	damage in any amount, arising out of the ownership, operation,
12052	use, or maintenance of a motor vehicle, either party may demand
12053	mediation of the claim prior to the institution of litigation.
12054	(b) A request for mediation shall be filed with the office
12055	department on a form approved by the officedepartment. The
12056	request for mediation shall state the reason for the request for
12057	mediation and the issues in dispute which are to be mediated.
12058	The filing of a request for mediation tolls the applicable time
12059	requirements for filing suit for a period of 60 days following
12060	the conclusion of the mediation process or the time prescribed
12061	in s. 95.11, whichever is later.
12062	(c) The insurance policy must specify in detail the terms
12063	and conditions for mediation of a first-party claim.
12064	(d) The mediation shall be conducted as an informal
12065	process in which formal rules of evidence and procedure need not
12066	be observed. Any party participating in a mediation must have
12067	the authority to make a binding decision. All parties must
12068	mediate in good faith.
12069	(e) The officedepartmentshall randomly select mediators.
12070	Each party may once reject the mediator selected, either
12071	originally or after the opposing side has exercised its option
12072	to reject a mediator.
12073	(f) Costs of mediation shall be borne equally by both
12074	parties unless the mediator determines that one party has not
12075	mediated in good faith.
12076	(g) Only one mediation may be requested for each claim,
12077	unless all parties agree to further mediation.
12078	(2) Upon receipt of a request for mediation, the office
12079	departmentshall refer the request to a mediator. The mediator
12080	shall notify the applicant and all interested parties, as
12081	identified by the applicant, and any other parties the mediator
12082	believes may have an interest in the mediation, of the date,
12083	time, and place of the mediation conference. The conference may
12084	be held by telephone, if feasible. The mediation conference
12085	shall be held within 45 days after the request for mediation.
12086	(3)(a) The officedepartmentshall approve mediators to
12087	conduct mediations pursuant to this section. All mediators must
12088	file an application under oath for approval as a mediator.
12089	(b) To qualify for approval as a mediator, a person must
12090	meet the following qualifications:
12091	1. Possess a masters or doctorate degree in psychology,
12092	counseling, business, accounting, or economics, be a member of
12093	The Florida Bar, be licensed as a certified public accountant,
12094	or demonstrate that the applicant for approval has been actively
12095	engaged as a qualified mediator for at least 4 years prior to
12096	July 1, 1990.
12097	2. Within 4 years immediately preceding the date the
12098	application for approval is filed with the officedepartment,
12099	have completed a minimum of a 40-hour training program approved
12100	by the officedepartmentand successfully passed a final
12101	examination included in the training program and approved by the
12102	officedepartment. The training program shall include and
12103	address all of the following:
12104	a. Mediation theory.
12105	b. Mediation process and techniques.
12106	c. Standards of conduct for mediators.
12107	d. Conflict management and intervention skills.
12108	e. Insurance nomenclature.
12109	(4) The commissiondepartmentmust adopt rules of
12110	procedure for claims mediation, taking into consideration a
12111	system which:
12112	(a) Is fair.
12113	(b) Promotes settlement.
12114	(c) Avoids delay.
12115	(d) Is nonadversarial.
12116	(e) Uses a framework for modern mediating technique.
12117	(f) Controls costs and expenses of mediation.
12118	(5) Disclosures and information divulged in the mediation
12119	process are not admissible in any subsequent action or
12120	proceeding relating to the claim or to the cause of action
12121	giving rise to the claim. A person demanding mediation under
12122	this section may not demand or request mediation after a suit is
12123	filed relating to the same facts already mediated.
12124	Section 209. Section 628.4615, Florida Statutes, is
12125	amended to read:
12126	628.4615 Specialty insurers; acquisition of controlling
12127	stock, ownership interest, assets, or control; merger or
12128	consolidation.--
12129	(1) For the purposes of this section, the term "specialty
12130	insurer" means any person holding a license or certificate of
12131	authority as:
12132	(a) A motor vehicle service agreement company authorized
12133	to issue motor vehicle service agreements as those terms are
12134	defined in s. 634.011(7)(8) and(8)(9);
12135	(b) A home warranty association authorized to issue "home
12136	warranties" as those terms are defined in s. 634.301(3)(4) and
12137	(4)(5);
12138	(c) A service warranty association authorized to issue
12139	"service warranties" as those terms are defined in s.
12140	634.401(13)(14) and (14)(15);
12141	(d) A prepaid limited health service organization
12142	authorized to issue prepaid limited health service contracts, as
12143	those terms are defined in chapter 636An optometric service
12144	plan corporation authorized to issue optometric service plan
12145	contracts as those terms are defined in s. 637.001(2) and (3);
12146	(e) A pharmaceutical service plan corporation authorized
12147	to issue pharmaceutical service plan contracts as those terms
12148	are defined in s. 637.1701(2) and (3);
12149	(f) A dental service plan corporation licensed to issue
12150	contracts for dental services pursuant to a dental service plan
12151	as that term is defined in s. 637.401(1);
12152	(g) An ambulance service association authorized to issue
12153	ambulance service contracts as those terms are defined in s.
12154	638.021(1) and (2);
12155	(e)(h)An authorized health maintenance organization
12156	operating pursuant to s. 641.21;
12157	(f)(i)An authorized prepaid health clinic operating
12158	pursuant to s. 641.405;
12159	(g)(j)A legal expense insurance corporation authorized to
12160	engage in a legal expense insurance business pursuant to s.
12161	642.021;
12162	(h)(k)A provider which is licensed to operate a facility
12163	which undertakes to provide continuing care as those terms are
12164	defined in s. 651.011(2), (4), (5), and (6), and (7);
12165	(i)(l)A multiple-employer welfare arrangement operating
12166	pursuant to ss. 624.436-624.446;
12167	(j)(m)A premium finance company authorized to finance
12168	insurance premiums pursuant to s. 627.828; or
12169	(k)(n)A corporation authorized to accept donor annuity
12170	agreements pursuant to s. 627.481.
12171	(2) No person shall, individually or in conjunction with
12172	any affiliated person of such person, directly or indirectly,
12173	conclude a tender offer or exchange offer for, enter into any
12174	agreement to exchange securities for, or otherwise finally
12175	acquire, 10 percent or more of the outstanding voting securities
12176	of a specialty insurer which is a stock corporation or of a
12177	controlling company of a specialty insurer which is a stock
12178	corporation; or conclude an acquisition of, or otherwise finally
12179	acquire, 10 percent or more of the ownership interest of a
12180	specialty insurer which is not a stock corporation or of a
12181	controlling company of a specialty insurer which is not a stock
12182	corporation, unless:
12183	(a) The person or affiliated person has filed with the
12184	officedepartmentand sent by registered mail to the principal
12185	office of the specialty insurer and controlling company an
12186	application, signed under oath and prepared on forms prescribed
12187	by the commissiondepartment, that contains the information
12188	specified in subsection(4) no later than 5 days after any form
12189	of tender offer or exchange offer is proposed, or no later than
12190	5 days after the acquisition of the securities or ownership
12191	interest if no tender offer or exchange offer is involved.
12192	(b) The officedepartmenthas approved the tender offer or
12193	exchange offer, or acquisition if no tender offer or exchange
12194	offer is involved.
12195	(3) This section does not apply to any acquisition of
12196	voting securities or ownership interest of a specialty insurer
12197	or of a controlling company by any person who, on July 9, 1986,
12198	is the owner of a majority of such voting securities or
12199	ownership interest or who, on or after July 9, 1986, becomes the
12200	owner of a majority of such voting securities or ownership
12201	interest with the approval of the officedepartmentpursuant to
12202	this section.
12203	(4) The application to be filed with the officedepartment
12204	and furnished to the specialty insurer and controlling company
12205	shall contain the following information and any additional
12206	information as the office deemsdepartment may deemnecessary to
12207	determine the character, experience, ability, and other
12208	qualifications of the person or affiliated person of such person
12209	for the protection of the insureds of the insurer and of the
12210	public:
12211	(a)1. The identity of, and the background information
12212	specified in subsection (5) on, each natural person by whom, or
12213	on whose behalf, the acquisition is to be made; and,
12214	2. If the acquisition is to be made by, or on behalf of, a
12215	person other than a natural person and as to any person who
12216	controls, either directly or indirectly, such other person, the
12217	identity of, and the background information specified in
12218	subsection (5) on:
12219	a. Each director, officer, or trustee, if a corporation,
12220	or
12221	b. Each partner, owner, manager, or joint venturer, or
12222	other person performing duties similar to those of persons in
12223	the aforementioned positions, if not a corporation,
12224
12225
12226	for the person.
12227	(b) The source and amount of the funds or other
12228	consideration used, or to be used, in making the acquisition.
12229	(c) Any plans or proposals which such persons may have
12230	made to liquidate the specialty insurer, to sell any of its
12231	assets or merge or consolidate it with any person, or to make
12232	any other major change in its business or corporate structure or
12233	management; and any plans or proposals which such persons may
12234	have made to liquidate any controlling company of the specialty
12235	insurer, to sell any of its assets or merge or consolidate it
12236	with any person, or to make any other major change in its
12237	business or corporate structure or management.
12238	(d) The nature and the extent of the controlling interest
12239	which the person or affiliated person of such person proposes to
12240	acquire, the terms of the proposed acquisition, and the manner
12241	in which the controlling interest is to be acquired of a
12242	specialty insurer or controlling company which is not a stock
12243	corporation.
12244	(e) The number of shares or other securities which the
12245	person or affiliated person of such person proposes to acquire,
12246	the terms of the proposed acquisition, and the manner in which
12247	the securities are to be acquired.
12248	(f) Information as to any contract, arrangement, or
12249	understanding with any party with respect to any of the
12250	securities of the specialty insurer or controlling company,
12251	including, but not limited to, information relating to the
12252	transfer of any of the securities, option arrangements, puts or
12253	calls, or the giving or withholding of proxies, which
12254	information names the party with whom the contract, arrangement,
12255	or understanding has been entered into and gives the details
12256	thereof.
12257	(5)(a) The information as to the background and identity
12258	of each natural person, which information is required to be
12259	furnished pursuant to paragraph(4)(a), shall include:
12260	1. The natural person's occupations, positions of
12261	employment, and offices held during the past 10 years.
12262	2. The principal business and address of any business,
12263	corporation, or organization in which each such office of the
12264	natural person was held, or in which each such occupation or
12265	position of employment was carried on.
12266	3. Whether the natural person was, at any time during such
12267	10-year period, convicted of any crime other than a traffic
12268	violation.
12269	4. Whether the natural person has been, during such 10-
12270	year period, the subject of any proceeding for the revocation of
12271	any license and, if so, the nature of the proceeding and the
12272	disposition of the proceeding.
12273	5. Whether, during the 10-year period, the natural person
12274	has been the subject of any proceeding under the federal
12275	Bankruptcy Act; or whether, during the 10-year period, any
12276	person or other business or organization in which the natural
12277	person was a director, officer, trustee, partner, owner,
12278	manager, or other official has been subject to any such
12279	proceeding, either during the time in which the natural person
12280	was a director, officer, or trustee, if a corporation, or a
12281	partner, owner, manager, joint venturer, or other official, if
12282	not a corporation, or within 12 months thereafter.
12283	6. Whether, during the 10-year period, the natural person
12284	has been enjoined, either temporarily or permanently, by a court
12285	of competent jurisdiction from violating any federal or state
12286	law regulating the business of insurance, securities, or
12287	banking, or from carrying out any particular practice or
12288	practices in the course of the business of insurance,
12289	securities, or banking, together with details as to any such
12290	event.
12291	7. Fingerprints of each person referred to in subsection
12292	(4).
12293	(b) Any person filing the statement required by this
12294	section shall give all required information that is within the
12295	knowledge of:
12296	1. The directors, officers, or trustees, if a corporation,
12297	or
12298	2. The partners, owners, managers, or joint venturers, or
12299	others performing functions similar to those of a director,
12300	officer, or trustee, if not a corporation,
12301
12302
12303	of the person making the filing and of any person controlling
12304	either directly or indirectly such person. If any material
12305	change occurs in the facts set forth in the application filed
12306	with the officedepartmentpursuant to this section, an
12307	amendment setting forth such changes shall be filed immediately
12308	with the officedepartment, and a copy of the amendment shall be
12309	sent by registered mail to the principal office of the specialty
12310	insurer and to the principal office of the controlling company.
12311	(6)(a) The acquisition application shall be reviewed in
12312	accordance with chapter 120. The officedepartmentmay on its
12313	own initiate, or, if requested to do so in writing by a
12314	substantially affected person, shall conduct, a proceeding to
12315	consider the appropriateness of the proposed filing. Time
12316	periods for purposes of chapter 120 shall be tolled during the
12317	pendency of the proceeding. Any written request for a proceeding
12318	must be filed with the officedepartmentwithin 10 days of the
12319	date notice of the filing is given. During the pendency of the
12320	proceeding or review period by the officedepartment, any person
12321	or affiliated person complying with the filing requirements of
12322	this section may proceed and take all steps necessary to
12323	conclude the acquisition so long as the acquisition becoming
12324	final is conditioned upon obtaining officedepartmental
12325	approval. The officedepartmentshall, however, at any time it
12326	finds an immediate danger to the public health, safety, and
12327	welfare of the insureds exists, immediately order, pursuant to
12328	s. 120.569(2)(n), the proposed acquisition disapproved and any
12329	further steps to conclude the acquisition ceased.
12330	(b) During the pendency of the office'sdepartment's
12331	review of any acquisition subject to the provisions of this
12332	section, the acquiring person shall not make any material change
12333	in the operation of the specialty insurer or controlling company
12334	unless the officedepartmenthas specifically approved the
12335	change nor shall the acquiring person make any material change
12336	in the management of the specialty insurer unless advance
12337	written notice of the change in management is furnished to the
12338	officedepartment. A material change in the operation of the
12339	specialty insurer is a transaction which disposes of or
12340	obligates 5 percent or more of the capital and surplus of the
12341	specialty insurer. A material change in the management of the
12342	specialty insurer is any change in management involving officers
12343	or directors of the specialty insurer or any person of the
12344	specialty insurer or controlling company having authority to
12345	dispose of or obligate 5 percent or more of the specialty
12346	insurer's capital or surplus. The officedepartmentshall
12347	approve a material change in operations if it finds the
12348	applicable provisions of subsection (8) have been met. The
12349	officedepartmentmay disapprove a material change in management
12350	if it finds that the applicable provisions of subsection (8)
12351	have not been met and in such case the specialty insurer shall
12352	promptly change management as acceptable to the office
12353	department.
12354	(c) If a request for a proceeding is filed, the proceeding
12355	shall be conducted within 60 days after the date the written
12356	request for a proceeding is received by the officedepartment. A
12357	recommended order shall be issued within 20 days of the date of
12358	the close of the proceedings. A final order shall be issued
12359	within 20 days of the date of the recommended order or, if
12360	exceptions to the recommended order are filed, within 20 days of
12361	the date the exceptions are filed.
12362	(7) The officedepartmentmay disapprove any acquisition
12363	subject to the provisions of this section by any person or any
12364	affiliated person of such person who:
12365	(a) Willfully violates this section;
12366	(b) In violation of an order of the officedepartment
12367	issued pursuant to subsection (11), fails to divest himself or
12368	herself of any stock or ownership interest obtained in violation
12369	of this section or fails to divest himself or herself of any
12370	direct or indirect control of such stock or ownership interest,
12371	within 25 days after such order; or
12372	(c) In violation of an order issued by the office
12373	departmentpursuant to subsection (11), acquires an additional
12374	stock or ownership interest in a specialty insurer or
12375	controlling company or direct or indirect control of such stock
12376	or ownership interest, without complying with this section.
12377	(8) The person or persons filing the application required
12378	by subsection(2) shall have the burden of proof. The office
12379	departmentshall approve any such acquisition if it finds, on
12380	the basis of the record made during any proceeding or on the
12381	basis of the filed application if no proceeding is conducted,
12382	that:
12383	(a) Upon completion of the acquisition, the specialty
12384	insurer will be able to satisfy the requirements for the
12385	issuance of a license or certificate to write the line of
12386	insurance for which it is presently licensed or certificated.
12387	(b) The financial condition of the acquiring person or
12388	persons will not jeopardize the financial stability of the
12389	specialty insurer or prejudice the interests of its insureds or
12390	the public.
12391	(c) Any plan or proposal which the acquiring person has,
12392	or acquiring persons have, made:
12393	1. To liquidate the specialty insurer, sell its assets, or
12394	merge or consolidate it with any person, or to make any other
12395	major change in its business or corporate structure or
12396	management, or
12397	2. To liquidate any controlling company, sell its assets,
12398	or merge or consolidate it with any person, or to make any major
12399	change in its business or corporate structure or management
12400	which would have an effect upon the specialty insurer,
12401
12402
12403	is fair and free of prejudice to the insureds of the specialty
12404	insurer or to the public.
12405	(d) The competence, experience, and integrity of those
12406	persons who will control directly or indirectly the operation of
12407	the specialty insurer indicate that the acquisition is in the
12408	best interest of the insureds of the insurer and in the public
12409	interest.
12410	(e) The natural persons for whom background information is
12411	required to be furnished pursuant to this section have such
12412	backgrounds as to indicate that it is in the best interests of
12413	the insureds of the specialty insurer and in the public interest
12414	to permit such persons to exercise control over the specialty
12415	insurer.
12416	(f) The directors and officers, if such specialty insurer
12417	or controlling company is a stock corporation, or the trustees,
12418	partners, owners, managers, or joint venturers or other persons
12419	performing duties similar to those of persons in the
12420	aforementioned positions, if such specialty insurer or
12421	controlling company is not a stock corporation, to be employed
12422	after the acquisition have sufficient insurance experience and
12423	ability to assure reasonable promise of successful operation.
12424	(g) The management of the specialty insurer after the
12425	acquisition will be competent and trustworthy, and will possess
12426	sufficient managerial experience so as to make the proposed
12427	operation of the specialty insurer not hazardous to the
12428	insurance-buying public.
12429	(h) The management of the specialty insurer after the
12430	acquisition shall not include any person who has directly or
12431	indirectly through ownership, control, reinsurance transactions,
12432	or other insurance or business relations unlawfully manipulated
12433	the assets, accounts, finances, or books of any insurer or
12434	otherwise acted in bad faith with respect thereto.
12435	(i) The acquisition is not likely to be hazardous or
12436	prejudicial to the insureds of the insurer or to the public.
12437	(j) The effect of the acquisition would not substantially
12438	lessen competition in the line of insurance for which the
12439	specialty insurer is licensed or certified in this state or
12440	would not tend to create a monopoly therein.
12441	(9) No vote by the stockholder of record, or by any other
12442	person, of any security acquired in contravention of the
12443	provisions of this section is valid. Any acquisition contrary
12444	to the provisions of this section is void. Upon the petition of
12445	the specialty insurer or the controlling company, the circuit
12446	court for the county in which the principal office of the
12447	specialty insurer is located may, without limiting the
12448	generality of its authority, order the issuance or entry of an
12449	injunction or other order to enforce the provisions of this
12450	section. There shall be a private right of action in favor of
12451	the specialty insurer or controlling company to enforce the
12452	provisions of this section. No demand upon the office
12453	departmentthat it perform its functions shall be required as a
12454	prerequisite to any suit by the specialty insurer or controlling
12455	company against any other person, and in no case shall the
12456	officedepartmentbe deemed a necessary party to any action by
12457	the specialty insurer or controlling company to enforce the
12458	provisions of this section. Any person who makes or proposes an
12459	acquisition requiring the filing of an application pursuant to
12460	this section, or who files such an application, shall be deemed
12461	to have thereby designated the Chief Financial OfficerInsurance
12462	Commissioner and Treasurer, or his or her assistant or deputy or
12463	another person in charge of his or her office, as such person's
12464	agent for service of process under this section and shall
12465	thereby be deemed to have submitted himself or herself to the
12466	administrative jurisdiction of the officedepartmentand to the
12467	jurisdiction of the circuit court.
12468	(10) Any approval by the officedepartmentunder this
12469	section does not constitute a recommendation by the office
12470	departmentof the tender offer or exchange offer, or
12471	acquisition, if no tender offer or exchange offer is involved.
12472	It is unlawful for a person to represent that the office's
12473	department'sapproval constitutes a recommendation. A person who
12474	violates the provisions of this subsection commits a felony of
12475	the third degree, punishable as provided in s. 775.082, s.
12476	775.083, or s. 775.084. The statute-of-limitations period for
12477	the prosecution of an offense committed under this subsection is
12478	5 years.
12479	(11) If the officedepartmentdetermines that any person
12480	or any affiliated person of such person has acquired 10 percent
12481	or more of the outstanding voting securities of a specialty
12482	insurer or controlling company which is a stock corporation, or
12483	10 percent or more of the ownership interest of a specialty
12484	insurer or controlling company which is not a stock corporation,
12485	without complying with the provisions of this section, the
12486	officedepartmentmay order that the person and any affiliated
12487	person of such person cease acquisition of the specialty insurer
12488	or controlling company and, if appropriate, divest itself of any
12489	stock or ownership interest acquired in violation of this
12490	section.
12491	(12)(a) The officedepartmentshall, if necessary to
12492	protect the public interest, suspend or revoke the certificate
12493	of authority of any specialty insurer or controlling company
12494	acquired in violation of this section.
12495	(b) If any specialty insurer is subject to suspension or
12496	revocation pursuant to paragraph (a), the specialty insurer
12497	shall be deemed to be in such condition, or to be using or to
12498	have been subject to such methods or practices in the conduct of
12499	its business, as to render its further transaction of insurance
12500	presently or prospectively hazardous to its insureds, creditors,
12501	or stockholders or to the public.
12502	(13)(a) For the purpose of this section, the term
12503	"acquisition" includes:
12504	1. A tender offer or exchange offer for securities,
12505	assets, or other ownership interest;
12506	2. An agreement to exchange securities for other
12507	securities, assets, or other ownership interest;
12508	3. A merger of a person or affiliated person into a
12509	specialty insurer or a merger of any person with a specialty
12510	insurer;
12511	4. A consolidation; or
12512	5. Any other form of change of control
12513
12514
12515	whereby any person or affiliated person acquires or attempts to
12516	acquire, directly or indirectly, 10 percent or more of the
12517	ownership interest or assets of a specialty insurer or of a
12518	controlling company. However, in the case of a health
12519	maintenance organization organized as a for-profit corporation,
12520	the provisions of s. 628.451 shall govern with respect to any
12521	merger or consolidation, and, in the case of a health
12522	maintenance organization organized as a not-for-profit
12523	corporation, the provisions of s. 628.471 shall govern with
12524	respect to any merger or consolidation.
12525	(b) For the purpose of this section, the term "affiliated
12526	person" of another person includes:
12527	1. The spouse of such other natural person;
12528	2. The parents of such other natural person and their
12529	lineal descendants and the parents of such other natural
12530	person's spouse and their lineal descendants;
12531	3. Any person who directly or indirectly owns or controls,
12532	or holds with power to vote, 10 percent or more of the
12533	outstanding voting securities of such other person;
12534	4. Any person who directly or indirectly owns 10 percent
12535	or more of the outstanding voting securities which are directly
12536	or indirectly owned or controlled, or held with power to vote,
12537	by such other person;
12538	5. Any person or group of persons who directly or
12539	indirectly control, are controlled by, or are under common
12540	control with such other person;
12541	6. Any director, officer, trustee, partner, owner,
12542	manager, joint venturer, or employee, or other person performing
12543	duties similar to those of persons in the aforementioned
12544	positions, of such other person;
12545	7. If such other person is an investment company, any
12546	investment adviser of such company or any member of an advisory
12547	board of such company;
12548	8. If such other person is an unincorporated investment
12549	company not having a board of directors, the depositor of such
12550	company; or
12551	9. Any person who has entered into an agreement, written
12552	or unwritten, to act in concert with such other person in
12553	acquiring, or limiting the disposition of, securities of a
12554	specialty insurer or controlling company which is a stock
12555	corporation or in acquiring, or limiting the disposition of, an
12556	ownership interest of a specialty insurer or controlling company
12557	which is not a stock corporation.
12558	(c) For the purposes of this section, the term
12559	"controlling company" means any corporation, trust, or
12560	association owning, directly or indirectly, 25 percent or more
12561	of the voting securities of one or more specialty insurance
12562	companies which are stock corporations, or 25 percent or more of
12563	the ownership interest of one or more specialty insurance
12564	companies which are not stock corporations.
12565	(d) For the purpose of this section, the term "natural
12566	person" means an individual.
12567	(e) For the purpose of this section, the term "person"
12568	includes a natural person, corporation, association, trust,
12569	general partnership, limited partnership, joint venture, firm,
12570	proprietorship, or any other entity which may hold a license or
12571	certificate as a specialty insurer.
12572	(14) The commission maydepartment is authorized toadopt,
12573	amend, or repeal rules that are necessary to implement the
12574	provisions of this section, pursuant to chapter 120.
12575	Section 210. Section 628.917, Florida Statutes, is amended
12576	to read:
12577	628.917 Insolvency and liquidation.--In the event that a
12578	captive insurer is insolvent as defined in chapter 631, the
12579	officedepartmentshall liquidate the captive insurer pursuant
12580	to the provisions of part I of chapter 631; except that the
12581	officedepartmentshall make no attempt to rehabilitate such
12582	insurer.
12583	Section 211. Subsection (3) of section 631.021, Florida
12584	Statutes, is amended to
12585	631.021 Jurisdiction of delinquency proceeding; venue;
12586	change of venue; exclusiveness of remedy; appeal.--
12587	(3) A delinquency proceeding pursuant to this chapter
12588	constitutes the sole and exclusive method of liquidating,
12589	rehabilitating, reorganizing, or conserving an insurer. No court
12590	shall entertain a petition for the commencement of such a
12591	proceeding unless the petition has been filed in the name of the
12592	state on the relation of the officedepartment. The Florida
12593	Insurance Guaranty Association, Incorporated, the Florida
12594	Workers' Compensation Insurance Guaranty Association,
12595	Incorporated, and the Florida Life and Health Guaranty
12596	Association, Incorporated, shall be given reasonable written
12597	notice by the officedepartmentof all hearings which pertain to
12598	an adjudication of insolvency of a member insurer.
12599	Section 212. Section 631.025, Florida Statutes, is amended
12600	to read:
12601	631.025 Persons subject to this part.--Delinquency
12602	proceedings authorized by this part may be initiated against any
12603	insurer, as defined in s. 631.011(15), if the statutory grounds
12604	are present as to that insurer, and the court may exercise
12605	jurisdiction over any person required to cooperate with the
12606	department and officepursuant to s. 631.391 and over all
12607	persons made subject to the court's jurisdiction by other
12608	provisions of law. Such persons include, but are not limited to:
12609	(1) A person transacting, or that has transacted,
12610	insurance business in or from this state and against whom claims
12611	arising from that business may exist now or in the future.
12612	(2) A person purporting to transact an insurance business
12613	in this state and any person who acts as an insurer, transacts
12614	insurance, or otherwise engages in insurance activities in or
12615	from this state, with or without a certificate of authority or
12616	proper authority from the officedepartment, against whom claims
12617	arising from that business may exist now or in the future.
12618	(3) An insurer with policyholders resident in this state.
12619	(4) All other persons organized or in the process of
12620	organizing with the intent to transact an insurance business in
12621	this state.
12622	Section 213. Section 631.031, Florida Statutes, is amended
12623	to read:
12624	631.031 Commencement of delinquency proceeding.--The
12625	officedepartmentmay commence any such proceeding by
12626	application to the court for an order directing the insurer to
12627	show cause why the officedepartmentshould not have the relief
12628	prayed for. On the return of such order to show cause, and after
12629	a full hearing, the court shall either deny the application or
12630	grant the application, together with such other relief as the
12631	nature of the case and the interests of the policyholders,
12632	creditors, stockholders, members, subscribers, or public may
12633	require. The officedepartmentmay also commence any such
12634	proceeding by application to the court by petition for the entry
12635	of a consent order of conservation, rehabilitation, or
12636	liquidation.
12637	Section 214. Subsections (2), (3), (4), and (5) of section
12638	631.041, Florida Statutes, are amended to read:
12639	631.041 Automatic stay; relief from stay; injunctions.--
12640	(2) Upon written request of a person or entity subject to
12641	the stay against obtaining or enforcing a judgment against an
12642	insurer or affiliate provided in paragraph (1)(b) the court,
12643	with notice to the office anddepartment and upon hearing, may
12644	grant relief from the stay provided the movant, who has the
12645	burden of proof, establishes by clear and convincing evidence
12646	that the judgment is not voidable or void by a receiver and that
12647	property from which the judgment would be satisfied does not
12648	constitute premium funds or another asset which belongs to the
12649	insurer.
12650	(3) Upon application by the office ordepartment pursuant
12651	to this part for an order to show cause or upon petition, or at
12652	any time thereafter, the court may without notice issue an
12653	injunction restraining the insurer and its officers, directors,
12654	stockholders, members, subscribers, and agents and all other
12655	persons from the transaction of its business or the waste or
12656	disposition of its property until the further order of the
12657	court.
12658	(4) The court may without notice at any time during a
12659	proceeding under this chapter issue such other injunctions or
12660	orders as may be deemed necessary to prevent interference with
12661	the office ordepartment or the proceeding; waste of the assets
12662	of the insurer; the commencement or prosecution of any actions;
12663	the obtaining of preferences, judgments, attachments, or other
12664	liens; or the making of any levy against the insurer or against
12665	its assets or any part thereof.
12666	(5) Notwithstanding any other provision of law, no bond
12667	shall be required of the office ordepartment as a prerequisite
12668	for the issuance of any injunction or restraining order pursuant
12669	to this section.
12670	Section 215. Subsections (1) and (4) of section 631.042,
12671	Florida Statutes, are amended to read:
12672	631.042 Extension of time.--
12673	(1) With respect to any action by or against an insurer,
12674	no statute of limitations or defense of laches shall run between
12675	the date the officedepartmentfiles a petition for a
12676	delinquency proceeding against an insurer and the date the court
12677	enters an order granting or denying that petition. If the
12678	petition is denied, any action against the insurer that might
12679	have been commenced when the petition was filed may be commenced
12680	no later than 60 days after the order denying such relief or the
12681	remaining unexpired time under the applicable statute of
12682	limitations or defense of laches that was available on the day
12683	the petition was filed, whichever is longer.
12684	(4) For actions not covered by subsection (2), if any
12685	unexpired time period is fixed by any agreement or in any
12686	proceeding for doing any act for the benefit of the estate, the
12687	receiver shall have 180 days, or for good cause shown more than
12688	180 days as allowed by the court, from the date the court enters
12689	the order granting the office'sdepartment'spetition for a
12690	delinquency proceeding.
12691	Section 216. Section 631.051, Florida Statutes, is amended
12692	to read:
12693	631.051 Grounds for rehabilitation; domestic
12694	insurers.--The officedepartmentmay petition for an order
12695	directing it to rehabilitate a domestic insurer or an alien
12696	insurer domiciled in this state on any one or more of the
12697	following grounds, that the insurer:
12698	(1) Is impaired or insolvent;
12699	(2) Has failed to comply with an order of the office
12700	departmentto make good an impairment of capital or surplus or
12701	both;
12702	(3) Is found by the officedepartmentto be in such
12703	condition or is using or has been subject to such methods or
12704	practices in the conduct of its business, as to render its
12705	further transaction of insurance presently or prospectively
12706	hazardous to its policyholders, creditors, stockholders, or the
12707	public;
12708	(4) Has failed, or its parent corporation, subsidiary, or
12709	affiliated person controlled by either the insurer or the parent
12710	corporation has failed, to submit its books, documents,
12711	accounts, records, and affairs pertaining to the insurer to the
12712	reasonable inspection or examination of the officedepartmentor
12713	its authorized representative; or any individual exercising any
12714	executive authority in the affairs of the insurer, or parent
12715	corporation, or subsidiary, or affiliated person has refused to
12716	be examined under oath by the officedepartmentor its
12717	authorized representative, whether within this state or
12718	otherwise, concerning the pertinent affairs of the insurer, or
12719	parent corporation or subsidiary or affiliated person; or if
12720	examined under oath refuses to divulge pertinent information
12721	reasonably known to her or him; or officers, directors, agents,
12722	employees, or other representatives of the insurer or parent
12723	corporation, subsidiary, or affiliated person have failed to
12724	comply promptly with the reasonable requests of the office
12725	departmentor its authorized representative for the purposes of,
12726	and during the conduct of, any such examination;
12727	(5) Has concealed or removed records or assets or
12728	otherwise violated s. 628.271 or s. 628.281;
12729	(6) Through its board of directors or governing body is
12730	deadlocked in the management of the insurer's affairs and that
12731	the members of a mutual, reciprocal, or any other type of
12732	organization or stockholders are unable to break the deadlock
12733	and that irreparable injury to the insurer, its creditors, its
12734	policyholders, its members or subscribers, or the public is
12735	threatened by reason thereof;
12736	(7) Has transferred or attempted to transfer substantially
12737	its entire property or business, or has entered into any
12738	transaction the effect of which is to merge substantially its
12739	entire property or business into that of any other insurer or
12740	entity without having first obtained the written approval of the
12741	officedepartmentunder the provisions of s. 628.451, s.
12742	628.461, or s. 628.4615, as the case may be;
12743	(8) Has willfully violated its charter or certificate of
12744	incorporation or any law of this state;
12745	(9) Is in such a position that control of it, whether by
12746	stock ownership or otherwise, and whether direct or indirect, is
12747	in one or more persons found by the officedepartmentafter
12748	notice and hearing to be dishonest or untrustworthy; or that the
12749	insurer has failed, upon order of the officedepartmentand
12750	expiration of such reasonable time for such removal as the
12751	officedepartmentshall specify in the order, to remove any
12752	person who in fact has executive authority, directly or
12753	indirectly, in the insurer, whether as an officer, director,
12754	manager, agent, employee, or otherwise, and if such person has
12755	been found by the officedepartmentafter notice and hearing, to
12756	be incompetent, dishonest, untrustworthy, or so lacking in
12757	insurance company managerial experience as to be hazardous to
12758	the insurance-buying public;
12759	(10) Has been or is the subject of an application for the
12760	appointment of a receiver, trustee, custodian, or sequestrator
12761	of the insurer or its property otherwise than pursuant to the
12762	provisions of this code, but only if such an appointment has
12763	been made or is imminent;
12764	(11) Has consented to such an order through a majority of
12765	its directors, stockholders, members, or subscribers;
12766	(12) Has failed to pay a final judgment rendered against
12767	it in this state upon any insurance contract issued or assumed
12768	by it, within 60 days after the judgment became final, within 60
12769	days after the time for taking an appeal has expired, or within
12770	30 days after dismissal of an appeal before final determination,
12771	whichever date is the later;
12772	(13) Has been the victim of embezzlement, wrongful
12773	sequestration, conversion, diversion, or encumbering of its
12774	assets; forgery or fraud affecting it; or other illegal conduct
12775	in, by, or with respect to it, which if established would
12776	threaten its solvency; or that the officedepartmenthas
12777	reasonable cause to so believe any of the foregoing has occurred
12778	or may occur;
12779	(14) Is engaging in a systematic practice of reaching
12780	settlements with and obtaining releases from policyholders or
12781	third-party claimants and then unreasonably delaying payment of,
12782	or failing to pay, the agreed-upon settlements; or
12783	(15) Within the previous 12 months has systematically
12784	attempted to compromise with creditors on the ground that it is
12785	financially unable to pay its claims in full.
12786	Section 217. Section 631.0515, Florida Statutes, is
12787	amended to read:
12788	631.0515 Appointment of receiver; insurance holding
12789	company.--A delinquency proceeding pursuant to this chapter
12790	constitutes the sole and exclusive method of dissolving,
12791	liquidating, rehabilitating, reorganizing, conserving, or
12792	appointing a receiver of a Florida corporation which is not
12793	insolvent as defined by s. 607.01401(16); which through its
12794	shareholders, board of directors, or governing body is
12795	deadlocked in the management of its affairs; and which directly
12796	or indirectly owns all of the stock of a Florida domestic
12797	insurer. The officedepartmentmay petition for an order
12798	directing the departmentitto rehabilitate such corporation if
12799	the interests of policyholders or the public will be harmed as a
12800	result of the deadlock. The department shall use due diligence
12801	to resolve the deadlock. Whether or not the officedepartment
12802	petitions for an order, the circuit court shall not have
12803	jurisdiction pursuant to s. 607.271, s. 607.274, or s. 607.277
12804	to dissolve, liquidate, or appoint receivers with respect to, a
12805	Florida corporation which directly or indirectly owns all of the
12806	stock of a Florida domestic insurer and which is not insolvent
12807	as defined by s. 607.01401(16).
12808	Section 218. Section 631.061, Florida Statutes, is amended
12809	to read:
12810	631.061 Grounds for liquidation.--The officedepartment
12811	may apply to the court for an order appointing the departmentit
12812	as receiver (if its appointment as receiver is not then in
12813	effect) and directing the departmentitto liquidate the
12814	business of a domestic insurer or of the United States branch of
12815	an alien insurer having trusteed assets in this state,
12816	regardless of whether or not there has been a prior order
12817	directing it to rehabilitate such insurer, upon any of the
12818	grounds specified in s. 631.051, or if such insurer:
12819	(1) Is or is about to become insolvent.
12820	(2) Is an insolvent insurer and has commenced or is
12821	attempting to commence voluntary liquidation or dissolution
12822	except under this code.
12823	(3) Has not completed its organization and obtained a
12824	certificate of authority as an insurer within the time allowed
12825	therefor under any applicable law.
12826	Section 219. Section 631.071, Florida Statutes, is amended
12827	to read:
12828	631.071 Grounds for conservation; foreign insurers.--The
12829	officedepartment may apply to the court for an order appointing
12830	the departmentitas receiver or ancillary receiver, and
12831	directing it to conserve the assets within this state, of a
12832	foreign insurer upon any of the following grounds:
12833	(1) Upon any of the grounds specified in s. 631.051 or s.
12834	631.061, or
12835	(2) Upon the ground that its property has been
12836	sequestrated in its domiciliary sovereignty or in any other
12837	sovereignty.
12838	Section 220. Section 631.081, Florida Statutes, is amended
12839	to read:
12840	631.081 Grounds for conservation; alien insurers.--The
12841	officedepartment may apply to the court for an order appointing
12842	the departmentitas receiver or ancillary receiver, and
12843	directing it to conserve the assets within this state, of any
12844	alien insurer upon any of the following grounds:
12845	(1) Upon any of the grounds specified in s. 631.051 or s.
12846	631.061;
12847	(2) Upon the ground that the insurer has failed to comply,
12848	within the time designated by the officedepartment, with an
12849	order made by it to make good an impairment of its trusteed
12850	funds; or
12851	(3) Upon the ground that the property of the insurer has
12852	been sequestrated in its domiciliary sovereignty or elsewhere.
12853	Section 221. Section 631.091, Florida Statutes, is amended
12854	to read:
12855	631.091 Grounds for ancillary liquidation; foreign
12856	insurers.--The officedepartmentmay apply to the circuit court
12857	for an order appointing the departmentitas ancillary receiver
12858	of, and directing it to liquidate the business and assets of, a
12859	foreign insurer which has assets, business, or claims in this
12860	state upon the appointment in the domiciliary state of such
12861	insurer of a receiver, liquidator, conservator, rehabilitator,
12862	or other officer by whatever name called for the purpose of
12863	liquidating the business of such insurer.
12864	Section 222. Subsection (3) of section 631.111, Florida
12865	Statutes, is amended to read:
12866	631.111 Order of liquidation; domestic insurers.--
12867	(3) The department or officemay apply for and secure an
12868	order dissolving the corporate existence of a domestic insurer
12869	upon theitsapplication for an order of liquidation of such
12870	insurer or at any time after such order has been granted.
12871	Section 223. Subsection (1) of section 631.152, Florida
12872	Statutes, is amended to read:
12873	631.152 Conduct of delinquency proceeding; foreign
12874	insurers.--
12875	(1) Whenever under this chapter an ancillary receiver is
12876	to be appointed in a delinquency proceeding for an insurer not
12877	domiciled in this state, the court shall appoint the department
12878	as ancillary receiver. The officedepartmentshall file a
12879	petition requesting the appointment on the grounds set forth in
12880	s. 631.091:
12881	(a) If it finds that there are sufficient assets of the
12882	insurer located in this state to justify the appointment of an
12883	ancillary receiver, or
12884	(b) If 10 or more persons resident in this state having
12885	claims against such insurer file a petition with the office
12886	departmentrequesting the appointment of such ancillary
12887	receiver.
12888	Section 224. Paragraph (d) of subsection (6) of section
12889	631.154, Florida Statutes, is amended to read:
12890	631.154 Funds, assets, or other property in the possession
12891	of third person.--
12892	(6) Should the receiver be successful in establishing its
12893	claim or any part thereof, the receiver shall be entitled to
12894	recover judgment for the following:
12895	(d) All costs, investigative and other expenses,
12896	including, but not limited to, those for department and office
12897	staff, incurred in the recovery of the property, assets, or
12898	funds, and reasonable attorney's fees. Department and office
12899	staff costs and expenses include staff salaries.
12900
12901
12902	It is the intent of this section that a person found to be
12903	holding receivership assets fully reimburse the receiver for any
12904	and all efforts made to recover those assets.
12905	Section 225. Section 631.221, Florida Statutes, is amended
12906	to read:
12907	631.221 Deposit of moneys collected.--The moneys collected
12908	by the department in a proceeding under this chapter shall be
12909	deposited in a qualified public depository as defined in s.
12910	280.02, which depository with regards to such funds shall
12911	conform to and be bound by all the provisions of chapter 280, or
12912	invested with the Chief Financial OfficerState Treasurer
12913	pursuant to chapter 18. For the purpose of accounting for the
12914	assets and transactions of the estate, the receiver shall use
12915	such accounting books, records, and systems as the court directs
12916	after it hears and considers the recommendations of the
12917	receiver.
12918	Section 226. Section 631.231, Florida Statutes, is amended
12919	to read:
12920	631.231 Exemption from fees.--The department or office
12921	shall not be required to pay any fee to any public officer in
12922	this state for filing, recording, issuing a transcript or
12923	certificate, or authenticating any paper or instrument
12924	pertaining to the exercise by the department or officeof any of
12925	the powers or duties conferred upon it under this chapter,
12926	whether or not such paper or instrument be executed by the
12927	department or office or theiritsemployees or attorneys of
12928	record and whether or not it is connected with the commencement
12929	of any action or proceeding by or against the department or
12930	office, or with the subsequent conduct of such action or
12931	proceeding.
12932	Section 227. Section 631.361, Florida Statutes, is amended
12933	to read:
12934	631.361 Seizure under court order.--
12935	(1) Upon filing by the officedepartmentin the circuit
12936	court in and for Leon County of its verified petition alleging
12937	any ground for a formal delinquency proceeding against an
12938	insurer under this chapter, alleging that the interests of the
12939	insurer's policyholders, claimants, or creditors or the public
12940	will be endangered or jeopardized by delay, and setting forth
12941	the order deemed necessary by the officedepartment, the court
12942	may, ex parte and without notice or hearing, issue forthwith the
12943	requested order. The requested order may:
12944	(a) Direct the department to take possession and control
12945	of all or part of the property, books, documents, accounts, and
12946	other records of the insurer and the premises occupied by it for
12947	transaction of its business and premium funds and other property
12948	of the insurer held by an affiliate; and
12949	(b) Until further order of court, enjoin the insurer and
12950	any affiliate and their officers, directors, managers, agents,
12951	and employees from removal, concealment, or other disposition of
12952	the insurer's property, books, records, or accounts and from
12953	transaction of the insurer's business except with the
12954	department's written consent.
12955	(2) The court's order shall be for such duration specified
12956	in the order as the court deems necessary to enable the office
12957	anddepartment to ascertain the insurer's condition. Upon motion
12958	of any party or affected person, or upon its own motion, the
12959	court may hold such hearings as it deems desirable, after such
12960	notice as it deems appropriate, and may extend, shorten, or
12961	modify the terms of the order. The court shall vacate the
12962	seizure order if the officedepartmentfails to commence a
12963	formal proceeding under this chapter after having had a
12964	reasonable opportunity to do so, and a seizure order is
12965	automatically vacated by issuance of the court's order pursuant
12966	to a formal delinquency proceeding under this chapter.
12967	(3) Entry of a seizure order under this section shall not
12968	constitute an anticipatory breach of any contract of the
12969	insurer.
12970	Section 228. Section 631.371, Florida Statutes, is amended
12971	to read:
12972	631.371 Seizure under order of the officedepartment.--
12973	(1) Upon the office'sdepartmentfiling a verified
12974	petition with any circuit judge of the proper judicial circuit
12975	as required by s. 631.021(2), which states that it believes that
12976	the interest of policyholders, the insurer, claimants,
12977	creditors, or the public will be endangered or jeopardized and
12978	that prima facie grounds exist for rehabilitation, liquidation,
12979	or conservation of an insurer under s. 631.051, s. 631.061, or
12980	s. 631.131, the officedepartmentmay request a seizure order
12981	and shall be entitled to an ex parte hearing forthwith and an
12982	appropriate seizure order from the judge or court in the
12983	interest of protecting the public and such insurer and its
12984	policyholders, claimants, or creditors. After a diligent effort
12985	is made to be heard by the judges of the circuit and such judges
12986	or the court fails or refuses to hear such petition for any
12987	reason, the officedepartmentshall then file a duplicate
12988	original of said petition and exhibits, if any, in the Circuit
12989	Court of Leon County along with an affidavit which shall state
12990	that a diligent effort was made to obtain such initial hearing
12991	in the judicial circuit where such hearing was sought and that
12992	the request to be heard was refused or that a hearing was not
12993	granted and the reasons therefor, if known. Upon compliance with
12994	the above and if said affidavit further states that the office
12995	departmentbelieves that irreparable harm will result to the
12996	public and the insurer and its policyholders, creditors, or
12997	claimants as a result of further delay, it may thereafter issue
12998	a seizure order on any ground that would justify court seizure
12999	under s. 631.361. Such seizure order may contain any or all the
13000	provisions of s. 631.361(1). The officedepartmentshall retain
13001	possession and control until the order is vacated or is replaced
13002	by an order of court pursuant to subsection (2) or subsection
13003	(3) or pursuant to a formal delinquency proceeding under this
13004	chapter.
13005	(2) The officedepartmentmay, at any time after seizure
13006	under its order, report its actions to the proper court; and, in
13007	the event that the insurer, for any reason, fails to avail
13008	itself of the judicial review provided for by law, then the
13009	officedepartmentshall forthwith report its actions to the
13010	proper court. The officedepartmentmay request the court to
13011	substitute its order for the office'sdepartment'sor it may
13012	seek any other order which it deems appropriate.
13013	(3) Every law enforcement officer of this state authorized
13014	by law shall assist the officedepartmentin making and
13015	enforcing any such seizure, and every such officer shall furnish
13016	it with such deputies, patrolmen, patrolwomen, or officers as
13017	are necessary to assist it in execution of its order.
13018	(4) Entry of a seizure order under this section shall not
13019	constitute an anticipatory breach of any contract of the
13020	insurer.
13021	Section 229. Section 631.391, Florida Statutes, is amended
13022	to read:
13023	631.391 Cooperation of officers and employees.--
13024	(1) Any officer, director, manager, trustee, agent,
13025	adjuster, employee, or independent contractor of any insurer or
13026	affiliate and any other person who possesses any executive
13027	authority over, or who exercises any control over, any segment
13028	of the affairs of the insurer or affiliate shall fully cooperate
13029	with the department and officein any proceeding under this
13030	chapter or any investigation preliminary or incidental to the
13031	proceeding. An order of rehabilitation or liquidation which
13032	results in the discharge or suspension of any of the persons
13033	listed above does not operate to release such person from the
13034	duty to cooperate with the department and officeas set out
13035	herein. To "cooperate" includes, but is not limited to, the
13036	following:
13037	(a) To reply promptly in writing to any inquiry from the
13038	department or officerequesting such a reply;
13039	(b) Promptly to make available and deliver to the
13040	department or officeany books, accounts, documents, other
13041	records, information, data processing software, or property of
13042	or pertaining to the insurer and in her or his possession,
13043	custody, or control; or
13044	(c) Promptly to provide access to all data processing
13045	records in hard copy and in electronic form and to data
13046	processing facilities and services.
13047	(2) No person shall obstruct or interfere with the
13048	department or officein the conduct of any delinquency
13049	proceeding or any investigation preliminary or incidental
13050	thereto.
13051	(3) This section does not prohibit any person from seeking
13052	legal relief from a court when aggrieved by the petition for
13053	liquidation or other delinquency proceeding or by other orders.
13054	(4) Any person referred to in subsection (1) who fails to
13055	cooperate with the department or office, or any other person who
13056	obstructs or interferes with the department or office, in the
13057	conduct of any delinquency proceeding or any investigation
13058	preliminary or incidental thereto, is guilty of a misdemeanor of
13059	the first degree, punishable as provided in s. 775.082 or by
13060	fine of not more than $10,000.
13061	(5) Refusal by any person referred to in subsection (1) to
13062	provide records upon the request of the department or officeis
13063	grounds for revocation of any insurance-related license,
13064	including, but not limited to, agent and third-party
13065	administrator licenses.
13066	Section 230. Section 631.392, Florida Statutes, is amended
13067	to read:
13068	631.392 Immunity.--There shall be no liability on the part
13069	of, and no cause of action of any nature shall arise against,
13070	the Chief Financial Officer,Insurance Commissioner orthe
13071	department, the office, or any of theiritsemployees or agents
13072	for any action taken by them in the performance of their powers
13073	and duties under this chapter.
13074	Section 231. Section 631.398, Florida Statutes, is amended
13075	to read:
13076	631.398 Prevention of insolvencies.--To aid in the
13077	detection and prevention of insurer insolvencies or impairments:
13078	(1) Any member insurer; agent, employee, or member of the
13079	board of directors; or representative of any insurance guaranty
13080	association may make reports and recommendations to the
13081	department or officeupon any matter germane to the solvency,
13082	liquidation, rehabilitation, or conservation of any member
13083	insurer or germane to the solvency of any company seeking to do
13084	an insurance business in this state. Such reports and
13085	recommendations are confidential and exempt from the provisions
13086	of s. 119.07(1) until the termination of a delinquency
13087	proceeding.
13088	(2) The officedepartmentshall:
13089	(a) Report to the board of directors of the appropriate
13090	insurance guaranty association when it has reasonable cause to
13091	believe from any examination, whether completed or in process,
13092	of any member insurer that such insurer may be an impaired or
13093	insolvent insurer.
13094	(b) Seek the advice and recommendations of the board of
13095	directors of the appropriate insurance guaranty association
13096	concerning any matter affecting the duties and responsibilities
13097	of the officedepartmentin relation to the financial condition
13098	of member companies and companies seeking admission to transact
13099	insurance business in this state.
13100	(3) The office and department jointlyshall, no later than
13101	the conclusion of any domestic insurer insolvency proceeding,
13102	prepare a summary report containing such information as is in
13103	theiritspossession relating to the history and causes of such
13104	insolvency, including a statement of the business practices of
13105	such insurer which led to such insolvency.
13106	Section 232. Section 631.54, Florida Statutes, is amended
13107	to read:
13108	631.54 Definitions.--As used in this part:
13109	(1) "Account" means any one of the three accounts created
13110	by s. 631.55.
13111	(2) "Association" means the Florida Insurance Guaranty
13112	Association, Incorporated.
13113	(3) "Covered claim" means an unpaid claim, including one
13114	of unearned premiums, which arises out of, and is within the
13115	coverage, and not in excess of, the applicable limits of an
13116	insurance policy to which this part applies, issued by an
13117	insurer, if such insurer becomes an insolvent insurer after
13118	October 1, 1970, and the claimant or insured is a resident of
13119	this state at the time of the insured event or the property from
13120	which the claim arises is permanently located in this state.
13121	"Covered claim" shall not include any amount due any reinsurer,
13122	insurer, insurance pool, or underwriting association, as
13123	subrogation, contribution, indemnification, or otherwise. Member
13124	insurers shall have no right of subrogation against the insured
13125	of any insolvent member.
13126	(4) "Department" means the Department of Insurance.
13127	(4)(5)"Expenses in handling claims" means allocated and
13128	unallocated expenses, including, but not limited to, general
13129	administrative expenses and those expenses which relate to the
13130	investigation, adjustment, defense, or settlement of specific
13131	claims under, or arising out of, a specific policy.
13132	(5)(6)"Insolvent insurer" means a member insurer
13133	authorized to transact insurance in this state, either at the
13134	time the policy was issued or when the insured event occurred,
13135	and against which an order of liquidation with a finding of
13136	insolvency has been entered by a court of competent jurisdiction
13137	if such order has become final by the exhaustion of appellate
13138	review.
13139	(6)(7)"Member insurer" means any person who writes any
13140	kind of insurance to which this part applies under s. 631.52,
13141	including the exchange of reciprocal or interinsurance
13142	contracts, and is licensed to transact insurance in this state.
13143	(7)(8)"Net direct written premiums" means direct gross
13144	premiums written in this state on insurance policies to which
13145	this part applies, less return premiums thereon and dividends
13146	paid or credited to policyholders on such direct business. "Net
13147	direct written premiums" does not include premiums on contracts
13148	between insurers or reinsurers.
13149	(8)(9)"Person" means individuals, children, firms,
13150	associations, joint ventures, partnerships, estates, trusts,
13151	business trusts, syndicates, fiduciaries, corporations, and all
13152	other groups or combinations.
13153	Section 233. Subsection (1) of section 631.55, Florida
13154	Statutes, is amended to read:
13155	631.55 Creation of the association.--
13156	(1) There is created a nonprofit corporation to be known
13157	as the "Florida Insurance Guaranty Association, Incorporated."
13158	All insurers defined as member insurers in s. 631.54(6)(7)shall
13159	be members of the association as a condition of their authority
13160	to transact insurance in this state, and, further, as a
13161	condition of such authority, an insurer shall agree to reimburse
13162	the association for all claim payments the association makes on
13163	said insurer's behalf if such insurer is subsequently
13164	rehabilitated. The association shall perform its functions under
13165	a plan of operation established and approved under s. 631.58 and
13166	shall exercise its powers through a board of directors
13167	established under s. 631.56. The corporation shall have all
13168	those powers granted or permitted nonprofit corporations, as
13169	provided in chapter 617.
13170	Section 234. Subsection (1) of section 631.56, Florida
13171	Statutes, is amended to read:
13172	631.56 Board of directors.--
13173	(1) The board of directors of the association shall
13174	consist of not less than five or more than nine persons serving
13175	terms as established in the plan of operation. The department
13176	shall approve and appoint to the board persons recommended by
13177	the member insurers. In the event the department finds that any
13178	recommended person does not meet the qualifications for service
13179	on the board, the department shall request the member insurers
13180	to recommend another person. Each member shall serve for a 4-
13181	year term and may be reappointed. Vacancies on the board shall
13182	be filled for the remaining period of the term in the same
13183	manner as initial appointments. If no members are selected by
13184	November 30, 1970, the department may appoint the initial
13185	members of the board of directors.
13186	Section 235. Paragraph (a) of subsection (1) and
13187	subsection (3) of section 631.57, Florida Statutes, are amended
13188	to read:
13189	631.57 Powers and duties of the association.--
13190	(1) The association shall:
13191	(a)1. Be obligated to the extent of the covered claims
13192	existing:
13193	a. Prior to adjudication of insolvency and arising within
13194	30 days after the determination of insolvency;
13195	b. Before the policy expiration date if less than 30 days
13196	after the determination; or
13197	c. Before the insured replaces the policy or causes its
13198	cancellation, if she or he does so within 30 days of the
13199	determination.
13200	2. The obligation under subparagraph 1. shall include only
13201	that amount of each covered claim which is in excess of $100 and
13202	is less than $300,000, except with respect to policies covering
13203	condominium associations or homeowners' associations, which
13204	associations have a responsibility to provide insurance coverage
13205	on residential units within the association, the obligation
13206	shall include that amount of each covered property insurance
13207	claim which is less than $100,000 multiplied by the number of
13208	condominium units or other residential units; however, as to
13209	homeowners' associations, this subparagraph applies only to
13210	claims for damage or loss to residential units and structures
13211	attached to residential units.
13212	3. In no event shall the association be obligated to a
13213	policyholder or claimant in an amount in excess of the
13214	obligation of the insolvent insurer under the policy from which
13215	the claim arises.
13216
13217	The foregoing notwithstanding, the association shall have no
13218	obligation to pay covered claims to be paid from the proceeds of
13219	bonds issued under s. 166.111(2). However, the association shall
13220	cause assessments to be made under paragraph (3)(e) for such
13221	covered claims, and such assessments shall be assigned and
13222	pledged under paragraph (3)(e) to or on behalf of the issuer of
13223	such bonds for the benefit of the holders of such bonds. The
13224	association shall administer any such covered claims and present
13225	valid covered claims for payment in accordance with the
13226	provisions of the assistance program in connection with which
13227	such bonds have been issued.
13228	(3)(a) To the extent necessary to secure the funds for the
13229	respective accounts for the payment of covered claims and also
13230	to pay the reasonable costs to administer the same, the office
13231	department, upon certification of the board of directors, shall
13232	levy assessments in the proportion that each insurer's net
13233	direct written premiums in this state in the classes protected
13234	by the account bears to the total of said net direct written
13235	premiums received in this state by all such insurers for the
13236	preceding calendar year for the kinds of insurance included
13237	within such account. Assessments shall be remitted to and
13238	administered by the board of directors in the manner specified
13239	by the approved plan. Each insurer so assessed shall have at
13240	least 30 days' written notice as to the date the assessment is
13241	due and payable. Every assessment shall be made as a uniform
13242	percentage applicable to the net direct written premiums of each
13243	insurer in the kinds of insurance included within the account in
13244	which the assessment is made. The assessments levied against
13245	any insurer shall not exceed in any one year more than 2 percent
13246	of that insurer's net direct written premiums in this state for
13247	the kinds of insurance included within such account during the
13248	calendar year next preceding the date of such assessments.
13249	(b) If sufficient funds from such assessments, together
13250	with funds previously raised, are not available in any one year
13251	in the respective account to make all the payments or
13252	reimbursements then owing to insurers, the funds available shall
13253	be prorated and the unpaid portion shall be paid as soon
13254	thereafter as funds become available.
13255	(c) Assessments shall be included as an appropriate factor
13256	in the making of rates.
13257	(d) No state funds of any kind shall be allocated or paid
13258	to said association or any of its accounts.
13259	(e)1.a. In addition to assessments otherwise authorized in
13260	paragraph (a), as a temporary measure related to insolvencies
13261	caused by Hurricane Andrew, and to the extent necessary to
13262	secure the funds for the account specified in s. 631.55(2)(c),
13263	or to retire indebtedness, including, without limitation, the
13264	principal, redemption premium, if any, and interest on, and
13265	related costs of issuance of, bonds issued under s. 166.111(2),
13266	and the funding of any reserves and other payments required
13267	under the bond resolution or trust indenture pursuant to which
13268	such bonds have been issued, the department, upon certification
13269	of the board of directors, shall levy assessments upon insurers
13270	holding a certificate of authority as follows:
13271	(I) Except as provided in sub-sub-subparagraph (II), the
13272	assessments payable under this paragraph by any insurer shall
13273	not exceed in any 1 year more than 2 percent of that insurer's
13274	direct written premiums, net of refunds, in this state during
13275	the preceding calendar year for the kinds of insurance within
13276	the account specified in s. 631.55(2)(c).
13277	(II) If the amount levied under sub-sub-subparagraph (I)
13278	is less than 2 percent of the insurer's direct written premiums,
13279	net of refunds, in this state during calendar year 1991 for the
13280	kinds of insurance within the account specified in s.
13281	631.55(2)(c), in addition to and separate from such assessment,
13282	the assessment shall also include the difference between the
13283	amount calculated based on calendar year 1991 and the amount
13284	determined under sub-sub-subparagraph (I). If this sub-sub-
13285	subparagraph is held invalid, the invalidity shall not affect
13286	other provisions of this section, and to this end the provisions
13287	of this section are declared severable.
13288	(III) In addition to any other insurers subject to this
13289	subparagraph, this subparagraph also applies to any insurer that
13290	held a certificate of authority on August 24, 1992. If this
13291	sub-sub-subparagraph is held invalid, the invalidity shall not
13292	affect other provisions of this section, and to this end the
13293	provisions of this section are declared severable.
13294	b. Any assessments authorized under this paragraph shall
13295	be levied by the department upon insurers referred to in sub-
13296	subparagraph a., upon certification as to the need therefor by
13297	the board of directors, in 1992 and in each year that bonds
13298	issued under s. 166.111(2) are outstanding, in such amounts up
13299	to such 2 percent limit as required in order to provide for the
13300	full and timely payment of the principal of, redemption premium,
13301	if any, and interest on, and related costs of, issuance of bonds
13302	issued under s. 166.111(2). The assessments provided for in
13303	this paragraph are hereby assigned and pledged to a municipality
13304	issuing bonds under s. 166.111(2)(b), for the benefit of the
13305	holders of such bonds, in order to enable such municipality to
13306	provide for the payment of the principal of, redemption premium,
13307	if any, and interest on such bonds, the cost of issuance of such
13308	bonds, and the funding of any reserves and other payments
13309	required under the bond resolution or trust indenture pursuant
13310	to which such bonds have been issued, without the necessity of
13311	any further action by the association, the department, or any
13312	other party. To the extent that bonds are issued under s.
13313	166.111(2), the proceeds of assessments levied under this
13314	paragraph shall be remitted directly to and administered by the
13315	trustee appointed for such bonds.
13316	c. Assessments under this paragraph shall be payable in 12
13317	monthly installments with the first installment being due and
13318	payable at the end of the month after an assessment is levied,
13319	and subsequent installments being due not later than the end of
13320	each succeeding month.
13321	d. The association shall issue a monthly report on the
13322	status of the use of the bond proceeds as related to
13323	insolvencies caused by Hurricane Andrew. The report must contain
13324	the number of claims paid and the amount of claims paid. The
13325	association shall also include an analysis of the revenue
13326	generated from the additional assessment levied under this
13327	subsection. The report must be sent to the Legislature and the
13328	Insurance Commissioner monthly.
13329	2. In order to assure that insurers paying assessments
13330	levied under this paragraph continue to charge rates that are
13331	neither inadequate nor excessive, within 90 days after being
13332	notified of such assessments, each insurer that is to be
13333	assessed pursuant to this paragraph shall make a rate filing for
13334	coverage included within the account specified in s.
13335	631.55(2)(c) and for which rates are required to be filed under
13336	s. 627.062. If the filing reflects a rate change that, as a
13337	percentage, is equal to the difference between the rate of such
13338	assessment and the rate of the previous year's assessment under
13339	this paragraph, the filing shall consist of a certification so
13340	stating and shall be deemed approved when made, subject to the
13341	department's continuing authority to require actuarial
13342	justification as to the adequacy of any rate at any time. Any
13343	rate change of a different percentage shall be subject to the
13344	standards and procedures of s. 627.062.
13345
13346	Section 236. Section 631.59, Florida Statutes, is amended
13347	to read:
13348	631.59 Duties and powers of department and officeof
13349	Insurance.--
13350	(1) The department shall:
13351	(a) Notify the association of the existence of an
13352	insolvent insurer not later than 3 days after it receives notice
13353	of the determination of the insolvency; and
13354	(b) Upon request of the board of directors, provide the
13355	association with a statement of the net direct written premiums
13356	of each member insurer.
13357	(2) The department may:
13358	(a)require that the association notify the insureds of
13359	the insolvent insurer and any other interested parties of the
13360	determination of insolvency and of their rights under this part.
13361	Such notification shall be by mail at their last known
13362	addresses, when available, but if sufficient information for
13363	notification by mail is not available, notice by publication in
13364	a newspaper of general circulation shall be sufficient.
13365	(3)(b)The office may:
13366	(a)Suspend or revoke the certificate of authority to
13367	transact insurance in this state of any member insurer which
13368	fails to pay an assessment when due or fails to comply with the
13369	plan of operation. As an alternative, the officedepartmentmay
13370	levy a fine on any member insurer which fails to pay an
13371	assessment when due. Such fine may not exceed 5 percent of the
13372	unpaid assessment per month, except that no fine shall be less
13373	than $100 per month.
13374	(b)(c)Revoke the designation of any servicing facility if
13375	it finds claims are being handled unsatisfactorily.
13376	Section 237. Section 631.62, Florida Statutes, is amended
13377	to read:
13378	631.62 Prevention of insolvencies.--To aid in the
13379	detection and prevention of insurer insolvencies:
13380	(1) It shall be the duty of the board of directors, upon
13381	majority vote, to notify the officedepartmentof any
13382	information indicating any member insurer may be insolvent or in
13383	a financial condition hazardous to the policyholders or the
13384	public.
13385	(2) The board of directors may, upon majority vote,
13386	request that the officedepartmentorder an examination of any
13387	member insurer which the board in good faith believes may be in
13388	a financial condition hazardous to the policyholders or the
13389	public. Within 30 days of the receipt of such request, the
13390	officedepartmentshall begin such examination. The examination
13391	may be conducted as a National Association of Insurance
13392	Commissioners examination or may be conducted by such persons as
13393	the officedepartmentdesignates. The cost of such examination
13394	shall be paid by the association and the examination report
13395	shall be treated as are other examination reports pursuant to s.
13396	624.319. In no event shall such examination report be released
13397	to the board of directors prior to its release to the public.
13398	The officedepartmentshall notify the board of directors when
13399	the examination is completed. The request for an examination
13400	shall be kept on file by the officedepartment; such request is
13401	confidential and exempt from the provisions of s. 119.07(1)
13402	until the examination report is released to the public.
13403	(3) The board of directors may, upon majority vote, make
13404	reports and recommendations to the department or officeupon any
13405	matter germane to the solvency, liquidation, rehabilitation, or
13406	conservation of any member insurer. Such reports and
13407	recommendations are confidential and exempt from the provisions
13408	of s. 119.07(1) until the termination of a delinquency
13409	proceeding.
13410	(4) The board of directors may, upon majority vote, make
13411	recommendations to the officedepartmentfor the detection and
13412	prevention of insurer insolvencies.
13413	Section 238. Section 631.66, Florida Statutes, is amended
13414	to read:
13415	631.66 Immunity.--There shall be no liability on the part
13416	of, and no cause of action of any nature shall arise against,
13417	any member insurer, the association or its agents or employees,
13418	the board of directors, or the department or office or theirits
13419	representatives for any action taken by them in the performance
13420	of their powers and duties under this part. Such immunity shall
13421	extend to the participation in any organization of one or more
13422	other state associations of similar purposes and to any such
13423	organization and its agents or employees.
13424	Section 239. Section 631.714, Florida Statutes, is amended
13425	to read:
13426	631.714 Definitions.--As used in this part, the term:
13427	(1) "Account" means any of the three accounts created in
13428	s. 631.715.
13429	(2) "Association" means the Florida Life and Health
13430	Insurance Guaranty Association created in s. 631.715.
13431	(3) "Contractual obligation" means any obligation under
13432	covered policies.
13433	(4) "Covered policy" means any policy or contract set out
13434	in s. 631.713 and reduced to written, printed, or other tangible
13435	form.
13436	(5) "Department" means the Department of Insurance.
13437	(5)(6)"Impaired insurer" means a member insurer deemed by
13438	the department to be potentially unable to fulfill its
13439	contractual obligations and not an insolvent insurer.
13440	(6)(7)"Insolvent insurer" means a member insurer
13441	authorized to transact insurance in this state, either at the
13442	time the policy was issued or when the insured event occurred,
13443	and against which an order of liquidation with a finding of
13444	insolvency has been entered by a court of competent
13445	jurisdiction, if such order has become final by the exhaustion
13446	of appellate review.
13447	(7)(8)"Member insurer" means any person licensed to
13448	transact in this state any kind of insurance as set out in s.
13449	631.713.
13450	(8)(9)"Premium" means any direct gross insurance premium
13451	and any annuity consideration written on covered policies, less
13452	return premium and consideration thereon and dividends paid or
13453	credited to policyholders on such direct business. "Premium"
13454	does not include premium and consideration on contracts between
13455	insurers and reinsurers.
13456	(9)(10)"Person" means any individual, corporation,
13457	partnership, association, or voluntary organization.
13458	(10)(11)"Resident" means any person who resides in this
13459	state at the time a member insurer is determined to be an
13460	impaired or insolvent insurer and to whom contractual
13461	obligations are owed by such impaired or insolvent member
13462	insurer.
13463	Section 240. Subsections (2) and (3) of section 631.72,
13464	Florida Statutes, are amended to read:
13465	631.72 Premium or income tax credits for assessments
13466	paid.--
13467	(2) If a member insurer ceases doing business in this
13468	state and surrenders to the officedepartmentits certificate of
13469	authority to transact insurance in this state, all uncredited
13470	assessments may be credited as provided in this section against
13471	either its premium or corporate income tax liabilities imposed
13472	pursuant to ss. 624.509 and 220.11 for the year it ceases doing
13473	business.
13474	(3) Any sums acquired by refund pursuant to s. 631.718(6)
13475	from the association which have theretofore been written off by
13476	contributing insurers and offset against premium or corporate
13477	income taxes as provided in subsection(1) and which are not
13478	needed for purposes of this part shall be paid by the insurer to
13479	the Department of Revenue for deposit with the Chief Financial
13480	OfficerTreasurerto the credit of the General Revenue Fund.
13481	Section 241. Section 631.722, Florida Statutes, is amended
13482	to read:
13483	631.722 Powers and duties of department and office.--
13484	(1) The officedepartmentshall:
13485	(a) Upon request of the board of directors, provide the
13486	association with a statement of the premiums in each of the
13487	appropriate states for each member insurer.
13488	(b) When an impairment is declared and the amount of the
13489	impairment is determined, serve a demand upon the impaired
13490	insurer to make good the impairment within a reasonable time.
13491	Notice to the impaired insurer shall constitute notice to its
13492	shareholders, if any. The failure of the insurer to promptly
13493	comply with such demand shall not excuse the association from
13494	the performance of its powers and duties under this part.
13495	(2)(c)The department shall,in any liquidation or
13496	rehabilitation proceeding involving a domestic insurer, be
13497	appointed as the liquidator or rehabilitator. If a foreign or
13498	alien member insurer is subject to a liquidation proceeding in
13499	its domiciliary jurisdiction or state of entry, the department
13500	shall be appointed conservator.
13501	(3)(2) The officedepartmentmay suspend or revoke, after
13502	notice and hearing, the certificate of authority to transact
13503	insurance in this state of any member insurer that fails to pay
13504	an assessment when due or fails to comply with the approved plan
13505	of operation of the association. As an alternative, the office
13506	departmentmay levy a forfeiture on any member insurer that
13507	fails to pay an assessment when due. Such forfeiture shall not
13508	exceed 5 percent of the unpaid assessment per month, but no
13509	forfeiture shall be less than $100 per month.
13510	(4)(3)Any action of the board of directors or of the
13511	association may be appealed to the officedepartmentby any
13512	member insurer if such appeal is taken within 30 days of the
13513	action being appealed. If a member company is appealing an
13514	assessment, the amount assessed shall be paid to the association
13515	and available to meet association obligations during the
13516	pendency of the appeal. If the appeal on the assessment is
13517	upheld, the amount paid in error or excess shall be returned to
13518	the member company. Any final action or order of the office
13519	departmentshall be subject to judicial review in a court of
13520	competent jurisdiction.
13521	(5)(4)The liquidator, rehabilitator, or conservator of
13522	any impaired insurer may notify all interested persons of the
13523	effect of this part.
13524	Section 242. Section 631.723, Florida Statutes, is amended
13525	to read:
13526	631.723 Prevention of insolvencies.--To aid in the
13527	detection and prevention of insurer insolvencies or impairments:
13528	(1) The board of directors may, upon majority vote, make
13529	reports and recommendations to the department or officeupon any
13530	matter germane to the solvency, liquidation, rehabilitation, or
13531	conservation of any member insurer or germane to the solvency of
13532	any company seeking to do an insurance business in this state.
13533	Such reports and recommendations are confidential and exempt
13534	from the provisions of s. 119.07(1) until the termination of a
13535	delinquency proceeding.
13536	(2) It is the duty of the board of directors, upon a
13537	majority vote, to notify the officedepartmentof any
13538	information indicating that any member insurer may be an
13539	impaired or insolvent insurer.
13540	(3) The board of directors may, upon majority vote,
13541	request that the officedepartmentorder an examination of any
13542	member insurer which the board in good faith believes may be an
13543	impaired or insolvent insurer. Within 30 days of the receipt of
13544	such a request, the officedepartmentshall begin such an
13545	examination. The examination may be conducted as a National
13546	Association of Insurance Commissioners examination or may be
13547	conducted by such persons as the officeInsurance Commissioner
13548	designates. The cost of such examination shall be paid by the
13549	association, and the examination report shall be treated in a
13550	manner similar to other examination reports pursuant to s.
13551	624.319. In no event may such examination report be released to
13552	the board of directors before its release to the public, but
13553	this does not preclude the officedepartmentfrom complying with
13554	s. 631.398(2). The officedepartmentshall notify the board of
13555	directors when the examination is completed. The request for an
13556	examination shall be kept on file by the officedepartment; such
13557	request is confidential and exempt from the provisions of s.
13558	119.07(1) until the examination report is released to the
13559	public.
13560	(4) The board of directors may, upon majority vote, make
13561	recommendations to the officedepartmentfor the detection and
13562	prevention of insurer insolvencies.
13563	Section 243. Section 631.727, Florida Statutes, is amended
13564	to read:
13565	631.727 Immunity.--There shall be no liability on the part
13566	of, and no cause of action of any nature shall arise against,
13567	any member insurer or its agents or employees, the association
13568	or its agents or employees, members of the board of directors,
13569	or the department or office or theiritsrepresentatives for any
13570	action taken by them in the performance of their powers and
13571	duties under this part. Such immunity shall extend to the
13572	participation in any organization of one or more other state
13573	associations of similar purposes and to any such organization
13574	and its agents or employees.
13575	Section 244. Section 631.813, Florida Statutes, is amended
13576	to read:
13577	631.813 Application of part.--This part shall apply to HMO
13578	contractual obligations to residents of Florida by HMOs
13579	possessing a valid certificate of authority issued by the
13580	Florida Department of Insuranceas provided by part I of chapter
13581	641. The provisions of this part shall not apply to persons
13582	participating in medical assistance programs under the Medicaid
13583	program.
13584	Section 245. Section 631.814, Florida Statutes, is amended
13585	to read:
13586	631.814 Definitions.--As used in this part, the term:
13587	(1) "Plan" means the Florida Health Maintenance
13588	Organization Consumer Assistance Plan created by this part.
13589	(2) "Board" means the board of directors of the plan.
13590	(3) "Contractual obligations" means any obligation under
13591	covered health care policies.
13592	(4) "Covered policy" means any policy or contract issued
13593	by an HMO for health care services.
13594	(5) "Date of insolvency" means the effective date of an
13595	order of liquidation entered by a court of competent
13596	jurisdiction.
13597	(6) "Department" means the Florida Department of
13598	Insurance.
13599	(6)(7)"Health care services" means comprehensive health
13600	care services as defined in s. 641.19.
13601	(7)(8)"HMO" means a health maintenance organization
13602	possessing a valid certificate of authority issued by the
13603	department pursuant to part I of chapter 641.
13604	(8)(9)"Insolvent HMO" means an HMO against which an order
13605	of rehabilitation or liquidation has been entered by a court of
13606	competent jurisdiction, with the department appointed as
13607	receiver, even if such order has not become final by the
13608	exhaustion of appellate reviews.
13609	(9)(10)"Person" means any individual, corporation,
13610	partnership, association, or voluntary organization.
13611	(10)(11)"Subscriber" means any resident of this state who
13612	is enrolled for benefits provided by an HMO and who makes
13613	premium payments or for whom premium payments are made.
13614	Section 246. Section 631.821, Florida Statutes, is amended
13615	to read:
13616	631.821 Powers and duties of the department and office.--
13617	(1) The officedepartmentmay suspend or revoke, after
13618	notice and hearing, the certificate of authority of a member HMO
13619	that fails to pay an assessment when due, fails to comply with
13620	the approved plan of operation of the plan, or fails either to
13621	timely comply with or to timely appeal pursuant to subsection
13622	(2) its appointment under s. 631.818(2).
13623	(2) Any action of the board of directors of the plan may
13624	be appealed to the department by any member HMO if such appeal
13625	is taken within 21 days of the action being appealed; however,
13626	the HMO must comply with such action pending exhaustion of
13627	appeal under s. 631.818(2). Any appeal shall be promptly
13628	determined by the department, and final action or order of the
13629	department shall be subject to judicial review in a court of
13630	competent jurisdiction.
13631	(3) The department may:
13632	(a)require that the plan notify the subscriber of the
13633	insolvent HMO and any other interested parties of the
13634	determination of insolvency and of their rights under this part.
13635	Such notification shall be by mail at their last known
13636	addresses, when available, but if sufficient information for
13637	notification by mail is not available, notice by publication in
13638	a newspaper of general circulation shall be sufficient.
13639	(4)(b)The office mayrevoke the designation of any
13640	servicing facility or administrator if it finds claims are being
13641	handled unsatisfactorily.
13642	Section 247. Section 631.825, Florida Statutes, is amended
13643	to read:
13644	631.825 Immunity.--There shall be no liability on the part
13645	of, and no cause of action of any nature shall arise against,
13646	any member HMO or its agents or employees, the plan or its
13647	agents or employees, members of the board of directors, or the
13648	department or office or theiritsrepresentatives for any action
13649	taken by them in the performance of their powers and duties
13650	under this part.
13651	Section 248. Section 631.904, Florida Statutes, is amended
13652	to read:
13653	631.904 Definitions.--As used in this part, the term:
13654	(1) "Corporation" means the Florida Workers' Compensation
13655	Insurance Guaranty Association, Incorporated.
13656	(2) "Covered claim" means an unpaid claim, including a
13657	claim for return of unearned premiums, which arises out of, is
13658	within the coverage of, and is not in excess of the applicable
13659	limits of, an insurance policy to which this part applies, which
13660	policy was issued by an insurer and which claim is made on
13661	behalf of a claimant or insured who was a resident of this state
13662	at the time of the injury. The term "covered claim" does not
13663	include any amount sought as a return of premium under any
13664	retrospective rating plan; any amount due any reinsurer,
13665	insurer, insurance pool, or underwriting association, as
13666	subrogation recoveries or otherwise; or any return of premium
13667	resulting from a policy that was not in force on the date of the
13668	final order of liquidation. Member insurers have no right of
13669	subrogation against the insured of any insolvent insurer. This
13670	provision shall be applied retroactively to cover claims of an
13671	insolvent self-insurance fund resulting from accidents or losses
13672	incurred prior to January 1, 1994, regardless of the date the
13673	Department of Insurance filed a petition in circuit court was
13674	filedalleging insolvency and the date the court entered an
13675	order appointing a receiver.
13676	(3) "Department" means the Department of Insurance.
13677	(3)(4)"Insolvency" means that condition in which all of
13678	the assets of the insurer, if made immediately available, would
13679	not be sufficient to discharge all of its liabilities or that
13680	condition in which the insurer is unable to pay its debts as
13681	they become due in the usual course of business. When the
13682	context of any provision of this part so indicates, insolvency
13683	also includes impairment of surplus or impairment of capital.
13684	(4)(5)"Insolvent insurer" means an insurer that was
13685	authorized to transact insurance in this state, either at the
13686	time the policy was issued or when the insured event occurred,
13687	and against which an order of liquidation with a finding of
13688	insolvency has been entered by a court of competent jurisdiction
13689	if such order has become final by the exhaustion of appellate
13690	review.
13691	(5)(6)"Insurer" means an insurance carrier or self-
13692	insurance fund authorized to insure under chapter 440. For
13693	purposes of this act, "insurer" does not include a qualified
13694	local government self-insurance fund, as defined in s. 624.4622,
13695	or an individual self-insurer as defined in s. 440.385.
13696	(6)(7)"Self-insurance fund" means a group self-insurance
13697	fund authorized under s. 624.4621, a commercial self-insurance
13698	fund writing workers' compensation insurance authorized under s.
13699	624.462, or an assessable mutual insurer authorized under s.
13700	628.6011. For purposes of this act, "self-insurance fund" does
13701	not include a qualified local government self-insurance fund, as
13702	defined in s. 624.4622, or an individual self-insurer as defined
13703	in s. 440.385.
13704	Section 249. Subsection (1) of section 631.911, Florida
13705	Statutes, is amended to read:
13706	631.911 Creation of the Florida Workers' Compensation
13707	Insurance Guaranty Association, Incorporated; merger; effect of
13708	merger.--
13709	(1)(a) The Florida Self-Insurance Fund Guaranty
13710	Association established in former part V of chapter 631 and the
13711	workers' compensation insurance account, which includes excess
13712	workers' compensation insurance, established in former s.
13713	631.55(2)(a) shall be merged, effective October 1, 1997, or as
13714	provided in paragraph (b),in accordance with the plan of
13715	operation adopted by the interim board of directors. The
13716	successor nonprofit corporation shall be known as the "Florida
13717	Workers' Compensation Insurance Guaranty Association,
13718	Incorporated."
13719	(b) The merger may be effected prior to October 1, 1997,
13720	if:
13721	1. The interim board of directors of the Workers'
13722	Compensation Insurance Guaranty Association provides the
13723	Department of Insurance with written notice of its intent to
13724	effectuate the merger as of a date certain and its functional
13725	readiness to initiate operations, such notice setting forth the
13726	plan or summary thereof for effecting the merger; and,
13727	2. The department, upon review of the plan or summary
13728	thereof, determines the Workers' Compensation Insurance Guaranty
13729	Association is functionally ready to initiate operations and so
13730	certifies to the interim board of directors.
13731	(c) Prior to the effective date of the merger, the Florida
13732	Self-Insurance Fund Guaranty Association shall be the entity
13733	responsible for the claims of insolvent self-insurance funds
13734	resulting from accidents or losses incurred prior to January 1,
13735	1994, regardless of the date the Department of Insurance filed a
13736	petition in circuit court alleging insolvency and the date the
13737	court entered an order appointing a receiver.
13738	(b)(d)Upon the effective date of the merger:
13739	1. The Florida Self-Insurance Fund Guaranty Association
13740	and the workers' compensation insurance account within the
13741	Florida Insurance Guaranty Association cease to exist and are
13742	succeeded by the Florida Workers' Compensation Insurance
13743	Guaranty Association.
13744	2. Title to all assets of any description, all real estate
13745	and other property, or any interest therein, owned by each party
13746	to the merger is vested in the successor corporation without
13747	reversion or impairment.
13748	3. The successor corporation shall be responsible and
13749	liable for all the liabilities and obligations of each party to
13750	the merger.
13751	4. Any claim existing or action or proceeding pending by
13752	or against any party to the merger may be continued as if the
13753	merger did not occur or the successor corporation may be
13754	substituted in the proceeding for the corporation or account
13755	which ceased existence.
13756	5. Neither the rights of creditors nor any liens upon the
13757	property of any party to the merger shall be impaired by such
13758	merger.
13759	6. Outstanding assessments levied by the Florida Self-
13760	Insurance Guaranty Association or the Florida Insurance Guaranty
13761	Association on behalf of the workers' compensation insurance
13762	account remain in full force and effect and shall be paid when
13763	due.
13764	Section 250. Subsections (1) and (3) of section 631.912,
13765	Florida Statutes, are amended to read:
13766	631.912 Board of directors.--
13767	(1) The board of directors of the corporation shall
13768	consist of 11 persons, 1 of whom is the insurance consumer
13769	advocate appointed under s. 627.0613 or designee and 1 of whom
13770	is designated by the Chief Financial OfficerInsurance
13771	Commissioner. The department shall appoint to the board 6
13772	persons selected by private carriers from among the 20 workers'
13773	compensation insurers with the largest amount of net direct
13774	written premium as determined by the department, and 3 persons
13775	selected by the self-insurance funds. At least two of the
13776	private carriers shall be foreign carriers authorized to do
13777	business in this state. The board shall elect a chairperson from
13778	among its members. The Chief Financial Officercommissionermay
13779	remove any board member for cause. Each board member shall
13780	serve for a 4-year term and may be reappointed, except that four
13781	members of the initial board shall have 2-year terms so as to
13782	stagger the periods of service. A vacancy on the board shall be
13783	filled for the remaining period of the term in the same manner
13784	by which the original appointment was made.
13785	(3) Effective upon this act becoming a law, the persons on
13786	the board of directors created pursuant to s. 627.311(4)(a) who
13787	evidence a willingness to serve in writing, shall serve as an
13788	interim board of directors of the corporation until the initial
13789	board of directors has been appointed for the corporation in
13790	accordance with the provisions of subsection (1). The interim
13791	board of directors shall serve for a period not to exceed 6
13792	months. The initial meeting shall be called by the commissioner
13793	within 30 days after this act becomes a law. The interim board
13794	of directors shall establish a process for the selection of
13795	persons to serve on the board of the Florida Workers'
13796	Compensation Insurance Guaranty Association in accordance with
13797	the terms of subsection (1). The board of directors shall adopt
13798	an interim plan of operation to effect the merger in s. 631.911
13799	and avoid any interruption of benefit payments to injured
13800	workers. When necessary and upon approval of the chairs of
13801	their respective board of directors, the Florida Self-Insurance
13802	Fund Guaranty Association and the Florida Insurance Guaranty
13803	Association shall provide staff support to the interim board of
13804	directors. The board shall submit the interim plan to the
13805	commissioner, who shall approve or disapprove the plan within 30
13806	days after receipt.
13807	Section 251. Section 631.917, Florida Statutes, is amended
13808	to read:
13809	631.917 Prevention of insolvencies.--To aid in the
13810	detection and prevention of insolvencies or impairments:
13811	(1)(a) The board may make reasonable and lawful
13812	investigation into the practices of any third-party
13813	administrator or service company for a self-insurance fund
13814	declared insolvent by the court.
13815	(b) If the results of an investigation reasonably lead to
13816	a finding that certain actions taken or not taken by those
13817	handling, processing, or preparing covered claims for payment or
13818	other benefit pursuant to any workers' compensation insurance
13819	policy contributed to the insolvency of an insurer, such
13820	information may, in the discretion of the board, be provided to
13821	the department or officein an expedited manner.
13822	(2) The board of directors may make reports and
13823	recommendations to the department or officeupon any matter
13824	germane to the solvency, liquidation, rehabilitation, or
13825	conservation of any member insurer or germane to the solvency of
13826	any insurer seeking to do insurance business in this state.
13827	(3) The board of directors, in its discretion, may notify
13828	the officedepartmentof any information indicating that any
13829	member insurer may be an impaired or insolvent insurer.
13830	(4) The board of directors, in its discretion, may request
13831	that the officedepartmentorder an examination of any member
13832	insurer which the board in good faith believes may be an
13833	impaired or insolvent insurer. Within 30 days after receipt of
13834	such a request, the officedepartmentshall begin such an
13835	examination. The examination may be conducted as a National
13836	Association of Insurance Commissioners examination or may be
13837	conducted by such persons as the officeInsurance Commissioner
13838	designates. The cost of such examination shall be paid by the
13839	corporation, and the examination report shall be treated in a
13840	manner similar to other examination reports pursuant to s.
13841	624.319. In no event may such examination report be released to
13842	the board of directors before its release to the public, but
13843	this requirement does not preclude the officedepartmentfrom
13844	complying with s. 631.398(2). The officedepartmentshall
13845	notify the board of directors when the examination is completed.
13846	The request for an examination shall be kept on file by the
13847	officedepartment.
13848	(5) The board is authorized to assist and aid the
13849	department or office, in any manner consistent with existing
13850	laws and this chapter, in the department's or office's
13851	investigation or referral for prosecution of those whose action
13852	or inaction may have contributed to the impairment or insolvency
13853	of the insurer.
13854	(6) The board may make recommendations to the office
13855	departmentfor the detection and prevention of insurer
13856	insolvencies.
13857	Section 252. Section 631.918, Florida Statutes, is amended
13858	to read:
13859	631.918 Immunity.--There is no liability on the part of,
13860	and a cause of action may not arise against, the corporation,
13861	its agents or employees, or members of its board of directors,
13862	or the department or office or theiritsagents or employees,
13863	for any action taken by them in the performance of their powers
13864	and duties under this section, unless such action is found to be
13865	a violation of antitrust laws, was in bad faith, or was
13866	undertaken with malicious purpose or in a manner exhibiting
13867	wanton and willful disregard of human rights, safety, or
13868	property.
13869	Section 253. Section 631.931, Florida Statutes, is amended
13870	to read:
13871	631.931 Reports and recommendations by board; public
13872	records exemption.--Reports and recommendations made by the
13873	Board of Directors of the Florida Workers' Compensation
13874	Insurance Guaranty Association to the Department of Insurance
13875	under s. 631.917 upon any matter germane to the solvency,
13876	liquidation, rehabilitation, or conservation of any member
13877	insurer are confidential and exempt from the provisions of s.
13878	119.07(1) and s. 24(a), Art. I of the State Constitution until
13879	the termination of a delinquency proceeding.
13880	Section 254. Subsections (3) and (4) of section 634.3284,
13881	Florida Statutes, are amended to read:
13882	634.3284 Civil remedy.--
13883	(3) As a condition precedent to bringing an action under
13884	this section, the officedepartmentand the insurer shall be
13885	given written notice of the violation. The notice shall state
13886	with specificity the facts which allegedly constitute the
13887	violation and the law upon which the plaintiff is relying and
13888	shall state that such notice is given in order to perfect the
13889	right to pursue the civil remedy authorized by this section. No
13890	action will lie if, within 30 days thereafter, the damages are
13891	paid or the circumstances giving rise to the violation are
13892	corrected.
13893	(4) This section shall not be construed to authorize a
13894	class action suit against a home warranty association or a civil
13895	action against the department or office or their, its employees,
13896	or the Chief Financial OfficerInsurance Commissioner.
13897	Section 255. Subsection (2) of section 634.430, Florida
13898	Statutes, is amended to read:
13899	634.430 Dissolution or liquidation.--
13900	(2) The department and officeshall be notified of the
13901	commencement of voluntary dissolution proceedings of a
13902	manufacturer licensed under this part. As to the warranty
13903	operations of a manufacturer in this state, the department shall
13904	supervise the voluntary dissolution and shall require protection
13905	of the interests of the department, office,and consumers who
13906	have been issued service warranties by the manufacturer by the
13907	continuation of deposits or bonds as required by this part until
13908	that time as all warranties issued by the manufacturer are no
13909	longer in effect or all outstanding warranties have been
13910	assigned to another association approved by the department and
13911	office. The notification as provided herein shall be made by the
13912	manufacturer within 30 days of the commencement of any legal
13913	action for dissolution.
13914	Section 256. Subsections (3) and (4) of section 634.433,
13915	Florida Statutes, are amended to read:
13916	634.433 Civil remedy.--
13917	(3) As a condition precedent to bringing an action under
13918	this section, the officedepartmentand the insurer shall be
13919	given written notice of the violation. The notice shall state
13920	with specificity the facts which allegedly constitute the
13921	violation and the law upon which the plaintiff is relying and
13922	shall state that such notice is given in order to perfect the
13923	right to pursue the civil remedy authorized by this section. No
13924	action will lie if, within 30 days thereafter, the damages are
13925	paid or the circumstances giving rise to the violation are
13926	corrected.
13927	(4) This section shall not be construed to authorize a
13928	class action suit against a service warranty association or a
13929	civil action against the department, the office, theirits
13930	employees, or the Chief Financial OfficerInsurance
13931	Commissioner.
13932	Section 257. Section 636.067, Florida Statutes, is amended
13933	to read:
13934	636.067 Rules.--The commission maydepartment has
13935	authority toadopt rules pursuant to ss. 120.536(1) and 120.54
13936	to implement the provisions of this act. A violation of any
13937	such rule subjects the violator to the provisions of s. 636.048.
13938	Section 258. Section 641.183, Florida Statutes, is amended
13939	to read:
13940	641.183 Statutory accounting procedures; transition
13941	provisions.--All health maintenance organizations, authorized to
13942	do business under this chapter on January 1, 2001, shall elect a
13943	transition method for compliance with statutory accounting
13944	principles as follows:
13945	(1) Report assets acquired prior to June 30, 2001, in
13946	accordance with s. 641.35, Florida Statutes (2000), through
13947	December 31, 2005. Assets acquired on or after June 30, 2001,
13948	shall be accounted for in accordance with the National
13949	Association of Insurance Commissioners Accounting Practices and
13950	Procedures Manual as of 2002effective January 1, 2001. A health
13951	maintenance organization electing to report assets pursuant to
13952	this subsection shall maintain complete and detailed records
13953	reflecting such accounting treatment; or
13954	(2) Report all assets in accordance with the NAIC
13955	Accounting Practices and Procedures Manual as of 2002effective
13956	January 1, 2001.
13957	Section 259. Section 641.185, Florida Statutes, is amended
13958	to read:
13959	641.185 Health maintenance organization subscriber
13960	protections.--
13961	(1) With respect to the provisions of this part and part
13962	III, the principles expressed in the following statements shall
13963	serve as standards to be followed by the commission, the office,
13964	the department,of Insuranceand the Agency for Health Care
13965	Administration in exercising their powers and duties, in
13966	exercising administrative discretion, in administrative
13967	interpretations of the law, in enforcing its provisions, and in
13968	adopting rules:
13969	(a) A health maintenance organization shall ensure that
13970	the health care services provided to its subscribers shall be
13971	rendered under reasonable standards of quality of care which are
13972	at a minimum consistent with the prevailing standards of medical
13973	practice in the community pursuant to ss. 641.495(1) and 641.51.
13974	(b) A health maintenance organization subscriber should
13975	receive quality health care from a broad panel of providers,
13976	including referrals, preventive care pursuant to s. 641.402(1),
13977	emergency screening and services pursuant to ss. 641.31(12) and
13978	641.513, and second opinions pursuant to s. 641.51.
13979	(c) A health maintenance organization subscriber should
13980	receive assurance that the health maintenance organization has
13981	been independently accredited by a national review organization
13982	pursuant to s. 641.512, and is financially secure as determined
13983	by the state pursuant to ss. 641.221, 641.225, and 641.228.
13984	(d) A health maintenance organization subscriber should
13985	receive continuity of health care, even after the provider is no
13986	longer with the health maintenance organization pursuant to s.
13987	641.51(8).
13988	(e) A health maintenance organization subscriber should
13989	receive timely, concise information regarding the health
13990	maintenance organization's reimbursement to providers and
13991	services pursuant to ss. 641.31 and 641.31015 and should receive
13992	prompt payment from the organization pursuant to s. 641.3155.
13993	(f) A health maintenance organization subscriber should
13994	receive the flexibility to transfer to another Florida health
13995	maintenance organization, regardless of health status, pursuant
13996	to ss. 641.228, 641.3104, 641.3107, 641.3111, 641.3921, and
13997	641.3922.
13998	(g) A health maintenance organization subscriber should be
13999	eligible for coverage without discrimination against individual
14000	participants and beneficiaries of group plans based on health
14001	status pursuant to s. 641.31073.
14002	(h) A health maintenance organization that issues a group
14003	health contract must: provide coverage for preexisting
14004	conditions pursuant to s. 641.31071; guarantee renewability of
14005	coverage pursuant to s. 641.31074; provide notice of
14006	cancellation pursuant to s. 641.3108; provide extension of
14007	benefits pursuant to s. 641.3111; provide for conversion on
14008	termination of eligibility pursuant to s. 641.3921; and provide
14009	for conversion contracts and conditions pursuant to s. 641.3922.
14010	(i) A health maintenance organization subscriber should
14011	receive timely and, if necessary, urgent grievances and appeals
14012	within the health maintenance organization pursuant to ss.
14013	641.228, 641.31(5), 641.47, and 641.511.
14014	(j) A health maintenance organization should receive
14015	timely and, if necessary, urgent review by an independent state
14016	external review organization for unresolved grievances and
14017	appeals pursuant to s. 408.7056.
14018	(k) A health maintenance organization subscriber shall be
14019	given written notice at least 30 days in advance of a rate
14020	change pursuant to s. 641.31(3)(b). In the case of a group
14021	member, there may be a contractual agreement with the health
14022	maintenance organization to have the employer provide the
14023	required notice to the individual members of the group pursuant
14024	to s. 641.31(3)(b).
14025	(l) A health maintenance organization subscriber shall be
14026	given a copy of the applicable health maintenance contract,
14027	certificate, or member handbook specifying: all the provisions,
14028	disclosure, and limitations required pursuant to s. 641.31(1)
14029	and (4); the covered services, including those services, medical
14030	conditions, and provider types specified in ss. 641.31,
14031	641.31094, 641.31095, 641.31096, 641.51(11), and 641.513; and
14032	where and in what manner services may be obtained pursuant to s.
14033	641.31(4).
14034	(2) This section shall not be construed as creating a
14035	civil cause of action by any subscriber or provider against any
14036	health maintenance organization.
14037	Section 260. Section 641.19, Florida Statutes, is amended
14038	to read:
14039	641.19 Definitions.--As used in this part, the term:
14040	(1) "Affiliate" means any entity thatwhichexercises
14041	control over or is controlled by the health maintenance
14042	organization, directly or indirectly, through:
14043	(a) Equity ownership of voting securities;
14044	(b) Common managerial control; or
14045	(c) Collusive participation by the management of the
14046	health maintenance organization and affiliate in the management
14047	of the health maintenance organization or the affiliate.
14048	(2) "Agency" means the Agency for Health Care
14049	Administration.
14050	(3) "Capitation" means the fixed amount paid by an HMO to
14051	a health care provider under contract with the health
14052	maintenance organization in exchange for the rendering of
14053	covered medical services.
14054	(4) "Comprehensive health care services" means services,
14055	medical equipment, and supplies furnished by a provider, which
14056	may include, but which are not limited to, medical, surgical,
14057	and dental care; psychological, optometric, optic, chiropractic,
14058	podiatric, nursing, physical therapy, and pharmaceutical
14059	services; health education, preventive medical, rehabilitative,
14060	and home health services; inpatient and outpatient hospital
14061	services; extended care; nursing home care; convalescent
14062	institutional care; technical and professional clinical
14063	pathology laboratory services; laboratory and ambulance
14064	services; appliances, drugs, medicines, and supplies; and any
14065	other care, service, or treatment of disease, or correction of
14066	defects for human beings.
14067	(5) "Copayment" means a specific dollar amount, except as
14068	otherwise provided for by statute, that the subscriber must pay
14069	upon receipt of covered health care services. Copayments may
14070	not be established in an amount that will prevent a person from
14071	receiving a covered service or benefit as specified in the
14072	subscriber contract approved by the officedepartment.
14073	(6) "Department" means the Department of Insurance.
14074	(6)(7)"Emergency medical condition" means:
14075	(a) A medical condition manifesting itself by acute
14076	symptoms of sufficient severity, which may include severe pain
14077	or other acute symptoms, such that the absence of immediate
14078	medical attention could reasonably be expected to result in any
14079	of the following:
14080	1. Serious jeopardy to the health of a patient, including
14081	a pregnant woman or a fetus.
14082	2. Serious impairment to bodily functions.
14083	3. Serious dysfunction of any bodily organ or part.
14084	(b) With respect to a pregnant woman:
14085	1. That there is inadequate time to effect safe transfer
14086	to another hospital prior to delivery;
14087	2. That a transfer may pose a threat to the health and
14088	safety of the patient or fetus; or
14089	3. That there is evidence of the onset and persistence of
14090	uterine contractions or rupture of the membranes.
14091	(7)(8)"Emergency services and care" means medical
14092	screening, examination, and evaluation by a physician, or, to
14093	the extent permitted by applicable law, by other appropriate
14094	personnel under the supervision of a physician, to determine if
14095	an emergency medical condition exists and, if it does, the care,
14096	treatment, or surgery for a covered service by a physician
14097	necessary to relieve or eliminate the emergency medical
14098	condition, within the service capability of a hospital.
14099	(8)(9)"Entity" means any legal entity with continuing
14100	existence, including, but not limited to, a corporation,
14101	association, trust, or partnership.
14102	(9)(10)"Geographic area" means the county or counties, or
14103	any portion of a county or counties, within which the health
14104	maintenance organization provides or arranges for comprehensive
14105	health care services to be available to its subscribers.
14106	(10)(11) "Guaranteeing organization" is an organization
14107	thatwhich is domiciled in the United States; thatwhichhas
14108	authorized service of process against it; and thatwhichhas
14109	appointed the Chief Financial OfficerInsurance Commissioner and
14110	Treasureras its agent for service of process issuing upon any
14111	cause of action arising in this state, based upon any guarantee
14112	entered into under this part.
14113	(11)(12)"Health maintenance contract" means any contract
14114	entered into by a health maintenance organization with a
14115	subscriber or group of subscribers to provide comprehensive
14116	health care services in exchange for a prepaid per capita or
14117	prepaid aggregate fixed sum.
14118	(12)(13)"Health maintenance organization" means any
14119	organization authorized under this part which:
14120	(a) Provides emergency care, inpatient hospital services,
14121	physician care including care provided by physicians licensed
14122	under chapters 458, 459, 460, and 461, ambulatory diagnostic
14123	treatment, and preventive health care services;
14124	(b) Provides, either directly or through arrangements with
14125	other persons, health care services to persons enrolled with
14126	such organization, on a prepaid per capita or prepaid aggregate
14127	fixed-sum basis;
14128	(c) Provides, either directly or through arrangements with
14129	other persons, comprehensive health care services which
14130	subscribers are entitled to receive pursuant to a contract;
14131	(d) Provides physician services, by physicians licensed
14132	under chapters 458, 459, 460, and 461, directly through
14133	physicians who are either employees or partners of such
14134	organization or under arrangements with a physician or any group
14135	of physicians; and
14136	(e) If offering services through a managed care system,
14137	then the managed care system must be a system in which a primary
14138	physician licensed under chapter 458 or chapter 459 and chapters
14139	460 and 461 is designated for each subscriber upon request of a
14140	subscriber requesting service by a physician licensed under any
14141	of those chapters, and is responsible for coordinating the
14142	health care of the subscriber of the respectively requested
14143	service and for referring the subscriber to other providers of
14144	the same discipline when necessary. Each female subscriber may
14145	select as her primary physician an obstetrician/gynecologist who
14146	has agreed to serve as a primary physician and is in the health
14147	maintenance organization's provider network.
14148	(13)(14)"Insolvent" or "insolvency" means that all the
14149	statutory assets of the health maintenance organization, if made
14150	immediately available, would not be sufficient to discharge all
14151	of its liabilities or that the health maintenance organization
14152	is unable to pay its debts as they become due in the usual
14153	course of business. In the event that all the assets of the
14154	health maintenance organization, if made immediately available,
14155	would not be sufficient to discharge all of its liabilities, but
14156	the organization has a written guarantee of the type and subject
14157	to the same provisions as outlined in s. 641.225, the
14158	organization shall not be considered insolvent unless it is
14159	unable to pay its debts as they become due in the usual course
14160	of business.
14161	(14)(15)"Provider" means any physician, hospital, or
14162	other institution, organization, or person that furnishes health
14163	care services and is licensed or otherwise authorized to
14164	practice in the state.
14165	(15)(16)"Reporting period" means the annual calendar year
14166	accounting period or any part thereof.
14167	(16)(17)"Statutory accounting principles" means
14168	accounting principles as defined in the National Association of
14169	Insurance Commissioners Accounting Practices and Procedures
14170	Manual as of 2002effective January 1, 2001.
14171	(17((18)"Subscriber" means an entity or individual who
14172	has contracted, or on whose behalf a contract has been entered
14173	into, with a health maintenance organization for health care
14174	services or other persons who also receive health care services
14175	as a result of the contract.
14176	(18)(19)"Surplus" means total statutory assets in excess
14177	of total liabilities, except that assets pledged to secure debts
14178	not reflected on the books of the health maintenance
14179	organization shall not be included in surplus. Surplus includes
14180	capital stock, capital in excess of par, other contributed
14181	capital, retained earnings, and surplus notes.
14182	(19)(20)"Uncovered expenditures" means the cost of health
14183	care services that are covered by a health maintenance
14184	organization, for which a subscriber would also be liable in the
14185	event of the insolvency of the organization.
14186	(20)(21)"Health care risk contract" means a contract
14187	under which an individual or entity receives consideration or
14188	other compensation in an amount greater than 1 percent of the
14189	health maintenance organization's annual gross written premium
14190	in exchange for providing to the health maintenance organization
14191	a provider network or other services, which may include
14192	administrative services. The 1-percent threshold shall be
14193	calculated on a contract-by-contract basis for each such
14194	individual or entity and not in the aggregate for all health
14195	care risk contracts.
14196	Section 261. Section 641.2017, Florida Statutes, is
14197	amended to read:
14198	641.2017 Insurance business not authorized.--Nothing in
14199	the Florida Insurance Code or this part shall be deemed to
14200	authorize any health maintenance organization to transact any
14201	insurance business other than that of health maintenance
14202	organization type insurance or otherwise to engage in any other
14203	type of insurance unless it is authorized under a certificate of
14204	authority issued by the officedepartmentunder the provisions
14205	of the Florida Insurance Code. However, a health maintenance
14206	organization may by contract:
14207	(1) Enter into arrangements whereby the expected cost of
14208	health care services provided directly or through arrangements
14209	with other persons by the health maintenance organization is
14210	self-funded by the person contracting with the health
14211	maintenance organization, but the health maintenance
14212	organization assumes the risks that costs will exceed that
14213	amount on a prepaid per capita or prepaid aggregate fixed-sum
14214	basis; or
14215	(2) Enter into arrangements whereby the cost of health
14216	care services provided directly or through arrangements with
14217	other persons by the health maintenance organization is self-
14218	funded by the person contracting with the health maintenance
14219	organization.
14220	Section 262. Subsections (1) and (2) of section 641.2018,
14221	Florida Statutes, are amended to read:
14222	641.2018 Limited coverage for home health care
14223	authorized.--
14224	(1) Notwithstanding other provisions of this chapter, a
14225	health maintenance organization may issue a contract that limits
14226	coverage to home health care services only. The organization and
14227	the contract shall be subject to all of the requirements of this
14228	part that do not require or otherwise apply to specific benefits
14229	other than home care services. To this extent, all of the
14230	requirements of this part apply to any organization or contract
14231	that limits coverage to home care services, except the
14232	requirements for providing comprehensive health care services as
14233	provided in ss. 641.19(4), (11), and (12), and (13),and
14234	641.31(1), except ss. 641.31(9), (12), (17), (18), (19), (20),
14235	(21), and (24) and 641.31095.
14236	(2) Notwithstanding the other provisions of this chapter,
14237	a health maintenance organization may apply for and obtain a
14238	certificate of authority from the officedepartmentpursuant to
14239	this part and a health care provider certificate pursuant to
14240	part III, which certificate limits the authority of the
14241	organization to the issuance of contracts that limit coverage to
14242	home health care services pursuant to subsection (1). In
14243	addition to all applicable requirements of this part, as
14244	specified in subsection (1), all of the requirements of part III
14245	apply to an organization applying for such a limited
14246	certificate, except to the extent that such requirements
14247	directly conflict with the limited nature of the coverage
14248	provided.
14249	Section 263. Subsections (1) and (2) of section 641.21,
14250	Florida Statutes, are amended to read:
14251	641.21 Application for certificate.--
14252	(1) Before any entity may operate a health maintenance
14253	organization, it shall obtain a certificate of authority from
14254	the officedepartment. The officedepartmentshall accept and
14255	shall begin its review of an application for a certificate of
14256	authority anytime after an organization has filed an application
14257	for a health care provider certificate pursuant to part III of
14258	this chapter. However, the office maydepartment shallnot
14259	issue a certificate of authority to any applicant which does not
14260	possess a valid health care provider certificate issued by the
14261	agency. Each application for a certificate shall be on such form
14262	as the commissiondepartmentshall prescribe, shall be verified
14263	by the oath of two officers of the corporation and properly
14264	notarized, and shall be accompanied by the following:
14265	(a) A copy of the articles of incorporation and all
14266	amendments thereto;
14267	(b) A copy of the bylaws, rules and regulations, or
14268	similar form of document, if any, regulating the conduct of the
14269	affairs of the applicant;
14270	(c) A list of the names, addresses, and official
14271	capacities with the organization of the persons who are to be
14272	responsible for the conduct of the affairs of the health
14273	maintenance organization, including all officers, directors, and
14274	owners of in excess of 5 percent of the common stock of the
14275	corporation. Such persons shall fully disclose to the office
14276	departmentand the directors of the health maintenance
14277	organization the extent and nature of any contracts or
14278	arrangements between them and the health maintenance
14279	organization, including any possible conflicts of interest;
14280	(d) A complete biographical statement on forms prescribed
14281	by the commissiondepartment, and an independent investigation
14282	report and fingerprints obtained pursuant to chapter 624, of all
14283	of the individuals referred to in paragraph (c);
14284	(e) A statement generally describing the health
14285	maintenance organization, its operations, and its grievance
14286	procedures;
14287	(f) Forms of all health maintenance contracts,
14288	certificates, and member handbooks the applicant proposes to
14289	offer the subscribers, showing the benefits to which they are
14290	entitled, together with a table of the rates charged, or
14291	proposed to be charged, for each form of such contract. A
14292	certified actuary shall:
14293	1. Certify that the rates are neither inadequate nor
14294	excessive nor unfairly discriminatory;
14295	2. Certify that the rates are appropriate for the classes
14296	of risks for which they have been computed; and
14297	3. File an adequate description of the rating methodology
14298	showing that such methodology follows consistent and equitable
14299	actuarial principles;
14300	(g) A statement describing with reasonable certainty the
14301	geographic area or areas to be served by the health maintenance
14302	organization;
14303	(h) As to any applicant whose business plan indicates that
14304	it will receive Medicaid funds, a list of all contracts and
14305	agreements and any information relative to any payment or
14306	agreement to pay, directly or indirectly, a consultant fee, a
14307	broker fee, a commission, or other fee or charge related in any
14308	way to the application for a certificate of authority or the
14309	issuance of a certificate of authority, including, but not
14310	limited to, the name of the person or entity paying the fee; the
14311	name of the person or entity receiving the fee; the date of
14312	payment; and a brief description of the work performed. The
14313	contract, agreement, and related information shall, if
14314	requested, be provided to the officedepartment.
14315	(i) An audited financial statement prepared on the basis
14316	of statutory accounting principles and certified by an
14317	independent certified public accountant, except that surplus
14318	notes acceptable to the officedepartmentand meeting the
14319	requirements of this act shall be included in the calculation of
14320	surplus; and
14321	(j) Such additional reasonable data, financial statements,
14322	and other pertinent information as the commissioner or office
14323	requiresdepartment may requirewith respect to the
14324	determination that the applicant can provide the services to be
14325	offered.
14326	(2) After submission of the application for a certificate
14327	of authority, the entity may engage in initial group marketing
14328	activities solely with respect to employers, representatives of
14329	labor unions, professional associations, and trade associations,
14330	so long as it does not enter into, issue, deliver, or otherwise
14331	effectuate health maintenance contracts, effectuate or bind
14332	coverage or benefits, provide health care services, or collect
14333	premiums or charges until it has been issued a certificate of
14334	authority by the officedepartment. Any such activities, oral
14335	or written, shall include a statement that the entity does not
14336	possess a valid certificate of authority and cannot enter into
14337	health maintenance contracts until such time as it has been
14338	issued a certificate of authority by the officedepartment.
14339	Section 264. Section 641.215, Florida Statutes, is amended
14340	to read:
14341	641.215 Conditions precedent to issuance or maintenance of
14342	certificate of authority; effect of bankruptcy proceedings.--
14343	(1) As a condition precedent to the issuance or
14344	maintenance of a certificate of authority, a health maintenance
14345	organization insurer must file or have on file with the office
14346	department:
14347	(a) An acknowledgment that a delinquency proceeding
14348	pursuant to part I of chapter 631, or supervision by the office
14349	department pursuant to ss. 624.80-624.87,constitutes the sole
14350	and exclusive method for the liquidation, rehabilitation,
14351	reorganization, or conservation of a health maintenance
14352	organization.
14353	(b) A waiver of any right to file or be subject to a
14354	bankruptcy proceeding.
14355	(2) The commencement of a bankruptcy proceeding either by
14356	or against a health maintenance organization shall, by operation
14357	of law:
14358	(a) Terminate the health maintenance organization's
14359	certificate of authority.
14360	(b) Vest in the officedepartmentfor the use and benefit
14361	of the subscribers of the health maintenance organization the
14362	title to any deposits of the insurer held by the department.
14363
14364
14365	If the proceeding is initiated by a party other than the health
14366	maintenance organization, the operation of subsection (2) shall
14367	be stayed for a period of 60 days following the date of
14368	commencement of the proceeding.
14369	Section 265. Section 641.22, Florida Statutes, is amended
14370	to read:
14371	641.22 Issuance of certificate of authority.--The office
14372	departmentshall issue a certificate of authority to any entity
14373	filing a completed application in conformity with s. 641.21,
14374	upon payment of the prescribed fees and upon the office's
14375	department'sbeing satisfied that:
14376	(1) As a condition precedent to the issuance of any
14377	certificate, the entity has obtained a health care provider
14378	certificate from the Agency for Health Care Administration
14379	pursuant to part III of this chapter.
14380	(2) The health maintenance organization is actuarially
14381	sound.
14382	(3) The entity has met the applicable requirements
14383	specified in s. 641.225.
14384	(4) The procedures for offering comprehensive health care
14385	services and offering and terminating contracts to subscribers
14386	will not unfairly discriminate on the basis of age, sex, race,
14387	health, or economic status. However, this section does not
14388	prohibit reasonable underwriting classifications for the
14389	purposes of establishing contract rates, nor does it prohibit
14390	experience rating.
14391	(5) The entity furnishes evidence of adequate insurance
14392	coverage or an adequate plan for self-insurance to respond to
14393	claims for injuries arising out of the furnishing of
14394	comprehensive health care.
14395	(6) The ownership, control, and management of the entity
14396	is competent and trustworthy and possesses managerial experience
14397	that would make the proposed health maintenance organization
14398	operation beneficial to the subscribers. The officedepartment
14399	shall not grant or continue authority to transact the business
14400	of a health maintenance organization in this state at any time
14401	during which the officedepartmenthas good reason to believe
14402	that:
14403	(a) The ownership, control, or management of the
14404	organization includes any person:
14405	1. Who is incompetent or untrustworthy;
14406	2. Who is so lacking in health maintenance organization
14407	expertise as to make the operation of the health maintenance
14408	organization hazardous to potential and existing subscribers;
14409	3. Who is so lacking in health maintenance organization
14410	experience, ability, and standing as to jeopardize the
14411	reasonable promise of successful operation;
14412	4. Who is affiliated, directly or indirectly, through
14413	ownership, control, reinsurance transactions, or other business
14414	relations, with any person whose business operations are or have
14415	been marked by business practices or conduct that is to the
14416	detriment of the public, stockholders, investors, or creditors;
14417	or
14418	5. Whose business operations are or have been marked by
14419	business practices or conduct that is to the detriment of the
14420	public, stockholders, investors, or creditors;
14421	(b) Any person, including any stock subscriber,
14422	stockholder, or incorporator, who exercises or has the ability
14423	to exercise effective control of the organization, or who
14424	influences or has the ability to influence the transaction of
14425	the business of the health maintenance organization, does not
14426	possess the financial standing and business experience for the
14427	successful operation of the health maintenance organization;
14428	(c) Any person, including any stock subscriber,
14429	stockholder, or incorporator, who exercises or has the ability
14430	to exercise effective control of the organization, or who
14431	influences or has the ability to influence the transaction of
14432	the business of the health maintenance organization, has been
14433	found guilty of, or has pled guilty or no contest to, any felony
14434	or crime punishable by imprisonment of 1 year or more under the
14435	laws of the United States or any state thereof or under the laws
14436	of any other country, which involves moral turpitude, without
14437	regard to whether a judgment or conviction has been entered by
14438	the court having jurisdiction in such case. However, in the case
14439	of a health maintenance organization operating under a
14440	subsisting certificate of authority, the health maintenance
14441	organization shall remove any such person immediately upon
14442	discovery of the conditions set forth in this paragraph when
14443	applicable to such person or under the order of the office
14444	department, and the failure to so act by the organization is
14445	grounds for revocation or suspension of the health maintenance
14446	organization's certificate of authority; or
14447	(d) Any person, including any stock subscriber,
14448	stockholder, or incorporator, who exercises or has the ability
14449	to exercise effective control of the organization, or who
14450	influences or has the ability to influence the transaction of
14451	the business of the health maintenance organization, is now or
14452	was in the past affiliated, directly or indirectly, through
14453	ownership interest of 10 percent or more, control, or
14454	reinsurance transactions, with any business, corporation, or
14455	other entity that has been found guilty of or has pleaded guilty
14456	or nolo contendere to any felony or crime punishable by
14457	imprisonment for 1 year or more under the laws of the United
14458	States, any state, or any other country, regardless of
14459	adjudication. In the case of a health maintenance organization
14460	operating under a subsisting certificate of authority, the
14461	health maintenance organization shall immediately remove such
14462	person or immediately notify the officedepartmentof such
14463	person upon discovery of the conditions set forth in this
14464	paragraph, either when applicable to such person or upon order
14465	of the officedepartment. The failure to remove such person,
14466	provide such notice, or comply with such order constitutes
14467	grounds for suspension or revocation of the health maintenance
14468	organization's certificate of authority.
14469	(7) The entity has a blanket fidelity bond in the amount
14470	of $100,000, issued by a licensed insurance carrier in this
14471	state, that will reimburse the entity in the event that anyone
14472	handling the funds of the entity either misappropriates or
14473	absconds with the funds. All employees handling the funds shall
14474	be covered by the blanket fidelity bond. An agent licensed
14475	under the provisions of the Florida Insurance Code may either
14476	directly or indirectly represent the health maintenance
14477	organization in the solicitation, negotiation, effectuation,
14478	procurement, receipt, delivery, or forwarding of any health
14479	maintenance organization subscriber's contract or collect or
14480	forward any consideration paid by the subscriber to the health
14481	maintenance organization; and the licensed agent shall not be
14482	required to post the bond required by this subsection.
14483	(8) The entity has filed with the officedepartment, and
14484	obtained approval from the officedepartmentof, all reinsurance
14485	contracts as provided in s. 641.285.
14486	(9) The health maintenance organization has a grievance
14487	procedure that will facilitate the resolution of subscriber
14488	grievances and that includes both formal and informal steps
14489	available within the organization.
14490	Section 266. Subsections (2) and (4), and paragraphs (b)
14491	and (d) of subsection (6) of section 641.225, Florida Statutes,
14492	are amended to read:
14493	641.225 Surplus requirements.--
14494	(2) The officedepartmentshall not issue a certificate of
14495	authority, except as provided in subsection (3), unless the
14496	health maintenance organization has a minimum surplus in an
14497	amount which is the greater of:
14498	(a) Ten percent of their total liabilities based on their
14499	startup projection as set forth in this part;
14500	(b) Two percent of their total projected premiums based on
14501	their startup projection as set forth in this part; or
14502	(c) $1,500,000, plus all startup losses, excluding
14503	profits, projected to be incurred on their startup projection
14504	until the projection reflects statutory net profits for 12
14505	consecutive months.
14506	(4) The commissiondepartmentmay adopt rules to set
14507	uniform standards and criteria for the early warning that the
14508	continued operation of any health maintenance organization might
14509	be hazardous to its subscribers, creditors, or the general
14510	public, and to set standards for evaluating the financial
14511	condition of any health maintenance organization.
14512	(6) In lieu of having any minimum surplus, the health
14513	maintenance organization may provide a written guarantee to
14514	assure payment of covered subscriber claims and all other
14515	liabilities of the health maintenance organization, provided
14516	that the written guarantee is made by a guaranteeing
14517	organization which:
14518	(b) Submits a guarantee that is approved by the office
14519	departmentas meeting the requirements of this part, provided
14520	that the written guarantee contains a provision which requires
14521	that the guarantee be irrevocable unless the guaranteeing
14522	organization can demonstrate to the officedepartmentthat the
14523	cancellation of the guarantee will not result in the insolvency
14524	of the health maintenance organization and the officedepartment
14525	approves cancellation of the guarantee.
14526	(d) Submits annually, within 3 months after the end of its
14527	fiscal year, an audited financial statement certified by an
14528	independent certified public accountant, prepared in accordance
14529	with generally accepted accounting principles. The office
14530	departmentmay, as it deems necessary, require quarterly
14531	financial statements from the guaranteeing organization.
14532	Section 267. Subsection (1) of section 641.227, Florida
14533	Statutes, is amended to read:
14534	641.227 Rehabilitation Administrative Expense Fund.--
14535	(1) The officedepartmentshall not issue or permit to
14536	exist a certificate of authority to operate a health maintenance
14537	organization in this state unless the organization has deposited
14538	with the department $10,000 in cash for use in the
14539	Rehabilitation Administrative Expense Fund as established in
14540	subsection (2).
14541	Section 268. Subsections (1) and (3) of section 641.228,
14542	Florida Statutes, are amended to read:
14543	641.228 Florida Health Maintenance Organization Consumer
14544	Assistance Plan.--
14545	(1) The officedepartmentshall not issue a certificate to
14546	any health maintenance organization after July 1, 1989, until
14547	the applicant health maintenance organization has paid in full
14548	its special assessment as set forth in s. 631.819(2)(a).
14549	(3) The officedepartmentmay suspend or revoke the
14550	certificate of authority of any health maintenance organization
14551	which does not timely pay its assessment to the Florida Health
14552	Maintenance Organization Consumer Assistance Plan.
14553	Section 269. Section 641.23, Florida Statutes, is amended
14554	to read:
14555	641.23 Revocation or cancellation of certificate of
14556	authority; suspension of enrollment of new subscribers; terms of
14557	suspension.--
14558	(1) The maintenance of a valid and current health care
14559	provider certificate issued pursuant to part III of this chapter
14560	is a condition of the maintenance of a valid and current
14561	certificate of authority issued by the officedepartmentto
14562	operate a health maintenance organization. Denial or revocation
14563	of a health care provider certificate shall be deemed to be an
14564	automatic and immediate cancellation of a health maintenance
14565	organization's certificate of authority. At the discretion of
14566	the officeDepartment of Insurance, nonrenewal of a health care
14567	provider certificate may be deemed to be an automatic and
14568	immediate cancellation of a health maintenance organization's
14569	certificate of authority if the Agency for Health Care
14570	Administration notifies the officeDepartment of Insurance, in
14571	writing, that the health care provider certificate will not be
14572	renewed.
14573	(2) The officedepartmentmay suspend the authority of a
14574	health maintenance organization to enroll new subscribers or
14575	revoke any certificate issued to a health maintenance
14576	organization, or order compliance within 30 days, if it finds
14577	that any of the following conditions exists:
14578	(a) The organization is not operating in compliance with
14579	this part;
14580	(b) The plan is no longer actuarially sound or the
14581	organization does not have the minimum surplus as required by
14582	this part;
14583	(c) The existing contract rates are excessive, inadequate,
14584	or unfairly discriminatory;
14585	(d) The organization has advertised, merchandised, or
14586	attempted to merchandise its services in such a manner as to
14587	misrepresent its services or capacity for service or has engaged
14588	in deceptive, misleading, or unfair practices with respect to
14589	advertising or merchandising; or
14590	(e) The organization is insolvent.
14591	(3) Whenever the financial condition of the health
14592	maintenance organization is such that, if not modified or
14593	corrected, its continued operation would result in impairment or
14594	insolvency, the officedepartmentmay order the health
14595	maintenance organization to file with the officedepartmentand
14596	implement a corrective action plan designed to do one or more of
14597	the following:
14598	(a) Reduce the total amount of present potential liability
14599	for benefits by reinsurance or other means.
14600	(b) Reduce the volume of new business being accepted.
14601	(c) Reduce the expenses of the health maintenance
14602	organization by specified methods.
14603	(d) Suspend or limit the writing of new business for a
14604	period of time.
14605	(e) Require an increase in the health maintenance
14606	organization's net worth.
14607
14608
14609	If the health maintenance organization fails to submit a plan
14610	within 30 days of the office'sdepartment'sorder or submits a
14611	plan which is insufficient to correct the health maintenance
14612	organization's financial condition, the officedepartmentmay
14613	order the health maintenance organization to implement one or
14614	more of the corrective actions listed in this subsection.
14615	(4) The officedepartmentshall, in its order suspending
14616	the authority of a health maintenance organization to enroll new
14617	subscribers, specify the period during which the suspension is
14618	to be in effect and the conditions, if any, which must be met by
14619	the health maintenance organization prior to reinstatement of
14620	its authority to enroll new subscribers. The order of
14621	suspension is subject to rescission or modification by further
14622	order of the officedepartmentprior to the expiration of the
14623	suspension period. Reinstatement shall not be made unless
14624	requested by the health maintenance organization; however, the
14625	officedepartmentshall not grant reinstatement if it finds that
14626	the circumstances for which the suspension occurred still exist
14627	or are likely to recur.
14628	(5) The commissiondepartment shall adoptpromulgaterules
14629	establishing an actuarially sound medical loss ratio for
14630	Medicaid. In determining the appropriate medical loss ratio,
14631	the commissiondepartmentshall consider factors, including but
14632	not limited to, plan age, plan structure, geographic service
14633	area, product mix, provider network, medical inflation, provider
14634	services, other professional services, out of network referrals
14635	and expenditures, in and out of network emergency room
14636	expenditures, inpatient expenditures, other medical
14637	expenditures, incentive pool adjustments, copayments,
14638	coordination of benefits, subrogation, and any other expenses
14639	associated with the delivery of medical benefits. The
14640	commissiondepartmentshall utilize assistance from the Agency
14641	for Health Care Administration, the State University System, an
14642	independent actuary, and representatives from health maintenance
14643	organizations in developing the rule for appropriate medical
14644	loss ratios.
14645	(6) The officedepartmentshall calculate and publish at
14646	least annually the medical loss ratios of all licensed health
14647	maintenance organizations. The publication shall include an
14648	explanation of what the medical loss ratio means and shall
14649	disclose that the medical loss ratio is not a direct reflection
14650	of quality, but must be looked at along with patient
14651	satisfaction and other standards that define quality.
14652	Section 270. Subsections (1), (2), and (3) of section
14653	641.234, Florida Statutes, are amended to read:
14654	641.234 Administrative, provider, and management
14655	contracts.--
14656	(1) The officedepartmentmay require a health maintenance
14657	organization to submit any contract for administrative services,
14658	contract with a provider other than an individual physician,
14659	contract for management services, and contract with an
14660	affiliated entity to the officedepartment.
14661	(2) After review of a contract the officedepartmentmay
14662	order the health maintenance organization to cancel the contract
14663	in accordance with the terms of the contract and applicable law
14664	if it determines:
14665	(a) That the fees to be paid by the health maintenance
14666	organization under the contract are so unreasonably high as
14667	compared with similar contracts entered into by the health
14668	maintenance organization or as compared with similar contracts
14669	entered into by other health maintenance organizations in
14670	similar circumstances that the contract is detrimental to the
14671	subscribers, stockholders, investors, or creditors of the health
14672	maintenance organization; or
14673	(b) That the contract is with an entity that is not
14674	licensed under state statutes, if such license is required, or
14675	is not in good standing with the applicable regulatory agency.
14676	(3) All contracts for administrative services, management
14677	services, provider services other than individual physician
14678	contracts, and with affiliated entities entered into or renewed
14679	by a health maintenance organization on or after October 1,
14680	1988, shall contain a provision that the contract shall be
14681	canceled upon issuance of an order by the officedepartment
14682	pursuant to this section.
14683	Section 271. Section 641.2342, Florida Statutes, is
14684	amended to read:
14685	641.2342 Contract providers.--Each health maintenance
14686	organization shall file, upon the request of the office
14687	department, financial statements for all contract providers of
14688	comprehensive health care services who have assumed, through
14689	capitation or other means, more than 10 percent of the health
14690	care risks of the health maintenance organization. However,
14691	this provision shall not apply to any individual physician.
14692	Section 272. Section 641.25, Florida Statutes, is amended
14693	to read:
14694	641.25 Administrative penalty in lieu of suspension or
14695	revocation.--If the officedepartmentfinds that one or more
14696	grounds exist for the revocation or suspension of a certificate
14697	issued under this part, the officedepartmentmay, in lieu of
14698	revocation or suspension, impose a fine upon the health
14699	maintenance organization. With respect to any nonwillful
14700	violation, the fine must not exceed $2,500 per violation. Such
14701	fines may not exceed an aggregate amount of $25,000 for all
14702	nonwillful violations arising out of the same action. With
14703	respect to any knowing and willful violation of a lawful order
14704	or rule of the office or commissiondepartmentor a provision of
14705	this part, the officedepartmentmay impose upon the
14706	organization a fine in an amount not to exceed $20,000 for each
14707	such violation. Such fines may not exceed an aggregate amount
14708	of $250,000 for all knowing and willful violations arising out
14709	of the same action. The commissiondepartmentmust adopt by
14710	rule by January 1, 1997,penalty categories that specify varying
14711	ranges of monetary fines for willful violations and for
14712	nonwillful violations.
14713	Section 273. Subsection (2) of section 641.255, Florida
14714	Statutes, is amended to read:
14715	641.255 Acquisition, merger, or consolidation.--
14716	(2) In addition to the requirements set forth in ss.
14717	628.451, 628.4615, and 628.471, each party to any transaction
14718	involving any licensee which, as indicated in its most recent
14719	quarterly or annual statement, derives income from Medicaid
14720	funds shall in the filing made with the officedepartment
14721	identify:
14722	(a) Any person who has received any payment from either
14723	party or any person on that party's behalf; or
14724	(b) The existence of any agreement entered into by either
14725	party or by any person on that party's behalf to pay a
14726	consultant fee, a broker fee, a commission, or other fee or
14727	charge,
14728
14729
14730	which in any way relates to the acquisition, merger, or
14731	consolidation. The commissiondepartmentmay adopt a form to be
14732	made part of the application which is to be sworn to by an
14733	officer of the entity which made or will make the payment. The
14734	form shall include the name of the person or entity paying the
14735	fee; the name of the person or entity receiving the fee; the
14736	date of payment; and a brief description of the work performed.
14737	Section 274. Section 641.26, Florida Statutes, is amended
14738	to read:
14739	641.26 Annual and quarterly reports.--
14740	(1) Every health maintenance organization shall, annually
14741	within 3 months after the end of its fiscal year, or within an
14742	extension of time therefor as the officedepartment, for good
14743	cause, may grant, in a form prescribed by the commission
14744	department, file a report with the officedepartment, verified
14745	by the oath of two officers of the organization or, if not a
14746	corporation, of two persons who are principal managing directors
14747	of the affairs of the organization, properly notarized, showing
14748	its condition on the last day of the immediately preceding
14749	reporting period. Such report shall include:
14750	(a) A financial statement of the health maintenance
14751	organization filed on a computer diskette using a format
14752	acceptable to the officedepartment.
14753	(b) A financial statement of the health maintenance
14754	organization filed on forms acceptable to the officedepartment.
14755	(c) An audited financial statement of the health
14756	maintenance organization, including its balance sheet and a
14757	statement of operations for the preceding year certified by an
14758	independent certified public accountant, prepared in accordance
14759	with statutory accounting principles.
14760	(d) The number of health maintenance contracts issued and
14761	outstanding and the number of health maintenance contracts
14762	terminated.
14763	(e) The number and amount of damage claims for medical
14764	injury initiated against the health maintenance organization and
14765	any of the providers engaged by it during the reporting year,
14766	broken down into claims with and without formal legal process,
14767	and the disposition, if any, of each such claim.
14768	(f) An actuarial certification that:
14769	1. The health maintenance organization is actuarially
14770	sound, which certification shall consider the rates, benefits,
14771	and expenses of, and any other funds available for the payment
14772	of obligations of, the organization.
14773	2. The rates being charged or to be charged are
14774	actuarially adequate to the end of the period for which rates
14775	have been guaranteed.
14776	3. Incurred but not reported claims and claims reported
14777	but not fully paid have been adequately provided for.
14778	4. The health maintenance organization has adequately
14779	provided for all obligations required by s. 641.35(3)(a).
14780	(g) A report prepared by the certified public accountant
14781	and filed with the officedepartmentdescribing material
14782	weaknesses in the health maintenance organization's internal
14783	control structure as noted by the certified public accountant
14784	during the audit. The report must be filed with the annual
14785	audited financial report as required in paragraph (c). The
14786	health maintenance organization shall provide a description of
14787	remedial actions taken or proposed to correct material
14788	weaknesses, if the actions are not described in the independent
14789	certified public accountant's report.
14790	(h) Such other information relating to the performance of
14791	health maintenance organizations as is required by the
14792	commission or officedepartment.
14793	(2) The officedepartmentmay require updates of the
14794	actuarial certification as to a particular health maintenance
14795	organization if the officedepartmenthas reasonable cause to
14796	believe that such reserves are understated to the extent of
14797	materially misstating the financial position of the health
14798	maintenance organization. Workpapers in support of the
14799	statement of the updated actuarial certification must be
14800	provided to the officedepartmentupon request.
14801	(3) Every health maintenance organization shall file
14802	quarterly, for the first three calendar quarters of each year,
14803	an unaudited financial statement of the organization as
14804	described in paragraphs (1)(a) and (b). The statement for the
14805	quarter ending March 31 shall be filed on or before May 15, the
14806	statement for the quarter ending June 30 shall be filed on or
14807	before August 15, and the statement for the quarter ending
14808	September 30 shall be filed on or before November 15. The
14809	quarterly report shall be verified by the oath of two officers
14810	of the organization, properly notarized.
14811	(4) Any health maintenance organization that neglects to
14812	file an annual report or quarterly report in the form and within
14813	the time required by this section shall forfeit up to $1,000 for
14814	each day for the first 10 days during which the neglect
14815	continues and shall forfeit up to $2,000 for each day after the
14816	first 10 days during which the neglect continues; and, upon
14817	notice by the officedepartmentto that effect, the
14818	organization's authority to enroll new subscribers or to do
14819	business in this state shall cease while such default continues.
14820	The officedepartmentshall deposit all sums collected by it
14821	under this section to the credit of the Insurance Commissioner's
14822	Regulatory Trust Fund. The officedepartmentshall not collect
14823	more than $100,000 for each report.
14824	(5) Each authorized health maintenance organization shall
14825	retain an independent certified public accountant, referred to
14826	in this section as "CPA," who agrees by written contract with
14827	the health maintenance organization to comply with the
14828	provisions of this part.
14829	(a) The CPA shall provide to the HMO audited financial
14830	statements consistent with this part.
14831	(b) Any determination by the CPA that the health
14832	maintenance organization does not meet minimum surplus
14833	requirements as set forth in this part shall be stated by the
14834	CPA, in writing, in the audited financial statement.
14835	(c) The completed work papers and any written
14836	communications between the CPA firm and the health maintenance
14837	organization relating to the audit of the health maintenance
14838	organization shall be made available for review on a visual-
14839	inspection-only basis by the officedepartmentat the offices of
14840	the health maintenance organization, at the officedepartment,
14841	or at any other reasonable place as mutually agreed between the
14842	officedepartmentand the health maintenance organization. The
14843	CPA must retain for review the work papers and written
14844	communications for a period of not less than 6 years.
14845	(d) The CPA shall provide to the officedepartmenta
14846	written report describing material weaknesses in the health
14847	maintenance organization's internal control structure as noted
14848	during the audit.
14849	(6) To facilitate uniformity in financial statements and
14850	to facilitate officedepartment analysis, the commission
14851	departmentmay by rule adopt the form for financial statements
14852	of a health maintenance organization, including supplements as
14853	approved by the National Association of Insurance Commissioners
14854	in 1995, and may adopt subsequent amendments thereto if the
14855	methodology remains substantially consistent, and may by rule
14856	require each health maintenance organization to submit to the
14857	officedepartmentall or part of the information contained in
14858	the annual statement in a computer-readable form compatible with
14859	the electronic data processing system specified by the office
14860	department.
14861	(7) In addition to information called for and furnished in
14862	connection with its annual or quarterly statements, the health
14863	maintenance organization shall furnish to the officedepartment
14864	as soon as reasonably possible such information as to its
14865	material transactions which, in the office'sdepartment's
14866	opinion, may have a material adverse effect on the health
14867	maintenance organization's financial condition, as the office
14868	requestsdepartment may requestin writing. All such information
14869	furnished pursuant to the office'sdepartment'srequest must be
14870	verified by the oath of two executive officers of the health
14871	maintenance organization.
14872	(8) Each health maintenance organization shall file one
14873	copy of its annual statement convention blank in electronic
14874	form, along with such additional filings as prescribed by the
14875	commissiondepartmentfor the preceding calendar year or
14876	quarter, with the National Association of Insurance
14877	Commissioners. Each health maintenance organization shall pay
14878	fees assessed by the National Association of Insurance
14879	Commissioners to cover costs associated with the filing and
14880	analysis of the documents by the National Association of
14881	Insurance Commissioners.
14882	Section 275. Section 641.27, Florida Statutes, is amended
14883	to read:
14884	641.27 Examination by the department.--
14885	(1) The officedepartmentshall examine the affairs,
14886	transactions, accounts, business records, and assets of any
14887	health maintenance organization as often as it deems it
14888	expedient for the protection of the people of this state, but
14889	not less frequently than once every 3 years. In lieu of making
14890	its own financial examination, the officedepartmentmay accept
14891	an independent certified public accountant's audit report
14892	prepared on a statutory accounting basis consistent with this
14893	part. However, except when the medical records are requested
14894	and copies furnished pursuant to s. 456.057, medical records of
14895	individuals and records of physicians providing service under
14896	contract to the health maintenance organization shall not be
14897	subject to audit, although they may be subject to subpoena by
14898	court order upon a showing of good cause. For the purpose of
14899	examinations, the officedepartmentmay administer oaths to and
14900	examine the officers and agents of a health maintenance
14901	organization concerning its business and affairs. The
14902	examination of each health maintenance organization by the
14903	officedepartmentshall be subject to the same terms and
14904	conditions as apply to insurers under chapter 624. In no event
14905	shall expenses of all examinations exceed a maximum of $20,000
14906	for any 1-year period. Any rehabilitation, liquidation,
14907	conservation, or dissolution of a health maintenance
14908	organization shall be conducted under the supervision of the
14909	department, which shall have all power with respect thereto
14910	granted to it under the laws governing the rehabilitation,
14911	liquidation, reorganization, conservation, or dissolution of
14912	life insurance companies.
14913	(2) The officedepartmentmay contract, at reasonable fees
14914	for work performed, with qualified, impartial outside sources to
14915	perform audits or examinations or portions thereof pertaining to
14916	the qualification of an entity for issuance of a certificate of
14917	authority or to determine continued compliance with the
14918	requirements of this part, in which case the payment must be
14919	made directly to the contracted examiner by the health
14920	maintenance organization examined, in accordance with the rates
14921	and terms agreed to by the officedepartmentand the examiner.
14922	Any contracted assistance shall be under the direct supervision
14923	of the officedepartment. The results of any contracted
14924	assistance shall be subject to the review of, and approval,
14925	disapproval, or modification by, the officedepartment.
14926	Section 276. Section 641.28, Florida Statutes, is amended
14927	to read:
14928	641.28 Civil remedy.--In any civil action brought to
14929	enforce the terms and conditions of a health maintenance
14930	organization contract, the prevailing party is entitled to
14931	recover reasonable attorney's fees and court costs. This section
14932	shall not be construed to authorize a civil action against the
14933	commission, office, or department, theirits employees, or the
14934	Chief Financial OfficerInsurance Commissioneror against the
14935	Agency for Health Care Administration, its employees, or the
14936	director of the agency.
14937	Section 277. Section 641.281, Florida Statutes, is amended
14938	to read:
14939	641.281 Injunction.--In addition to the penalties and
14940	other enforcement provisions of this part, the office and
14941	department, within the scope of their regulatory jurisdictions,
14942	areisvested with the power to seek both temporary and
14943	permanent injunctive relief when:
14944	(1) A health maintenance organization is being operated by
14945	any person or entity without a subsisting certificate of
14946	authority.
14947	(2) Any person, entity, or health maintenance organization
14948	has engaged in any activity prohibited by this part or any rule
14949	adopted pursuant thereto.
14950	(3) Any health maintenance organization, person, or entity
14951	is renewing, issuing, or delivering a health maintenance
14952	contract or contracts without a subsisting certificate of
14953	authority.
14954
14955
14956	The office's anddepartment's authority to seek injunctive
14957	relief shall not be conditioned on having conducted any
14958	proceeding pursuant to chapter 120.
14959	Section 278. Section 641.284, Florida Statutes, is amended
14960	to read:
14961	641.284 Liquidation, rehabilitation, reorganization, and
14962	conservation; exclusive methods of remedy.--A delinquency
14963	proceeding under part I of chapter 631, or supervision by the
14964	officedepartment under ss. 624.80-624.87,constitute the sole
14965	and exclusive means of liquidating, reorganizing,
14966	rehabilitating, or conserving a health maintenance organization.
14967	Section 279. Subsections (1), (2), and (3) of section
14968	641.285, Florida Statutes, are amended to read:
14969	641.285 Insolvency protection.--
14970	(1) Each health maintenance organization shall deposit
14971	with the department cash or securities of the type eligible
14972	under s. 625.52, which shall have at all times a market value in
14973	the amount set forth in this subsection. The amount of the
14974	deposit shall be reviewed annually, or more often, as the office
14975	departmentdeems necessary. The market value of the deposit
14976	shall be a minimum of $300,000.
14977	(2) If securities or assets deposited by a health
14978	maintenance organization under this part are subject to material
14979	fluctuations in market value, the officedepartmentmay, in its
14980	discretion, require the organization to deposit and maintain on
14981	deposit additional securities or assets in an amount as may be
14982	reasonably necessary to assure that the deposit will at all
14983	times have a market value of not less than the amount specified
14984	under this section. If for any reason the market value of assets
14985	and securities of a health maintenance organization held on
14986	deposit in this state under this code falls below the amount
14987	required, the organization shall promptly deposit other or
14988	additional assets or securities eligible for deposit sufficient
14989	to cure the deficiency. If the health maintenance organization
14990	has failed to cure the deficiency within 30 days after receipt
14991	of notice thereof by registered or certified mail from the
14992	officedepartment, the officedepartmentmay revoke the
14993	certificate of authority of the health maintenance organization.
14994	(3) Whenever the officedepartmentdetermines that the
14995	financial condition of a health maintenance organization has
14996	deteriorated to the point that the policyholders' or
14997	subscribers' best interests are not being preserved by the
14998	activities of a health maintenance organization, the office
14999	departmentmay require such health maintenance organization to
15000	deposit and maintain deposited in trust with the department for
15001	the protection of the health maintenance organization's
15002	policyholders, subscribers, and creditors, for such time as the
15003	officedepartmentdeems necessary, securities eligible for such
15004	deposit under s. 625.52 having a market value of not less than
15005	the amount that the officedepartmentdetermines is necessary,
15006	which amount must not be less than $100,000 or greater than $2
15007	million. The deposit required under this subsection is in
15008	addition to any other deposits required of a health maintenance
15009	organization pursuant to subsections (1) and (2).
15010	Section 280. Section 641.29, Florida Statutes, is amended
15011	to read:
15012	641.29 Fees.--Every health maintenance organization shall
15013	pay to the officedepartmentthe following fees:
15014	(1) For filing a copy of its application for a certificate
15015	of authority or amendment thereto, a nonrefundable fee in the
15016	amount of $1,000.
15017	(2) For filing each annual report, which must be filed on
15018	computer diskettes, $150.
15019	Section 281. Paragraph (b) of subsection (4) of section
15020	641.3007, Florida Statutes, is amended to read:
15021	641.3007 HIV infection and AIDS for contract
15022	(4) UTILIZATION OF MEDICAL TESTS.--
15023	(b) Prior to testing, the health maintenance organization
15024	must disclose its intent to test the person for the HIV
15025	infection or for a specific sickness or medical condition
15026	derived therefrom and must obtain the person's written informed
15027	consent to administer the test. Written informed consent shall
15028	include a fair explanation of the test, including its purpose,
15029	potential uses, and limitations, and the meaning of its results
15030	and the right to confidential treatment of information. Use of
15031	a form approved by the officedepartmentshall raise a
15032	conclusive presumption of informed consent.
15033	Section 282. Section 641.305, Florida Statutes, is amended
15034	to read:
15035	641.305 Language used in contracts and advertisements;
15036	translations.--
15037	(1)(a) All health maintenance contracts or forms shall be
15038	printed in English.
15039	(b) If the negotiations by a health maintenance
15040	organization with a member leading up to the effectuation of a
15041	health maintenance contract are conducted in a language other
15042	than English, the health maintenance organization shall supply
15043	to the member a written translation of the contract, which
15044	translation accurately reflects the substance of the contract
15045	and is in the language used to negotiate the contract. The
15046	written translation shall be affixed to and shall become a part
15047	of the contract or form. Any such translation shall be
15048	furnished to the officedepartmentas part of the filing of the
15049	health maintenance contract form. No translation of a health
15050	maintenance contract form shall be approved by the department
15051	unless the translation accurately reflects the substance of the
15052	health maintenance contract form in translation.
15053	(2) The text of all advertisements by a health maintenance
15054	organization, if printed or broadcast in a language other than
15055	English, also shall be available in English and shall be
15056	furnished to the officedepartmentupon request. As used in
15057	this subsection, the term "advertisement" means any
15058	advertisement, circular, pamphlet, brochure, or other printed
15059	material disclosing or disseminating advertising material or
15060	information by a health maintenance organization to prospective
15061	or existing subscribers and includes any radio or television
15062	transmittal of an advertisement or information.
15063	Section 283. Subsections (2), (3), (5), and (12) and
15064	paragraphs (c) and (e) of subsection (38) of section 641.31,
15065	Florida Statutes, are amended to read:
15066	641.31 Health maintenance contracts.--
15067	(2) The rates charged by any health maintenance
15068	organization to its subscribers shall not be excessive,
15069	inadequate, or unfairly discriminatory or follow a rating
15070	methodology that is inconsistent, indeterminate, or ambiguous or
15071	encourages misrepresentation or misunderstanding. The
15072	commissiondepartment, in accordance with generally accepted
15073	actuarial practice as applied to health maintenance
15074	organizations, may define by rule what constitutes excessive,
15075	inadequate, or unfairly discriminatory rates and may require
15076	whatever information it deems necessary to determine that a rate
15077	or proposed rate meets the requirements of this subsection.
15078	(3)(a) If a health maintenance organization desires to
15079	amend any contract with its subscribers or any certificate or
15080	member handbook, or desires to change any basic health
15081	maintenance contract, certificate, grievance procedure, or
15082	member handbook form, or application form where written
15083	application is required and is to be made a part of the
15084	contract, or printed amendment, addendum, rider, or endorsement
15085	form or form of renewal certificate, it may do so, upon filing
15086	with the officedepartmentthe proposed change or amendment.
15087	Any proposed change shall be effective immediately, subject to
15088	disapproval by the officedepartment. Following receipt of
15089	notice of such disapproval or withdrawal of approval, no health
15090	maintenance organization shall issue or use any form disapproved
15091	by the officedepartment or as to which the officedepartment
15092	has withdrawn approval.
15093	(b) Any change in the rate is subject to paragraph (d) and
15094	requires at least 30 days' advance written notice to the
15095	subscriber. In the case of a group member, there may be a
15096	contractual agreement with the health maintenance organization
15097	to have the employer provide the required notice to the
15098	individual members of the group.
15099	(c) The officedepartmentshall disapprove any form filed
15100	under this subsection, or withdraw any previous approval
15101	thereof, if the form:
15102	1. Is in any respect in violation of, or does not comply
15103	with, any provision of this part or rule adopted thereunder.
15104	2. Contains or incorporates by reference, where such
15105	incorporation is otherwise permissible, any inconsistent,
15106	ambiguous, or misleading clauses or exceptions and conditions
15107	which deceptively affect the risk purported to be assumed in the
15108	general coverage of the contract.
15109	3. Has any title, heading, or other indication of its
15110	provisions which is misleading.
15111	4. Is printed or otherwise reproduced in such a manner as
15112	to render any material provision of the form substantially
15113	illegible.
15114	5. Contains provisions which are unfair, inequitable, or
15115	contrary to the public policy of this state or which encourage
15116	misrepresentation.
15117	6. Excludes coverage for human immunodeficiency virus
15118	infection or acquired immune deficiency syndrome or contains
15119	limitations in the benefits payable, or in the terms or
15120	conditions of such contract, for human immunodeficiency virus
15121	infection or acquired immune deficiency syndrome which are
15122	different than those which apply to any other sickness or
15123	medical condition.
15124	(d) Any change in rates charged for the contract must be
15125	filed with the officedepartmentnot less than 30 days in
15126	advance of the effective date. At the expiration of such 30
15127	days, the rate filing shall be deemed approved unless prior to
15128	such time the filing has been affirmatively approved or
15129	disapproved by order of the officedepartment. The approval of
15130	the filing by the officedepartmentconstitutes a waiver of any
15131	unexpired portion of such waiting period. The officedepartment
15132	may extend by not more than an additional 15 days the period
15133	within which it may so affirmatively approve or disapprove any
15134	such filing, by giving notice of such extension before
15135	expiration of the initial 30-day period. At the expiration of
15136	any such period as so extended, and in the absence of such prior
15137	affirmative approval or disapproval, any such filing shall be
15138	deemed approved.
15139	(e) It is not the intent of this subsection to restrict
15140	unduly the right to modify rates in the exercise of reasonable
15141	business judgment.
15142	(5) Every subscriber shall receive a clear and
15143	understandable description of the method of the health
15144	maintenance organization for resolving subscriber grievances,
15145	and the method shall be set forth in the contract, certificate,
15146	and member handbook. The organization shall also furnish, at
15147	the time of initial enrollment and when necessary due to
15148	substantial changes to the grievance process a separate and
15149	additional communication prepared or approved by the office
15150	departmentnotifying the contract holder of a group contract or
15151	subscriber of an individual contract of their rights and
15152	responsibilities under the grievance process.
15153	(12) Each health maintenance contract, certificate, or
15154	member handbook shall state that emergency services and care
15155	shall be provided to subscribers in emergency situations not
15156	permitting treatment through the health maintenance
15157	organization's providers, without prior notification to and
15158	approval of the organization. Not less than 75 percent of the
15159	reasonable charges for covered services and supplies shall be
15160	paid by the organization, up to the subscriber contract benefit
15161	limits. Payment also may be subject to additional applicable
15162	copayment provisions, not to exceed $100 per claim. The health
15163	maintenance contract, certificate, or member handbook shall
15164	contain the definitions of "emergency services and care" and
15165	"emergency medical condition" as specified in s. 641.19(6)(7)
15166	and (7)(8), shall describe procedures for determination by the
15167	health maintenance organization of whether the services qualify
15168	for reimbursement as emergency services and care, and shall
15169	contain specific examples of what does constitute an emergency.
15170	In providing for emergency services and care as a covered
15171	service, a health maintenance organization shall be governed by
15172	s. 641.513.
15173	(38)
15174	(c) Premiums paid in for the point-of-service riders may
15175	not exceed 15 percent of total premiums for all health plan
15176	products sold by the health maintenance organization offering
15177	the rider. If the premiums paid for point-of-service riders
15178	exceed 15 percent, the health maintenance organization must
15179	notify the officedepartmentand, once this fact is known, must
15180	immediately cease offering such a rider until it is in
15181	compliance with the rider premium cap.
15182	(e) The term "point of service" may not be used by a
15183	health maintenance organization except with riders permitted
15184	under this section or with forms approved by the office
15185	departmentin which a point-of-service product is offered with
15186	an indemnity carrier.
15187	Section 284. Subsection (2) of section 641.3105, Florida
15188	Statutes, is amended to read:
15189	641.3105 Validity of noncomplying contracts.--
15190	(2) Any health maintenance contract delivered or issued
15191	for delivery in this state covering a subscriber, which
15192	subscriber, pursuant to the provisions of this part, the
15193	organization may not lawfully cover under the contract, shall be
15194	cancelable at any time by the organization, any provision of the
15195	contract to the contrary notwithstanding; and the organization
15196	shall promptly cancel the contract in accordance with the
15197	request of the officedepartmenttherefor. No such illegality
15198	or cancellation shall be deemed to relieve the organization of
15199	any liability incurred by it under the contract while in force
15200	or to prohibit the organization from retaining the pro rata
15201	earned premium or rate thereon. This provision does not relieve
15202	the organization from any penalty otherwise incurred by the
15203	organization under this part on account of any such violation.
15204	Section 285. Subsection (5), paragraph (b) of subsection
15205	(7), paragraphs (a) and (e) of subsection (8), paragraph (c) of
15206	subsection (9), and paragraph (b) of subsection (10) of section
15207	641.31071, Florida Statutes, are amended to read:
15208	641.31071 Preexisting conditions.--
15209	(5)(a) The term "creditable coverage" means, with respect
15210	to an individual, coverage of the individual under any of the
15211	following:
15212	1. A group health plan, as defined in s. 2791 of the
15213	Public Health Service Act.
15214	2. Health insurance coverage consisting of medical care,
15215	provided directly, through insurance or reimbursement or
15216	otherwise, and including terms and services paid for as medical
15217	care, under any hospital or medical service policy or
15218	certificate, hospital or medical service plan contract, or
15219	health maintenance contract offered by a health insurance
15220	issuer.
15221	3. Part A or part B of Title XVIII of the Social Security
15222	Act.
15223	4. Title XIX of the Social Security Act, other than
15224	coverage consisting solely of benefits under s. 1928.
15225	5. Chapter 55 of Title 10, United States Code.
15226	6. A medical care program of the Indian Health Service or
15227	of a tribal organization.
15228	7. The Florida Comprehensive Health Association or another
15229	state health benefit risk pool.
15230	8. A health plan offered under chapter 89 of Title 5,
15231	United States Code.
15232	9. A public health plan as defined by rule of the
15233	commissiondepartment. To the greatest extent possible, such
15234	rules must be consistent with regulations adopted by the United
15235	States Department of Health and Human Services.
15236	10. A health benefit plan under s. 5(e) of the Peace Corps
15237	Act (22 U.S.C. s. 2504(e)).
15238	(b) Creditable coverage does not include coverage that
15239	consists solely of one or more or any combination thereof of the
15240	following excepted benefits:
15241	1. Coverage only for accident, or disability income
15242	insurance, or any combination thereof.
15243	2. Coverage issued as a supplement to liability insurance.
15244	3. Liability insurance, including general liability
15245	insurance and automobile liability insurance.
15246	4. Workers' compensation or similar insurance.
15247	5. Automobile medical payment insurance.
15248	6. Credit-only insurance.
15249	7. Coverage for onsite medical clinics.
15250	8. Other similar insurance coverage, specified in rules
15251	adopted by the commissiondepartment, under which benefits for
15252	medical care are secondary or incidental to other insurance
15253	benefits. To the greatest extent possible, such rules must be
15254	consistent with regulations adopted by the United States
15255	Department of Health and Human Services.
15256	(c) The following benefits are not subject to the
15257	creditable coverage requirements, if offered separately;
15258	1. Limited scope dental or vision benefits.
15259	2. Benefits or long-term care, nursing home care, home
15260	health care, community-based care, or any combination of these.
15261	3. Such other similar, limited benefits as are specified
15262	in rules adopted by the commissiondepartment. To the greatest
15263	extent possible, such rules must be consistent with regulations
15264	adopted by the United States Department of Health and Human
15265	Services.
15266	(d) The following benefits are not subject to creditable
15267	coverage requirements if offered as independent, noncoordinated
15268	benefits:
15269	1. Coverage only for a specified disease or illness.
15270	2. Hospital indemnity or other fixed indemnity insurance.
15271	(e) Benefits provided through Medicare supplemental health
15272	insurance, as defined under s. 1882(g)(1) of the Social Security
15273	Act, coverage supplemental to the coverage provided under
15274	chapter 55 of Title 10, United States Code, and similar
15275	supplemental coverage provided to coverage under a group health
15276	plan are not considered creditable coverage if offered as a
15277	separate insurance policy.
15278	(7)
15279	(b) A health maintenance organization may elect to count
15280	as creditable coverage, coverage of benefits within each of
15281	several classes or categories of benefits specified in rules
15282	adopted by the commissiondepartmentrather than as provided
15283	under paragraph (a). Such election shall be made on a uniform
15284	basis for all participants and beneficiaries. Under such
15285	election, a health maintenance organization shall count a period
15286	of creditable coverage with respect to any class or category of
15287	benefits if any level of benefits is covered within such class
15288	or category.
15289	(8)(a) Periods of creditable coverage with respect to an
15290	individual shall be established through presentation of
15291	certifications described in this subsection or in such other
15292	manner as may be specified in rules adopted by the commission
15293	department.
15294	(e) The commissiondepartmentshall adopt rules to prevent
15295	an insurer's or health maintenance organization's failure to
15296	provide information under this subsection with respect to
15297	previous coverage of an individual from adversely affecting any
15298	subsequent coverage of the individual under another group health
15299	plan or health maintenance organization coverage.
15300	(9)
15301	(c) As an alternative to the method authorized by
15302	paragraph (a), a health maintenance organization may address
15303	adverse selection in a method approved by the officedepartment.
15304	(10)
15305	(b) The commissiondepartmentshall adopt rules that
15306	provide a process whereby individuals who need to establish
15307	creditable coverage for periods before July 1, 1996, and who
15308	would have such coverage credited but for paragraph (a), may be
15309	given credit for creditable coverage for such periods through
15310	the presentation of documents or other means.
15311	Section 286. Paragraph (b) of subsection (3) of section
15312	641.31074, Florida Statutes, is amended to read:
15313	641.31074 Guaranteed renewability of coverage.--
15314	(3)
15315	(b)1. In any case in which a health maintenance
15316	organization elects to discontinue offering all coverage in the
15317	small group market or the large group market, or both, in this
15318	state, coverage may be discontinued by the insurer only if:
15319	a. The health maintenance organization provides notice to
15320	the officedepartmentand to each contract holder, and
15321	participants and beneficiaries covered under such coverage, of
15322	such discontinuation at least 180 days prior to the date of the
15323	nonrenewal of such coverage; and
15324	b. All health insurance issued or delivered for issuance
15325	in this state in such market is discontinued and coverage under
15326	such health insurance coverage in such market is not renewed.
15327	2. In the case of a discontinuation under subparagraph 1.
15328	in a market, the health maintenance organization may not provide
15329	for the issuance of any health maintenance organization contract
15330	coverage in the market in this state during the 5-year period
15331	beginning on the date of the discontinuation of the last
15332	insurance contract not renewed.
15333	Section 287. Subsection (2) of section 641.315, Florida
15334	Statutes, is amended to read:
15335	641.315 Provider contracts.--
15336	(2)(a) For all provider contracts executed after October
15337	1, 1991, and within 180 days after October 1, 1991, for
15338	contracts in existence as of October 1, 1991:
15339	1. The contracts must require the provider to give 60
15340	days' advance written notice to the health maintenance
15341	organization and the officedepartmentbefore canceling the
15342	contract with the health maintenance organization for any
15343	reason; and
15344	2. The contract must also provide that nonpayment for
15345	goods or services rendered by the provider to the health
15346	maintenance organization is not a valid reason for avoiding the
15347	60-day advance notice of cancellation.
15348	(b) All provider contracts must provide that the health
15349	maintenance organization will provide 60 days' advance written
15350	notice to the provider and the officedepartmentbefore
15351	canceling, without cause, the contract with the provider, except
15352	in a case in which a patient's health is subject to imminent
15353	danger or a physician's ability to practice medicine is
15354	effectively impaired by an action by the Board of Medicine or
15355	other governmental agency.
15356	Section 288. Subsections (4) and (5) of section 641.3154,
15357	Florida Statutes, are amended to read:
15358	641.3154 Organization liability; provider billing
15359	prohibited.--
15360	(4) A provider or any representative of a provider,
15361	regardless of whether the provider is under contract with the
15362	health maintenance organization, may not collect or attempt to
15363	collect money from, maintain any action at law against, or
15364	report to a credit agency a subscriber of an organization for
15365	payment of services for which the organization is liable, if the
15366	provider in good faith knows or should know that the
15367	organization is liable. This prohibition applies during the
15368	pendency of any claim for payment made by the provider to the
15369	organization for payment of the services and any legal
15370	proceedings or dispute resolution process to determine whether
15371	the organization is liable for the services if the provider is
15372	informed that such proceedings are taking place. It is presumed
15373	that a provider does not know and should not know that an
15374	organization is liable unless:
15375	(a) The provider is informed by the organization that it
15376	accepts liability;
15377	(b) A court of competent jurisdiction determines that the
15378	organization is liable;
15379	(c) The officedepartmentor agency makes a final
15380	determination that the organization is required to pay for such
15381	services subsequent to a recommendation made by the Statewide
15382	Provider and Subscriber Assistance Panel pursuant to s.
15383	408.7056; or
15384	(d) The agency issues a final order that the organization
15385	is required to pay for such services subsequent to a
15386	recommendation made by a resolution organization pursuant to s.
15387	408.7057.
15388	(5) An organization, the office,and the department shall
15389	report any suspected violation of this section by a health care
15390	practitioner to the Department of Health and by a facility to
15391	the agency, which shall take such action as authorized by law.
15392	Section 289. Subsection (12) of section 641.3155, Florida
15393	Statutes, is amended to read:
15394	641.3155 Prompt payment of claims.--
15395	(12) A permissible error ratio of 5 percent is established
15396	for health maintenance organizations' claims payment violations
15397	of paragraphs (3)(a),(b), (c), and (e) and (4)(a), (b), (c), and
15398	(e). If the error ratio of a particular insurer does not exceed
15399	the permissible error ratio of 5 percent for an audit period, no
15400	fine shall be assessed for the noted claims violations for the
15401	audit period. The error ratio shall be determined by dividing
15402	the number of claims with violations found on a statistically
15403	valid sample of claims for the audit period by the total number
15404	of claims in the sample. If the error ratio exceeds the
15405	permissible error ratio of 5 percent, a fine may be assessed
15406	according to s. 624.4211 for those claims payment violations
15407	which exceed the error ratio. Notwithstanding the provisions of
15408	this section, the officedepartmentmay fine a health
15409	maintenance organization for claims payment violations of
15410	paragraphs (3)(e) and (4)(e) which create an uncontestable
15411	obligation to pay the claim. The officedepartmentshall not
15412	fine organizations for violations which the officedepartment
15413	determines were due to circumstances beyond the organization's
15414	control.
15415	Section 290. Subsection (4), (6), and (7) of section
15416	641.316, Florida Statutes, are amended to read:
15417	641.316 Fiscal intermediary services.--
15418	(4) A fiscal intermediary services organization, as
15419	described in subsection (3), shall secure and maintain a surety
15420	bond on file with the officedepartment, naming the intermediary
15421	as principal. The bond must be obtained from a company
15422	authorized to write surety insurance in the state, and the
15423	officedepartmentshall be obligee on behalf of itself and third
15424	parties. The penal sum of the bond may not be less than 5
15425	percent of the funds handled by the intermediary in connection
15426	with its fiscal and fiduciary services during the prior year or
15427	$250,000, whichever is less. The minimum bond amount must be
15428	$10,000. The condition of the bond must be that the intermediary
15429	shall register with the officedepartmentand shall not
15430	misappropriate funds within its control or custody as a fiscal
15431	intermediary or fiduciary. The aggregate liability of the surety
15432	for any and all breaches of the conditions of the bond may not
15433	exceed the penal sum of the bond. The bond must be continuous in
15434	form, must be renewed annually by a continuation certificate,
15435	and may be terminated by the surety upon its giving 30 days'
15436	written notice of termination to the officedepartment.
15437	(6) Any fiscal intermediary services organization, other
15438	than a fiscal intermediary services organization owned,
15439	operated, or controlled by a hospital licensed under chapter
15440	395, an insurer licensed under chapter 624, a third-party
15441	administrator licensed under chapter 626, a prepaid limited
15442	health service organization licensed under chapter 636, a health
15443	maintenance organization licensed under this chapter, or
15444	physician group practices as defined in s. 456.053(3)(h), must
15445	register with the officedepartmentand meet the requirements of
15446	this section. In order to register as a fiscal intermediary
15447	services organization, the organization must comply with ss.
15448	641.21(1)(c) and (d) and 641.22(6). Should the officedepartment
15449	determine that the fiscal intermediary services organization
15450	does not meet the requirements of this section, the registration
15451	shall be denied. In the event that the registrant fails to
15452	maintain compliance with the provisions of this section, the
15453	officedepartmentmay revoke or suspend the registration. In
15454	lieu of revocation or suspension of the registration, the office
15455	departmentmay levy an administrative penalty in accordance with
15456	s. 641.25.
15457	(7) The commissiondepartmentshall adopt rules necessary
15458	to administer this section.
15459	Section 291. Subsections (1), (2), (3), and (4), paragraph
15460	(b) of subsection (6), subsection (8), paragraph (c) of
15461	subsection (10), subsections (11) and (12), paragraph (a) of
15462	subsection (14), and subsections (15), (16), and (17) of section
15463	641.35, Florida Statutes, are amended to read:
15464	641.35 Assets, liabilities, and investments.--
15465	(1) ASSETS.--In any determination of the financial
15466	condition of a health maintenance organization, there shall be
15467	allowed as "assets" only those assets that are owned by the
15468	health maintenance organization and that consist of:
15469	(a) Cash or cash equivalents in the possession of the
15470	health maintenance organization, or in transit under its
15471	control, including the true balance of any deposit in a solvent
15472	bank, savings and loan association, or trust company which is
15473	domiciled in the United States. Cash equivalents are short-term,
15474	highly liquid investments, with original maturities of 3 months
15475	or less, which are both readily convertible to known amounts of
15476	cash and so near their maturity that they present insignificant
15477	risk of changes in value because of changes in interest rates.
15478	(b) Investments, securities, properties, and loans
15479	acquired or held in accordance with this part, and in connection
15480	therewith the following items:
15481	1. Interest due or accrued on any bond or evidence of
15482	indebtedness which is not in default and which is not valued on
15483	a basis including accrued interest.
15484	2. Declared and unpaid dividends on stock and shares,
15485	unless the amount of the dividends has otherwise been allowed as
15486	an asset.
15487	3. Interest due or accrued upon a collateral loan which is
15488	not in default in an amount not to exceed 1 year's interest
15489	thereon.
15490	4. Interest due or accrued on deposits or certificates of
15491	deposit in solvent banks, savings and loan associations, and
15492	trust companies domiciled in the United States, and interest due
15493	or accrued on other assets, if such interest is in the judgment
15494	of the officedepartmenta collectible asset.
15495	5. Interest due or accrued on current mortgage loans, in
15496	an amount not exceeding in any event the amount, if any, of the
15497	excess of the value of the property less delinquent taxes
15498	thereon over the unpaid principal; but in no event shall
15499	interest accrued for a period in excess of 90 days be allowed as
15500	an asset.
15501	(c) Premiums in the course of collection, not more than 3
15502	months past due, less commissions payable thereon. The
15503	foregoing limitation shall not apply to premiums payable
15504	directly or indirectly by any governmental body in the United
15505	States or by any of their instrumentalities.
15506	(d) The full amount of reinsurance recoverable from a
15507	solvent reinsurer, which reinsurance is authorized under s.
15508	624.610.
15509	(e) Pharmaceutical and medical supply inventories.
15510	(f) Goodwill created by acquisitions and mergers occurring
15511	on or after January 1, 2001.
15512	(g) Loans or advances by a health maintenance organization
15513	to its parent or principal owner if approved by the office
15514	department.
15515	(h) Other assets, not inconsistent with the provisions of
15516	this section, deemed by the officedepartmentto be available
15517	for the payment of losses and claims, at values to be determined
15518	by it.
15519
15520
15521	The officedepartment, upon determining that a health
15522	maintenance organization's asset has not been evaluated
15523	according to applicable law or that it does not qualify as an
15524	asset, shall require the health maintenance organization to
15525	properly reevaluate the asset or replace the asset with an asset
15526	suitable to the officedepartmentwithin 30 days of receipt of
15527	written notification by the officedepartmentof this
15528	determination, if the removal of the asset from the
15529	organization's assets would impair the organization's solvency.
15530	(2) ASSETS NOT ALLOWED.--In addition to assets impliedly
15531	excluded by the provisions of subsection (1), the following
15532	assets expressly shall not be allowed as assets in any
15533	determination of the financial condition of a health maintenance
15534	organization:
15535	(a) Subscriber lists, patents, trade names, agreements not
15536	to compete, and other like intangible assets.
15537	(b) Any note or account receivable from or advances to
15538	officers, directors, or controlling stockholders, whether
15539	secured or not, and advances to employees, agents, or other
15540	persons on personal security only, other than those transactions
15541	authorized under paragraph (1)(g).
15542	(c) Stock of the health maintenance organization owned by
15543	it directly or owned by it through any entity in which the
15544	organization owns or controls, directly or indirectly, more than
15545	25 percent of the ownership interest.
15546	(d) Leasehold improvements, nonmedical libraries,
15547	stationery, literature, and nonmedical supply inventories,
15548	except that leasehold improvements made prior to October 1,
15549	1985, shall be allowed as an asset and shall be amortized over
15550	the shortest of the following periods:
15551	1. The life of the lease.
15552	2. The useful life of the improvements.
15553	3. The 3-year period following October 1, 1985.
15554	(e) Furniture, fixtures, furnishings, vehicles, medical
15555	libraries, and equipment.
15556	(f) Notes or other evidences of indebtedness which are
15557	secured by mortgages or deeds of trust which are in default and
15558	beyond the express period specified in the instrument for curing
15559	the default.
15560	(g) Bonds in default for more than 60 days.
15561	(h) Prepaid and deferred expenses.
15562	(i) Any note, account receivable, advance, or other
15563	evidence of indebtedness, or investment in:
15564	1. The parent of the health maintenance organization;
15565	2. Any entity directly or indirectly controlled by the
15566	health maintenance organization parent; or
15567	3. An affiliate of the parent or the health maintenance
15568	organization,
15569
15570
15571	except as allowed in subsections (1), (11), and (12). The
15572	officedepartmentmay, however, allow all or a portion of such
15573	asset, at values to be determined by the officedepartment, if
15574	deemed by the officedepartmentto be available for the payment
15575	of losses and claims.
15576	(3) LIABILITIES.--In any determination of the financial
15577	condition of a health maintenance organization, liabilities to
15578	be charged against its assets shall include:
15579	(a) The amount, estimated consistently with the provisions
15580	of this part, necessary to pay all of its unpaid losses and
15581	claims incurred for or on behalf of a subscriber, on or prior to
15582	the end of the reporting period, whether reported or unreported,
15583	including contract and premium deficiency reserves. If a health
15584	maintenance organization, through a health care risk contract,
15585	transfers to any entity the obligation to pay any provider for
15586	any claim arising from services provided to or for the benefit
15587	of any subscriber, the liabilities of the health maintenance
15588	organization under this section shall include the amount of
15589	those losses and claims to the extent that the provider has not
15590	received payment. No liability need be established if the entity
15591	has provided to the health maintenance organization a financial
15592	instrument acceptable to the officedepartmentsecuring the
15593	obligations under the contract or if the health maintenance
15594	organization has in place an escrow or withhold agreement
15595	approved by the officedepartmentwhich assures full payment of
15596	those claims. Financial instruments may include irrevocable,
15597	clean, and evergreen letters of credit. As used in this
15598	paragraph, the term "entity" does not include this state, the
15599	United States, or an agency thereof or an insurer or health
15600	maintenance organization authorized in this state.
15601	(b) The amount equal to the unearned portions of the gross
15602	premiums charged on health maintenance contracts in force.
15603	(c) Taxes, expenses, and other obligations due or accrued
15604	at the date of the statement.
15605
15606
15607	The officedepartment, upon determining that a health
15608	maintenance organization has failed to report liabilities that
15609	should have been reported, shall require a corrected report
15610	which reflects the proper liabilities to be submitted by the
15611	organization to the officedepartmentwithin 10 working days of
15612	receipt of written notification.
15613	(4) INVESTMENTS GENERALLY.--Health maintenance
15614	organizations may invest their funds only in accordance with the
15615	provisions of this part. Notwithstanding the provisions of this
15616	part, however, the officedepartmentmay, after notice and
15617	hearing, order a health maintenance organization to limit or
15618	withdraw from certain investments or to discontinue certain
15619	investment practices, to the extent that the officedepartment
15620	finds the investment practices hazardous to the financial
15621	condition of the organization. At any such hearing, the office
15622	departmentshall have the burden of presenting a prima facie
15623	case that the investment or investment practices are hazardous
15624	to the financial condition of the organization. If the office
15625	departmentpresents such a prima facie case, then it shall be
15626	the organization's burden to demonstrate that the investment or
15627	investment practices are not hazardous to the financial
15628	condition of the organization.
15629	(6) GENERAL QUALIFICATIONS.--
15630	(b) No security or investment shall be eligible for
15631	purchase at a price above its market value unless it is approved
15632	by the officedepartment.
15633	(8) EXCESSIVE COMMISSIONS AND CERTAIN INTERESTS
15634	PROHIBITED.--
15635	(a) No health maintenance organization shall pay any
15636	commission or brokerage for the purchase or sale of property,
15637	whether real or personal, in excess of that usual and customary
15638	at the time and in the locality where the purchases or sales are
15639	made. Information regarding payments of commissions and
15640	brokerage shall be maintained from the date of the most recent
15641	examination by the officedepartmentpursuant to s. 641.27 until
15642	the date of completion of the following examination.
15643	(b) No health maintenance organization shall knowingly
15644	invest in or loan upon any property, directly or indirectly,
15645	whether real or personal, in which any officer or director of
15646	the organization has a financial interest, nor shall any
15647	organization make a loan of any kind to any officer or director
15648	of the organization, except that:
15649	1. This paragraph shall not apply to loans in
15650	circumstances in which the financial interest of the officer or
15651	director is only nominal, trifling, or so remote as not to give
15652	rise to a conflict of interest; and
15653	2. In any case, the officedepartmentmay approve a
15654	transaction between an organization and its officers or
15655	directors under this paragraph if it is satisfied that:
15656	a. The transaction is entered into in good faith for the
15657	advantage and benefit of the organization,
15658	b. The amount of the proposed investment or loan does not
15659	violate any other provision of this part or exceed the
15660	reasonable, normal value of the property or the interest which
15661	the company proposed to acquire,
15662	c. The transaction is otherwise fair and reasonable, and
15663	d. The transaction will not adversely affect, to any
15664	substantial degree, the liquidity of the organization's
15665	investments or its ability thereafter to comply with
15666	requirements of this part or the payment of its claims and
15667	obligations.
15668	(10) PROPERTY USED IN THE HEALTH MAINTENANCE
15669	ORGANIZATION'S BUSINESS.--Real estate, including leasehold
15670	estates, for the convenient accommodation of the organization's
15671	business operations, including home office, branch
15672	administrative offices, hospitals, medical clinics, medical
15673	professional buildings, and any other facility to be used in the
15674	provision of health care services, or real estate for rental to
15675	any health care provider under contract with the organization to
15676	provide health care services which shall be used in the
15677	provision of health care services to members of the organization
15678	by that provider, is acceptable as an investment on the
15679	following conditions:
15680	(c) The greater of the admitted value of the asset, as
15681	determined by statutory accounting principles, or, if approved
15682	by the officedepartment, the health maintenance organization's
15683	equity in the real estate plus all encumbrances on the real
15684	estate owned by the organization under this subsection, when
15685	added to the value of all personal and mixed property used in
15686	the organization's business, shall not exceed 75 percent of its
15687	admitted assets unless, with the permission of the office
15688	department, it finds that the percentage of its admitted assets
15689	is insufficient to provide convenient accommodation for the
15690	organization's business and the operations of the organization
15691	would not otherwise be impaired.
15692	(11) INVESTMENTS IN ADMINISTRATIVE AND MANAGEMENT SERVICE
15693	ENTITIES AND OTHER HEALTH CARE PROVIDERS.--A health maintenance
15694	organization may invest directly or indirectly in real estate,
15695	common and preferred stocks, bonds or debentures, including
15696	convertible debentures, or other evidences of debts of or equity
15697	in an entity if the entity is owned by or, with the approval of
15698	the officedepartment, under contract to the organization to
15699	provide management services, administrative services, or health
15700	care services for the organization, on the following conditions:
15701	(a) Investments authorized under this subsection shall not
15702	exceed 50 percent of admitted assets, and these investments
15703	shall be included in the calculation of the overall limitation
15704	in paragraph (10)(c) relating to all real and personal property.
15705	(b) Investments may qualify under this section only
15706	insofar as a provider of management, administrative, or health
15707	care service relationship as defined herein exists. Upon
15708	cessation of such relationship, each investment shall be subject
15709	to the rules applicable to an investment of that type and must
15710	qualify under the appropriate limitation or, failing that,
15711	become ineligible and subject to disposal under subsection (17).
15712	(12) EXCHANGES OF FACILITIES OR ASSETS.--Health care or
15713	administrative service entities, if subsidiaries of or under
15714	contract to the health maintenance organization to provide
15715	administrative or health care services to the organization's
15716	members, may exchange facilities or similar assets to be used in
15717	the organization's business for stock of the organization.
15718	However, any exchange involving an entity under contract with
15719	the health maintenance organization must have the approval of
15720	the officedepartmentprior to the exchange. These facilities
15721	or assets shall be valued in accordance with statutory
15722	accounting principles.
15723	(14) SPECIAL LIMITATION INVESTMENTS.--
15724	(a) After satisfying the requirements of this part, any
15725	funds of the health maintenance organization may be invested in
15726	the following investments, subject to a cost limitation of 10
15727	percent of its admitted assets in each category of investment:
15728	1. Anticipation obligations of political subdivisions of a
15729	state.--Anticipation obligations of any political subdivision of
15730	any state of the United States, including, but not limited to,
15731	bond anticipation notes, tax anticipation notes, preliminary
15732	loan anticipation notes, revenue anticipation notes, and
15733	construction anticipation notes, for the payment of money within
15734	12 months from the issuance of the obligation, on the following
15735	conditions:
15736	a. The anticipation notes are a direct obligation of the
15737	issuer under conditions set forth in subsection (9).
15738	b. The political subdivision is not in default in the
15739	payment of the principal or interest on any of its direct
15740	general obligations or any obligation guaranteed by such
15741	political subdivision.
15742	c. The anticipated funds are specifically pledged to
15743	secure the obligations.
15744	2. Revenue obligations of state or municipal public
15745	utilities.--Obligations of any state of the United States, a
15746	political subdivision thereof, or a public instrumentality of
15747	any one or more of the foregoing for the payment of money, on
15748	the following conditions:
15749	a. The obligations are payable from revenues or earnings
15750	of a public utility of such state, political subdivision, or
15751	public instrumentality which are specifically pledged therefor.
15752	b. The law under which the obligations are issued requires
15753	that such rates for service shall be charged and collected at
15754	all times so as to produce sufficient revenue or earning,
15755	together with any other revenues or moneys pledged, to pay all
15756	operating and maintenance charges of the public utility and all
15757	principal and interest on such charges.
15758	c. No prior or parity obligations payable from the
15759	revenues or earnings of that public utility are in default at
15760	the date of such investment.
15761	3. Other revenue obligations.--Obligations of any state of
15762	the United States, a political subdivision thereof, or a public
15763	instrumentality of any of the foregoing for the payment of
15764	money, on the following conditions:
15765	a. The obligations are payable from revenues or earnings,
15766	excluding revenues or earnings from public utilities,
15767	specifically pledged therefor by such state, political
15768	subdivision, or public instrumentality.
15769	b. No prior or parity obligation of the same issuer
15770	payable from revenues or earnings from the same source has been
15771	in default as to principal or interest during the 5 years next
15772	preceding the date of the investment, but the issuer need not
15773	have been in existence for that period, and obligations acquired
15774	under this paragraph may be newly issued.
15775	4. Corporate stocks.--Stocks, common or preferred, of any
15776	corporation created or existing under the laws of the United
15777	States or any state thereof. The organization may invest in
15778	stocks, common or preferred, of any corporation created or
15779	existing under the laws of any foreign country if such stocks
15780	are listed and traded on a national securities exchange in the
15781	United States or, in the alternative, if such investment in
15782	stocks of any corporation created or existing under the laws of
15783	any foreign country are first approved by the officedepartment.
15784	Investment in common stock of any one corporation shall not
15785	exceed 3 percent of the health maintenance organization's
15786	admitted assets.
15787	(15) INVESTMENT OF EXCESS FUNDS.--
15788	(a) After satisfying the requirements of this part, any
15789	funds of a health maintenance organization in excess of its
15790	statutorily required reserves and surplus may be invested:
15791	1. Without limitation in any investments otherwise
15792	authorized by this part; or
15793	2. In such other investments not specifically authorized
15794	by this part, provided such investments do not exceed the lesser
15795	of 5 percent of the health maintenance organization's admitted
15796	assets or 25 percent of the amount by which a health maintenance
15797	organization's surplus exceeds its statutorily required minimum
15798	surplus. A health maintenance organization may exceed the
15799	limitations of this subparagraph only with the prior written
15800	approval of the officedepartment.
15801	(b) Nothing in this section authorizes a health
15802	maintenance organization to:
15803	1. Invest any funds in excess of the amount by which its
15804	actual surplus exceeds its statutorily required minimum surplus;
15805	or
15806	2. Make any investment prohibited by this code.
15807	(16) PROHIBITED INVESTMENTS AND INVESTMENT UNDERWRITING.--
15808	(a) In addition to investments excluded pursuant to other
15809	provisions of this act, a health maintenance organization shall
15810	not directly or indirectly invest in or lend its funds upon the
15811	security of:
15812	1. Issued shares of its own capital stock, except in
15813	connection with a plan approved by the officedepartmentfor
15814	purchase of the shares by the organization's officers,
15815	employees, or agents. However, no such stock shall constitute an
15816	asset of the organization in any determination of its financial
15817	condition.
15818	2. Except with the consent of the officedepartment,
15819	securities issued by any corporation or enterprise the
15820	controlling interest of which is, or will after such acquisition
15821	by the organization be, held directly or indirectly by the
15822	organization or any combination of the organization and its
15823	directors, officers, parent corporation, subsidiaries, or
15824	controlling stockholders. Investments in health care providers
15825	under subsections (11) and(12) shall not be subject to this
15826	provision.
15827	3. Any note or other evidence of indebtedness of any
15828	director, officer, or controlling stockholder of the health
15829	maintenance organization.
15830	(b) No health maintenance organization shall underwrite or
15831	participate in the underwriting of an offering of securities or
15832	property by any other person.
15833	(17) TIME LIMIT FOR DISPOSAL OF INELIGIBLE PROPERTY AND
15834	SECURITIES; EFFECT OF FAILURE TO DISPOSE.--
15835	(a) Any property or securities lawfully acquired by a
15836	health maintenance organization which it could not otherwise
15837	have invested in or loaned its funds upon at the time of such
15838	acquisition shall be disposed of within 6 months from the date
15839	of acquisition, unless within such period the security has
15840	attained to the standard of eligibility; except that any
15841	security or property acquired under any agreement of merger or
15842	consolidation may be retained for a longer period if so provided
15843	in the plan for such merger or consolidation, as approved by the
15844	officedepartment. Upon application by the organization and
15845	proof to the officedepartmentthat forced sale of any such
15846	property or security would materially injure the interests of
15847	the health maintenance organization, the officedepartmentshall
15848	extend the disposal period for an additional reasonable time.
15849	(b) Notwithstanding the provisions of paragraph (a), any
15850	ineligible property or securities shall not be allowed as an
15851	asset of the organization.
15852	Section 292. Section 641.36, Florida Statutes, is amended
15853	to read:
15854	641.36 Adoption of rules; penalty for violation.--The
15855	commissiondepartmentshall adopt rules necessary to carry out
15856	the provisions of this part. The officedepartmentshall
15857	collect and make available all health maintenance organization
15858	rules adopted by the commissiondepartment. Any violation of a
15859	rule adopted under this section shall subject the violating
15860	entity to the provisions of s. 641.23.
15861	Section 293. Subsections (1), (2), and (5) of section
15862	641.365, Florida Statutes, are amended to read:
15863	641.365 Dividends.--
15864	(1)(a) A health maintenance organization shall not pay any
15865	dividend or distribute cash or other property to stockholders
15866	except out of that part of its available and accumulated surplus
15867	funds which is derived from realized net operating profits on
15868	its business and net realized capital gains.
15869	(b) Unless prior written approval is obtained from the
15870	officedepartment, a health maintenance organization may not pay
15871	or declare any dividend or distribute cash or other property to
15872	or on behalf of any stockholder if, immediately before or after
15873	such distribution, the health maintenance organization's
15874	available and accumulated surplus funds, which are derived from
15875	realized net operating profits on its business and net realized
15876	gains, are or would be less than zero.
15877	(c) A health maintenance organization may make dividend
15878	payments or distributions to stockholders without the prior
15879	written approval of the officedepartmentwhen:
15880	1. The dividend is equal to or less than the greater of:
15881	a. Ten percent of the health maintenance organization's
15882	accumulated surplus funds which are derived from realized net
15883	operating profits on its business and net realized capital gains
15884	as of the immediate preceding calendar year; or
15885	b. The health maintenance organization's entire net
15886	operating profit and realized net capital gains derived during
15887	the immediately preceding calendar year.
15888	2. The health maintenance organization will have surplus
15889	equal to or exceeding 115 percent of the minimum required
15890	statutory surplus after the dividend or distribution is made.
15891	3. The health maintenance organization has filed a notice
15892	with the officedepartmentat least 30 days prior to the
15893	dividend payment or distribution, or such shorter period of time
15894	as approved by the officedepartmenton a case-by-case basis.
15895	4. The notice includes a certification by an officer of
15896	the health maintenance organization attesting that after payment
15897	of the dividend or distribution the health maintenance
15898	organization will have at least 115 percent of required
15899	statutory surplus.
15900	5. The health maintenance organization has negative
15901	retained earnings, statutory surplus in excess of $50 million,
15902	and statutory surplus greater than or equal to 150 percent of
15903	its required statutory surplus before and after the dividend
15904	distribution is made based upon the health maintenance
15905	organization's most recently filed annual financial statement.
15906	(2) The officedepartmentshall not approve a dividend or
15907	distribution in excess of the maximum amount allowed in
15908	subsection(1) unless it determines that the distribution or
15909	dividend would not jeopardize the financial condition of the
15910	health maintenance organization, considering:
15911	(a) The liquidity, quality, and diversification of the
15912	health maintenance organization's assets and the effect on its
15913	ability to meet its obligations.
15914	(b) Any reduction of investment portfolio and investment
15915	income.
15916	(c) History of capital contributions.
15917	(d) Prior dividend distributions of the health maintenance
15918	organization.
15919	(e) Whether the dividend is only a pass-through dividend
15920	from a subsidiary of the health maintenance organization.
15921	(5) The officedepartmentmay revoke or suspend the
15922	certificate of authority of a health maintenance organization
15923	which has declared or paid such an illegal dividend.
15924	Section 294. Section 641.385, Florida Statutes, is amended
15925	to read:
15926	641.385 Order to discontinue certain advertising.--If in
15927	the opinion of the officedepartmentany advertisement by a
15928	health maintenance organization violates any of the provisions
15929	of this part, the department may enter an immediate order
15930	requiring that the use of the advertisement be discontinued. If
15931	requested by the health maintenance organization, the office
15932	departmentshall conduct a hearing within 10 days of the entry
15933	of such order. If, after the hearing or by agreement with the
15934	health maintenance organization, a final determination is made
15935	that the advertising was in fact violative of any provision of
15936	this part, the officedepartmentmay, in lieu of revocation of
15937	the certificate of authority, require the publication of a
15938	corrective advertisement; impose an administrative penalty of up
15939	to $10,000; and, in the case of an initial solicitation, require
15940	that the health maintenance organization, prior to accepting any
15941	application received in response to the advertisement, provide
15942	an acceptable clarification of the advertisement to each
15943	individual applicant.
15944	Section 295. Subsection (1) of section 641.39001, Florida
15945	Statutes, is amended to read:
15946	641.39001 Soliciting or accepting new or renewal health
15947	maintenance contracts by insolvent or impaired health
15948	maintenance organization prohibited; penalty.--
15949	(1) Whether or not delinquency proceedings as to a health
15950	maintenance organization have been or are to be initiated, a
15951	director or officer of a health maintenance organization, except
15952	with the written permission of the officeDepartment of
15953	Insurance, may not authorize or permit the health maintenance
15954	organization to solicit or accept new or renewal health
15955	maintenance contracts or provider contracts in this state after
15956	the director or officer knew, or reasonably should have known,
15957	that the health maintenance organization was insolvent or
15958	impaired. As used in this section, the term "impaired" means
15959	that the health maintenance organization does not meet the
15960	requirements of s. 641.225.
15961	Section 296. Subsections (6) and (10) of section 641.3903,
15962	Florida Statutes, are amended to read:
15963	641.3903 Unfair methods of competition and unfair or
15964	deceptive acts or practices defined.--The following are defined
15965	as unfair methods of competition and unfair or deceptive acts or
15966	practices:
15967	(6) FAILURE TO MAINTAIN COMPLAINT-HANDLING
15968	PROCEDURES.--Failure of any person to maintain a complete record
15969	of all the complaints received since the date of the most recent
15970	examination of the health maintenance organization by the office
15971	department. For the purposes of this subsection, the term
15972	"complaint" means any written communication primarily expressing
15973	a grievance and requesting a remedy to the grievance.
15974	(10) ILLEGAL DEALINGS IN PREMIUMS; EXCESS OR REDUCED
15975	CHARGES FOR HEALTH MAINTENANCE COVERAGE.--
15976	(a) Knowingly collecting any sum as a premium or charge
15977	for health maintenance coverage which is not then provided or is
15978	not in due course to be provided, subject to acceptance of the
15979	risk by the health maintenance organization, by a health
15980	maintenance contract issued by a health maintenance organization
15981	as permitted by this part.
15982	(b) Knowingly collecting as a premium or charge for health
15983	maintenance coverage any sum in excess of or less than the
15984	premium or charge applicable to health maintenance coverage, in
15985	accordance with the applicable classifications and rates as
15986	filed with the officedepartment, and as specified in the health
15987	maintenance contract.
15988	Section 297. Section 641.3905, Florida Statutes, is
15989	amended to read:
15990	641.3905 General powers and duties of the department and
15991	office.--In addition to the powers and duties set forth in s.
15992	624.307, the department and office shall each have the power
15993	within its respective regulatory jurisdictionto examine and
15994	investigate the affairs of every person, entity, or health
15995	maintenance organization in order to determine whether the
15996	person, entity, or health maintenance organization is operating
15997	in accordance with the provisions of this part or has been or is
15998	engaged in any unfair method of competition or in any unfair or
15999	deceptive act or practice prohibited by s. 641.3901, and each
16000	shall have the powers and duties specified in ss. 641.3907-
16001	641.3913 in connection therewith.
16002	Section 298. Section 641.3907, Florida Statutes, is
16003	amended to read:
16004	641.3907 Defined unfair practices; hearings, witnesses,
16005	appearances, production of books, and service of process.--
16006	(1) Whenever the department or officehas reason to
16007	believe that any person, entity, or health maintenance
16008	organization has engaged, or is engaging, in this state in any
16009	unfair method of competition or any unfair or deceptive act or
16010	practice as defined in s. 641.3903 or is operating a health
16011	maintenance organization without a certificate of authority as
16012	required by this part and that a proceeding by it in respect
16013	thereto would be to the interest of the public, the department
16014	or officeshall conduct or cause to have conducted a hearing in
16015	accordance with chapter 120.
16016	(2) The department or office, a duly empowered hearing
16017	officer, or an administrative law judge shall, during the
16018	conduct of such hearing, have those powers enumerated in s.
16019	120.569; however, the penalties for failure to comply with a
16020	subpoena or with an order directing discovery shall be limited
16021	to a fine not to exceed $1,000 per violation.
16022	(3) Statements of charges, notices, and orders under this
16023	part may be served by anyone duly authorized by the department
16024	or office, either in the manner provided by law for service of
16025	process in civil actions or by certifying and mailing a copy
16026	thereof to the person, entity, or health maintenance
16027	organization affected by the statement, notice, order, or other
16028	process at her or his or its residence or principal office or
16029	place of business. The verified return by the person so serving
16030	such statement, notice, order, or other process, setting forth
16031	the manner of the service, shall be proof of the same, and the
16032	return postcard receipt for such statement, notice, order, or
16033	other process, certified and mailed as aforesaid, shall be proof
16034	of service of the same.
16035	Section 299. Section 641.3909, Florida Statutes, is
16036	amended to read:
16037	641.3909 Cease and desist and penalty orders.--After the
16038	hearing provided in s. 641.3907, the department or officeshall
16039	enter a final order in accordance with s. 120.569. If it is
16040	determined that the person, entity, or health maintenance
16041	organization charged has engaged in an unfair or deceptive act
16042	or practice or the unlawful operation of a health maintenance
16043	organization without a subsisting certificate of authority, the
16044	department or officeshall also issue an order requiring the
16045	violator to cease and desist from engaging in such method of
16046	competition, act, or practice or unlawful operation of a health
16047	maintenance organization. Further, if the act or practice
16048	constitutes a violation of s. 641.3155, s. 641.3901, or s.
16049	641.3903, the department or officemay, at its discretion, order
16050	any one or more of the following:
16051	(1) Suspension or revocation of the health maintenance
16052	organization's certificate of authority if it knew, or
16053	reasonably should have known, it was in violation of this part.
16054	(2) If it is determined that the person or entity charged
16055	has engaged in the business of operating a health maintenance
16056	organization without a certificate of authority, an
16057	administrative penalty not to exceed $1,000 for each health
16058	maintenance contract offered or effectuated.
16059	Section 300. Section 641.3911, Florida Statutes, is
16060	amended to read:
16061	641.3911 Appeals from the department or office.--Any
16062	person, entity, or health maintenance organization subject to an
16063	order of the department or officeunder s. 641.3909 or s.
16064	641.3913 may obtain a review of the order by filing an appeal
16065	therefrom in accordance with the provisions and procedures for
16066	appeal under s. 120.68.
16067	Section 301. Section 641.3913, Florida Statutes, is
16068	amended to read:
16069	641.3913 Penalty for violation of cease and desist
16070	orders.--Any person, entity, or health maintenance organization
16071	which violates a cease and desist order of the department or
16072	officeunder s. 641.3909 while such order is in effect, after
16073	notice and hearing as provided in s. 641.3907, shall be subject,
16074	at the discretion of the department or office, to any one or
16075	more of the following:
16076	(1) A monetary penalty of not more than $200,000 as to all
16077	matters determined in such hearing.
16078	(2) Suspension or revocation of the health maintenance
16079	organization's certificate of authority.
16080	Section 302. Section 641.3917, Florida Statutes, is
16081	amended to read:
16082	641.3917 Civil liability.--The provisions of this part are
16083	cumulative to rights under the general civil and common law, and
16084	no action of the department or officeshall abrogate such rights
16085	to damage or other relief in any court.
16086	Section 303. Subsections (3), (10), and (14) of section
16087	641.3922, Florida Statutes, are amended to read:
16088	641.3922 Conversion contracts; conditions.--Issuance of a
16089	converted contract shall be subject to the following conditions:
16090	(3) CONVERSION PREMIUM.--The premium for the converted
16091	contract shall be determined in accordance with premium rates
16092	applicable to the age and class of risk of each person to be
16093	covered under the converted contract and to the type and amount
16094	of coverage provided. However, the premium for the converted
16095	contract may not exceed 200 percent of the standard risk rate,
16096	as established by the officedepartmentunder s. 627.6675(3).
16097	The mode of payment for the converted contract shall be
16098	quarterly or more frequently at the option of the organization,
16099	unless otherwise mutually agreed upon between the subscriber and
16100	the organization.
16101	(10) ALTERNATE PLANS.--The health maintenance organization
16102	shall offer a standard health benefit plan as established
16103	pursuant to s. 627.6699(12). The health maintenance organization
16104	may, at its option, also offer alternative plans for group
16105	health conversion in addition to those required by this section,
16106	provided any alternative plan is approved by the office
16107	departmentor is a converted policy, approved under s. 627.6675
16108	and issued by an insurance company authorized to transact
16109	insurance in this state. Approval by the officedepartmentof an
16110	alternative plan shall be based on compliance by the alternative
16111	plan with the provisions of this part and the rules promulgated
16112	thereunder, applicable provisions of the Florida Insurance Code
16113	and rules promulgated thereunder, and any other applicable law.
16114	(14) NOTIFICATION.--A notification of the conversion
16115	privilege shall be included in each health maintenance contract
16116	and in any certificate or member's handbook. The organization
16117	shall mail an election and premium notice form, including an
16118	outline of coverage, on a form approved by the office
16119	department, within 14 days after any individual who is eligible
16120	for a converted health maintenance contract gives notice to the
16121	organization that the individual is considering applying for the
16122	converted contract or otherwise requests such information. The
16123	outline of coverage must contain a description of the principal
16124	benefits and coverage provided by the contract and its principal
16125	exclusions and limitations, including, but not limited to,
16126	deductibles and coinsurance.
16127	Section 304. Section 641.402, Florida Statutes, is amended
16128	to read:
16129	641.402 Definitions.--As used in this part, the term:
16130	(1) "Basic services" includes any of the following:
16131	emergency care, physician care other than hospital inpatient
16132	physician services, ambulatory diagnostic treatment, and
16133	preventive health care services.
16134	(2) "Department" means the Department of Insurance.
16135	(2)(3) "Guaranteeing organization" means an organization
16136	thatwhich is domiciled in the United States; thatwhichhas
16137	authorized service of process against it; and thatwhichhas
16138	appointed the Chief Financial OfficerInsurance Commissioner and
16139	Treasureras its agent for service of process in connection with
16140	any cause of action arising in this state, based upon any
16141	guarantee entered into under this part.
16142	(3)(4)"Insolvent" or "insolvency" means the inability of
16143	a prepaid health clinic to discharge its liabilities as they
16144	become due in the normal course of business.
16145	(4)(5)"Prepaid health clinic" means any organization
16146	authorized under this part which provides, either directly or
16147	through arrangements with other persons, basic services to
16148	persons enrolled with such organization, on a prepaid per capita
16149	or prepaid aggregate fixed-sum basis, including those basic
16150	services which subscribers might reasonably require to maintain
16151	good health. However, no clinic thatwhichprovides or contracts
16152	for, either directly or indirectly, inpatient hospital services,
16153	hospital inpatient physician services, or indemnity against the
16154	cost of such services shall be a prepaid health clinic.
16155	(5)(6)"Prepaid health clinic contract" means any contract
16156	entered into by a prepaid health clinic with a subscriber or
16157	group of subscribers to provide any of the basic services in
16158	exchange for a prepaid per capita or prepaid aggregate fixed
16159	sum.
16160	(6)(7)"Provider" means any physician or person other than
16161	a hospital that furnishes health care services and is licensed
16162	or authorized to practice in this state.
16163	(7)(8)"Reporting period" means the particular span of
16164	time by or for which accounts are redeemed on an annualized
16165	basis.
16166	(8)(9)"Subscriber" means an individual who has
16167	contracted, or on whose behalf a contract has been entered into,
16168	with a prepaid health clinic for health care services.
16169	(9)(10)"Surplus" means total unencumbered assets in
16170	excess of total liabilities. Surplus includes capital stock,
16171	capital in excess of par, and retained earnings and may include
16172	surplus notes.
16173	(10)(11) "Surplus notes" means debt thatwhichhas been
16174	guaranteed by the United States Government or its agencies or
16175	debt thatwhichhas been subordinated to all claims of
16176	subscribers and general creditors of the prepaid health clinic.
16177	Section 305. Section 641.403, Florida Statutes, is amended
16178	to read:
16179	641.403 Rulemaking authority.--The commission may
16180	Department of Insurance has authority toadopt rules pursuant to
16181	ss. 120.536(1) and 120.54 to implement the provisions of this
16182	part.
16183	Section 306. Section 641.405, Florida Statutes, is amended
16184	to read:
16185	641.405 Application for certificate of authority to
16186	operate prepaid health clinic.--
16187	(1) No person may operate a prepaid health clinic without
16188	first obtaining a certificate of authority from the office
16189	department. The officedepartmentshall not issue a certificate
16190	of authority to any applicant which does not possess a valid
16191	Health Care Provider Certificate issued by the Agency for Health
16192	Care Administration.
16193	(2) Each application for a certificate of authority shall
16194	be on such form as the commissiondepartmentprescribes, and
16195	such application shall be accompanied by:
16196	(a) A copy of the basic organizational document of the
16197	applicant, if any, such as the articles of incorporation,
16198	articles of association, partnership agreement, trust agreement,
16199	or other applicable document, and all amendments to such
16200	document.
16201	(b) A copy of the constitution, bylaws, rules and
16202	regulations, or similar form of document, if any, regulating the
16203	conduct of the affairs of the applicant.
16204	(c) A list of the names, addresses, and official
16205	capacities with the applicant of the persons who are to be
16206	responsible for the conduct of the affairs of the clinic,
16207	including all members of the governing body, the officers and
16208	directors in the case of a corporation, and the partners or
16209	associates in the case of a partnership or association. Such
16210	persons shall fully disclose to the officedepartmentand the
16211	governing body of the clinic the extent and nature of any
16212	contracts or arrangements between them and the clinic, including
16213	any possible conflicts of interest.
16214	(d) A statement generally describing the clinic and its
16215	operations.
16216	(e) Each form of prepaid health clinic contract that the
16217	applicant proposes to offer the subscribers, showing for each
16218	form of contract the benefits to which the subscribers are
16219	entitled, together with a table of the rates charged, or
16220	proposed to be charged.
16221	(f) A copy of the applicant's Health Care Provider
16222	Certificate from the Agency for Health Care Administration,
16223	issued pursuant to part III of this chapter.
16224	(g) A financial statement prepared on the basis of
16225	generally accepted accounting principles, except that surplus
16226	notes acceptable to the officedepartmentmay be included in the
16227	calculation of surplus.
16228	Section 307. Section 641.406, Florida Statutes, is amended
16229	to read:
16230	641.406 Issuance of certificate of authority.--The office
16231	departmentshall issue a certificate of authority for a prepaid
16232	health clinic to any applicant filing a properly completed
16233	application in conformity with s. 641.405, upon payment of the
16234	prescribed fees and upon the office'sdepartment'sbeing
16235	satisfied that:
16236	(1) As a condition precedent to the issuance of any
16237	certificate, the applicant has obtained a Health Care Provider
16238	Certificate from the Agency for Health Care Administration
16239	pursuant to part III of this chapter.
16240	(2) The proposed rates are actuarially sound for the
16241	benefits provided, including administrative costs.
16242	(3) The applicant has met the minimum surplus requirements
16243	of s. 641.407.
16244	(4) The procedures for offering basic services and
16245	offering and terminating contracts to subscribers will not
16246	unfairly discriminate on the basis of age, health, or economic
16247	status. However, this subsection does not prohibit reasonable
16248	underwriting classifications for the purposes of establishing
16249	contract rates, nor does it prohibit experience rating.
16250	(5) The procedures for offering basic services and
16251	offering and terminating contracts to subscribers will not
16252	discriminate on the basis of sex, race, or national origin.
16253	(6) The applicant furnishes evidence of adequate insurance
16254	coverage or an adequate plan for self-insurance to respond to
16255	claims for injuries arising out of the furnishing of basic
16256	services.
16257	(7) The ownership, control, or management of the applicant
16258	is competent and trustworthy and possesses managerial experience
16259	that would make the proposed clinic operation beneficial to the
16260	subscribers. The officedepartmentshall not grant or continue
16261	authority to transact the business of a prepaid health clinic in
16262	this state at any time during which the officedepartmenthas
16263	good reason to believe that the ownership, control, or
16264	management of the clinic is under the control of any person
16265	whose business operations are or have been marked by business
16266	practices or conduct that is to the detriment of the public,
16267	stockholders, investors, or creditors; by the improper
16268	manipulation of assets or of accounts; or by bad faith.
16269	(8) The application and the applicant are in conformity
16270	with all requirements of this part.
16271	Section 308. Section 641.4065, Florida Statutes, is
16272	amended to read:
16273	641.4065 Insurance business not authorized.--Nothing in
16274	the Florida Insurance Code or this part shall be deemed to
16275	authorize any prepaid health clinic to transact any insurance
16276	business other than that issuing prepaid health clinic contracts
16277	or otherwise to engage in any other type of insurance unless it
16278	is authorized under a certificate of authority issued by the
16279	officedepartmentunder the provisions of the Florida Insurance
16280	Code.
16281	Section 309. Subsection (2) of section 641.407, Florida
16282	Statutes, is amended to read:
16283	641.407 Minimum surplus.--
16284	(2) In lieu of having any minimum surplus, the prepaid
16285	health clinic may provide a written guaranty to assure payment
16286	of covered subscriber claims if the guaranteeing organization
16287	has been in operation for at least 3 years and has a surplus,
16288	not including land, buildings, and equipment, equal to the
16289	product of 2 times the amount of the required statutory surplus.
16290	Such guaranteeing organization and such written guaranty must be
16291	acceptable to, and approved by, the officedepartment. The
16292	officedepartmentshall consider the likelihood of the payment
16293	of subscriber claims in granting or withholding such approval.
16294	Section 310. Section 641.409, Florida Statutes, is amended
16295	to read:
16296	641.409 Insolvency protection.--
16297	(1) Every prepaid health clinic shall comply with one of
16298	the following paragraphs:
16299	(a) The prepaid health clinic shall secure insurance to
16300	the satisfaction of the officedepartmentto protect subscribers
16301	in the event the prepaid health clinic is unable to meet its
16302	obligations to subscribers under the terms of any prepaid health
16303	clinic contract issued to a subscriber.
16304	(b) The prepaid health clinic shall file with the office
16305	departmenta surety bond issued by an authorized surety insurer.
16306	The bond shall be for the same purpose as the insurance in lieu
16307	of which the bond is filed. The officedepartmentshall not
16308	approve any bond under the terms of which the protection
16309	afforded against insolvency is not equivalent to the protection
16310	afforded by such insurance. The bond shall guarantee that the
16311	prepaid health clinic will faithfully and truly perform all the
16312	conditions of any prepaid health clinic contract. No such bond
16313	shall be canceled or subject to cancellation unless at least 60
16314	days' notice of the cancellation, in writing, is filed with the
16315	officedepartment. In the event that the notice of termination
16316	of the bond is filed with the officedepartment, the prepaid
16317	health clinic insured under the bond shall, within 30 days of
16318	the filing of the notice of termination, provide the office
16319	departmentwith a replacement bond meeting the requirements of
16320	this part or secure insurance as required by paragraph (a). The
16321	cancellation of a bond does not relieve the obligation of the
16322	issuer of the bond for claims arising out of contracts issued
16323	prior to the cancellation of the bond unless a replacement bond
16324	or insurance is secured. In no event shall the issuer's
16325	aggregate liability under the bond exceed the face amount of the
16326	bond. If, within 30 days of filing the notice of termination, a
16327	replacement bond or insurance has not been secured and filed
16328	with the officedepartment, the officedepartmentshall suspend
16329	the certificate of the prepaid health clinic until the deposit
16330	requirements are satisfied. Whenever the prepaid health clinic
16331	ceases to do business in this state and furnishes to the office
16332	departmentsatisfactory proof that it has discharged or
16333	otherwise adequately provided for all of its obligations to its
16334	subscribers, the officedepartmentshall release any bond filed
16335	by the prepaid health clinic.
16336	(2) In determining the sufficiency of the insurance
16337	required under paragraph (1)(a) or the surety bond required
16338	under paragraph (1)(b), the officedepartmentmay consider the
16339	number of subscribers, the basic services included in subscriber
16340	contracts, and the cost of providing such basic services to
16341	subscribers in the geographic area served.
16342	(3) Every prepaid health clinic shall deposit with the
16343	department a cash deposit in the amount of $30,000 to guarantee
16344	that the obligations to the subscribers will be performed.
16345	Section 311. Section 641.41, Florida Statutes, is amended
16346	to read:
16347	641.41 Annual report of prepaid health clinic;
16348	administrative penalty.--
16349	(1) Each prepaid health clinic shall file a report with
16350	the officedepartment, annually on or before March 1, or within
16351	3 months of the end of the reporting period of the clinic, or
16352	within such extension of time for the filing of the report as
16353	the officedepartment, for good cause, may grant. The report of
16354	the prepaid health clinic must be filed on forms prescribed by
16355	the commissiondepartmentand must be verified under oath by two
16356	executive officers of the clinic or, if the clinic is not a
16357	corporation, verified under oath by two persons who are
16358	principal managing directors of the affairs of the clinic. The
16359	report of the clinic shall show the condition of the clinic on
16360	the last day of the immediately preceding reporting period.
16361	Such report shall include:
16362	(a) A financial statement of the clinic, including its
16363	balance sheet and a statement of operations for the preceding
16364	year;
16365	(b) A list of the name and residence address of every
16366	person responsible for the conduct of the affairs of the clinic,
16367	together with a disclosure of the extent and nature of any
16368	contract or arrangement between such person and the clinic,
16369	including any possible conflicts of interest;
16370	(c) The number of prepaid health clinic contracts issued
16371	and outstanding, and the number of prepaid health clinic
16372	contracts terminated and a compilation of the reasons for such
16373	terminations;
16374	(d) Such statistical information as is requested by the
16375	commission or officedepartment, which information shows the
16376	rates of the clinic for all basic services provided under
16377	prepaid health clinic contracts;
16378	(e) The number and amount of damage claims for medical
16379	injury initiated against the clinic and any of the providers
16380	engaged by it during the reporting year, broken down into claims
16381	with and without formal legal process, and the disposition, if
16382	any, of each such claim; and
16383	(f) Such other information relating to the performance of
16384	the clinic as is required by the commission or office
16385	department.
16386	(2) Any clinic which neglects to file the annual report in
16387	the form and within the time required by this section is subject
16388	to an administrative penalty, not to exceed $100 for each day
16389	during which the neglect continues; and, upon notice by the
16390	officedepartmentto that effect, the authority of the clinic to
16391	do business in this state shall cease while such default
16392	continues.
16393	Section 312. Section 641.412, Florida Statutes, is amended
16394	to read:
16395	641.412 Fees.--
16396	(1) Every prepaid health clinic shall pay to the office
16397	departmentthe following fees:
16398	(a) For filing a copy of its application for a certificate
16399	of authority or an amendment to such certificate, a
16400	nonrefundable fee in the amount of $150.
16401	(b) For filing each annual report, a fee in the amount of
16402	$150.
16403	(2) The fees charged under this section shall be
16404	distributed as follows:
16405	(a) One-third of the total amount of fees shall be
16406	distributed to the Agency for Health Care Administration; and
16407	(b) Two-thirds of the total amount of fees shall be
16408	distributed to the officeDepartment of Insurance.
16409	Section 313. Section 641.418, Florida Statutes, is amended
16410	to read:
16411	641.418 Examination of prepaid health clinic by the office
16412	department.--The officedepartmentshall examine the affairs,
16413	transactions, accounts, business records, and assets of any
16414	prepaid health clinic as often as the officedepartmentdeems it
16415	expedient for the protection of the people of this state. Every
16416	clinic shall submit its books and records and take other
16417	appropriate action as may be necessary to facilitate an
16418	examination. However, medical records of individuals and
16419	records of physicians providing services under contracts to the
16420	clinic are not subject to audit, although such records may be
16421	subject to subpoena by court order upon a showing of good cause.
16422	For the purpose of examinations, the officedepartmentmay
16423	administer oaths to and examine the officers and agents of a
16424	clinic concerning its business and affairs. The expenses for
16425	the examination of each clinic by the officedepartmentare
16426	subject to the same terms and conditions that apply to insurers
16427	under part II of chapter 624. In no event shall the expenses of
16428	all examinations exceed the maximum amount of $15,000 per year.
16429	Section 314. Subsections (2), (3), (5), and (7) of section
16430	641.42, Florida Statutes, is amended to read:
16431	641.42 Prepaid health clinic contracts.--
16432	(2) The rates charged by any clinic to its subscribers
16433	shall not be excessive, inadequate, or unfairly discriminatory.
16434	The commissiondepartment, in accordance with generally accepted
16435	actuarial practice, may define by rule what constitutes
16436	excessive, inadequate, or unfairly discriminatory rates and may
16437	require whatever information the commissiondepartmentdeems
16438	necessary to determine that a rate or proposed rate meets the
16439	requirements of this subsection.
16440	(3) No clinic shall issue or agree to issue any prepaid
16441	health clinic contract to a subscriber unless the contract has
16442	first been filed with, and approved by, the officedepartment.
16443	(5) Every subscriber shall receive a clear and
16444	understandable description of the method of the clinic for
16445	resolving subscriber grievances; such method shall be set forth
16446	in the contract and shall be approved by the officedepartment
16447	on the basis of its underlying fairness.
16448	(7)(a) If a clinic desires to amend any contract with any
16449	of its subscribers or desires to change any rate charged for the
16450	contract, the clinic may do so, upon filing with the office
16451	departmentthe proposed amendment or change in rates.
16452	(b) No prepaid health clinic contract form or application
16453	form when written application is required and is to be made a
16454	part of the policy or contract, or no printed amendment,
16455	addendum, rider, or endorsement form or form of renewal
16456	certificate, shall be delivered or issued for delivery in this
16457	state, unless the form has been filed with the officedepartment
16458	at its offices in Tallahasseeby or in behalf of the clinic
16459	which proposes to use such form and has been approved by the
16460	officedepartment. Every such filing shall be made not less than
16461	30 days in advance of any such use or delivery. At the
16462	expiration of such 30 days, the form so filed shall be deemed
16463	approved unless prior to the end of the 30 days the form has
16464	been affirmatively approved or disapproved by the office
16465	department. The approval of any such form by the office
16466	departmentconstitutes a waiver of any unexpired portion of such
16467	waiting period. The officedepartmentmay extend by not more
16468	than an additional 15 days the period within which the office
16469	departmentmay so affirmatively approve or disapprove any such
16470	form, by giving notice of such extension before the expiration
16471	of the initial 30-day period. At the expiration of any such
16472	period as so extended, and in the absence of such prior
16473	affirmative approval or disapproval, such form shall be deemed
16474	approved. The officedepartmentmay, for cause, withdraw a
16475	previous approval. No clinic shall issue or use any form which
16476	has been disapproved by the officedepartmentor any form for
16477	which the officedepartmenthas withdrawn approval.
16478	(c) The officedepartmentshall disapprove any form filed
16479	under this subsection, or withdraw any previous approval of the
16480	form, only if the form:
16481	1. Is in any respect in violation of, or does not comply
16482	with, any provision of this part or rule adopted under this
16483	part.
16484	2. Contains or incorporates by reference, where such
16485	incorporation is otherwise permissible, any inconsistent,
16486	ambiguous, or misleading clauses, or exceptions and conditions
16487	which deceptively affect the risk purported to be assumed in the
16488	general coverage of the contract.
16489	3. Has a misleading title, misleading heading, or other
16490	indication of the provisions of the form which is misleading.
16491	4. Is printed or otherwise reproduced in such manner as to
16492	render any material provision of the form substantially
16493	illegible.
16494	5. Provides benefits which are unreasonable in relation to
16495	the rate charged or contains provisions which are unfair,
16496	inequitable, or contrary to the public policy of this state or
16497	encourage misrepresentation.
16498	(d) In determining whether the benefits are reasonable in
16499	relation to the rate charged, the officedepartment, in
16500	accordance with reasonable actuarial techniques, shall consider:
16501	1. Past loss experience and prospective loss experience.
16502	2. Allocation of expenses.
16503	3. Risk and contingency margins, along with justification
16504	of such margins.
16505	4. Acquisition costs.
16506	5. Other factors deemed appropriate by the office
16507	department, based on sound actuarial techniques.
16508	Section 315. Section 641.421, Florida Statutes, is amended
16509	to read:
16510	641.421 Language used in contracts and advertisements;
16511	translations.--
16512	(1)(a) All prepaid health clinic contracts or forms shall
16513	be printed in English.
16514	(b) If the negotiations by a prepaid health clinic with a
16515	subscriber leading up to the effectuation of a prepaid health
16516	clinic contract are conducted in a language other than English,
16517	the prepaid health clinic shall supply to the subscriber a
16518	written translation of the contract, which translation
16519	accurately reflects the substance of the contract and is in the
16520	language used to negotiate the contract. Any such translation
16521	shall be furnished to the officedepartmentas part of the
16522	filing of the prepaid health clinic contract form and shall be
16523	approved by the officedepartmentprior to use. No translation
16524	of a prepaid health clinic contract form shall be approved by
16525	the officedepartmentunless the translation accurately reflects
16526	the substance of the prepaid health clinic contract form in
16527	translation. When a translation of a prepaid health clinic
16528	contract is used, the translation shall clearly and
16529	conspicuously state on its face and in the language of the
16530	translation:
16531	READ THIS FIRST
16532	This is a translation of the document that you are about
16533	to sign.
16534
16535	(2) All advertisements by a prepaid health clinic, if
16536	printed or broadcast in a language other than English, also
16537	shall be available in English and shall be furnished to the
16538	officedepartmentupon request. As used in this subsection, the
16539	term "advertisement" means any advertisement, circular,
16540	pamphlet, brochure, or other printed material disclosing or
16541	disseminating advertising material or information by a clinic to
16542	prospective or existing subscribers and includes any radio or
16543	television transmittal of an advertisement or information.
16544	Section 316. Subsection (2) of section 641.424, Florida
16545	Statutes, is amended to read:
16546	641.424 Validity of noncomplying contracts.--
16547	(2) Any contract delivered or issued for delivery in this
16548	state covering a subscriber resident, located, or to be
16549	performed in this state, which subscriber, pursuant to the
16550	provisions of this part, the clinic may not lawfully provide
16551	under such a contract, is cancelable at any time by the clinic,
16552	any provision of the contract to the contrary notwithstanding;
16553	and the clinic shall promptly cancel the contract in accordance
16554	with the request of the officedepartmentfor such cancellation.
16555	No such illegality or cancellation shall be deemed to relieve
16556	the clinic of any liability incurred by the clinic under the
16557	contract while the contract was in force or to prohibit the
16558	clinic from retaining the pro rata earned premium on the
16559	contract. This provision does not relieve the clinic from any
16560	penalty otherwise incurred by the clinic under this part on
16561	account of any such violation.
16562	Section 317. Section 641.437, Florida Statutes, is amended
16563	to read:
16564	641.437 Investigatory power of officedepartment.--The
16565	officedepartmenthas the power to examine and investigate the
16566	affairs of every person, entity, or prepaid health clinic in
16567	order to determine whether the person, entity, or prepaid health
16568	clinic is operating in accordance with the provisions of this
16569	part or has been or is engaged in any unfair method of
16570	competition or any unfair or deceptive act or practice
16571	prohibited by s. 641.44.
16572	Section 318. Section 641.443, Florida Statutes, is amended
16573	to read:
16574	641.443 Temporary restraining orders.--
16575	(1) The officedepartmentis vested with the power to seek
16576	a temporary restraining order:
16577	(a) On behalf of the officedepartmentor on behalf of a
16578	subscriber or subscribers of a prepaid health clinic that is
16579	being operated by a person or entity without a subsisting
16580	certificate of authority; or
16581	(b) On behalf of the officedepartmentor on behalf of a
16582	subscriber or subscribers to whom a prepaid health clinic,
16583	person, or entity is issuing, delivering, or renewing prepaid
16584	health clinic contracts without an existing certificate of
16585	authority.
16586	(2) The officedepartmentand the Agency for Health Care
16587	Administration are each vested with the power to seek a
16588	temporary restraining order on their behalf or on behalf of a
16589	subscriber or subscribers of a prepaid health clinic that is
16590	being operated in violation of any provision of this part or any
16591	rule promulgated under this part, or any other applicable law or
16592	rule.
16593	Section 319. Section 641.444, Florida Statutes, is amended
16594	to read:
16595	641.444 Injunction.--In addition to the penalties and
16596	other enforcement provisions of this part, if a person, entity,
16597	or prepaid health clinic has engaged in any activity prohibited
16598	by this part or any rule adopted pursuant to this part, the
16599	officedepartmentmay resort to a proceeding for injunction in
16600	the circuit court of the county where such person, entity, or
16601	prepaid health clinic is located or has her or his or its
16602	principal place of business; and the officedepartmentmay apply
16603	in such court for such temporary and permanent orders as the
16604	officedepartmentmay deem necessary to restrain the person,
16605	entity, or prepaid health clinic from engaging in any such
16606	activity, until the person, entity, or prepaid health clinic
16607	complies with the provisions and rules.
16608	Section 320. Section 641.445, Florida Statutes, is amended
16609	to read:
16610	641.445 Defined practices; hearings, witnesses,
16611	appearances, production of books, and service of process.--
16612	(1) Whenever the officedepartmenthas reason to believe
16613	that a person, entity, or prepaid health clinic has engaged, or
16614	is engaging, in this state in any unfair method of competition
16615	or any unfair or deceptive act or practice as defined in s.
16616	641.441, or is operating a prepaid health clinic without a
16617	certificate of authority as required by this part or otherwise
16618	operating in violation of any provision of this part or rule
16619	adopted pursuant to this part, and that a proceeding by the
16620	officedepartmentin respect thereto would be in the interest of
16621	the public, the officedepartmentshall conduct, or cause to
16622	have conducted, a hearing in accordance with chapter 120.
16623	(2) The officedepartment, a duly empowered hearing
16624	officer, or an administrative law judge shall, during the
16625	conduct of such hearing, have those powers enumerated in s.
16626	120.569; however, the penalty for the failure to comply with a
16627	subpoena or with an order directing discovery is limited to a
16628	fine not to exceed $1,000 per violation.
16629	(3) A statement of charges, notice, or order under this
16630	part may be served by anyone duly authorized by the office
16631	department, either in the manner provided by law for service of
16632	process in civil actions or by certifying and mailing a copy of
16633	the statement of charges, notice, or order to the person,
16634	entity, or prepaid health clinic affected by the statement,
16635	notice, or order or other process at his or her or its residence
16636	or principal office or place of business. The verified return
16637	by the person so serving such statement, notice, or order or
16638	other process, setting forth the manner of the service, is proof
16639	of such service; and the return postcard receipt for such
16640	statement, notice, or order or other process, certified and
16641	mailed as provided in this subsection, is proof of the service
16642	of the statement, notice, or order or other process.
16643	Section 321. Section 641.446, Florida Statutes, is amended
16644	to read:
16645	641.446 Cease and desist and penalty orders.--After the
16646	hearing provided in s. 641.445, the officedepartmentshall
16647	enter a final order in accordance with s. 120.569. If it is
16648	determined that the person, entity, or prepaid health clinic
16649	charged has engaged in an unfair or deceptive act or practice or
16650	the unlawful operation of a prepaid health clinic, the office
16651	departmentalso shall issue an order requiring the violator to
16652	cease and desist from engaging in such method of competition,
16653	act, or practice or unlawful operation of a prepaid health
16654	clinic. Furthermore, the officedepartmentmay, at its
16655	discretion, order any one or more of the following:
16656	(1) The suspension or revocation of the certificate of
16657	authority of the prepaid health clinic if it knew, or reasonably
16658	should have known, that it was in violation of this part.
16659	(2) If it is determined that the person or entity charged
16660	has engaged in the business of operating a prepaid health clinic
16661	without a certificate of authority, an administrative penalty
16662	not to exceed $1,000 for each prepaid health clinic contract
16663	offered or effectuated.
16664	Section 322. Section 641.447, Florida Statutes, is amended
16665	to read:
16666	641.447 Appeal from departmentalorder.--Any person,
16667	entity, or prepaid health clinic that is subject to an order of
16668	the officedepartmentunder s. 641.446 may obtain a review of
16669	the order by filing an appeal from the order in accordance with
16670	the provisions and procedures for appeal under s. 120.68.
16671	Section 323. Section 641.448, Florida Statutes, is amended
16672	to read:
16673	641.448 Penalty for violation of cease and desist
16674	order.--Any person, entity, or prepaid health clinic that
16675	violates a cease and desist order of the officedepartmentunder
16676	s. 641.446 while such order is in effect, after notice and
16677	hearing as provided in s. 641.445, is subject, at the discretion
16678	of the officedepartment, to any one or more of the following:
16679	(1) A monetary penalty of not more than $50,000 as to all
16680	matters determined in such hearing.
16681	(2) The suspension or revocation of the certificate of
16682	authority of the prepaid health clinic.
16683	Section 324. Section 641.45, Florida Statutes, is amended
16684	to read:
16685	641.45 Revocation or cancellation of certificate of
16686	authority; suspension of authority to enroll new subscribers;
16687	terms of suspension.--
16688	(1) The maintenance of a valid and current Health Care
16689	Provider Certificate issued pursuant to part III of this chapter
16690	is a condition of the maintenance of a valid and current
16691	certificate of authority issued by the officedepartmentto
16692	operate a prepaid health clinic. Revocation or nonrenewal of a
16693	Health Care Provider Certificate shall be deemed to be an
16694	automatic and immediate cancellation of a prepaid health
16695	clinic's certificate of authority.
16696	(2) The officedepartmentmay suspend the authority of a
16697	clinic to enroll new subscribers or revoke any certificate of
16698	authority issued to a prepaid health clinic, or order compliance
16699	within 60 days, if the officedepartmentfinds that any of the
16700	following conditions exist:
16701	(a) The clinic is not operating in compliance with this
16702	part or any rule promulgated under this part.
16703	(b) The plan is no longer actuarially sound or the clinic
16704	does not have the minimum surplus as required by this part.
16705	(c) The existing contract rates are excessive, inadequate,
16706	or unfairly discriminatory.
16707	(d) The clinic has advertised, merchandised, or attempted
16708	to merchandise its services in such a manner as to misrepresent
16709	its services or capacity for services or has engaged in
16710	deceptive, misleading, or unfair practices with respect to
16711	advertising or merchandising.
16712	(e) The organization is insolvent.
16713	(f) The clinic has not complied with the grievance
16714	procedures for subscribers that are set forth in any prepaid
16715	health clinic contract.
16716	(g) The clinic has not fully satisfied a judgment against
16717	the clinic within 10 days of the entry of the judgment by any
16718	court in the state or, in the case of an appeal from such
16719	judgment, has not fully satisfied the judgment within 60 days
16720	after affirmance of the judgment by the appellate court.
16721	(3) The officedepartmentshall, in its order suspending
16722	the authority of a clinic to enroll new subscribers, specify the
16723	period during which the suspension is to be in effect and the
16724	conditions, if any, which must be met by the clinic prior to
16725	reinstatement of its authority to enroll new subscribers. The
16726	order of suspension is subject to rescission or modification by
16727	further order of the officedepartmentprior to the expiration
16728	of the suspension period. Reinstatement shall not be made unless
16729	requested by the clinic; however, the officedepartmentshall
16730	not grant reinstatement if it finds that the circumstances for
16731	which the suspension occurred still exist or are likely to
16732	recur.
16733	Section 325. Section 641.452, Florida Statutes, is amended
16734	to read:
16735	641.452 Administrative penalty in lieu of suspension or
16736	revocation of certificate of authority.--The officedepartment
16737	may, in lieu of suspension or revocation of a certificate of
16738	authority, levy an administrative penalty in an amount not more
16739	than $10,000 for each violation by a prepaid health clinic. In
16740	levying such fine, the officedepartmentshall consider the
16741	number of members and total revenues of the clinic and whether
16742	the violation was committed knowingly and willfully.
16743	Section 326. Section 641.453, Florida Statutes, is amended
16744	to read:
16745	641.453 Civil liability.--The provisions of this part are
16746	cumulative to the rights under the general civil law and common
16747	law, and no action of the officedepartmentshall abrogate such
16748	rights to damages or other relief in any court.
16749	Section 327. Section 641.454, Florida Statutes, is amended
16750	to read:
16751	641.454 Civil action to enforce prepaid health clinic
16752	contract; attorney's fees; court costs.--In any civil action
16753	brought to enforce the terms and conditions of a prepaid health
16754	clinic contract, the prevailing party is entitled to recover
16755	reasonable attorney's fees and court costs. This section shall
16756	not be construed to authorize a civil action against the
16757	commission or officedepartment, or theirits employees, or the
16758	Insurance Commissioner and Treasureror against the Agency for
16759	Health Care Administration, the employees of the Agency for
16760	Health Care Administration, or the Secretary of Health Care
16761	Administration.
16762	Section 328. Section 641.455, Florida Statutes, is amended
16763	to read:
16764	641.455 Disposition of moneys collected under this
16765	part.--Fees, administrative penalties, examination expenses, and
16766	other sums collected by the officedepartmentunder this part
16767	shall be deposited to the credit of the Insurance Commissioner's
16768	Regulatory Trust Fund; however, fees, examination expenses, and
16769	other sums collected by, or allocated to, the Agency for Health
16770	Care Administration under this part shall be deposited to the
16771	credit of the General Revenue Fund.
16772	Section 329. Section 641.457, Florida Statutes, is amended
16773	to read:
16774	641.457 Exemption for certain operational prepaid health
16775	clinics.--The provisions of this part do not apply to those
16776	prepaid health clinics providing the services defined in ss.
16777	641.40 through 641.459, which clinics have been continuously
16778	engaged in providing such services since January 1, 1947,
16779	provided that any prepaid health clinic claiming an exemption
16780	under this section notifiednotifies the former Department of
16781	Insuranceof its claim on or before January 1, 1985. This
16782	exemption will terminate upon a change in controlling ownership
16783	of the organization.
16784	Section 330. Section 641.48, Florida Statutes, is amended
16785	to read:
16786	641.48 Purpose and application of part.--The purpose of
16787	this part is to ensure that health maintenance organizations and
16788	prepaid health clinics deliver high-quality health care to their
16789	subscribers. To achieve this purpose, this part requires all
16790	such organizations to obtain a health care provider certificate
16791	from the agency as a condition precedent to obtaining a
16792	certificate of authority to do business in Florida from the
16793	officeDepartment of Insurance, under part I or part II of this
16794	chapter.
16795	Section 331. Subsection (2) of section 641.49, Florida
16796	Statutes, is amended to read:
16797	641.49 Certification of health maintenance organization
16798	and prepaid health clinic as health care providers; application
16799	procedure.--
16800	(2) The officeDepartment of Insuranceshall not issue a
16801	certificate of authority under part I or part II of this chapter
16802	to any applicant which does not possess a valid health care
16803	provider certificate issued by the agency under this part.
16804	Section 332. Subsection (4) of section 641.495, Florida
16805	Statutes, is amended to read:
16806	641.495 Requirements for issuance and maintenance of
16807	certificate.--
16808	(4) The organization shall ensure that the health care
16809	services it provides to subscribers, including physician
16810	services as required by s. 641.19(12)(13)(d) and (e), are
16811	accessible to the subscribers, with reasonable promptness, with
16812	respect to geographic location, hours of operation, provision of
16813	after-hours service, and staffing patterns within generally
16814	accepted industry norms for meeting the projected subscriber
16815	needs. The health maintenance organization must provide
16816	treatment authorization 24 hours a day, 7 days a week. Requests
16817	for treatment authorization may not be held pending unless the
16818	requesting provider contractually agrees to take a pending or
16819	tracking number.
16820	Section 333. Subsections (7), (8), and (11) of section
16821	641.511, Florida Statutes, are amended to read:
16822	641.511 Subscriber grievance reporting and resolution
16823	requirements.--
16824	(7) Each organization shall send to the agency a copy of
16825	its quarterly grievance reports submitted to the office
16826	Department of Insurancepursuant to s. 408.7056(12).
16827	(8) The agency shall investigate all reports of unresolved
16828	quality of care grievances received from:
16829	(a) Annual and quarterly grievance reports submitted by
16830	the organization to the officeDepartment of Insurance.
16831	(b) Review requests of subscribers whose grievances remain
16832	unresolved after the subscriber has followed the full grievance
16833	procedure of the organization.
16834	(11) Each organization, as part of its contract with any
16835	provider, must require the provider to post a consumer
16836	assistance notice prominently displayed in the reception area of
16837	the provider and clearly noticeable by all patients. The
16838	consumer assistance notice must state the addresses and toll-
16839	free telephone numbers of the Agency for Health Care
16840	Administration, the Statewide Provider and Subscriber Assistance
16841	Program, and the Department of Financial ServicesInsurance. The
16842	consumer assistance notice must also clearly state that the
16843	address and toll-free telephone number of the organization's
16844	grievance department shall be provided upon request. The agency
16845	may adoptis authorized to promulgaterules to implement this
16846	section.
16847	Section 334. Subsections (1), (3), and (6) of section
16848	641.512, Florida Statutes, are amended to read:
16849	641.512 Accreditation and external quality assurance
16850	assessment.--
16851	(1)(a) To promote the quality of health care services
16852	provided by health maintenance organizations and prepaid health
16853	clinics in this state, the officedepartmentshall require each
16854	health maintenance organization and prepaid health clinic to be
16855	accredited within 1 year of the organization's receipt of its
16856	certificate of authority and to maintain accreditation by an
16857	accreditation organization approved by the officedepartment, as
16858	a condition of doing business in the state.
16859	(b) In the event that no accreditation organization can be
16860	approved by the officedepartment, the officedepartmentshall
16861	require each health maintenance organization and prepaid health
16862	clinic to have an external quality assurance assessment
16863	performed by a review organization approved by the office
16864	department, as a condition of doing business in the state. The
16865	assessment shall be conducted within 1 year of the
16866	organization's receipt of its certificate of authority and every
16867	2 years thereafter, or when the officedepartmentdeems
16868	additional assessments necessary.
16869	(3) A representative of the officedepartmentshall
16870	accompany the accreditation or review organization throughout
16871	the accreditation or assessment process, but shall not
16872	participate in the final accreditation or assessment
16873	determination. The accreditation or review organization shall
16874	monitor and evaluate the quality and appropriateness of patient
16875	care, the organization's pursuance of opportunities to improve
16876	patient care and resolve identified problems, and the
16877	effectiveness of the internal quality assurance program required
16878	for health maintenance organization and prepaid health clinic
16879	certification pursuant to s. 641.49(3)(p).
16880	(6) The accreditation or review organization shall issue a
16881	written report of its findings to the health maintenance
16882	organization's or prepaid health clinic's board of directors. A
16883	copy of the report shall be submitted to the officedepartment
16884	by the organization within 30 business days of its receipt by
16885	the health maintenance organization or prepaid health clinic.
16886	Section 335. Section 641.52, Florida Statutes, is amended
16887	to read:
16888	641.52 Revocation of certificate; suspension of new
16889	enrollment; suspension of the health care provider certificate;
16890	administrative fine; notice of action to the officeDepartment
16891	of Insurance; penalty for use of unlicensed providers.--
16892	(1) The agency may suspend the authority of an
16893	organization to enroll new subscribers or revoke the health care
16894	provider certificate of any organization, or order compliance
16895	within a time certain, if it finds that any of the following
16896	conditions exist:
16897	(a) The organization is in substantial violation of its
16898	contracts.
16899	(b) The organization is unable to fulfill its obligations
16900	under outstanding contracts entered into with its subscribers.
16901	(c) The organization knowingly utilizes a provider who is
16902	furnishing or has furnished health care services and who does
16903	not have a subsisting license or other authority to practice or
16904	furnish health care services in this state.
16905	(d) The organization no longer meets the requirements for
16906	the certificate as originally issued.
16907	(e) The organization has violated any lawful rule or order
16908	of the agency or any provision of this part.
16909	(f) The organization has refused to be examined or to
16910	produce its accounts, records, and files for examination or to
16911	perform any other legal obligation as to such examination, when
16912	required by the agency.
16913	(g) The organization has not, after given reasonable
16914	notice, maintained accreditation or received favorable external
16915	quality assurance reviews under s. 641.512 or, following an
16916	investigation under s. 641.515, has been determined to not
16917	materially meet requirements under this part.
16918	(2) Revocation of an organization's certificate shall be
16919	for a period of 2 years. After 2 years, the organization may
16920	apply for a new certificate by compliance with all application
16921	requirements applicable to first-time applicants.
16922	(3) Suspension of an organization's authority to enroll
16923	new subscribers shall be for such period, not to exceed 1 year,
16924	as is fixed by the agency. The agency shall, in its order
16925	suspending the authority of an organization to enroll new
16926	subscribers, specify the period during which the suspension is
16927	to be in effect and the conditions, if any, which must be met by
16928	the organization prior to reinstatement of its authority to
16929	enroll new subscribers. The order of suspension is subject to
16930	rescission or modification by further order of the agency prior
16931	to the expiration of the suspension period. Authority to enroll
16932	new subscribers shall not be reinstated unless requested by the
16933	organization; however, the agency may not grant reinstatement if
16934	it finds that the circumstances for which the suspension of
16935	authority to enroll new subscribers occurred still exist or are
16936	likely to recur.
16937	(4) The agency may suspend the health care provider
16938	certificate issued to an organization. The agency shall, in its
16939	order suspending the health care provider certificate, specify
16940	the period during which the suspension is to be in effect and
16941	the conditions, if any, which must be met by the organization
16942	for reinstatement. Upon expiration of the suspension period, the
16943	organization's certificate automatically reinstates unless the
16944	agency finds that the causes of the suspension have not been
16945	removed or that the organization is otherwise not in compliance
16946	with this part. If the agency makes such a finding, the health
16947	care provider certificate shall not be reinstated and is
16948	considered to have expired as of the end of the suspension
16949	period.
16950	(5) If the agency finds that one or more grounds exist for
16951	the revocation or suspension of a certificate issued under this
16952	part, the agency may, in lieu of such revocation or suspension,
16953	impose a fine upon the organization. With respect to any
16954	nonwillful violation, the fine may not exceed $2,500 per
16955	violation. Such fines may not exceed an aggregate amount of
16956	$25,000 for all nonwillful violations arising out of the same
16957	action. With respect to any knowing and willful violation of a
16958	lawful order or rule of the agency or a provision of this part,
16959	the agency may impose a fine upon the organization in an amount
16960	not to exceed $20,000 for each such violation. Such fines may
16961	not exceed an aggregate amount of $250,000 for all knowing and
16962	willful violations arising out of the same action. The agency
16963	shall, by January 1, 1997, adopt by rule penalty categories that
16964	specify varying ranges of fines for willful violations and for
16965	nonwillful violations.
16966	(6) The agency shall immediately notify the office
16967	Department of Insurancewhenever it issues an administrative
16968	complaint or an order or otherwise initiates legal proceedings
16969	resulting in or which may result in suspension or revocation of
16970	an organization's health care provider certificate or suspension
16971	of new enrollment.
16972	(7) Any organization that knowingly utilizes the services
16973	of a provider who is not licensed or otherwise authorized by law
16974	to provide such services is guilty of a felony of the third
16975	degree, punishable as provided in s. 775.082, s. 775.083, or s.
16976	775.084.
16977	Section 336. Subsection (2) of section 641.54, Florida
16978	Statutes, is amended to read:
16979	641.54 Information disclosure.--
16980	(2) The list shall be made available, upon request, to the
16981	officedepartment. The list shall also be made available, upon
16982	request:
16983	(a) With respect to negotiation, application, or
16984	effectuation of a group health maintenance contract, to the
16985	employer or other person who will hold the contract on behalf of
16986	the subscriber group. The list may be restricted to include
16987	only physicians and hospitals in the group's geographic area.
16988	(b) With respect to an individual health maintenance
16989	contract or any contract offered to a person who is entitled to
16990	have payments for health care costs made under Medicare, to the
16991	person considering or making application to, or under contract
16992	with, the health maintenance organization. The list may be
16993	restricted to include only physicians and hospitals in the
16994	person's geographic area.
16995	Section 337. Subsection (4) of section 641.55, Florida
16996	Statutes, is amended to read:
16997	641.55 Internal risk management program.--
16998	(4) The Agency for Health Care Administration shall adopt
16999	rules necessary to carry out the provisions of this section,
17000	including rules governing the establishment of required internal
17001	risk management programs to meet the needs of individual
17002	organizations and each specific organization type governed by
17003	this part. The officeDepartment of Insuranceshall assist the
17004	agency in preparing these rules. Each internal risk management
17005	program shall include the use of incident reports to be filed
17006	with the risk manager. The risk manager shall have free access
17007	to all organization or provider medical records. The incident
17008	reports shall be considered to be a part of the workpapers of
17009	the attorney defending the organization in litigation relating
17010	thereto and shall be subject to discovery, but not be admissible
17011	as evidence in court, nor shall any person filing an incident
17012	report be subject to civil suit by virtue of the incident report
17013	and the matters it contains. As a part of each internal risk
17014	management program, the incident reports shall be utilized to
17015	develop categories of incidents which identify problem areas.
17016	Once identified, procedures must be adjusted to correct these
17017	problem areas.
17018
17019
17020	The gross data compiled under this section or s. 395.0197 shall
17021	be furnished by the agency upon request to organizations to be
17022	utilized for risk management purposes. The agency shall adopt
17023	rules necessary to carry out the provisions of this section.
17024	Section 338. Subsection (2) of section 641.58, Florida
17025	Statutes, is amended to read:
17026	641.58 Regulatory assessment; levy and amount; use of
17027	funds; tax returns; penalty for failure to pay.--
17028	(2) The officeDepartment of Insuranceshall determine the
17029	amount of gross premiums for the purposes of the regulatory
17030	assessment, and then the agency shall determine on or before
17031	December 1 of each year the regulatory assessment percentage
17032	necessary to be imposed for that calendar year, payable on or
17033	before the following April 1, as herein prescribed, to provide
17034	the funds appropriated to the agency to carry out the provisions
17035	of subsection (4).
17036	Section 339. Subsections (3) and (4) of section 642.0475,
17037	Florida Statutes, are amended to read:
17038	642.0475 Civil remedy.--
17039	(3) As a condition precedent to bringing an action under
17040	this section, the officedepartmentand the person against whom
17041	the action is to be brought shall be given notice of the
17042	violation. The notice shall state with specificity the facts
17043	which allegedly constitute the violation and the law which the
17044	plaintiff is relying upon. No action shall lie if, within 30
17045	days thereafter, the damages are paid or the circumstances
17046	giving rise to the violation are corrected.
17047	(4) This section shall not be construed to authorize a
17048	class action suit against a legal expense insurance corporation
17049	or a civil action against the department, commission, or office
17050	or theirits employees, or the Insurance Commissioner.
17051	Section 340. Section 651.119, Florida Statutes, is amended
17052	to read:
17053	651.119 Assistance to persons affected by closure due to
17054	liquidation or pending liquidation.--
17055	(1) If a facility closes and ceases to operate as a result
17056	of liquidation or pending liquidation and residents are forced
17057	to relocate, the department shall become a creditor of the
17058	facility for the purpose of providing moving expenses for
17059	displaced residents and such other care or services as is made
17060	possible by the unencumbered assets of the facility. To the
17061	extent that another provider provides, as approved by the office
17062	department, direct assistance to such residents, the cost of
17063	such direct assistance shall be offset against reserves pursuant
17064	to subsection (4). The department shall provide proportional
17065	reimbursements of such costs to the respective providers from
17066	such unencumbered assets.
17067	(2) If the moneys and direct assistance made available
17068	under subsection(1) are not sufficient to cover moving costs,
17069	the officedepartmentmay seek voluntary contributions from the
17070	reserves maintained by providers under s. 651.035 in amounts
17071	approved by the officedepartmentto provide for the moving
17072	expenses of the residents in moving to another residence within
17073	the state.
17074	(3) If the moneys and direct assistance provided under
17075	subsections (1) and(2) are not sufficient to provide for the
17076	moving expenses of displaced residents in moving to other
17077	residences within the state, the officedepartmentmay levy pro
17078	rata assessments on the reserves of providers maintained under
17079	s. 651.035 for such moving expenses of any displaced resident
17080	who lacks sufficient assets to pay for such moving expenses. The
17081	assessments for such moving expenses on any particular provider
17082	may not exceed for any 12-month period an aggregate of 1 percent
17083	of the unencumbered portion of the reserves maintained by the
17084	provider under s. 651.035. If the officedepartmentdetermines
17085	that payment of an assessment under this subsection would impair
17086	the financial standing of a facility or its residents, the
17087	officedepartmentmay waive or temporarily defer all or part of
17088	the assessment with respect to that provider. The office
17089	departmentshall apply any moneys voluntarily paid by a provider
17090	under subsection (1) or subsection (2) to satisfaction of
17091	assessments under this subsection.
17092	(4) The officedepartmentshall permanently reduce the
17093	reserves required of a provider under s. 651.035 to the extent
17094	of the provider's costs under subsection (1), voluntary
17095	contributions under subsection (2), and assessments under
17096	subsection (3). However, the officedepartmentshall thereafter
17097	raise the reserve requirements of a provider to the extent of
17098	reimbursements paid to the provider under subsection (1) unless
17099	such increase would raise the reserve requirement above the
17100	amount required under s. 651.035.
17101	(5) No payment, contribution, or assessment may be paid by
17102	a provider under this section if the release of funds from the
17103	reserves of the provider would violate a bond or lending
17104	commitment or covenant.
17105	(6) Moneys received under this section for the support of
17106	residents shall be kept in a separate fund maintained and
17107	administered by the department. The Continuing Care Advisory
17108	Council shall monitor the collection and use of such funds and
17109	shall advise the office ordepartment on plans for resident
17110	relocation. The council shall seek the assistance of providers
17111	licensed under this chapter and other service providers in
17112	locating alternative housing and care arrangements.
17113	(7) For the purposes of this section, "moving expenses"
17114	means transportation expenses and the cost of packing and
17115	relocating personal belongings.
17116	Section 341. Section 252.62, Florida Statutes, is amended
17117	to read:
17118	252.62 Director of Office of Financial Institutions and
17119	Securities RegulationComptroller'spowers in a state of
17120	emergency.--
17121	(1) It is the purpose and intent of this section to
17122	provide the Director of the Office of Financial Institutions and
17123	Securities Regulation of the Financial Services Commission
17124	Comptroller, as head of the Department of Banking and Finance,
17125	the authority to make temporary modifications to or suspensions
17126	of the financial institutions codes in order to expedite the
17127	recovery of communities affected by a disaster or other
17128	emergency and in order to encourage financial institutions to
17129	meet the credit, deposit, and other financial needs of such
17130	communities.
17131	(2)(a) When the Governor declares a state of emergency
17132	pursuant to s. 252.36, the Director of the Office of Financial
17133	Institutions and Securities RegulationComptrollermay issue:
17134	1. One or more general orders applicable to all financial
17135	institutions that are subject to the financial institutions
17136	codes and that serve any portion of the area of the state under
17137	the state of emergency; or
17138	2. One or more specific orders to particular financial
17139	institutions that are subject to the financial institution codes
17140	and that normally derive more than 60 percent of their deposits
17141	from persons in the area of the state under the state of
17142	emergency,
17143
17144	which orders may modify or suspend, as to those institutions,
17145	all or any part of the financial institutions codes, as defined
17146	in s. 655.005, or any applicable rule, consistent with the
17147	stated purposes of the financial institutions codes and with
17148	maintaining the safety and soundness of the financial
17149	institutions system in this state.
17150	(b) An order issued by the directorComptrollerunder this
17151	section becomes effective upon issuance and continues for 120
17152	days unless it is terminated by the directorComptroller. The
17153	directorComptrollermay extend an order for one additional
17154	period of 120 days if he or shethe Comptrollerdetermines that
17155	the emergency conditions that gave rise to the Comptroller's
17156	initial order still exist. The Legislature, by concurrent
17157	resolution, may terminate any order issued under this section.
17158	(3) The directorComptrollershall publish, in the next
17159	available publication of the Florida Administrative Weekly, a
17160	copy of the text of any order issued under this section,
17161	together with a statement describing the modification or
17162	suspension and explaining how the modification or suspension
17163	will facilitate recovery from the emergency and maintain the
17164	safety and soundness of financial institutions in this state.
17165	Section 342. Section 288.778, Florida Statutes, is amended
17166	to read:
17167	288.778 Office of Financial Institutions and Securities
17168	RegulationDepartment of Banking and Finance.--The Office of
17169	Financial Institutions and Securities RegulationDepartment of
17170	Banking and Financeshall review the corporation's activities
17171	once every 24 months to determine compliance with this part and
17172	other related laws and rules and to evaluate the corporation's
17173	operations. The officedepartmentshall prepare a report based
17174	on its review and evaluation with recommendation for any
17175	corrective action. The president shall submit to the office
17176	departmentregular reports on the corporation's activities. The
17177	content and frequency of such reports shall be determined by the
17178	officedepartment. The officedepartmentshall charge a fee for
17179	conducting the review and evaluation and preparing the related
17180	report, which fee shall not be in excess of the examination fee
17181	paid by financial institutions chartered or licensed under the
17182	financial institutions code of this state.
17183	Section 343. Paragraphs (c) and (e) through (p) of
17184	subsection (3), paragraphs (a), (b),(c), (d), (g), and (h) of
17185	subsection (4), paragraph (b) of subsection (5), subsection (7),
17186	paragraphs (a) and (c) of subsection (8), paragraph (b) of
17187	subsection (9), paragraphs (a) through (e), (h), and (j) of
17188	subsection (10), subsections (12), (13), and (14), paragraphs
17189	(a), (c), (d), (e), and (g) of subsection (15), and subsection
17190	(17) of section 288.99, Florida Statutes, are amended to read:
17191	288.99 Certified Capital Company Act.--
17192	(3) DEFINITIONS.--As used in this section, the term:
17193	(c) "Certified capital company" means a corporation,
17194	partnership, or limited liability company which:
17195	1. Is certified by the officedepartmentin accordance
17196	with this act.
17197	2. Receives investments of certified capital from two or
17198	more unaffiliated certified investors.
17199	3. Makes qualified investments as its primary activity.
17200	(e) "Commission" means the Financial Services Commission
17201	"Department" means the Department of Banking and Finance.
17202	(f) "Director" means the director of the Office of
17203	Tourism, Trade, and Economic Development.
17204	(f)(g)"Early stage technology business" means a qualified
17205	business that is:
17206	1. Involved, at the time of the certified capital
17207	company's initial investment in such business, in activities
17208	related to developing initial product or service offerings, such
17209	as prototype development or the establishment of initial
17210	production or service processes;
17211	2. Less than 2 years old and has, together with its
17212	affiliates, less than $3 million in annual revenues for the
17213	fiscal year immediately preceding the initial investment by the
17214	certified capital company on a consolidated basis, as determined
17215	in accordance with generally accepted accounting principles;
17216	3. The Florida Black Business Investment Board;
17217	4. Any entity that is majority owned by the Florida Black
17218	Business Investment Board; or
17219	5. Any entity in which the Florida Black Business
17220	Investment Board holds a majority voting interest on the board
17221	of directors.
17222	(g)(h) "Office" means the Office of Financial Institutions
17223	and Securities Regulation of the commissionTourism, Trade, and
17224	Economic Development.
17225	(h)(i)"Premium tax liability" means any liability
17226	incurred by an insurance company under the provisions of ss.
17227	624.509 and 624.5091.
17228	(i)(j)"Principal" means an executive officer of a
17229	corporation, partner of a partnership, manager of a limited
17230	liability company, or any other person with equivalent executive
17231	functions.
17232	(j)(k)"Qualified business" means the Digital Divide Trust
17233	Fund established under the State of Florida Technology Office or
17234	a business that meets the following conditions as evidenced by
17235	documentation required by commissiondepartmentrule:
17236	1. The business is headquartered in this state and its
17237	principal business operations are located in this state or at
17238	least 75 percent of the employees are employed in the state.
17239	2. At the time a certified capital company makes an
17240	initial investment in a business, the business would qualify for
17241	investment under 13 C.F.R. s. 121.301(c), which is involved in
17242	manufacturing, processing or assembling products, conducting
17243	research and development, or providing services.
17244	3. At the time a certified capital company makes an
17245	initial investment in a business, the business certifies in an
17246	affidavit that:
17247	a. The business is unable to obtain conventional
17248	financing, which means that the business has failed in an
17249	attempt to obtain funding for a loan from a bank or other
17250	commercial lender or that the business cannot reasonably be
17251	expected to qualify for such financing under the standards of
17252	commercial lending;
17253	b. The business plan for the business projects that the
17254	business is reasonably expected to achieve in excess of $25
17255	million in sales revenue within 5 years after the initial
17256	investment, or the business is located in a designated Front
17257	Porch community, enterprise zone, urban high crime area, rural
17258	job tax credit county, or nationally recognized historic
17259	district;
17260	c. The business will maintain its headquarters in this
17261	state for the next 10 years and any new manufacturing facility
17262	financed by a qualified investment will remain in this state for
17263	the next 10 years, or the business is located in a designated
17264	Front Porch community, enterprise zone, urban high crime area,
17265	rural job tax credit county, or nationally recognized historic
17266	district; and
17267	d. The business has fewer than 200 employees and at least
17268	75 percent of the employees are employed in this state. For
17269	purposes of this subsection, the term also includes the Florida
17270	Black Business Investment Board, any entity majority owned by
17271	the Florida Black Business Investment Board, or any entity in
17272	which the Florida Black Business Investment Board holds a
17273	majority voting interest on the board of directors.
17274	4. The term does not include:
17275	a. Any business predominantly engaged in retail sales,
17276	real estate development, insurance, banking, lending, or oil and
17277	gas exploration.
17278	b. Any business predominantly engaged in professional
17279	services provided by accountants, lawyers, or physicians.
17280	c. Any company that has no historical revenues and either
17281	has no specific business plan or purpose or has indicated that
17282	its business plan is solely to engage in a merger or acquisition
17283	with any unidentified company or other entity.
17284	d. Any company that has a strategic plan to grow through
17285	the acquisition of firms with substantially similar business
17286	which would result in the planned net loss of Florida-based jobs
17287	over a 12-month period after the acquisition as determined by
17288	the officedepartment.
17289	(k)(l)"Qualified debt instrument" means a debt
17290	instrument, or a hybrid of a debt instrument, issued by a
17291	certified capital company, at par value or a premium, with an
17292	original maturity date of at least 5 years after the date of
17293	issuance, a repayment schedule which is no faster than a level
17294	principal amortization over a 5-year period, and interest,
17295	distribution, or payment features which are not related to the
17296	profitability of the certified capital company or the
17297	performance of the certified capital company's investment
17298	portfolio.
17299	(l)(m)"Qualified distribution" means any distribution or
17300	payment by a certified capital company for:
17301	1. Reasonable costs and expenses, including, but not
17302	limited to, professional fees, of forming and syndicating the
17303	certified capital company, if no such costs or expenses are paid
17304	to a certified investor, except as provided in subparagraph
17305	(4)(f)2., and the total cash, cash equivalents, and other
17306	current assets permitted by sub-subparagraph (5)(b)3.g. that can
17307	be converted into cash within 5 business days available to the
17308	certified capital company at the time of receipt of certified
17309	capital from certified investors, after deducting the costs and
17310	expenses of forming and syndicating the certified capital
17311	company, including any payments made over time for obligations
17312	incurred at the time of receipt of certified capital but
17313	excluding other future qualified distributions and payments made
17314	under paragraph (9)(a), are an amount equal to or greater than
17315	50 percent of the total certified capital allocated to the
17316	certified capital pursuant to subsection (7);
17317	2. Reasonable costs of managing and operating the
17318	certified capital company, not exceeding 5 percent of the
17319	certified capital in any single year, including an annual
17320	management fee in an amount that does not exceed 2.5 percent of
17321	the certified capital of the certified capital company;
17322	3. Reasonable and necessary fees in accordance with
17323	industry custom for professional services, including, but not
17324	limited to, legal and accounting services, related to the
17325	operation of the certified capital company; or
17326	4. Any projected increase in federal or state taxes,
17327	including penalties and interest related to state and federal
17328	income taxes, of the equity owners of a certified capital
17329	company resulting from the earnings or other tax liability of
17330	the certified capital company to the extent that the increase is
17331	related to the ownership, management, or operation of a
17332	certified capital company.
17333	(m)(n)1. "Qualified investment" means the investment of
17334	cash by a certified capital company in a qualified business for
17335	the purchase of any debt, equity, or hybrid security, including
17336	a debt instrument or security that has the characteristics of
17337	debt but which provides for conversion into equity or equity
17338	participation instruments such as options or warrants.
17339	2. The term does not include:
17340	a. Any investment made after the effective date of this
17341	act the contractual terms of which require the repayment of any
17342	portion of the principal in instances, other than default as
17343	determined by commissiondepartmentrule, within 12 months
17344	following the initial investment by the certified capital
17345	company unless such investment has a repayment schedule no
17346	faster than a level principal amortization of at least 2 years;
17347	b. Any "follow-on" or "add-on" investment except for the
17348	amount by which the new investment is in addition to the amount
17349	of the certified capital company's initial investment returned
17350	to it other than in the form of interest, dividends, or other
17351	types of profit participation or distributions; or
17352	c. Any investment in a qualified business or affiliate of
17353	a qualified business that exceeds 15 percent of certified
17354	capital.
17355	(n)(o)"Program One" means the $150 million in premium tax
17356	credits issued under this section in 1999, the allocation of
17357	such credits under this section, and the regulation of certified
17358	capital companies and investments made by them hereunder.
17359	(o)(p)"Program Two" means the $150 million in premium tax
17360	credits to be issued under subsection (17), the allocation of
17361	such credits under this section, and the regulation of certified
17362	capital companies and investments made by them hereunder.
17363	(4) CERTIFICATION; GROUNDS FOR DENIAL OR
17364	DECERTIFICATION.--
17365	(a) To operate as a certified capital company, a
17366	corporation, partnership, or limited liability company must be
17367	certified by the Department of Banking and Finance or the office
17368	pursuant to this act.
17369	(b) An applicant for certification as a certified capital
17370	company must file a verified application with the Department of
17371	Banking and Financeon or before December 1, 1998, a date
17372	determined in rules adopted pursuant to subsection (17) in the
17373	case of applicants for Program Two, in a form which the
17374	commissiondepartmentmay prescribe by rule. The applicant shall
17375	submit a nonrefundable application fee of $7,500 to the office
17376	department. The applicant shall provide:
17377	1. The name of the applicant and the address of its
17378	principal office and each office in this state.
17379	2. The applicant's form and place of organization and the
17380	relevant organizational documents, bylaws, and amendments or
17381	restatements of such documents, bylaws, or amendments.
17382	3. Evidence from the Department of State that the
17383	applicant is registered with the Department of State as required
17384	by law, maintains an active status with the Department of State,
17385	and has not been dissolved or had its registration revoked,
17386	canceled, or withdrawn.
17387	4. The applicant's proposed method of doing business.
17388	5. The applicant's financial condition and history,
17389	including an audit report on the financial statements prepared
17390	in accordance with generally accepted accounting principles. The
17391	applicant must have, at the time of application for
17392	certification, an equity capitalization of at least $500,000 in
17393	the form of cash or cash equivalents. The applicant must
17394	maintain this equity capitalization until the applicant receives
17395	an allocation of certified capital pursuant to this act. If the
17396	date of the application is more than 90 days after preparation
17397	of the applicant's fiscal year-end financial statements, the
17398	applicant may file financial statements reviewed by an
17399	independent certified public accountant for the period
17400	subsequent to the audit report, together with the audited
17401	financial statement for the most recent fiscal year. If the
17402	applicant has been in business less than 12 months, and has not
17403	prepared an audited financial statement, the applicant may file
17404	a financial statement reviewed by an independent certified
17405	public accountant.
17406	6. Copies of any offering materials used or proposed to be
17407	used by the applicant in soliciting investments of certified
17408	capital from certified investors.
17409	(c) Within 60 days after receipt of a verified
17410	application, the officedepartmentshall grant or deny
17411	certification as a certified capital company. If the office
17412	departmentdenies certification within the time period
17413	specified, the officedepartmentshall inform the applicant of
17414	the grounds for the denial. If the officedepartmenthas not
17415	granted or denied certification within the time specified, the
17416	application shall be deemed approved. The officedepartment
17417	shall approve the application if the officedepartmentfinds
17418	that:
17419	1. The applicant satisfies the requirements of paragraph
17420	(b).
17421	2. No evidence exists that the applicant has committed any
17422	act specified in paragraph (d).
17423	3. At least two of the principals have a minimum of 5
17424	years of experience making venture capital investments out of
17425	private equity funds, with not less than $20 million being
17426	provided by third-party investors for investment in the early
17427	stage of operating businesses. At least one full-time manager or
17428	principal of the certified capital company who has such
17429	experience must be primarily located in an office of the
17430	certified capital company which is based in this state.
17431	4. The applicant's proposed method of doing business and
17432	raising certified capital as described in its offering materials
17433	and other materials submitted to the officedepartmentconforms
17434	with the requirements of this section.
17435	(d) The officedepartmentmay deny certification or
17436	decertify a certified capital company if the grounds for
17437	decertification are not removed or corrected within 90 days
17438	after the notice of such grounds is received by the certified
17439	capital company. The officedepartmentmay deny certification or
17440	decertify a certified capital company if the certified capital
17441	company fails to maintain common stock or paid-in capital of at
17442	least $500,000, or if the officedepartmentdetermines that the
17443	applicant, or any principal or director of the certified capital
17444	company, has:
17445	1. Violated any provision of this section;
17446	2. Made a material misrepresentation or false statement or
17447	concealed any essential or material fact from any person during
17448	the application process or with respect to information and
17449	reports required of certified capital companies under this
17450	section;
17451	3. Been convicted of, or entered a plea of guilty or nolo
17452	contendere to, a crime against the laws of this state or any
17453	other state or of the United States or any other country or
17454	government, including a fraudulent act in connection with the
17455	operation of a certified capital company, or in connection with
17456	the performance of fiduciary duties in another capacity;
17457	4. Been adjudicated liable in a civil action on grounds of
17458	fraud, embezzlement, misrepresentation, or deceit; or
17459	5.a. Been the subject of any decision, finding,
17460	injunction, suspension, prohibition, revocation, denial,
17461	judgment, or administrative order by any court of competent
17462	jurisdiction, administrative law judge, or any state or federal
17463	agency, national securities, commodities, or option exchange, or
17464	national securities, commodities, or option association,
17465	involving a material violation of any federal or state
17466	securities or commodities law or any rule or regulation adopted
17467	under such law, or any rule or regulation of any national
17468	securities, commodities, or options exchange, or national
17469	securities, commodities, or options association; or
17470	b. Been the subject of any injunction or adverse
17471	administrative order by a state or federal agency regulating
17472	banking, insurance, finance or small loan companies, real
17473	estate, mortgage brokers, or other related or similar
17474	industries.
17475	(g) On or before December 31 of each year, each certified
17476	capital company shall pay to the officedepartmentan annual,
17477	nonrefundable renewal certification fee of $5,000. If a
17478	certified capital company fails to pay its renewal fee by the
17479	specified deadline, the company must pay a late fee of $5,000 in
17480	addition to the renewal fee on or by January 31 of each year in
17481	order to continue its certification in the program. On or before
17482	April 30 of each year, each certified capital company shall file
17483	audited financial statements with the officedepartment. No
17484	renewal fees shall be required within 6 months after the date of
17485	initial certification.
17486	(h) The commission and officedepartmentshall administer
17487	and provide for the enforcement of certification requirements
17488	for certified capital companies as provided in this act. The
17489	commissiondepartmentmay adopt any rules necessary to carry out
17490	its duties, obligations, and powers related to certification,
17491	renewal of certification, or decertification of certified
17492	capital companies and the commission and officemay perform any
17493	other acts necessary for the proper administration and
17494	enforcement of such duties, obligations, and powers.
17495	(5) INVESTMENTS BY CERTIFIED CAPITAL COMPANIES.--
17496	(b) All capital not invested in qualified investments by
17497	the certified capital company:
17498	1. Must be held in a financial institution as defined by
17499	s. 655.005(1)(h) or held by a broker-dealer registered under s.
17500	517.12, except as set forth in sub-subparagraph 3.g.
17501	2. Must not be invested in a certified investor of the
17502	certified capital company or any affiliate of the certified
17503	investor of the certified capital company, except for an
17504	investment permitted by sub-subparagraph 3.g., provided
17505	repayment terms do not permit the obligor to directly or
17506	indirectly manage or control the investment decisions of the
17507	certified capital company.
17508	3. Must be invested only in:
17509	a. Any United States Treasury obligations;
17510	b. Certificates of deposit or other obligations, maturing
17511	within 3 years after acquisition of such certificates or
17512	obligations, issued by any financial institution or trust
17513	company incorporated under the laws of the United States;
17514	c. Marketable obligations, maturing within 10 years or
17515	less after the acquisition of such obligations, which are rated
17516	"A" or better by any nationally recognized credit rating agency;
17517	d. Mortgage-backed securities, with an average life of 5
17518	years or less, after the acquisition of such securities, which
17519	are rated "A" or better by any nationally recognized credit
17520	rating agency;
17521	e. Collateralized mortgage obligations and real estate
17522	mortgage investment conduits that are direct obligations of an
17523	agency of the United States Government; are not private-label
17524	issues; are in book-entry form; and do not include the classes
17525	of interest only, principal only, residual, or zero;
17526	f. Interests in money market funds, the portfolio of which
17527	is limited to cash and obligations described in sub-
17528	subparagraphs a.-d.; or
17529	g. Obligations that are issued by an insurance company
17530	that is not a certified investor of the certified capital
17531	company making the investment, that has provided a guarantee
17532	indemnity bond, insurance policy, or other payment undertaking
17533	in favor of the certified capital company's certified investors
17534	as permitted by subparagraph (3)(l)(m)1. or an affiliate of such
17535	insurance company as defined by subparagraph (3)(a)3. that is
17536	not a certified investor of the certified capital company making
17537	the investment, provided that such obligations are:
17538	(I) Issued or guaranteed as to principal by an entity
17539	whose senior debt is rated "AA" or better by Standard & Poor's
17540	Ratings Group or such other nationally recognized credit rating
17541	agency as the commissiondepartmentmay by rule determine.
17542	(II) Not subordinated to other unsecured indebtedness of
17543	the issuer or the guarantor.
17544	(III) Invested by such issuing entity in accordance with
17545	sub-subparagraphs 3.a.-f.
17546	(IV) Readily convertible into cash within 5 business days
17547	for the purpose of making a qualified investment unless such
17548	obligations are held to provide a guarantee, indemnity bond,
17549	insurance policy, or other payment undertaking in favor of the
17550	certified capital company's certified investors as permitted by
17551	subparagraph (3)(l)(m)1.
17552	(7) ANNUAL TAX CREDIT; MAXIMUM AMOUNT; ALLOCATION
17553	PROCESS.--
17554	(a) The total amount of tax credits which may be allocated
17555	by the Office of Tourism, Trade, and Economic Developmentshall
17556	not exceed $150 million with respect to Program One and $150
17557	million with respect to Program Two. The total amount of tax
17558	credits which may be used by certified investors under this act
17559	shall not exceed $15 million annually with respect to credits
17560	earned under Program One and $15 million annually with respect
17561	to credits earned under Program Two.
17562	(b) The Office of Tourism, Trade, and Economic Development
17563	shall be responsible for allocating premium tax credits as
17564	provided for in this act to certified capital companies.
17565	(c) Each certified capital company must apply to the
17566	Office of Tourism, Trade, and Economic Developmentfor an
17567	allocation of premium tax credits for potential certified
17568	investors on a form developed by the Office of Tourism, Trade,
17569	and Economic Developmentwith the cooperation of the Department
17570	of Revenue. The form shall be accompanied by an affidavit from
17571	each potential certified investor confirming that the potential
17572	certified investor has agreed to make an investment of certified
17573	capital in a certified capital company up to a specified amount,
17574	subject only to the receipt of a premium tax credit allocation
17575	pursuant to this subsection. No certified capital company shall
17576	submit premium tax allocation claims on behalf of certified
17577	investors that in the aggregate would exceed the total dollar
17578	amount appropriated by the Legislature for the specific program.
17579	No allocation shall be made to the potential investors of a
17580	certified capital company under Program Two unless such
17581	certified capital company has filed premium tax allocation
17582	claims of not less than $15 million in the aggregate.
17583	(d) The Office of Tourism, Trade, and Economic Development
17584	shall inform each certified capital company of its share of
17585	total premium tax credits available for allocation to each of
17586	its potential investors.
17587	(e) If a certified capital company does not receive
17588	certified capital equaling the amount of premium tax credits
17589	allocated to a potential certified investor for which the
17590	investor filed a premium tax allocation claim within 10 business
17591	days after the investor received a notice of allocation, the
17592	certified capital company shall notify the Office of Tourism,
17593	Trade, and Economic Developmentby overnight common carrier
17594	delivery service of the company's failure to receive the
17595	capital. That portion of the premium tax credits allocated to
17596	the certified capital company shall be forfeited. If the Office
17597	of Tourism, Trade, and Economic Developmentmust make a pro rata
17598	allocation under paragraph (f), thattheoffice shall reallocate
17599	such available credits among the other certified capital
17600	companies on the same pro rata basis as the initial allocation.
17601	(f) If the total amount of capital committed by all
17602	certified investors to certified capital companies in premium
17603	tax allocation claims under Program Two exceeds the aggregate
17604	cap on the amount of credits that may be awarded under Program
17605	Two, the premium tax credits that may be allowed to any one
17606	certified investor under Program Two shall be allocated using
17607	the following ratio:
17608	A/B = X/>$150,000,000
17609
17610
17611	where the letter "A" represents the total amount of certified
17612	capital certified investors have agreed to invest in any one
17613	certified capital company under Program Two, the letter "B"
17614	represents the aggregate amount of certified capital that all
17615	certified investors have agreed to invest in all certified
17616	capital companies under Program Two, the letter "X" is the
17617	numerator and represents the total amount of premium tax credits
17618	and certified capital that may be allocated to a certified
17619	capital company on a date determined by rule adopted by the
17620	commissiondepartmentpursuant to subsection (17), and $150
17621	million is the denominator and represents the total amount of
17622	premium tax credits and certified capital that may be allocated
17623	to all certified investors under Program Two. Any such premium
17624	tax credits are not first available for utilization until annual
17625	filings are made in 2001 for calendar year 2000 in the case of
17626	Program One, and the tax credits may be used at a rate not to
17627	exceed 10 percent annually per program.
17628	(g) The maximum amount of certified capital for which
17629	premium tax allocation claims may be filed on behalf of any
17630	certified investor and its affiliates by one or more certified
17631	capital companies may not exceed $15 million for Program One and
17632	$22.5 million for Program Two.
17633	(h) To the extent that less than $150 million in certified
17634	capital is raised in connection with the procedure set forth in
17635	paragraphs (c)-(g), the commissiondepartmentmay adopt rules to
17636	allow a subsequent allocation of the remaining premium tax
17637	credits authorized under this section.
17638	(i) The Office of Tourism, Trade, and Economic Development
17639	shall issue a certification letter for each certified investor,
17640	showing the amount invested in the certified capital company
17641	under each program. The applicable certified capital company
17642	shall attest to the validity of the certification letter.
17643	(8) ANNUAL TAX CREDIT; CLAIM PROCESS.--
17644	(a) On an annual basis, on or before January 31, each
17645	certified capital company shall file with the officedepartment
17646	and the Office of Tourism, Trade, and Economic Development, in
17647	consultation with the officedepartment, on a form prescribed by
17648	the Office of Tourism, Trade, and Economic Development, for each
17649	calendar year:
17650	1. The total dollar amount the certified capital company
17651	received from certified investors, the identity of the certified
17652	investors, and the amount received from each certified investor
17653	during the immediately preceding calendar year.
17654	2. The total dollar amount the certified capital company
17655	invested and the amount invested in qualified businesses,
17656	together with the identity and location of those businesses and
17657	the amount invested in each qualified business during the
17658	immediately preceding calendar year.
17659	3. For informational purposes only, the total number of
17660	permanent, full-time jobs either created or retained by the
17661	qualified business during the immediately preceding calendar
17662	year, the average wage of the jobs created or retained, the
17663	industry sectors in which the qualified businesses operate, and
17664	any additional capital invested in qualified businesses from
17665	sources other than certified capital companies.
17666	(c) The Office of Tourism, Trade, and Economic Development
17667	shall review the form, and any supplemental documentation,
17668	submitted by each certified capital company for the purpose of
17669	verifying:
17670	1. That the businesses in which certified capital has been
17671	invested by the certified capital company are in fact qualified
17672	businesses, and that the amount of certified capital invested by
17673	the certified capital company is as represented in the form.
17674	2. The amount of certified capital invested in the
17675	certified capital company by the certified investors.
17676	3. The amount of premium tax credit available to certified
17677	investors.
17678	(9) REQUIREMENT FOR 100 PERCENT INVESTMENT; STATE
17679	PARTICIPATION.--
17680	(b) Cumulative distributions from a certified capital
17681	company from funds related to a particular program to its
17682	certified investors and equity holders under such program, other
17683	than qualified distributions, in excess of the certified capital
17684	company's original certified capital raised under such program
17685	and any additional capital contributions to the certified
17686	capital company with respect to such program may be audited by a
17687	nationally recognized certified public accounting firm
17688	acceptable to the officedepartment, at the expense of the
17689	certified capital company, if the officedepartmentdirects such
17690	audit be conducted. The audit shall determine whether aggregate
17691	cumulative distributions from the funds related to a particular
17692	program made by the certified capital company to all certified
17693	investors and equity holders under such program, other than
17694	qualified distributions, have equaled the sum of the certified
17695	capital company's original certified capital raised under such
17696	program and any additional capital contributions to the
17697	certified capital company with respect to such program. If at
17698	the time of any such distribution made by the certified capital
17699	company, such distribution taken together with all other such
17700	distributions from the funds related to such program made by the
17701	certified capital company, other than qualified distributions,
17702	exceeds in the aggregate the sum of the certified capital
17703	company's original certified capital raised under such program
17704	and any additional capital contributions to the certified
17705	capital company with respect to such program, as determined by
17706	the audit, the certified capital company shall pay to the
17707	Department of Revenue 10 percent of the portion of such
17708	distribution in excess of such amount. Payments to the
17709	Department of Revenue by a certified capital company pursuant to
17710	this paragraph shall not exceed the aggregate amount of tax
17711	credits used by all certified investors in such certified
17712	capital company for such program.
17713	(10) DECERTIFICATION.--
17714	(a) The officedepartmentshall conduct an annual review
17715	of each certified capital company to determine if the certified
17716	capital company is abiding by the requirements of certification,
17717	to advise the certified capital company as to the eligibility
17718	status of its qualified investments, and to ensure that no
17719	investment has been made in violation of this act. The cost of
17720	the annual review shall be paid by each certified capital
17721	company.
17722	(b) Nothing contained in this subsection shall be
17723	construed to limit the Chief Financial Officer's or the office's
17724	Comptroller'sauthority to conduct audits of certified capital
17725	companies as deemed appropriate and necessary.
17726	(c) Any material violation of this section, or a finding
17727	that the certified capital company or any principal or director
17728	thereof has committed any act specified in paragraph (4)(d),
17729	shall be grounds for decertification of the certified capital
17730	company. If the officedepartmentdetermines that a certified
17731	capital company is no longer in compliance with the
17732	certification requirements of this act, the officedepartment
17733	shall, by written notice, inform the officers of such company
17734	that the company may be subject to decertification 90 days after
17735	the date of mailing of the notice, unless the deficiencies are
17736	corrected and such company is again found to be in compliance
17737	with all certification requirements.
17738	(d) At the end of the 90-day grace period, if the
17739	certified capital company is still not in compliance with the
17740	certification requirements, the officedepartmentmay issue a
17741	notice to revoke or suspend the certification or to impose an
17742	administrative fine. The officedepartmentshall advise each
17743	respondent of the right to an administrative hearing under
17744	chapter 120 prior to final action by the officedepartment.
17745	(e) If the officedepartmentrevokes a certification, such
17746	revocation shall also deny, suspend, or revoke the
17747	certifications of all affiliates of the certified capital
17748	company.
17749	(h) The Office of Tourism, Trade, and Economic Development
17750	shall send written notice to the address of each certified
17751	investor whose premium tax credit has been subject to recapture
17752	or forfeiture, using the address last shown on the last premium
17753	tax filing.
17754	(j) The certified investor shall file with the Department
17755	of Revenue an amended return or such other report as the
17756	commissiondepartment may prescribe by ruleregulationand pay
17757	any required tax, not later than 60 days after such
17758	decertification has been agreed to or finally determined,
17759	whichever shall first occur.
17760	(12) REPORTING REQUIREMENTS.--The Office of Tourism,
17761	Trade, and Economic Developmentshall report on an annual basis
17762	to the Governor, the President of the Senate, and the Speaker of
17763	the House of Representatives on or before April 1:
17764	(a) The total dollar amount each certified capital company
17765	received from all certified investors and any other investor,
17766	the identity of the certified investors, and the total amount of
17767	premium tax credit used by each certified investor for the
17768	previous calendar year.
17769	(b) The total dollar amount invested by each certified
17770	capital company and that portion invested in qualified
17771	businesses, the identity and location of those businesses, the
17772	amount invested in each qualified business, and the total number
17773	of permanent, full-time jobs created or retained by each
17774	qualified business.
17775	(c) The return for the state as a result of the certified
17776	capital company investments, including the extent to which:
17777	1. Certified capital company investments have contributed
17778	to employment growth.
17779	2. The wage level of businesses in which certified capital
17780	companies have invested exceed the average wage for the county
17781	in which the jobs are located.
17782	3. The investments of the certified capital companies in
17783	qualified businesses have contributed to expanding or
17784	diversifying the economic base of the state.
17785	(13) FEES.--All fees and charges of any nature collected
17786	by the officedepartmentpursuant to this act shall be paid into
17787	the State Treasury and credited to the General Revenue Fund.
17788	(14) RULEMAKING AUTHORITY.--
17789	(a) The Department of Revenue may by rule prescribe forms
17790	and procedures for the tax credit filings, audits, and
17791	forfeiture of premium tax credits described in this section, and
17792	for certified capital company payments under paragraph (9)(b).
17793	(b) The commission and the Office of Tourism, Trade, and
17794	Economic Development may adopt any rules necessary to carry out
17795	their respectiveitsduties, obligations, and powers related to
17796	the administration, review, and reporting provisions of this
17797	section and may perform any other acts necessary for the proper
17798	administration and enforcement of such duties, obligations, and
17799	powers.
17800	(15)(a) CONFIDENTIALITY OF INVESTIGATION AND REVIEW
17801	INFORMATION.--Except as otherwise provided by this section, any
17802	information relating to an investigation or officedepartment
17803	review of a certified capital company, including any consumer
17804	complaint, is confidential and exempt from the provisions of s.
17805	119.07(1) and s. 24(a), Art. I of the State Constitution until
17806	the investigation or review is complete or ceases to be active.
17807	Such information shall remain confidential and exempt from the
17808	provisions of s. 119.07(1) and s. 24(a), Art. I of the State
17809	Constitution after the investigation or review is complete or
17810	ceases to be active if the information is submitted to any law
17811	enforcement or administrative agency for further investigation,
17812	and shall remain confidential and exempt from the provisions of
17813	s. 119.07(1) and s. 24(a), Art. I of the State Constitution
17814	until that agency's investigation is complete or ceases to be
17815	active. For purposes of this subsection, an investigation or
17816	review shall be considered "active" so long as the office
17817	department, a law enforcement agency, or an administrative
17818	agency is proceeding with reasonable dispatch and has a
17819	reasonable good faith belief that the investigation may lead to
17820	the filing of an administrative, civil, or criminal proceeding.
17821	This section shall not be construed to prohibit disclosure of
17822	information which is required by law to be filed with the office
17823	departmentand which, but for the investigation, would otherwise
17824	be subject to s. 119.07(1).
17825	(c) Nothing in this section shall be construed to prohibit
17826	the officedepartmentfrom providing information to any law
17827	enforcement or administrative agency. Any law enforcement or
17828	administrative agency receiving confidential information in
17829	connection with its official duties shall maintain the
17830	confidentiality of the information so long as it would otherwise
17831	be confidential.
17832	(d) In the event officedepartmentpersonnel are or have
17833	been involved in an investigation or review of such nature as to
17834	endanger their lives or physical safety or that of their
17835	families, the home addresses, telephone numbers, places of
17836	employment, and photographs of such personnel, together with the
17837	home addresses, telephone numbers, photographs, and places of
17838	employment of spouses and children of such personnel and the
17839	names and locations of schools and day care facilities attended
17840	by the children of such personnel are confidential and exempt
17841	from s. 119.07(1).
17842	(e) All information obtained by the officedepartmentfrom
17843	any person which is only made available to the officedepartment
17844	on a confidential or similarly restricted basis shall be
17845	confidential and exempt from s. 119.07(1). This exemption shall
17846	not be construed to prohibit disclosure of information which is
17847	specifically required by law to be filed with the office
17848	departmentor which is otherwise subject to s. 119.07(1).
17849	(g) A privilege against civil liability is granted to a
17850	person with regard to information or evidence furnished to the
17851	officedepartment, unless such person acts in bad faith or with
17852	malice in providing such information or evidence.
17853	(17) Notwithstanding the limitations set forth in
17854	paragraph (7)(a), in the first fiscal year in which the total
17855	insurance premium tax collections as determined by the Revenue
17856	Estimating Conference exceed collections for fiscal year 2000-
17857	2001 by more than the total amount of tax credits issued
17858	pursuant to this section which were used by certified investors
17859	in that year, the Office of Tourism, Trade, and Economic
17860	Developmentmay allocate to certified investors in accordance
17861	with paragraph (7)(a) tax credits for Program Two. The
17862	commissiondepartmentshall establish, by rule, a date and
17863	procedures by which certified capital companies must file
17864	applications for allocations of such additional premium tax
17865	credits, which date shall be no later than 180 days from the
17866	date of determination by the Revenue Estimating Conference. With
17867	respect to new certified capital invested and premium tax
17868	credits earned pursuant to this subsection, the schedule
17869	specified in subparagraphs (5)(a)1.-4. is satisfied by
17870	investments by December 31 of the 2nd, 3rd, 4th, and 5th
17871	calendar year, respectively, after the date established by the
17872	commissiondepartmentfor applications of additional premium tax
17873	credits. The commissiondepartmentshall adopt rules by which an
17874	entity not already certified as a certified capital company may
17875	apply for certification as a certified capital company for
17876	participation in this additional allocation. The insurance
17877	premium tax credit authorized by Program Two may not be used by
17878	certified investors until the annual return due March 1, 2004,
17879	and may be used on all subsequent returns and estimated
17880	payments; however, notwithstanding the provisions of s.
17881	624.5092(2)(b), the installments of taxes due and payable on
17882	April 15, 2004, and June 15, 2004, shall be based on the net tax
17883	due in 2003 not taking into account credits granted pursuant to
17884	this section for Program Two.
17885	Section 344. Paragraph (c) of subsection (1) of section
17886	289.051, Florida Statutes, is amended to read:
17887	289.051 Membership of financial institutions; loans to
17888	corporation, limitations.--
17889	(1) Any financial institution may request membership in
17890	the corporation by making application to the board of directors
17891	on such form and in such manner as said board of directors may
17892	require, and membership shall become effective upon acceptance
17893	of such application by said board. Each member of the
17894	corporation shall make loans to the corporation as and when
17895	called upon by it to do so, on such terms and other conditions
17896	as shall be approved from time to time by the board of
17897	directors, subject to the following conditions:
17898	(c) The total amount outstanding on loans to the
17899	corporation made by any member at any one time, when added to
17900	the amount of the investment in the capital stock of the
17901	corporation then held by such member, shall not exceed:
17902	1. Twenty percent of the total amount then outstanding on
17903	loans to the corporation by all members, including, in said
17904	total amount outstanding, amounts validly called for loan but
17905	not yet loaned.
17906	2. The following limit, to be determined as of the time
17907	such member becomes a member on the basis of the audited balance
17908	sheet of such member at the close of its fiscal year immediately
17909	preceding its application for membership, or, in the case of an
17910	insurance company, its last annual statement to the Office of
17911	Insurance Regulation of the Financial Services Commission
17912	Department of Insurance: 2.5 percent of the capital and surplus
17913	of commercial banks and trust companies; 0.5 percent of the
17914	total outstanding loans made by savings and loan associations
17915	and building and loan associations; 2.5 percent of the capital
17916	and unassigned surplus of stock insurance companies, except fire
17917	insurance companies; 2.5 percent of the unassigned surplus of
17918	mutual insurance companies, except fire insurance companies; 0.1
17919	percent of the assets of fire insurance companies; and such
17920	limits as may be approved by the board of directors of the
17921	corporation for other financial institutions.
17922	Section 345. Subsection (1) of section 289.081, Florida
17923	Statutes, is amended to read:
17924	289.081 Amendments to articles of incorporation.--
17925	(1) The articles of incorporation may be amended by the
17926	votes of the stockholders and the members of the corporation,
17927	voting separately by classes, and such amendments shall require
17928	approval by the affirmative vote of two-thirds of the votes to
17929	which the stockholders shall be entitled and two-thirds of the
17930	votes to which the members shall be entitled. No amendment of
17931	the articles of incorporation which is inconsistent with the
17932	general purposes expressed herein, or which authorizes any
17933	additional class of capital stock to be issued, or which
17934	eliminates or curtails the right of the Office of Financial
17935	Institutions and Securities Regulation of the Financial Services
17936	CommissionDepartment of Banking and Financeto examine the
17937	corporation or the obligation of the corporation to make reports
17938	as provided in s. 289.121, shall be made. No amendment of the
17939	articles of incorporation which increases the obligation of a
17940	member to make loans to the corporation, or makes any change in
17941	the principal amount, interest rate, maturity date, or in the
17942	security or credit position of any outstanding loan of a member
17943	to the corporation, or affects a member's right to withdraw from
17944	membership as provided herein, or affects a member's voting
17945	rights as provided herein, shall be made without the consent of
17946	each member affected by such amendment.
17947	Section 346. Section 289.121, Florida Statutes, is amended
17948	to read:
17949	289.121 Periodic examinations; reports.--The corporation
17950	shall be examined at least once annually by the Office of
17951	Financial Institutions and Securities Regulation of the
17952	Financial Services CommissionDepartment of Banking and Finance
17953	and shall make reports of its condition not less than annually
17954	to that officesaid departmentand more frequently upon call of
17955	the officedepartment, which in turn shall make copies of such
17956	reports available to the Office of Insurance Regulation of the
17957	Financial Services CommissionDepartment of Insuranceand the
17958	Governor; and the corporation shall also furnish such other
17959	information as may from time to time be required by the Office
17960	of Financial Institutions and Securities RegulationDepartment
17961	of Banking and Financeand Department of State. The corporation
17962	shall pay the actual cost of said examinations. The office
17963	Department of Banking and Financeshall exercise the same power
17964	and authority over corporations organized under this act as is
17965	exercised over financial institutions under the provisions of
17966	the financial institutions codes, when such codes are not in
17967	conflict with this act.
17968	Section 347. Paragraph (d) of subsection (1) of section
17969	420.101, Florida Statutes, is amended to read:
17970	420.101 Housing Development Corporation of Florida;
17971	creation, membership, and purposes.--
17972	(1) Twenty-five or more persons, a majority of whom shall
17973	be residents of this state, who may desire to create a housing
17974	development corporation under the provisions of this part for
17975	the purpose of promoting and developing housing and advancing
17976	the prosperity and economic welfare of the state and, to that
17977	end, to exercise the powers and privileges hereinafter provided,
17978	may be incorporated by filing in the Department of State, as
17979	hereinafter provided, articles of incorporation. The articles
17980	of incorporation shall contain:
17981	(d) The names and post office addresses of the members of
17982	the first board of directors. The first board of directors shall
17983	be elected by and from the stockholders of the corporation and
17984	shall consist of 21 members. However, five of such members
17985	shall consist of the following persons, who shall be nonvoting
17986	members: the secretary of the Department of Community Affairs or
17987	her or his designee; the head of the Department of Financial
17988	ServicesBanking and Finance or her or his designee with
17989	expertise in insurance matters; a designee ofthe head of the
17990	Department of Financial Services with expertise in banking
17991	mattersInsurance or her or his designee;one state senator
17992	appointed by the President of the Senate; and one representative
17993	appointed by the Speaker of the House of Representatives.
17994	Section 348. Section 494.00125, Florida Statutes, is
17995	amended to read:
17996	494.00125 Confidentiality of information relating to
17997	investigations and examinations.--
17998	(1)(a) Except as otherwise provided by this section,
17999	information relative to an investigation or examination by the
18000	officedepartmentpursuant to this chapter, including any
18001	consumer complaint received by the office or the Department of
18002	Financial Services, is confidential and exempt from s. 119.07(1)
18003	until the investigation or examination is completed or ceases to
18004	be active. The information compiled by the officedepartmentin
18005	such an investigation or examination shall remain confidential
18006	and exempt from s. 119.07(1) after the office'sdepartment's
18007	investigation or examination is completed or ceases to be active
18008	if the officedepartmentsubmits the information to any law
18009	enforcement or administrative agency for further investigation.
18010	Such information shall remain confidential and exempt from s.
18011	119.07(1) until that agency's investigation is completed or
18012	ceases to be active. For purposes of this section, an
18013	investigation or examination shall be considered "active" so
18014	long as the officedepartmentor any law enforcement or
18015	administrative agency is proceeding with reasonable dispatch and
18016	has a reasonable good faith belief that the investigation or
18017	examination may lead to the filing of an administrative, civil,
18018	or criminal proceeding or to the denial or conditional grant of
18019	a license. This section shall not be construed to prohibit
18020	disclosure of information which is required by law to be filed
18021	with the officedepartmentand which, but for the investigation
18022	or examination, would be subject to s. 119.07(1).
18023	(b) Except as necessary for the officedepartmentto
18024	enforce the provisions of this chapter, a consumer complaint and
18025	other information relative to an investigation or examination
18026	shall remain confidential and exempt from s. 119.07(1) after the
18027	investigation or examination is completed or ceases to be active
18028	to the extent disclosure would:
18029	1. Jeopardize the integrity of another active
18030	investigation or examination.
18031	2. Reveal the name, address, telephone number, social
18032	security number, or any other identifying number or information
18033	of any complainant, customer, or account holder.
18034	3. Disclose the identity of a confidential source.
18035	4. Disclose investigative techniques or procedures.
18036	5. Reveal a trade secret as defined in s. 688.002.
18037	(c) In the event that officedepartmentpersonnel are or
18038	have been involved in an investigation or examination of such
18039	nature as to endanger their lives or physical safety or that of
18040	their families, then the home addresses, telephone numbers,
18041	places of employment, and photographs of such personnel,
18042	together with the home addresses, telephone numbers,
18043	photographs, and places of employment of spouses and children of
18044	such personnel and the names and locations of schools and day
18045	care facilities attended by the children of such personnel are
18046	confidential and exempt from s. 119.07(1).
18047	(d) Nothing in this section shall be construed to prohibit
18048	the officedepartmentfrom providing information to any law
18049	enforcement or administrative agency. Any law enforcement or
18050	administrative agency receiving confidential information in
18051	connection with its official duties shall maintain the
18052	confidentiality of the information so long as it would otherwise
18053	be confidential.
18054	(e) All information obtained by the officedepartmentfrom
18055	any person which is only made available to the officedepartment
18056	on a confidential or similarly restricted basis shall be
18057	confidential and exempt from s. 119.07(1). This exemption shall
18058	not be construed to prohibit disclosure of information which is
18059	required by law to be filed with the officedepartmentor which
18060	is otherwise subject to s. 119.07(1).
18061	(2) If information subject to subsection (1) is offered in
18062	evidence in any administrative, civil, or criminal proceeding,
18063	the presiding officer may, in her or his discretion, prevent the
18064	disclosure of information which would be confidential pursuant
18065	to paragraph (1)(b).
18066	(3) A privilege against civil liability is granted to a
18067	person who furnishes information or evidence to the office
18068	department, unless such person acts in bad faith or with malice
18069	in providing such information or evidence.
18070	Section 349. Subsection (7) of section 494.00421, Florida
18071	Statutes, is amended to read:
18072	494.00421 Fees earned upon obtaining a bona fide
18073	commitment.--Notwithstanding the provisions of ss. 494.001-
18074	494.0077, any mortgage brokerage business which contracts to
18075	receive from a borrower a mortgage brokerage fee upon obtaining
18076	a bona fide commitment shall accurately disclose in the mortgage
18077	brokerage agreement:
18078	(7)(a) The following statement, in no less than 12-point
18079	boldface type immediately above the signature lines for the
18080	borrowers:
18081
18082
18083	"You are entering into a contract with a mortgage brokerage
18084	business to obtain a bona fide mortgage loan commitment under
18085	the same terms and conditions as stated hereinabove or in a
18086	separate executed good faith estimate form. If the mortgage
18087	brokerage business obtains a bona fide commitment under the same
18088	terms and conditions, you will be obligated to pay the mortgage
18089	brokerage business fees, including, but not limited to, a
18090	mortgage brokerage fee, even if you choose not to complete the
18091	loan transaction. If the provisions of s. 494.00421, Florida
18092	Statutes, are not met, the mortgage brokerage fee can only be
18093	earned upon the funding of the mortgage loan. The borrower may
18094	contact the Department of Financial ServicesBanking and
18095	Finance, Tallahassee, Florida, regarding any complaints that the
18096	borrower may have against the mortgage broker or the mortgage
18097	brokerage business. The telephone number of the department as
18098	set by rule of the departmentis: . . . [insert telephone
18099	number] . . . ."
18100	(b) Paragraph (a) does not apply to nonresidential
18101	mortgage loan commitments in excess of $1 million.
18102	Section 350. Subsection (7) of section 517.021, Florida
18103	Statutes, is amended, present subsections (8)-(20) of said
18104	section are renumbered as subsections (9)-(21), respectively,
18105	and a new subsection (8) is added to that section to read:
18106	517.021 Definitions.--When used in this chapter, unless
18107	the context otherwise indicates, the following terms have the
18108	following respective meanings:
18109	(7) "Commission" means the Financial Services Commission
18110	"Department" means the Department of Banking and Finance.
18111	(8) "Office" means the Office of Financial Institutions
18112	and Securities Regulation of the commission.
18113	Section 351. Section 517.03, Florida Statutes, is amended
18114	to read:
18115	517.03 Rulemaking; immunity for acts in conformity with
18116	rules.--
18117	(1) The officeDepartment of Banking and Financeshall
18118	administer and provide for the enforcement of all the provisions
18119	of this chapter. The commission maydepartment has authority to
18120	adopt rules pursuant to ss. 120.536(1) and 120.54 to implement
18121	the provisions of this chapter conferring powers or duties upon
18122	the officeit, including, without limitation, adopting rules and
18123	forms governing reports. The commissiondepartmentshall also
18124	have the nonexclusive power to define by rule any term, whether
18125	or not used in this chapter, insofar as the definition is not
18126	inconsistent with the provisions of this chapter.
18127	(2) No provision of this chapter imposing liability shall
18128	apply to an act done, or omitted to be done, in conformity with
18129	a rule of the commissiondepartmentin existence at the time of
18130	the act or omission, even though such rule may thereafter be
18131	amended or repealed or determined by judicial or other authority
18132	to be invalid for any reason.
18133	Section 352. Section 517.051, Florida Statutes, is amended
18134	to read:
18135	517.051 Exempt securities.--The exemptions provided herein
18136	from the registration requirements of s. 517.07 are self-
18137	executing and do not require any filing with the office
18138	departmentprior to claiming such exemption. Any person who
18139	claims entitlement to any of these exemptions bears the burden
18140	of proving such entitlement in any proceeding brought under this
18141	chapter. The registration provisions of s. 517.07 do not apply
18142	to any of the following securities:
18143	(1) A security issued or guaranteed by the United States
18144	or any territory or insular possession of the United States, by
18145	the District of Columbia, or by any state of the United States
18146	or by any political subdivision or agency or other
18147	instrumentality thereof; provided that no person shall directly
18148	or indirectly offer or sell securities, other than general
18149	obligation bonds, under this subsection if the issuer or
18150	guarantor is in default or has been in default any time after
18151	December 31, 1975, as to principal or interest:
18152	(a) With respect to an obligation issued by the issuer or
18153	successor of the issuer; or
18154	(b) With respect to an obligation guaranteed by the
18155	guarantor or successor of the guarantor,
18156
18157	except by an offering circular containing a full and fair
18158	disclosure as prescribed by rule of the commissiondepartment.
18159	(2) A security issued or guaranteed by any foreign
18160	government with which the United States is maintaining
18161	diplomatic relations at the time of the sale or offer of sale of
18162	the security, or by any state, province, or political
18163	subdivision thereof having the power of taxation or assessment,
18164	which security is recognized at the time it is offered for sale
18165	in this state as a valid obligation by such foreign government
18166	or by such state, province, or political subdivision thereof
18167	issuing the security.
18168	(3) A security issued or guaranteed by:
18169	(a) A national bank, a federally chartered savings and
18170	loan association, or a federally chartered savings bank, or the
18171	initial subscription for equity securities in such national
18172	bank, federally chartered savings and loan association, or
18173	federally chartered savings bank;
18174	(b) Any federal land bank, joint-stock land bank, or
18175	national farm loan association under the provisions of the
18176	Federal Farm Loan Act of July 17, 1916;
18177	(c) An international bank of which the United States is a
18178	member; or
18179	(d) A corporation created and acting as an instrumentality
18180	of the government of the United States.
18181	(4) A security issued or guaranteed, as to principal,
18182	interest, or dividend, by a corporation owning or operating a
18183	railroad or any other public service utility; provided that such
18184	corporation is subject to regulation or supervision whether as
18185	to its rates and charges or as to the issue of its own
18186	securities by a public commission, board, or officer of the
18187	government of the United States, of any state, territory, or
18188	insular possession of the United States, of any municipality
18189	located therein, of the District of Columbia, or of the Dominion
18190	of Canada or of any province thereof; also equipment securities
18191	based on chattel mortgages, leases, or agreements for
18192	conditional sale of cars, motive power, or other rolling stock
18193	mortgaged, leased, or sold to or furnished for the use of or
18194	upon such railroad or other public service utility corporation
18195	or where the ownership or title of such equipment is pledged or
18196	retained in accordance with the provisions of the laws of the
18197	United States or of any state or of the Dominion of Canada to
18198	secure the payment of such equipment securities; and also bonds,
18199	notes, or other evidences of indebtedness issued by a holding
18200	corporation and secured by collateral consisting of any
18201	securities hereinabove described; provided, further, that the
18202	collateral securities equal in fair value at least 125 percent
18203	of the par value of the bonds, notes, or other evidences of
18204	indebtedness so secured.
18205	(5) A security issued or guaranteed by any of the
18206	following which are subject to the examination, supervision, or
18207	control of this state or of the Federal Deposit Insurance
18208	Corporation or the National Credit Union Association:
18209	(a) A bank,
18210	(b) A trust company,
18211	(c) A savings institution,
18212	(d) A building or savings and loan association,
18213	(e) An international development bank, or
18214	(f) A credit union;
18215
18216	or the initial subscription for equity securities of any
18217	institution listed in paragraphs (a)-(f), provided such
18218	institution is subject to the examination, supervision, or
18219	control of this state.
18220	(6) A security, other than common stock, providing for a
18221	fixed return, which security has been outstanding in the hands
18222	of the public for a period of not less than 5 years, and upon
18223	which security no default in payment of principal or failure to
18224	pay the fixed return has occurred for an immediately preceding
18225	period of 5 years.
18226	(7) Securities of nonprofit agricultural cooperatives
18227	organized under the laws of this state when the securities are
18228	sold or offered for sale to persons principally engaged in
18229	agricultural production or selling agricultural products.
18230	(8) A note, draft, bill of exchange, or banker's
18231	acceptance having a unit amount of $25,000 or more which arises
18232	out of a current transaction, or the proceeds of which have been
18233	or are to be used for current transactions, and which has a
18234	maturity period at the time of issuance not exceeding 9 months
18235	exclusive of days of grace, or any renewal thereof which has a
18236	maturity period likewise limited. This subsection applies only
18237	to prime quality negotiable commercial paper of a type not
18238	ordinarily purchased by the general public; that is, paper
18239	issued to facilitate well-recognized types of current
18240	operational business requirements and of a type eligible for
18241	discounting by Federal Reserve banks.
18242	(9) A security issued by a corporation organized and
18243	operated exclusively for religious, educational, benevolent,
18244	fraternal, charitable, or reformatory purposes and not for
18245	pecuniary profit, no part of the net earnings of which
18246	corporation inures to the benefit of any private stockholder or
18247	individual, or any security of a fund that is excluded from the
18248	definition of an investment company under s. 3(c)(10)(B) of the
18249	Investment Company Act of 1940; provided that no person shall
18250	directly or indirectly offer or sell securities under this
18251	subsection except by an offering circular containing full and
18252	fair disclosure, as prescribed by the rules of the commission
18253	department, of all material information, including, but not
18254	limited to, a description of the securities offered and terms of
18255	the offering, a description of the nature of the issuer's
18256	business, a statement of the purpose of the offering and the
18257	intended application by the issuer of the proceeds thereof, and
18258	financial statements of the issuer prepared in conformance with
18259	generally accepted accounting principles. Section 6(c) of the
18260	Philanthropy Protection Act of 1995, Pub. L. No. 104-62, shall
18261	not preempt any provision of this chapter.
18262	(10) Any insurance or endowment policy or annuity contract
18263	or optional annuity contract or self-insurance agreement issued
18264	by a corporation, insurance company, reciprocal insurer, or risk
18265	retention group subject to the supervision of the insurance
18266	regulatorcommissioner or bank regulatorcommissioner, or any
18267	agency or officer performing like functions, of any state or
18268	territory of the United States or the District of Columbia.
18269	Section 353. Section 517.061, Florida Statutes, is amended
18270	to read:
18271	517.061 Exempt transactions.--The exemption for each
18272	transaction listed below is self-executing and does not require
18273	any filing with the officedepartmentprior to claiming such
18274	exemption. Any person who claims entitlement to any of the
18275	exemptions bears the burden of proving such entitlement in any
18276	proceeding brought under this chapter. The registration
18277	provisions of s. 517.07 do not apply to any of the following
18278	transactions; however, such transactions are subject to the
18279	provisions of ss. 517.301, 517.311, and 517.312:
18280	(1) At any judicial, executor's, administrator's,
18281	guardian's, or conservator's sale, or at any sale by a receiver
18282	or trustee in insolvency or bankruptcy, or any transaction
18283	incident to a judicially approved reorganization in which a
18284	security is issued in exchange for one or more outstanding
18285	securities, claims, or property interests.
18286	(2) By or for the account of a pledgeholder or mortgagee
18287	selling or offering for sale or delivery in the ordinary course
18288	of business and not for the purposes of avoiding the provisions
18289	of this chapter, to liquidate a bona fide debt, a security
18290	pledged in good faith as security for such debt.
18291	(3) The isolated sale or offer for sale of securities when
18292	made by or on behalf of a vendor not the issuer or underwriter
18293	of the securities, who, being the bona fide owner of such
18294	securities, disposes of her or his own property for her or his
18295	own account, and such sale is not made directly or indirectly
18296	for the benefit of the issuer or an underwriter of such
18297	securities or for the direct or indirect promotion of any scheme
18298	or enterprise with the intent of violating or evading any
18299	provision of this chapter. For purposes of this subsection,
18300	isolated offers or sales include, but are not limited to, an
18301	isolated offer or sale made by or on behalf of a vendor of
18302	securities not the issuer or underwriter of the securities if:
18303	(a) The offer or sale of securities is in a transaction
18304	satisfying all of the requirements of subparagraphs (11)(a)1.,
18305	2., 3., and 4. and paragraph(11)(b); or
18306	(b) The offer or sale of securities is in a transaction
18307	exempt under s. 4(1) of the Securities Act of 1933, as amended.
18308
18309	For purposes of this subsection, any person, including, without
18310	limitation, a promoter or affiliate of an issuer, shall not be
18311	deemed an underwriter, an issuer, or a person acting for the
18312	direct or indirect benefit of the issuer or an underwriter with
18313	respect to any securities of the issuer which she or he has
18314	owned beneficially for at least 1 year.
18315	(4) The distribution by a corporation, trust, or
18316	partnership, actively engaged in the business authorized by its
18317	charter or other organizational articles or agreement, of
18318	securities to its stockholders or other equity security holders,
18319	partners, or beneficiaries as a stock dividend or other
18320	distribution out of earnings or surplus.
18321	(5) The issuance of securities to such equity security
18322	holders or other creditors of a corporation, trust, or
18323	partnership in the process of a reorganization of such
18324	corporation or entity, made in good faith and not for the
18325	purpose of avoiding the provisions of this chapter, either in
18326	exchange for the securities of such equity security holders or
18327	claims of such creditors or partly for cash and partly in
18328	exchange for the securities or claims of such equity security
18329	holders or creditors.
18330	(6) Any transaction involving the distribution of the
18331	securities of an issuer exclusively among its own security
18332	holders, including any person who at the time of the transaction
18333	is a holder of any convertible security, any nontransferable
18334	warrant, or any transferable warrant which is exercisable within
18335	not more than 90 days of issuance, when no commission or other
18336	remuneration is paid or given directly or indirectly in
18337	connection with the sale or distribution of such additional
18338	securities.
18339	(7) The offer or sale of securities to a bank, trust
18340	company, savings institution, insurance company, dealer,
18341	investment company as defined by the Investment Company Act of
18342	1940, pension or profit-sharing trust, or qualified
18343	institutional buyer as defined by rule of the commission
18344	departmentin accordance with Securities and Exchange Commission
18345	Rule 144A (17 C.F.R. 230.144(A)(a)), whether any of such
18346	entities is acting in its individual or fiduciary capacity;
18347	provided that such offer or sale of securities is not for the
18348	direct or indirect promotion of any scheme or enterprise with
18349	the intent of violating or evading any provision of this
18350	chapter.
18351	(8) The sale of securities from one corporation to another
18352	corporation provided that:
18353	(a) The sale price of the securities is $50,000 or more;
18354	and
18355	(b) The buyer and seller corporations each have assets of
18356	$500,000 or more.
18357	(9) The offer or sale of securities from one corporation
18358	to another corporation, or to security holders thereof, pursuant
18359	to a vote or consent of such security holders as may be provided
18360	by the articles of incorporation and the applicable corporate
18361	statutes in connection with mergers, share exchanges,
18362	consolidations, or sale of corporate assets.
18363	(10) The issuance of notes or bonds in connection with the
18364	acquisition of real property or renewals thereof, if such notes
18365	or bonds are issued to the sellers of, and are secured by all or
18366	part of, the real property so acquired.
18367	(11)(a) The offer or sale, by or on behalf of an issuer,
18368	of its own securities, which offer or sale is part of an
18369	offering made in accordance with all of the following
18370	conditions:
18371	1. There are no more than 35 purchasers, or the issuer
18372	reasonably believes that there are no more than 35 purchasers,
18373	of the securities of the issuer in this state during an offering
18374	made in reliance upon this subsection or, if such offering
18375	continues for a period in excess of 12 months, in any
18376	consecutive 12-month period.
18377	2. Neither the issuer nor any person acting on behalf of
18378	the issuer offers or sells securities pursuant to this
18379	subsection by means of any form of general solicitation or
18380	general advertising in this state.
18381	3. Prior to the sale, each purchaser or the purchaser's
18382	representative, if any, is provided with, or given reasonable
18383	access to, full and fair disclosure of all material information.
18384	4. No person defined as a "dealer" in this chapter is paid
18385	a commission or compensation for the sale of the issuer's
18386	securities unless such person is registered as a dealer under
18387	this chapter.
18388	5. When sales are made to five or more persons in this
18389	state, any sale in this state made pursuant to this subsection
18390	is voidable by the purchaser in such sale either within 3 days
18391	after the first tender of consideration is made by such
18392	purchaser to the issuer, an agent of the issuer, or an escrow
18393	agent or within 3 days after the availability of that privilege
18394	is communicated to such purchaser, whichever occurs later.
18395	(b) The following purchasers are excluded from the
18396	calculation of the number of purchasers under subparagraph
18397	(a)1.:
18398	1. Any relative or spouse, or relative of such spouse, of
18399	a purchaser who has the same principal residence as such
18400	purchaser.
18401	2. Any trust or estate in which a purchaser, any of the
18402	persons related to such purchaser specified in subparagraph 1.,
18403	and any corporation specified in subparagraph 3. collectively
18404	have more than 50 percent of the beneficial interest (excluding
18405	contingent interest).
18406	3. Any corporation or other organization of which a
18407	purchaser, any of the persons related to such purchaser
18408	specified in subparagraph 1., and any trust or estate specified
18409	in subparagraph 2. collectively are beneficial owners of more
18410	than 50 percent of the equity securities or equity interest.
18411	4. Any purchaser who makes a bona fide investment of
18412	$100,000 or more, provided such purchaser or the purchaser's
18413	representative receives, or has access to, the information
18414	required to be disclosed by subparagraph (a)3.
18415	5. Any accredited investor, as defined by rule of the
18416	commissiondepartmentin accordance with Securities and Exchange
18417	Commission Regulation 230.501 (17 C.F.R. 230.501).
18418	(c)1. For purposes of determining which offers and sales
18419	of securities constitute part of the same offering under this
18420	subsection and are therefore deemed to be integrated with one
18421	another:
18422	a. Offers or sales of securities occurring more than 6
18423	months prior to an offer or sale of securities made pursuant to
18424	this subsection shall not be considered part of the same
18425	offering, provided there are no offers or sales by or for the
18426	issuer of the same or a similar class of securities during such
18427	6-month period.
18428	b. Offers or sales of securities occurring at any time
18429	after 6 months from an offer or sale made pursuant to this
18430	subsection shall not be considered part of the same offering,
18431	provided there are no offers or sales by or for the issuer of
18432	the same or a similar class of securities during such 6-month
18433	period.
18434	2. Offers or sales which do not satisfy the conditions of
18435	any of the provisions of subparagraph 1. may or may not be part
18436	of the same offering, depending on the particular facts and
18437	circumstances in each case. The commissiondepartment may, but
18438	is not required to,adopt a rule or rules indicating what
18439	factors should be considered in determining whether offers and
18440	sales not qualifying for the provisions of subparagraph 1. are
18441	part of the same offering for purposes of this subsection.
18442	(d) Offers or sales of securities made pursuant to, and in
18443	compliance with, any other subsection of this section or any
18444	subsection of s. 517.051 shall not be considered part of an
18445	offering pursuant to this subsection, regardless of when such
18446	offers and sales are made.
18447	(12) The sale of securities by a bank or trust company
18448	organized or incorporated under the laws of the United States or
18449	this state at a profit to such bank or trust company of not more
18450	than 2 percent of the total sale price of such securities;
18451	provided that there is no solicitation of this business by such
18452	bank or trust company where such bank or trust company acts as
18453	agent in the purchase or sale of such securities.
18454	(13) An unsolicited purchase or sale of securities on
18455	order of, and as the agent for, another by a dealer registered
18456	with the Department of Banking and Financepursuant to the
18457	provisions of s. 517.12; provided that this exemption applies
18458	solely and exclusively to such registered dealers and does not
18459	authorize or permit the purchase or sale of securities on order
18460	of, and as agent for, another by any person other than a dealer
18461	so registered; and provided, further, that such purchase or sale
18462	is not directly or indirectly for the benefit of the issuer or
18463	an underwriter of such securities or for the direct or indirect
18464	promotion of any scheme or enterprise with the intent of
18465	violation or evading any provision of this chapter.
18466	(14) The offer or sale of shares of a corporation which
18467	represent ownership, or entitle the holders of the shares to
18468	possession and occupancy, of specific apartment units in
18469	property owned by such corporation and organized and operated on
18470	a cooperative basis, solely for residential purposes.
18471	(15) The offer or sale of securities under a bona fide
18472	employer-sponsored stock option, stock purchase, pension,
18473	profit-sharing, savings, or other benefit plan when offered only
18474	to employees of the sponsoring organization or to employees of
18475	its controlled subsidiaries.
18476	(16) The sale by or through a registered dealer of any
18477	securities option if at the time of the sale of the option:
18478	(a) The performance of the terms of the option is
18479	guaranteed by any dealer registered under the federal Securities
18480	Exchange Act of 1934, as amended, which guaranty and dealer are
18481	in compliance with such requirements or rules as may be approved
18482	or adopted by the commissiondepartment; or
18483	(b) Such options transactions are cleared by the Options
18484	Clearing Corporation or any other clearinghouse recognized by
18485	the officedepartment; and
18486	(c) The option is not sold by or for the benefit of the
18487	issuer of the underlying security; and
18488	(d) The underlying security may be purchased or sold on a
18489	recognized securities exchange or is quoted on the National
18490	Association of Securities Dealers Automated Quotation System;
18491	and
18492	(e) Such sale is not directly or indirectly for the
18493	purpose of providing or furthering any scheme to violate or
18494	evade any provisions of this chapter.
18495	(17)(a) The offer or sale of securities, as agent or
18496	principal, by a dealer registered pursuant to s. 517.12, when
18497	such securities are offered or sold at a price reasonably
18498	related to the current market price of such securities, provided
18499	such securities are:
18500	1. Securities of an issuer for which reports are required
18501	to be filed by s. 13 or s. 15(d) of the Securities Exchange Act
18502	of 1934, as amended;
18503	2. Securities of a company registered under the Investment
18504	Company Act of 1940, as amended;
18505	3. Securities of an insurance company, as that term is
18506	defined in s. 2(a)(17) of the Investment Company Act of 1940, as
18507	amended;
18508	4. Securities, other than any security that is a federal
18509	covered security pursuant to s. 18(b)(1) of the Securities Act
18510	of 1933 and is not subject to any registration or filing
18511	requirements under this act, which appear in any list of
18512	securities dealt in on any stock exchange registered pursuant to
18513	the Securities Exchange Act of 1934, as amended, and which
18514	securities have been listed or approved for listing upon notice
18515	of issuance by such exchange, and also all securities senior to
18516	any securities so listed or approved for listing upon notice of
18517	issuance, or represented by subscription rights which have been
18518	so listed or approved for listing upon notice of issuance, or
18519	evidences of indebtedness guaranteed by companies any stock of
18520	which is so listed or approved for listing upon notice of
18521	issuance, such securities to be exempt only so long as such
18522	listings or approvals remain in effect. The exemption provided
18523	for herein does not apply when the securities are suspended from
18524	listing approval for listing or trading.
18525	(b) The exemption provided in this subsection does not
18526	apply if the sale is made for the direct or indirect benefit of
18527	an issuer or controlling persons of such issuer or if such
18528	securities constitute the whole or part of an unsold allotment
18529	to, or subscription or participation by, a dealer as an
18530	underwriter of such securities.
18531	(c) This exemption shall not be available for any
18532	securities which have been denied registration by the department
18533	pursuant to s. 517.111. Additionally, the officedepartmentmay
18534	deny this exemption with reference to any particular security,
18535	other than a federal covered security, by order published in
18536	such manner as the officedepartmentfinds proper.
18537	(18) The offer or sale of any security effected by or
18538	through a person registered pursuant to s. 517.12(17).
18539	(19) Other transactions defined by rules as transactions
18540	exempted from the registration provisions of s. 517.07, which
18541	rules the commissiondepartment may, but is not required to,
18542	adopt from time to time, but only after a finding by the office
18543	departmentthat the application of the provisions of s. 517.07
18544	to a particular transaction is not necessary in the public
18545	interest and for the protection of investors because of the
18546	small dollar amount of securities involved or the limited
18547	character of the offering. In conjunction with its adoption of
18548	such rules, the commissiondepartmentmay also provide in such
18549	rules that persons selling or offering for sale the exempted
18550	securities are exempt from the registration requirements of s.
18551	517.12. No rule so adopted may have the effect of narrowing or
18552	limiting any exemption provided for by statute in the other
18553	subsections of this section.
18554	(20) Any nonissuer transaction by a registered associated
18555	person of a registered dealer, and any resale transaction by a
18556	sponsor of a unit investment trust registered under the
18557	Investment Company Act of 1940, in a security of a class that
18558	has been outstanding in the hands of the public for at least 90
18559	days; provided, at the time of the transaction:
18560	(a) The issuer of the security is actually engaged in
18561	business and is not in the organization stage or in bankruptcy
18562	or receivership and is not a blank check, blind pool, or shell
18563	company whose primary plan of business is to engage in a merger
18564	or combination of the business with, or an acquisition of, any
18565	unidentified person;
18566	(b) The security is sold at a price reasonably related to
18567	the current market price of the security;
18568	(c) The security does not constitute the whole or part of
18569	an unsold allotment to, or a subscription or participation by,
18570	the broker-dealer as an underwriter of the security;
18571	(d) A nationally recognized securities manual designated
18572	by rule of the commission or order of the officedepartmentor a
18573	document filed with the Securities and Exchange Commission that
18574	is publicly available through the commission's electronic data
18575	gathering and retrieval system contains:
18576	1. A description of the business and operations of the
18577	issuer;
18578	2. The names of the issuer's officers and directors, if
18579	any, or, in the case of an issuer not domiciled in the United
18580	States, the corporate equivalents of such persons in the
18581	issuer's country of domicile;
18582	3. An audited balance sheet of the issuer as of a date
18583	within 18 months before such transaction or, in the case of a
18584	reorganization or merger in which parties to the reorganization
18585	or merger had such audited balance sheet, a pro forma balance
18586	sheet; and
18587	4. An audited income statement for each of the issuer's
18588	immediately preceding 2 fiscal years, or for the period of
18589	existence of the issuer, if in existence for less than 2 years
18590	or, in the case of a reorganization or merger in which the
18591	parties to the reorganization or merger had such audited income
18592	statement, a pro forma income statement; and
18593	(e) The issuer of the security has a class of equity
18594	securities listed on a national securities exchange registered
18595	under the Securities Exchange Act of 1934 or designated for
18596	trading on the National Association of Securities Dealers
18597	Automated Quotation System, unless:
18598	1. The issuer of the security is a unit investment trust
18599	registered under the Investment Company Act of 1940;
18600	2. The issuer of the security has been engaged in
18601	continuous business, including predecessors, for at least 3
18602	years; or
18603	3. The issuer of the security has total assets of at least
18604	$2 million based on an audited balance sheet as of a date within
18605	18 months before such transaction or, in the case of a
18606	reorganization or merger in which parties to the reorganization
18607	or merger had such audited balance sheet, a pro forma balance
18608	sheet.
18609	Section 354. Section 517.07, Florida Statutes, is amended
18610	to read:
18611	517.07 Registration of securities.--
18612	(1) It is unlawful and a violation of this chapter for any
18613	person to sell or offer to sell a security within this state
18614	unless the security is exempt under s. 517.051, is sold in a
18615	transaction exempt under s. 517.061, is a federal covered
18616	security, or is registered pursuant to this chapter.
18617	(2) No securities that are required to be registered under
18618	this chapter shall be sold or offered for sale within this state
18619	unless such securities have been registered pursuant to this
18620	chapter and unless prior to each sale the purchaser is furnished
18621	with a prospectus meeting the requirements of rules adopted by
18622	the commissiondepartment.
18623	(3) The officedepartmentshall issue a permit when
18624	registration has been granted by the officedepartment. A
18625	permit to sell securities is effective for 1 year from the date
18626	it was granted. Registration of securities shall be deemed to
18627	include the registration of rights to subscribe to such
18628	securities if the application under s. 517.081 or s. 517.082 for
18629	registration of such securities includes a statement that such
18630	rights are to be issued.
18631	(4) A record of the registration of securities shall be
18632	kept byin the office of the department, in which register of
18633	securities shall also be recorded any orders entered by the
18634	officedepartmentwith respect to such securities. Such
18635	register, and all information with respect to the securities
18636	registered therein, shall be open to public inspection.
18637	(5) Notwithstanding any other provision of this section,
18638	offers of securities required to be registered by this section
18639	may be made in this state before the registration of such
18640	securities if the offers are made in conformity with rules
18641	adopted by the commissiondepartment.
18642	Section 355. Subsections (2), (3), (4), and (5) of section
18643	517.075, Florida Statutes, are amended to read:
18644	517.075 Cuba, prospectus disclosure of doing business
18645	with, required.--
18646	(2) Any disclosure required by subsection (1) must
18647	include:
18648	(a) The name of such person, affiliate, or government with
18649	which the issuer does business and the nature of that business;
18650	(b) A statement that the information is accurate as of the
18651	date the securities were effective with the United States
18652	Securities and Exchange Commission or with the office
18653	department, whichever date is later; and
18654	(c) A statement that current information concerning the
18655	issuer's business dealings with the government of Cuba or with
18656	any person or affiliate located in Cuba may be obtained from the
18657	officeDepartment of Banking and Finance, which statement must
18658	include the address and phone number of the officedepartment.
18659	(3) If an issuer commences engaging in business with the
18660	government of Cuba or with any person or affiliate located in
18661	Cuba, after the date issuer's securities become effective with
18662	the Securities and Exchange Commission or with the office
18663	department, whichever date is later, or if the information
18664	reported in the prospectus concerning that business changes in
18665	any material way, the issuer must provide the officedepartment
18666	notice of that business or change, as appropriate, in a manner
18667	form acceptable to the officedepartment. The commission
18668	departmentshall prescribe by rule a form for persons to use to
18669	report the commencement of such business or any change in such
18670	business which occurs after the effective registration of such
18671	securities. This form must include, at a minimum, the
18672	information required by subsection (2). The information reported
18673	on the form must be kept current. Information is current if
18674	reported to the officedepartmentwithin 90 days after the
18675	commencement of business or within 90 days after the change
18676	occurs with respect to previously reported information.
18677	(4) The officedepartmentshall provide, upon request, a
18678	copy of any form filed with the officedepartmentunder
18679	subsection (3) to any person requesting the form.
18680	(5) Each securities offering sold in violation of this
18681	section, and each failure of an issuer to timely file the form
18682	required by subsection (3), subjects the issuer to a fine of up
18683	to $5,000. Any fine collected under this section shall be
18684	deposited into the Anti-Fraud Trust Fund of the office
18685	Department of Banking and Finance.
18686	Section 356. Section 517.081, Florida Statutes, is amended
18687	to read:
18688	517.081 Registration procedure.--
18689	(1) All securities required by this chapter to be
18690	registered before being sold in this state and not entitled to
18691	registration by notification shall be registered in the manner
18692	provided by this section.
18693	(2) The officedepartmentshall receive and act upon
18694	applications to have securities registered and the commission
18695	may prescribe forms on which it may require such applications to
18696	be submitted. Applications shall be duly signed by the
18697	applicant, sworn to by any person having knowledge of the facts,
18698	and filed with the officedepartment. The commissiondepartment
18699	may establish, by rule, procedures for depositing fees and
18700	filing documents by electronic means provided such procedures
18701	provide the officedepartmentwith the information and data
18702	required by this section. An application may be made either by
18703	the issuer of the securities for which registration is applied
18704	or by any registered dealer desiring to sell the same within the
18705	state.
18706	(3) The officedepartmentmay require the applicant to
18707	submit to the officedepartmentthe following information
18708	concerning the issuer and such other relevant information as the
18709	officedepartmentmay in its judgment deem necessary to enable
18710	it to ascertain whether such securities shall be registered
18711	pursuant to the provisions of this section:
18712	(a) The names and addresses of the directors, trustees,
18713	and officers, if the issuer be a corporation, association, or
18714	trust; of all the partners, if the issuer be a partnership; or
18715	of the issuer, if the issuer be an individual.
18716	(b) The location of the issuer's principal business office
18717	and of its principal office in this state, if any.
18718	(c) The general character of the business actually to be
18719	transacted by the issuer and the purposes of the proposed issue.
18720	(d) A statement of the capitalization of the issuer.
18721	(e) A balance sheet showing the amount and general
18722	character of its assets and liabilities on a day not more than
18723	90 days prior to the date of filing such balance sheet or such
18724	longer period of time, not exceeding 6 months, as the office
18725	departmentmay permit at the written request of the issuer on a
18726	showing of good cause therefor.
18727	(f) A detailed statement of the plan upon which the issuer
18728	proposes to transact business.
18729	(g)1. A specimen copy of the security and a copy of any
18730	circular, prospectus, advertisement, or other description of
18731	such securities.
18732	2. The commissiondepartmentshall adopt a form for a
18733	simplified offering circular to be used solely by corporations
18734	to register, under this section, securities of the corporation
18735	that are sold in offerings in which the aggregate offering price
18736	in any consecutive 12-month period does not exceed the amount
18737	provided in s. 3(b) of the Securities Act of 1933. The
18738	following issuers shall not be eligible to submit a simplified
18739	offering circular adopted pursuant to this subparagraph:
18740	a. An issuer seeking to register securities for resale by
18741	persons other than the issuer.
18742	b. An issuer who is subject to any of the
18743	disqualifications described in 17 C.F.R. s. 230.262, adopted
18744	pursuant to the Securities Act of 1933, or who has been or is
18745	engaged or is about to engage in an activity that would be
18746	grounds for denial, revocation, or suspension under s. 517.111.
18747	For purposes of this subparagraph, an issuer includes an
18748	issuer's director, officer, shareholder who owns at least 10
18749	percent of the shares of the issuer, promoter, or selling agent
18750	of the securities to be offered or any officer, director, or
18751	partner of such selling agent.
18752	c. An issuer who is a development-stage company that
18753	either has no specific business plan or purpose or has indicated
18754	that its business plan is to merge with an unidentified company
18755	or companies.
18756	d. An issuer of offerings in which the specific business
18757	or properties cannot be described.
18758	e. Any issuer the officedepartmentdetermines is
18759	ineligible if the form would not provide full and fair
18760	disclosure of material information for the type of offering to
18761	be registered by the issuer.
18762	f. Any corporation which has failed to provide the office
18763	departmentthe reports required for a previous offering
18764	registered pursuant to this subparagraph.
18765
18766
18767	As a condition precedent to qualifying for use of the
18768	simplified offering circular, a corporation shall agree to
18769	provide the officedepartmentwith an annual financial report
18770	containing a balance sheet as of the end of the issuer's fiscal
18771	year and a statement of income for such year, prepared in
18772	accordance with generally accepted accounting principles and
18773	accompanied by an independent accountant's report. If the
18774	issuer has more than 100 security holders at the end of a fiscal
18775	year, the financial statements must be audited. Annual financial
18776	reports must be filed with the officedepartmentwithin 90 days
18777	after the close of the issuer's fiscal year for each of the
18778	first 5 years following the effective date of the registration.
18779	(h) A statement of the amount of the issuer's income,
18780	expenses, and fixed charges during the last fiscal year or, if
18781	in actual business less than 1 year, then for such time as the
18782	issuer has been in actual business.
18783	(i) A statement of the issuer's cash sources and
18784	application during the last fiscal year or, if in actual
18785	business less than 1 year, then for such time as the issuer has
18786	been in actual business.
18787	(j) A statement showing the maximum price at which such
18788	security is proposed to be sold, together with the maximum
18789	amount of commission, including expenses, or other form of
18790	remuneration to be paid in cash or otherwise, directly or
18791	indirectly, for or in connection with the sale or offering for
18792	sale of such securities.
18793	(k) A copy of the opinion or opinions of counsel
18794	concerning the legality of the issue or other matters which the
18795	officedepartmentmay determine to be relevant to the issue.
18796	(l) A detailed statement showing the items of cash,
18797	property, services, patents, good will, and any other
18798	consideration in payment for which such securities have been or
18799	are to be issued.
18800	(m) The amount of securities to be set aside and disposed
18801	of and a statement of all securities issued from time to time
18802	for promotional purposes.
18803	(n) If the issuer is a corporation, there shall be filed
18804	with the application a copy of its articles of incorporation
18805	with all amendments and of its existing bylaws, if not already
18806	on file in the officedepartment. If the issuer is a trustee,
18807	there shall be filed with the application a copy of all
18808	instruments by which the trust is created or declared and in
18809	which it is accepted and acknowledged. If the issuer is a
18810	partnership, unincorporated association, joint-stock company, or
18811	any other form of organization whatsoever, there shall be filed
18812	with the application a copy of its articles of partnership or
18813	association and all other papers pertaining to its organization,
18814	if not already on file in the officedepartment.
18815	(4) All of the statements, exhibits, and documents of
18816	every kind required by the departmentunder this section, except
18817	properly certified public documents, shall be verified by the
18818	oath of the applicant or of the issuer in such manner and form
18819	as may be required by the commissiondepartment.
18820	(5) The commissiondepartmentmay by rule fix the maximum
18821	discounts, commissions, expenses, remuneration, and other
18822	compensation to be paid in cash or otherwise, not to exceed 20
18823	percent, directly or indirectly, for or in connection with the
18824	sale or offering for sale of such securities in this state.
18825	(6) An issuer filing an application under this section
18826	shall, at the time of filing, pay the officedepartmenta
18827	nonreturnable fee of $1,000 per application.
18828	(7) If upon examination of any application the office
18829	departmentshall find that the sale of the security referred to
18830	therein would not be fraudulent and would not work or tend to
18831	work a fraud upon the purchaser, that the terms of the sale of
18832	such securities would be fair, just, and equitable, and that the
18833	enterprise or business of the issuer is not based upon unsound
18834	business principles, it shall record the registration of such
18835	security in the register of securities; and thereupon such
18836	security so registered may be sold by any registered dealer,
18837	subject, however, to the further order of the officedepartment.
18838	Section 357. Section 517.082, Florida Statutes, is amended
18839	to read:
18840	517.082 Notification registration.--
18841	(1) Except as provided in subsection (3), securities
18842	offered or sold pursuant to a registration statement filed under
18843	the Securities Act of 1933 shall be entitled to registration by
18844	notification in the manner provided in subsection (2), provided
18845	that prior to the offer or sale the registration statement has
18846	become effective.
18847	(2) An application for registration by notification shall
18848	be filed with the officedepartment, shall contain the following
18849	information, and shall be accompanied by the following:
18850	(a) An application to sell executed by the issuer, any
18851	person on whose behalf the offering is made, a dealer registered
18852	under this chapter, or any duly authorized agent of any such
18853	person, setting forth the name and address of the applicant, the
18854	name and address of the issuer, and the title of the securities
18855	to be offered and sold;
18856	(b) Copies of such documents filed with the Securities and
18857	Exchange Commission as the Financial Services Commission
18858	departmentmay by rule require;
18859	(c) An irrevocable written consent to service as required
18860	by s. 517.101; and
18861	(d) A nonreturnable fee of $1,000 per application.
18862
18863
18864	A registration under this section becomes effective when the
18865	federal registration statement becomes effective or as of the
18866	date the application is filed with the officedepartment,
18867	whichever is later, provided that, in addition to the items
18868	listed in paragraphs (a)-(d), the officedepartmenthas received
18869	written notification of effective registration under the
18870	Securities Act of 1933 or the Investment Company Act of 1940
18871	within 10 business days from the date federal registration is
18872	granted. Failure to provide all the information required by
18873	this subsection to the officedepartmentwithin 60 days of the
18874	date the registration statement becomes effective with the
18875	Securities and Exchange Commission shall be a violation of this
18876	chapter.
18877	(3) Except for units of limited partnership interests or
18878	such other securities as the commissiondepartmentdescribes by
18879	rule as exempt from this subsection due to high investment
18880	quality, the provisions of this section may not be used to
18881	register securities if the offering price at the time of
18882	effectiveness with the Securities and Exchange Commission is $5
18883	or less per share, unless such securities are listed or
18884	designated, or approved for listing or designation upon notice
18885	of issuance, on a stock exchange registered pursuant to the
18886	Securities Exchange Act of 1934 or on the National Association
18887	of Securities Dealers Automated Quotation (NASDAQ) System, or
18888	unless such securities are of the same issuer and of senior or
18889	substantially equal rank to securities so listed or designated.
18890	(4) In lieu of filing with the officedepartmentthe
18891	application, fees, and documents for registration required by
18892	subsection (2), the commissiondepartmentmay establish, by
18893	rule, procedures for depositing fees and filing documents by
18894	electronic means, provided such procedures provide the office
18895	departmentwith the information and data required by this
18896	section.
18897	Section 358. Section 517.101, Florida Statutes, is amended
18898	to read:
18899	517.101 Consent to service.--
18900	(1) Upon any initial application for registration under s.
18901	517.081 or s. 517.082 or upon request of the officedepartment,
18902	the issuer shall file with such application the irrevocable
18903	written consent of the issuer that in suits, proceedings, and
18904	actions growing out of the violation of any provision of this
18905	chapter, the service on the officedepartmentof a notice,
18906	process, or pleading therein, authorized by the laws of this
18907	state, shall be as valid and binding as if due service had been
18908	made on the issuer.
18909	(2) Any such action shall be brought either in the county
18910	of the plaintiff's residence or in the county in which the
18911	officedepartmenthas its official headquarters. The written
18912	consent shall be authenticated by the seal of said issuer, if it
18913	has a seal, and by the acknowledged signature of a member of the
18914	copartnership or company, or by the acknowledged signature of
18915	any officer of the incorporated or unincorporated association,
18916	if it be an incorporated or unincorporated association, duly
18917	authorized by resolution of the board of directors, trustees, or
18918	managers of the corporation or association, and shall in such
18919	case be accompanied by a duly certified copy of the resolution
18920	of the board of directors, trustees, or managers of the
18921	corporation or association, authorizing the officers to execute
18922	the same. In case any process or pleadings mentioned in this
18923	chapter are served upon the officedepartment, it shall be by
18924	duplicate copies, one of which shall be filed in the office
18925	department and another immediately forwarded by the office
18926	departmentby registered mail to the principal office of the
18927	issuer against which said process or pleadings are directed.
18928	Section 359. Section 517.111, Florida Statutes, is amended
18929	to read:
18930	517.111 Revocation or denial of registration of
18931	securities.--
18932	(1) The officedepartmentmay revoke or suspend the
18933	registration of any security, or may deny any application to
18934	register securities, if upon examination into the affairs of the
18935	issuer of such security it shall appear that:
18936	(a) The issuer is insolvent;
18937	(b) The issuer or any officer, director, or control person
18938	of the issuer has violated any provision of this chapter or any
18939	rule made hereunder or any order of the officedepartmentof
18940	which such issuer has notice;
18941	(c) The issuer or any officer, director, or control person
18942	of the issuer has been or is engaged or is about to engage in
18943	fraudulent transactions;
18944	(d) The issuer or any officer, director, or control person
18945	of the issuer has been found guilty of a fraudulent act in
18946	connection with any sale of securities, has engaged, is engaged,
18947	or is about to engage, in making a fictitious sale or purchase
18948	of any security, or in any practice or sale of any security
18949	which is fraudulent or a violation of any law;
18950	(e) The issuer or any officer, director, or control person
18951	of the issuer has had a final judgment entered against such
18952	issuer or person in a civil action on the grounds of fraud,
18953	embezzlement, misrepresentation, or deceit;
18954	(f) The issuer or any officer, director, or control person
18955	of the issuer has demonstrated any evidence of unworthiness;
18956	(g) The issuer or any officer, director, or control person
18957	of the issuer is in any other way dishonest or has made any
18958	fraudulent representations or failed to disclose any material
18959	information in any prospectus or in any circular or other
18960	literature that has been distributed concerning the issuer or
18961	its securities;
18962	(h) The security registered or sought to be registered is
18963	the subject of an injunction entered by a court of competent
18964	jurisdiction or is the subject of an administrative stop-order
18965	or similar order prohibiting the offer or sale of the security;
18966	(i) For any security for which registration has been
18967	applied pursuant to s. 517.081, the terms of the offer or sale
18968	of such securities would not be fair, just, or equitable; or
18969	(j) The issuer or any person acting on behalf of the
18970	issuer has failed to timely complete any application for
18971	registration filed with the officedepartmentpursuant to the
18972	provisions of s. 517.081 or s. 517.082 or any rule adopted under
18973	such sections.
18974
18975	In making such examination, the officedepartmentshall have
18976	access to and may compel the production of all the books and
18977	papers of such issuer and may administer oaths to and examine
18978	the officers of such issuer or any other person connected
18979	therewith as to its business and affairs and may also require a
18980	balance sheet exhibiting the assets and liabilities of any such
18981	issuer or its income statement, or both, to be certified to by a
18982	public accountant either of this state or of any other state
18983	where the issuer's business is located. Whenever the office
18984	deemsdepartment may deemit necessary, it may also require such
18985	balance sheet or income statement, or both, to be made more
18986	specific in such particulars as the officedepartmentmay
18987	require.
18988	(2) If any issuer shall refuse to permit an examination to
18989	be made by the officedepartment, it shall be proper ground for
18990	revocation of registration.
18991	(3) If the office deemsdepartment shall deemit
18992	necessary, it may enter an order suspending the right to sell
18993	securities pending any investigation, provided that the order
18994	shall state the office'sdepartment'sgrounds for taking such
18995	action.
18996	(4) Notice of the entry of such order shall be given by
18997	mail, personally, by telephone confirmed in writing, or by
18998	telegraph to the issuer. Before such order is made final, the
18999	issuer applying for registration shall, on application, be
19000	entitled to a hearing.
19001	(5) The officedepartmentmay deny any request to
19002	terminate any registration or to withdraw any application for
19003	registration if the officedepartmentbelieves that an act which
19004	would be grounds for denial, suspension, or revocation under
19005	this chapter has been committed.
19006	Section 360. Section 517.12, Florida Statutes, is amended
19007	to read:
19008	517.12 Registration of dealers, associated persons,
19009	investment advisers, and branch offices.--
19010	(1) No dealer, associated person, or issuer of securities
19011	shall sell or offer for sale any securities in or from offices
19012	in this state, or sell securities to persons in this state from
19013	offices outside this state, by mail or otherwise, unless the
19014	person has been registered with the officedepartmentpursuant
19015	to the provisions of this section. The officedepartmentshall
19016	not register any person as an associated person of a dealer
19017	unless the dealer with which the applicant seeks registration is
19018	lawfully registered with the officedepartmentpursuant to this
19019	chapter.
19020	(2) The registration requirements of this section do not
19021	apply to the issuers of securities exempted by s. 517.051(1)-(8)
19022	and (10).
19023	(3) Except as otherwise provided in s. 517.061(11)(a)4.,
19024	(13), (16), (17), or (19), the registration requirements of this
19025	section do not apply in a transaction exempted by s. 517.061(1)-
19026	(12), (14), and (15).
19027	(4) No investment adviser or associated person of an
19028	investment adviser or federal covered adviser shall engage in
19029	business from offices in this state, or render investment advice
19030	to persons of this state, by mail or otherwise, unless the
19031	federal covered adviser has made a notice filing with the office
19032	departmentpursuant to s. 517.1201 or the investment adviser is
19033	registered pursuant to the provisions of this chapter and
19034	associated persons of the federal covered adviser or investment
19035	adviser have been registered with the officedepartmentpursuant
19036	to this section. The officedepartmentshall not register any
19037	person or an associated person of a federal covered adviser or
19038	an investment adviser unless the federal covered adviser or
19039	investment adviser with which the applicant seeks registration
19040	is in compliance with the notice filing requirements of s.
19041	517.1201 or is lawfully registered with the officedepartment
19042	pursuant to this chapter. A dealer or associated person who is
19043	registered pursuant to this section may render investment advice
19044	upon notification to and approval from the officedepartment.
19045	(5) No dealer or investment adviser shall conduct business
19046	from a branch office within this state unless the branch office
19047	is registered with the officedepartmentpursuant to the
19048	provisions of this section.
19049	(6) A dealer, associated person, investment adviser, or
19050	branch office, in order to obtain registration, must file with
19051	the officedepartment a written application, on a form which the
19052	commissiondepartmentmay by rule prescribe, verified under
19053	oath. The commissiondepartmentmay establish, by rule,
19054	procedures for depositing fees and filing documents by
19055	electronic means provided such procedures provide the office
19056	departmentwith the information and data required by this
19057	section. Each dealer or investment adviser must also file an
19058	irrevocable written consent to service of civil process similar
19059	to that provided for in s. 517.101. The application shall
19060	contain such information as the commission or officedepartment
19061	may require concerning such matters as:
19062	(a) The name of the applicant and the address of its
19063	principal office and each office in this state.
19064	(b) The applicant's form and place of organization; and,
19065	if the applicant is a corporation, a copy of its articles of
19066	incorporation and amendments to the articles of incorporation
19067	or, if a partnership, a copy of the partnership agreement.
19068	(c) The applicant's proposed method of doing business and
19069	financial condition and history, including a certified financial
19070	statement showing all assets and all liabilities, including
19071	contingent liabilities of the applicant as of a date not more
19072	than 90 days prior to the filing of the application.
19073	(d) The names and addresses of all associated persons of
19074	the applicant to be employed in this state and the offices to
19075	which they will be assigned.
19076	(7) The application shall also contain such information as
19077	the commission or officedepartmentmay require about the
19078	applicant; any partner, officer, or director of the applicant or
19079	any person having a similar status or performing similar
19080	functions; any person directly or indirectly controlling the
19081	applicant; or any employee of a dealer or of an investment
19082	adviser rendering investment advisory services. Each applicant
19083	shall file a complete set of fingerprints taken by an authorized
19084	law enforcement officer. Such fingerprints shall be submitted
19085	to the Department of Law Enforcement or the Federal Bureau of
19086	Investigation for state and federal processing. The commission
19087	departmentmay waive, by rule, the requirement that applicants
19088	must file a set of fingerprints or the requirement that such
19089	fingerprints must be processed by the Department of Law
19090	Enforcement or the Federal Bureau of Investigation. The
19091	commission or officedepartmentmay require information about
19092	any such applicant or person concerning such matters as:
19093	(a) His or her full name, and any other names by which he
19094	or she may have been known, and his or her age, photograph,
19095	qualifications, and educational and business history.
19096	(b) Any injunction or administrative order by a state or
19097	federal agency, national securities exchange, or national
19098	securities association involving a security or any aspect of the
19099	securities business and any injunction or administrative order
19100	by a state or federal agency regulating banking, insurance,
19101	finance, or small loan companies, real estate, mortgage brokers,
19102	or other related or similar industries, which injunctions or
19103	administrative orders relate to such person.
19104	(c) His or her conviction of, or plea of nolo contendere
19105	to, a criminal offense or his or her commission of any acts
19106	which would be grounds for refusal of an application under s.
19107	517.161.
19108	(d) The names and addresses of other persons of whom the
19109	officedepartmentmay inquire as to his or her character,
19110	reputation, and financial responsibility.
19111	(8) The commission or officedepartmentmay require the
19112	applicant or one or more principals or general partners, or
19113	natural persons exercising similar functions, or any associated
19114	person applicant to successfully pass oral or written
19115	examinations. Because any principal, manager, supervisor, or
19116	person exercising similar functions shall be responsible for the
19117	acts of the associated persons affiliated with a dealer or
19118	investment adviser, the examination standards may be higher for
19119	a dealer, office manager, principal, or person exercising
19120	similar functions than for a nonsupervisory associated person.
19121	The commissiondepartmentmay waive the examination process when
19122	it determines that such examinations are not in the public
19123	interest. The officedepartmentshall waive the examination
19124	requirements for any person who has passed any tests as
19125	prescribed in s. 15(b)(7) of the Securities Exchange Act of 1934
19126	that relates to the position to be filled by the applicant.
19127	(9)(a) All dealers, except securities dealers who are
19128	designated by the Federal Reserve Bank of New York as primary
19129	government securities dealers or securities dealers registered
19130	as issuers of securities, shall comply with the net capital and
19131	ratio requirements imposed pursuant to the Securities Exchange
19132	Act of 1934. The commissiondepartmentmay by rule require a
19133	dealer to file with the officedepartmentany financial or
19134	operational information that is required to be filed by the
19135	Securities Exchange Act of 1934 or any rules adopted under such
19136	act.
19137	(b) The commissiondepartmentmay by rule require the
19138	maintenance of a minimum net capital for securities dealers who
19139	are designated by the Federal Reserve Bank of New York as
19140	primary government securities dealers and securities dealers
19141	registered as issuers of securities and investment advisers, or
19142	prescribe a ratio between net capital and aggregate
19143	indebtedness, to assure adequate protection for the investing
19144	public. The provisions of this section shall not apply to any
19145	investment adviser that maintains its principal place of
19146	business in a state other than this state, provided such
19147	investment adviser is registered in the state where it maintains
19148	its principal place of business and is in compliance with such
19149	state's net capital requirements.
19150	(10) An applicant for registration shall pay an assessment
19151	fee of $200, in the case of a dealer or investment adviser, or
19152	$40, in the case of an associated person. The assessment fee of
19153	an associated person shall be reduced to $30, but only after the
19154	officedepartmentdetermines, by final order, that sufficient
19155	funds have been allocated to the Securities Guaranty Fund
19156	pursuant to s. 517.1203 to satisfy all valid claims filed in
19157	accordance with s. 517.1203(2) and after all amounts payable
19158	under any service contract entered into by the officedepartment
19159	pursuant to s. 517.1204, and all notes, bonds, certificates of
19160	indebtedness, other obligations, or evidences of indebtedness
19161	secured by such notes, bonds, certificates of indebtedness, or
19162	other obligations, have been paid or provision has been made for
19163	the payment of such amounts, notes, bonds, certificates of
19164	indebtedness, other obligations, or evidences of indebtedness.
19165	An associated person not having current fingerprint cards filed
19166	with the National Association of Securities Dealers or a
19167	national securities exchange registered with the Securities and
19168	Exchange Commission shall be assessed an additional fee to cover
19169	the cost for said fingerprint cards to be processed by the
19170	officedepartment. Such fee shall be determined by rule of the
19171	commissiondepartment. Each dealer and each investment adviser
19172	shall pay an assessment fee of $100 for each office in this
19173	state, except its designated principal office. Such fees become
19174	the revenue of the state, except for those assessments provided
19175	for under s. 517.131(1) until such time as the Securities
19176	Guaranty Fund satisfies the statutory limits, and are not
19177	returnable in the event that registration is withdrawn or not
19178	granted.
19179	(11) If the officedepartmentfinds that the applicant is
19180	of good repute and character and has complied with the
19181	provisions of this chapter and the rules made pursuant hereto,
19182	it shall register the applicant. The registration of each
19183	dealer, investment adviser, and associated person will expire on
19184	December 31, and the registration of each branch office will
19185	expire on March 31, of the year in which it became effective
19186	unless the registrant has renewed its registration on or before
19187	that date. Registration may be renewed by furnishing such
19188	information as the commissiondepartmentmay require, together
19189	with payment of the fee required in subsection (10) for dealers,
19190	investment advisers, associated persons, or branch offices and
19191	the payment of any amount lawfully due and owing to the office
19192	department pursuant to any order of the officedepartmentor
19193	pursuant to any agreement with the officedepartment. Any
19194	dealer, investment adviser, or associated person registrant who
19195	has not renewed a registration by the time the current
19196	registration expires may request reinstatement of such
19197	registration by filing with the officedepartment, on or before
19198	January 31 of the year following the year of expiration, such
19199	information as may be required by the commissiondepartment,
19200	together with payment of the fee required in subsection (10) for
19201	dealers, investment advisers, or associated persons and a late
19202	fee equal to the amount of such fee. Any reinstatement of
19203	registration granted by the officedepartmentduring the month
19204	of January shall be deemed effective retroactive to January 1 of
19205	that year.
19206	(12)(a) The officedepartmentmay issue a license to a
19207	dealer, investment adviser, associated person, or branch office
19208	to evidence registration under this chapter. The office
19209	department may require the return to the officedepartmentof
19210	any license it may issue prior to issuing a new license.
19211	(b) Every dealer, investment adviser, or federal covered
19212	adviser shall promptly file with the officedepartment, as
19213	prescribed by rules adopted by the commissiondepartment, notice
19214	as to the termination of employment of any associated person
19215	registered for such dealer or investment adviser in this state
19216	and shall also furnish the reason or reasons for such
19217	termination.
19218	(c) Each dealer or investment adviser shall designate in
19219	writing to, and register with, the officedepartmenta manager
19220	for each office the dealer or investment adviser has in this
19221	state.
19222	(13) Changes in registration occasioned by changes in
19223	personnel of a partnership or in the principals, copartners,
19224	officers, or directors of any dealer or investment adviser or by
19225	changes of any material fact or method of doing business shall
19226	be reported by written amendment in such form and at such time
19227	as the commissiondepartmentmay specify. In any case in which
19228	a person or a group of persons, directly or indirectly or acting
19229	by or through one or more persons, proposes to purchase or
19230	acquire a controlling interest in a registered dealer or
19231	investment adviser, such person or group shall submit an initial
19232	application for registration as a dealer or investment adviser
19233	prior to such purchase or acquisition. The commissiondepartment
19234	shall adopt rules providing for waiver of the application
19235	required by this subsection where control of a registered dealer
19236	or investment adviser is to be acquired by another dealer or
19237	investment adviser registered under this chapter or where the
19238	application is otherwise unnecessary in the public interest.
19239	(14) Every dealer, investment adviser, or branch office
19240	registered or required to be registered with the office
19241	departmentshall keep records of all currency transactions in
19242	excess of $10,000 and shall file reports, as prescribed under
19243	the financial recordkeeping regulations in 31 C.F.R. part 103,
19244	with the officedepartmentwhen transactions occur in or from
19245	this state. All reports required by this subsection to be filed
19246	with the officedepartmentshall be confidential and exempt from
19247	s. 119.07(1) except that any law enforcement agency or the
19248	Department of Revenue shall have access to, and shall be
19249	authorized to inspect and copy, such reports.
19250	(15) In lieu of filing with the officedepartmentthe
19251	applications specified in subsection (6), the fees required by
19252	subsection(10), and the termination notices required by
19253	subsection (12), the commissiondepartmentmay by rule establish
19254	procedures for the deposit of such fees and documents with the
19255	Central Registration Depository of the National Association of
19256	Securities Dealers, Inc., as developed under contract with the
19257	North American Securities Administrators Association, Inc.;
19258	provided, however, that such procedures shall provide the office
19259	departmentwith the information and data as required by this
19260	section.
19261	(16) Except for securities dealers who are designated by
19262	the Federal Reserve Bank of New York as primary government
19263	securities dealers or securities dealers registered as issuers
19264	of securities, every applicant for initial or renewal
19265	registration as a securities dealer and every person registered
19266	as a securities dealer shall be registered as a broker or dealer
19267	with the Securities and Exchange Commission and shall be subject
19268	to insurance coverage by the Securities Investor Protection
19269	Corporation.
19270	(17)(a) A dealer that is located in Canada and has no
19271	office or other physical presence in this state may, provided
19272	the dealer is registered in accordance with this section, effect
19273	transactions in securities with or for, or induce or attempt to
19274	induce the purchase or sale of any security by:
19275	1. A person from Canada who temporarily resides in this
19276	state and with whom the Canadian dealer had a bona fide dealer-
19277	client relationship before the person entered the United States;
19278	or
19279	2. A person from Canada who is a resident of this state,
19280	and whose transactions are in a self-directed tax advantage
19281	retirement plan in Canada of which the person is the holder or
19282	contributor.
19283	(b) An associated person who represents a Canadian dealer
19284	registered under this section may, provided the agent is
19285	registered in accordance with this section, effect transactions
19286	in securities in this state as permitted for a dealer, under
19287	subsection (a).
19288	(c) A Canadian dealer may register under this section
19289	provided that such dealer:
19290	1. Files an application in the form required by the
19291	jurisdiction in which the dealer has a head office.
19292	2. Files a consent to service of process.
19293	3. Is registered as a dealer in good standing in the
19294	jurisdiction from which it is effecting transactions into this
19295	state and files evidence of such registration with the office
19296	department.
19297	4. Is a member of a self-regulatory organization or stock
19298	exchange in Canada.
19299	(d) An associated person who represents a Canadian dealer
19300	registered under this section in effecting transactions in
19301	securities in this state may register under this section
19302	provided that such person:
19303	1. Files an application in the form required by the
19304	jurisdiction in which the dealer has its head office.
19305	2. Is registered in good standing in the jurisdiction from
19306	which he or she is effecting transactions into this state and
19307	files evidence of such registration with the officedepartment.
19308	(e) If the officedepartmentfinds that the applicant is
19309	of good repute and character and has complied with the
19310	provisions of this chapter, the officedepartmentshall register
19311	the applicant.
19312	(f) A Canadian dealer registered under this section shall:
19313	1. Maintain its provincial or territorial registration and
19314	its membership in a self-regulatory organization or stock
19315	exchange in good standing.
19316	2. Provide the officedepartmentupon request with its
19317	books and records relating to its business in this state as a
19318	dealer.
19319	3. Provide the officedepartmentnotice of each civil,
19320	criminal, or administrative action initiated against the dealer.
19321	4. Disclose to its clients in this state that the dealer
19322	and its agents are not subject to the full regulatory
19323	requirements under this chapter.
19324	5. Correct any inaccurate information within 30 days, if
19325	the information contained in the application form becomes
19326	inaccurate for any reason before or after the dealer becomes
19327	registered.
19328	(g) An associated person of a Canadian dealer registered
19329	under this section shall:
19330	1. Maintain provincial or territorial registration in good
19331	standing.
19332	2. Provide the officedepartmentwith notice of each
19333	civil, criminal, or administrative action initiated against such
19334	person.
19335	3. Through the dealer, correct any inaccurate information
19336	within 30 days, if the information contained in the application
19337	form becomes inaccurate for any reason before or after the
19338	associated person becomes registered.
19339	(h) Renewal applications for Canadian dealers and
19340	associated persons under this section must be filed before
19341	December 31 each year. Every applicant for registration or
19342	renewal registration under this section shall pay the fee for
19343	dealers and associated persons under this chapter.
19344	(18) Every dealer or associated person registered or
19345	required to be registered with the officedepartmentshall
19346	satisfy any continuing education requirements established by
19347	rule pursuant to law.
19348	(19) The registration requirements of this section which
19349	apply to investment advisers and associated persons do not apply
19350	to a commodity trading adviser who:
19351	(a) Is registered as such with the Commodity Futures
19352	Trading Commission pursuant to the Commodity Exchange Act.
19353	(b) Advises or exercises trading discretion, with respect
19354	to foreign currency options listed and traded exclusively on the
19355	Philadelphia Stock Exchange, on behalf of an "appropriate
19356	person" as defined by the Commodity Exchange Act.
19357
19358
19359	The exemption provided in this subsection does not apply to a
19360	commodity trading adviser who engages in other activities that
19361	require registration under this chapter.
19362	(20) The registration requirements of this section do not
19363	apply to any general lines insurance agent or life insurance
19364	agent licensed under chapter 626individuals licensed under s.
19365	626.041 or its successor statute, or s. 626.051 or its successor
19366	statute, for the sale of a security as defined in s.
19367	517.021(20)(19)(g), if the individual is directly authorized by
19368	the issuer to offer or sell the security on behalf of the issuer
19369	and the issuer is a federally chartered savings bank subject to
19370	regulation by the Federal Deposit Insurance Corporation. Actions
19371	under this subsection shall constitute activity under the
19372	insurance agent's license for purposes of ss. 626.611 and
19373	626.621.
19374	Section 361. Section 517.1201, Florida Statutes, is
19375	amended to read:
19376	517.1201 Notice filing requirements for federal covered
19377	advisers.--
19378	(1) It is unlawful for a person to transact business in
19379	this state as a federal covered adviser unless such person has
19380	made a notice filing with the officedepartment. A notice
19381	filing under this section shall consist of a copy of those
19382	documents that have been filed or are required to be filed by
19383	the federal covered adviser with the Securities and Exchange
19384	Commission that the Financial Services Commissiondepartmentby
19385	rule requires to be filed, together with a consent to service of
19386	process and a filing fee of $200. The commissiondepartmentmay
19387	establish by rule procedures for the deposit of fees and the
19388	filing of documents to be made through electronic means, if the
19389	procedures provide to the officedepartmentthe information and
19390	data required by this section.
19391	(2) A notice filing shall be effective upon receipt. A
19392	notice filing shall expire on December 31 of the year in which
19393	the filing became effective unless the federal covered adviser
19394	has renewed the filing on or before that date. A federal covered
19395	adviser may renew a notice filing by furnishing to the office
19396	departmentsuch information that has been filed or is required
19397	to be filed with the Securities and Exchange Commission, as the
19398	Financial Services Commission or officedepartmentmay require,
19399	together with a renewal fee of $200 and the payment of any
19400	amount due and owing the officedepartmentpursuant to any
19401	agreement with the officedepartment. Any federal covered
19402	adviser who has not renewed a notice filing by the time a
19403	current notice filing expires may request reinstatement of such
19404	notice filing by filing with the officedepartment, on or before
19405	January 31 of the year following the year the notice filing
19406	expires, such information that has been filed or is required to
19407	be filed with the Securities and Exchange Commission as may be
19408	required by the Financial Services Commission or office
19409	department, together with the payment of $200 and a late fee
19410	equal to $200. Any reinstatement of a notice filing granted by
19411	the officedepartmentduring the month of January shall be
19412	deemed effective retroactive to January 1 of that year.
19413	(3) The commissiondepartmentmay require, by rule, a
19414	federal covered adviser who has made a notice filing pursuant to
19415	this section to file with the officedepartmentcopies of any
19416	amendments filed or required to be filed with the Securities and
19417	Exchange Commission.
19418	(4) The officedepartmentmay issue a permit to evidence
19419	the effectiveness of a notice filing for a federal covered
19420	adviser.
19421	(5) A notice filing may be terminated by filing notice of
19422	such termination with the officedepartment. Unless another
19423	date is specified by the federal covered adviser, such notice
19424	shall be effective upon its receipt by the officedepartment.
19425	(6) All fees collected under this section become the
19426	revenue of the state, except for those assessments provided for
19427	under s. 517.131(1) until such time as the Securities Guaranty
19428	Fund satisfies the statutory limits, and are not returnable in
19429	the event that a notice filing is withdrawn.
19430	Section 362. Section 517.1203, Florida Statutes, is
19431	amended to read:
19432	517.1203 Allocation and disbursement of assessment fees.--
19433	(1) Notwithstanding s. 517.131(1), an additional amount
19434	equal to 25 percent of all revenues received as assessment fees
19435	pursuant to s. 517.12(10) and (11) from persons applying for or
19436	renewing registrations as associated persons shall be allocated
19437	to the Securities Guaranty Fund and disbursed as provided in
19438	this section. This allocation shall continue until the office
19439	departmentdetermines, by final order, that sufficient funds
19440	have been allocated to the Securities Guaranty Fund pursuant to
19441	this section to satisfy all valid claims filed in accordance
19442	with subsection (2) and until all amounts payable under any
19443	service contract entered into by the officedepartmentpursuant
19444	to s. 517.1204, and all notes, bonds, certificates of
19445	indebtedness, other obligations, or evidences of indebtedness
19446	secured by such notes, bonds, certificates of indebtedness, or
19447	other obligations, have been paid or provision has been made for
19448	the payment of such amounts, notes, bonds, certificates of
19449	indebtedness, other obligations, or evidences of indebtedness.
19450	This assessment fee shall be part of the regular license fee and
19451	shall be transferred to or deposited into the Securities
19452	Guaranty Fund. The moneys allocated to the Securities Guaranty
19453	Fund under this section shall not be included in the calculation
19454	of the allocation of the assessment fees referred to in s.
19455	517.131(1)(b). Moneys allocated under this section in excess of
19456	the valid claims filed pursuant to subsection (2) shall be
19457	allocated to the Anti-Fraud Trust Fund.
19458	(2)(a) Notwithstanding the provisions of ss. 517.131 and
19459	517.141, moneys allocated to the Securities Guaranty Fund under
19460	this section shall be used to pay amounts payable under any
19461	service contract entered into by the officedepartmentpursuant
19462	to s. 517.1204, subject to annual appropriation by the
19463	Legislature, and to pay investors who have filed claims with the
19464	Department of Banking and Finance after October 1, 1996, and on
19465	or before December 31, 1998, who have:
19466	1. Received a final judgment against an associated person
19467	of GIC Government Securities, Inc., based upon allegations which
19468	would amount to a violation of s. 517.07 or s. 517.301; or
19469	2. Demonstrated to the former Department of Banking and
19470	Finance or officethat the claimant has suffered monetary
19471	damages as a result of the acts or actions of GIC Government
19472	Securities, Inc., or any associated person thereof, based upon
19473	allegations which would amount to a violation of s. 517.07 or s.
19474	517.301.
19475	(b)1. Claims shall be paid in the order that they were
19476	have been filed with the former Department of Banking and
19477	Finance, unless the department hasnoticed its intent to deny
19478	the claim in whole or in part. If a notice of intent to deny a
19479	claim in whole or in part wasisissued, the claim shall not be
19480	paid until a final order has been entered which is not subject
19481	to an order staying its effect.
19482	2. If at any time the money in the Securities Guaranty
19483	Fund allocated under this section is insufficient to satisfy any
19484	valid claim or portion of a valid claim approved by the
19485	department or office under this section, the officedepartment
19486	shall prorate the payment based upon the ratio that the person's
19487	claim bears to the total approved claims filed on the same day.
19488	The officedepartmentshall satisfy the unpaid claims as soon as
19489	a sufficient amount of money has been deposited in or
19490	transferred to the fund as provided in this section.
19491	3. A claimant shall not be substantially affected by the
19492	payment of another person's claim.
19493	(c) Claims shall be limited to the amount of the
19494	investment, reduced by any amounts received from a bankruptcy
19495	proceeding or from any other source. If an investor is deceased,
19496	the award shall be made to the surviving spouse. If the investor
19497	and surviving spouse are both deceased, the award shall be made
19498	pursuant to the laws of descent and distribution. Neither the
19499	officedepartmentnor the Investment Fraud Restoration Financing
19500	Corporation shall make payment to assignees, secured parties,
19501	lien creditors, or other such entities.
19502	(3) In rendering a determination, the officedepartment
19503	may rely on records from the bankruptcy proceeding regarding GIC
19504	Government Securities, Inc., unless there is good cause to
19505	believe that the record is not genuine.
19506	(4) Amounts deposited into the Securities Guaranty Fund
19507	pursuant to this section shall be applied to or allocated for
19508	payment of amounts payable by the officedepartmentpursuant to
19509	paragraph (2)(a), under a service contract entered into by the
19510	officedepartmentpursuant to s. 517.1204, subject to annual
19511	appropriation by the Legislature, before making or providing for
19512	any other disbursements from the fund.
19513	Section 363. Subsection (2), paragraph (e) of subsection
19514	(3), and subsections (4), (5), and(6) of section 517.1204,
19515	Florida Statutes, are amended to read:
19516	517.1204 Investment Fraud Restoration Financing
19517	Corporation.--
19518	(2) The corporation shall be governed by a board of
19519	directors consisting of the director of the office or his or her
19520	designeeassistant comptroller, the Secretary of Elderly Affairs
19521	or the secretary's designee, and the executive director of the
19522	Department of Veterans' Affairs or the executive director's
19523	designee. The executive director of the State Board of
19524	Administration shall be the chief executive officer of the
19525	corporation and shall direct and supervise the administrative
19526	affairs of the corporation and shall control, direct, and
19527	supervise the operation of the corporation. The corporation
19528	shall also have such other officers as may be determined by the
19529	board of directors.
19530	(3) The corporation shall have all the powers of a
19531	corporate body under the laws of this state to the extent not
19532	inconsistent with or restricted by the provisions of this
19533	section, including, but not limited to, the power to:
19534	(e) Elect or appoint and employ such officers, agents, and
19535	employees as the corporation deems advisable to operate and
19536	manage the affairs of the corporation, which officers, agents,
19537	and employees may be officers or employees of the office
19538	departmentand the state agencies represented on the board of
19539	directors of the corporation.
19540	(4) The corporation is authorized to enter into one or
19541	more service contracts with the officedepartmentpursuant to
19542	which the corporation shall provide services to the office
19543	departmentin connection with financing the functions and
19544	activities provided for in s. 517.1203. The officedepartment
19545	may enter into one or more such service contracts with the
19546	corporation and provide for payments under such contracts
19547	pursuant to s. 517.1203(2)(a), subject to annual appropriation
19548	by the Legislature. The proceeds from such service contracts
19549	may be used for the costs and expenses of administration of the
19550	corporation after payments as set forth in subsection(5). Each
19551	service contract shall have a term not to exceed 15 years and
19552	shall terminate no later than July 1, 2021. The aggregate
19553	amount payable from the Securities Guaranty Fund under all such
19554	service contracts shall not exceed the amount provided by s.
19555	517.1203(1). In compliance with provisions of s. 287.0641 and
19556	other applicable provisions of law, the obligations of the
19557	officedepartmentunder such service contracts shall not
19558	constitute a general obligation of the state or a pledge of the
19559	faith and credit or taxing power of the state nor shall such
19560	obligations be construed in any manner as an obligation of the
19561	State Board of Administration or entities for which it invests
19562	funds, other than the officedepartmentas provided in this
19563	section, but shall be payable solely from amounts available in
19564	the Securities Guaranty Fund, subject to annual appropriation.
19565	In compliance with this subsection and s. 287.0582, such service
19566	contracts shall expressly include the following statement: "The
19567	State of Florida's performance and obligation to pay under this
19568	contract is contingent upon an annual appropriation by the
19569	Legislature."
19570	(5) The corporation may issue and incur notes, bonds,
19571	certificates of indebtedness, or other obligations or evidences
19572	of indebtedness payable from and secured by amounts payable to
19573	the corporation by the officedepartmentunder a service
19574	contract entered into pursuant to subsection (4) for the purpose
19575	of the simultaneous payment of all claims approved pursuant to
19576	s. 517.1203. The term of any such note, bond, certificate of
19577	indebtedness, or other obligation or evidence of indebtedness
19578	shall not exceed 15 years. The corporation may select a
19579	financing team and issue obligations through competitive bidding
19580	or negotiated contracts, whichever is most cost-effective. Any
19581	such indebtedness of the corporation shall not constitute a debt
19582	or obligation of the state or a pledge of the faith and credit
19583	or taxing power of the state, but shall be payable from and
19584	secured by payments made by the officedepartmentunder the
19585	service contract pursuant to subsection (4).
19586	(6) The corporation shall pay all claims approved pursuant
19587	to s. 517.1203 as determined by and at the direction of the
19588	officedepartment.
19589	Section 364. Section 517.121, Florida Statutes, is amended
19590	to read:
19591	517.121 Books and records requirements; examinations.--
19592	(1) A dealer, investment adviser, branch office, or
19593	associated person shall maintain such books and records as the
19594	commissiondepartmentmay prescribe by rule.
19595	(2) The officedepartmentshall, at intermittent periods,
19596	examine the affairs and books and records of each registered
19597	dealer, investment adviser, branch office, or associated person,
19598	or require such records and reports to be submitted to it as
19599	requiredit may require by rule of the commission, to determine
19600	compliance with this act.
19601	Section 365. Paragraph (a) of subsection (1), paragraphs
19602	(b) and (e) of subsection (3), and subsection (4) of section
19603	517.131, Florida Statutes, are amended to read:
19604	517.131 Securities Guaranty Fund.--
19605	(1)(a) The Chief Financial OfficerTreasurershall
19606	establish a Securities Guaranty Fund. An amount not exceeding
19607	20 percent of all revenues received as assessment fees pursuant
19608	to s. 517.12(10) and (11) for dealers and investment advisers or
19609	s. 517.1201 for federal covered advisers and an amount not
19610	exceeding 10 percent of all revenues received as assessment fees
19611	pursuant to s. 517.12(10) and (11) for associated persons shall
19612	be allocated to the fund. An additional amount not exceeding
19613	3.5 percent of all revenues received as assessment fees for
19614	associated persons pursuant to s. 517.12(10) and (11) shall be
19615	allocated to the Securities Guaranty Fund but only after the
19616	officedepartmentdetermines, by final order, that sufficient
19617	funds have been allocated to the fund pursuant to s. 517.1203 to
19618	satisfy all valid claims filed in accordance with s. 517.1203(2)
19619	and after all amounts payable under any service contract entered
19620	into by the officedepartmentpursuant to s. 517.1204, and all
19621	notes, bonds, certificates of indebtedness, other obligations,
19622	or evidences of indebtedness secured by such notes, bonds,
19623	certificates of indebtedness, or other obligations, have been
19624	paid or provision has been made for the payment of such amounts,
19625	notes, bonds, certificates of indebtedness, other obligations,
19626	or evidences of indebtedness. This assessment fee shall be part
19627	of the regular license fee and shall be transferred to or
19628	deposited in the Securities Guaranty Fund.
19629	(3) Any person is eligible to seek recovery from the
19630	Securities Guaranty Fund if:
19631	(b) Such person has made all reasonable searches and
19632	inquiries to ascertain whether the judgment debtor possesses
19633	real or personal property or other assets subject to being sold
19634	or applied in satisfaction of the judgment, and by her or his
19635	search the person has discovered no property or assets; or she
19636	or he has discovered property and assets and has taken all
19637	necessary action and proceedings for the application thereof to
19638	the judgment, but the amount thereby realized was insufficient
19639	to satisfy the judgment. To verify compliance with such
19640	condition, the officedepartmentmay require such person to have
19641	a writ of execution be issued upon such judgment and may further
19642	require a showing that no personal or real property of the
19643	judgment debtor liable to be levied upon in complete
19644	satisfaction of the judgment can be found.
19645	(e) The officedepartmentwaives compliance with the
19646	requirements of paragraph (a) or paragraph (b). The office
19647	departmentmay waive such compliance if the dealer, investment
19648	adviser, or associated person which is the subject of the claim
19649	filed with the officedepartmentis the subject of any
19650	proceeding in which a receiver has been appointed by a court of
19651	competent jurisdiction. If the officedepartmentwaives such
19652	compliance, the officedepartmentmay, upon petition by the
19653	debtor or the court-appointed trustee, examiner, or receiver,
19654	distribute funds from the Securities Guaranty Fund up to the
19655	amount allowed under s. 517.141. Any waiver granted pursuant to
19656	this section shall be considered a judgment for purposes of
19657	complying with the requirements of this section and of s.
19658	517.141.
19659	(4) Any person who files an action that may result in the
19660	disbursement of funds from the Securities Guaranty Fund pursuant
19661	to the provisions of s. 517.141 shall give written notice by
19662	certified mail to the officedepartmentas soon as practicable
19663	after such action has been filed. The failure to give such
19664	notice shall not bar a payment from the Securities Guaranty Fund
19665	if all of the conditions specified in subsection (3) are
19666	satisfied.
19667	Section 366. Section 517.141, Florida Statutes, is amended
19668	to read:
19669	517.141 Payment from the fund.--
19670	(1) Any person who meets all of the conditions prescribed
19671	in s. 517.131 may apply to the officedepartmentfor payment to
19672	be made to such person from the Securities Guaranty Fund in the
19673	amount equal to the unsatisfied portion of such person's
19674	judgment or $10,000, whichever is less, but only to the extent
19675	and amount reflected in the judgment as being actual or
19676	compensatory damages, excluding costs and attorney's fees.
19677	(2) Regardless of the number of claimants involved,
19678	payments for claims shall be limited in the aggregate to
19679	$100,000 against any one dealer, investment adviser, or
19680	associated person. If the total claims exceed the aggregate
19681	limit of $100,000, the officedepartmentshall prorate the
19682	payment based upon the ratio that the person's claim bears to
19683	the total claims filed.
19684	(3) No payment shall be made on any claim against any one
19685	dealer, investment adviser, or associated person before the
19686	expiration of 2 years from the date any claimant is found by the
19687	officedepartmentto be eligible for recovery pursuant to this
19688	section. If during this 2-year period more than one claim is
19689	filed against the same dealer, investment adviser, or associated
19690	person, or if the officedepartmentreceives notice pursuant to
19691	s. 517.131(4) that an action against the same dealer, investment
19692	adviser, or associated person is pending, all such claims and
19693	notices of pending claims received during this period against
19694	the same dealer, investment adviser, or associated person may be
19695	handled by the officedepartmentas provided in this section.
19696	Two years after the first claimant against that same dealer,
19697	investment adviser, or associated person applies for payment
19698	pursuant to this section:
19699	(a) The officedepartmentshall determine those persons
19700	eligible for payment or for potential payment in the event of a
19701	pending action. All such persons may be entitled to receive
19702	their pro rata shares of the fund as provided in this section.
19703	(b) Those persons who meet all the conditions prescribed
19704	in s. 517.131 and who have applied for payment pursuant to this
19705	section will be entitled to receive their pro rata shares of the
19706	total disbursement.
19707	(c) Those persons who have filed notice with the office
19708	departmentof a pending claim pursuant to s. 517.131(4) but who
19709	are not yet eligible for payment from the fund will be entitled
19710	to receive their pro rata shares of the total disbursement once
19711	they have complied with subsection (1). However, in the event
19712	that the amounts they are eligible to receive pursuant to
19713	subsection (1) are less than their pro rata shares as determined
19714	under this section, any excess shall be distributed pro rata to
19715	those persons entitled to disbursement under this subsection
19716	whose pro rata shares of the total disbursement were less than
19717	the amounts of their claims.
19718	(4) Individual claims filed by persons owning the same
19719	joint account, or claims stemming from any other type of account
19720	maintained by a particular licensee on which more than one name
19721	appears, shall be treated as the claims of one eligible claimant
19722	with respect to payment from the fund. If a claimant who has
19723	obtained a judgment which qualifies for disbursement under s.
19724	517.131 has maintained more than one account with the dealer,
19725	investment adviser, or associated person who is the subject of
19726	the claims, for purposes of disbursement of the fund, all such
19727	accounts, whether joint or individual, shall be considered as
19728	one account and shall entitle such claimant to only one
19729	distribution from the fund not to exceed the lesser of $10,000
19730	or the unsatisfied portion of such claimant's judgment as
19731	provided in subsection (1). To the extent that a claimant
19732	obtains more than one judgment against a dealer, investment
19733	adviser, or one or more associated persons arising out of the
19734	same transactions, occurrences, or conduct or out of the
19735	dealer's, investment adviser's, or associated person's handling
19736	of the claimant's account, such judgments shall be consolidated
19737	for purposes of this section and shall entitle the claimant to
19738	only one disbursement from the fund not to exceed the lesser of
19739	$10,000 or the unsatisfied portion of such claimant's judgment
19740	as provided in subsection (1).
19741	(5) If the final judgment which gave rise to the claim is
19742	overturned in any appeal or in any collateral proceeding, the
19743	claimant shall reimburse the fund all amounts paid to the
19744	claimant on the claim. Such reimbursement shall be paid to the
19745	officedepartmentwithin 60 days after the final resolution of
19746	the appellate or collateral proceedings, with the 60-day period
19747	commencing on the date the final order or decision is entered in
19748	such proceedings.
19749	(6) If a claimant receives payments in excess of that
19750	which is permitted under this chapter, the claimant shall
19751	reimburse the fund such excess within 60 days after the claimant
19752	receives such excess payment or after the payment is determined
19753	to be in excess of that permitted by law, whichever is later.
19754	(7) The officedepartmentmay institute legal proceedings
19755	to enforce compliance with this section and with s. 517.131 to
19756	recover moneys owed to the fund, and shall be entitled to
19757	recover interest, costs, and attorney's fees in any action
19758	brought pursuant to this section in which the officedepartment
19759	prevails.
19760	(8) If at any time the money in the Securities Guaranty
19761	Fund is insufficient to satisfy any valid claim or portion of a
19762	valid claim approved by the officedepartment, the office
19763	departmentshall satisfy such unpaid claim or portion of such
19764	valid claim as soon as a sufficient amount of money has been
19765	deposited in or transferred to the fund. When there is more
19766	than one unsatisfied claim outstanding, such claims shall be
19767	paid in the order in which the claims were approved by final
19768	order of the officedepartment, which order is not subject to an
19769	appeal or other pending proceeding.
19770	(9) Upon receipt by the claimant of the payment from the
19771	Securities Guaranty Fund, the claimant shall assign any
19772	additional right, title, and interest in the judgment, to the
19773	extent of such payment, to the officedepartment. If the
19774	provisions of s. 517.131(3)(e) apply, the claimant must assign
19775	to the officedepartmentany right, title, and interest in the
19776	debt to the extent of any payment by the officedepartmentfrom
19777	the Securities Guaranty Fund.
19778	(10) All payments and disbursements made from the
19779	Securities Guaranty Fund shall be made by the Chief Financial
19780	OfficerTreasurer upon authorizationa voucher signed by the
19781	director of the officeComptroller, as head of the department,
19782	or such agent as she or he may designate.
19783	Section 367. Section 517.151, Florida Statutes, is amended
19784	to read:
19785	517.151 Investments of the fund.--The funds of the
19786	Securities Guaranty Fund shall be invested by the Chief
19787	Financial OfficerTreasurerunder the same limitations as other
19788	state funds, and the interest earned thereon shall be deposited
19789	to the credit of the fund and available for the same purpose as
19790	other moneys deposited in the Securities Guaranty Fund.
19791	Section 368. Subsection (1), (3), and (5), and paragraph
19792	(b) of subsection (6) of section 517.161, Florida Statutes, are
19793	amended to read:
19794	517.161 Revocation, denial, or suspension of registration
19795	of dealer, investment adviser, associated person, or branch
19796	office.--
19797	(1) Registration under s. 517.12 may be denied or any
19798	registration granted may be revoked, restricted, or suspended by
19799	the officedepartment if the officedepartmentdetermines that
19800	such applicant or registrant:
19801	(a) Has violated any provision of this chapter or any rule
19802	or order made under this chapter;
19803	(b) Has made a material false statement in the application
19804	for registration;
19805	(c) Has been guilty of a fraudulent act in connection with
19806	rendering investment advice or in connection with any sale of
19807	securities, has been or is engaged or is about to engage in
19808	making fictitious or pretended sales or purchases of any such
19809	securities or in any practice involving the rendering of
19810	investment advice or the sale of securities which is fraudulent
19811	or in violation of the law;
19812	(d) Has made a misrepresentation or false statement to, or
19813	concealed any essential or material fact from, any person in the
19814	rendering of investment advice or the sale of a security to such
19815	person;
19816	(e) Has failed to account to persons interested for all
19817	money and property received;
19818	(f) Has not delivered, after a reasonable time, to persons
19819	entitled thereto securities held or agreed to be delivered by
19820	the dealer, broker, or investment adviser, as and when paid for,
19821	and due to be delivered;
19822	(g) Is rendering investment advice or selling or offering
19823	for sale securities through any associated person not registered
19824	in compliance with the provisions of this chapter;
19825	(h) Has demonstrated unworthiness to transact the business
19826	of dealer, investment adviser, or associated person;
19827	(i) Has exercised management or policy control over or
19828	owned 10 percent or more of the securities of any dealer or
19829	investment adviser that has been declared bankrupt, or had a
19830	trustee appointed under the Securities Investor Protection Act;
19831	or is, in the case of a dealer or investment adviser, insolvent;
19832	(j) Has been convicted of, or has entered a plea of guilty
19833	or nolo contendere to, a crime against the laws of this state or
19834	any other state or of the United States or of any other country
19835	or government which relates to registration as a dealer,
19836	investment adviser, issuer of securities, associated person, or
19837	branch office; which relates to the application for such
19838	registration; or which involves moral turpitude or fraudulent or
19839	dishonest dealing;
19840	(k) Has had a final judgment entered against her or him in
19841	a civil action upon grounds of fraud, embezzlement,
19842	misrepresentation, or deceit;
19843	(l) Is of bad business repute; or
19844	(m) Has been the subject of any decision, finding,
19845	injunction, suspension, prohibition, revocation, denial,
19846	judgment, or administrative order by any court of competent
19847	jurisdiction, administrative law judge, or by any state or
19848	federal agency, national securities, commodities, or option
19849	exchange, or national securities, commodities, or option
19850	association, involving a violation of any federal or state
19851	securities or commodities law or any rule or regulation
19852	promulgated thereunder, or any rule or regulation of any
19853	national securities, commodities, or options exchange or
19854	national securities, commodities, or options association, or has
19855	been the subject of any injunction or adverse administrative
19856	order by a state or federal agency regulating banking,
19857	insurance, finance or small loan companies, real estate,
19858	mortgage brokers, or other related or similar industries. For
19859	purposes of this subsection, the officedepartmentmay not deny
19860	registration to any applicant who has been continuously
19861	registered with the officedepartmentfor 5 years from the entry
19862	of such decision, finding, injunction, suspension, prohibition,
19863	revocation, denial, judgment, or administrative order provided
19864	such decision, finding, injunction, suspension, prohibition,
19865	revocation, denial, judgment, or administrative order has been
19866	timely reported to the officedepartment pursuant to the
19867	commission'sdepartment's rules and regulations.
19868	(3) In the event the officedepartmentdetermines to deny
19869	an application or revoke a registration, it shall enter a final
19870	order with its findings on the register of dealers and
19871	associated persons; and denial, suspension, or revocation of the
19872	registration of a dealer or investment adviser shall also deny,
19873	suspend, or revoke the registration of all her or his associated
19874	persons.
19875	(5) The officedepartmentmay deny any request to
19876	terminate or withdraw any application or registration if the
19877	officedepartmentbelieves that an act which would be a ground
19878	for denial, suspension, restriction, or revocation under this
19879	chapter has been committed.
19880	(6) Registration under s. 517.12 may be denied or any
19881	registration granted may be suspended or restricted if an
19882	applicant or registrant is charged, in a pending enforcement
19883	action or pending criminal prosecution, with any conduct that
19884	would authorize denial or revocation under subsection (1).
19885	(b) Any order of suspension or restriction under this
19886	subsection shall:
19887	1. Take effect only after a hearing, unless no hearing is
19888	requested by the registrant or unless the suspension or
19889	restriction is made in accordance with s. 120.60(6).
19890	2. Contain a finding that evidence of a prima facie case
19891	supports the charge made in the enforcement action or criminal
19892	prosecution.
19893	3. Operate for no longer than 10 days beyond receipt of
19894	notice by the officedepartmentof termination with respect to
19895	the registrant of the enforcement action or criminal
19896	prosecution.
19897	Section 369. Section 517.181, Florida Statutes, is amended
19898	to read:
19899	517.181 Escrow agreement.--
19900	(1) If the statement containing information as to
19901	securities to be registered, as provided for in s. 517.081,
19902	shall disclose that any such securities or any securities senior
19903	thereto shall have been or shall be intended to be issued for
19904	any patent right, copyright, trademark, process, formula, or
19905	goodwill; for organization or promotion fees or expenses; or for
19906	goodwill or going-concern value or other intangible assets, then
19907	the amount and nature thereof shall be fully set forth, and the
19908	officedepartmentmay require that such securities so issued in
19909	payment of such patent right, copyright, trademark, process,
19910	formula, or goodwill; for organization or promotion fees or
19911	expenses; or for other intangible assets shall be delivered in
19912	escrow to the officedepartmentor other depository satisfactory
19913	to the officedepartmentunder an escrow agreement. The escrow
19914	agreement shall be in a form suitable to the officedepartment
19915	and shall provide for the escrow or impoundment of such
19916	securities for a reasonable length of time determined by the
19917	officedepartmentto be in the best interest of other
19918	shareholders. The securities subject to escrow shall also
19919	include any dividend, cash, or stock that may be paid during the
19920	life of the escrow and any stock issued through, or by reason
19921	of, any stock split, exchange of shares, recapitalization,
19922	merger, consolidation, reorganization, or similar combination or
19923	subdivision in substitution for or in lieu of any stock subject
19924	to this provision; and in case of dissolution or insolvency
19925	during the time such securities are held in escrow, the owners
19926	of such securities shall not participate in the assets until
19927	after the owners of all other securities shall have been paid in
19928	full.
19929	(2) Any securities held in escrow under this section on
19930	November 1, 1978, may be released to the owners thereof upon
19931	request, if satisfactory financial data is submitted to the
19932	officedepartmentshowing that the issuer is currently operating
19933	on sound business principles and has net income in accordance
19934	with criteria-implementing rules of the commissiondepartment
19935	relating to escrow of securities. At any time, the office
19936	departmentmay review any existing escrow agreement made under
19937	this section and determine that the same may be amended in order
19938	to permit a subsequent release of the securities upon terms and
19939	conditions which are just and equitable as defined by said
19940	rules.
19941	(3) When it shall appear from information available to the
19942	officedepartmentthat the issuer of securities held in escrow
19943	has been dissolved or disbanded or is defunct or no longer
19944	actively engaged in business and such securities are of no
19945	value, the officedepartment, after giving at least 60 days'
19946	notice in at least one newspaper of general circulation and
19947	after giving interested parties opportunity for hearing, may
19948	enter its order authorizing the destruction of said securities.
19949	Any affected escrow agent may rely on such order and shall not
19950	be required to determine the validity or sufficiency thereof.
19951	Section 370. Section 517.191, Florida Statutes, is amended
19952	to read:
19953	517.191 Injunction to restrain violations.--
19954	(1) When it appearsshall appear to the officedepartment,
19955	either upon complaint or otherwise, that a person has engaged or
19956	is about to engage in any act or practice constituting a
19957	violation of this chapter or a rule or order hereunder, the
19958	officedepartmentmay investigate; and whenever it shall believe
19959	from evidence satisfactory to it that any such person has
19960	engaged, is engaged, or is about to engage in any act or
19961	practice constituting a violation of this chapter or a rule or
19962	order hereunder, the officedepartmentmay, in addition to any
19963	other remedies, bring action in the name and on behalf of the
19964	state against such person and any other person concerned in or
19965	in any way participating in or about to participate in such
19966	practices or engaging therein or doing any act or acts in
19967	furtherance thereof or in violation of this chapter to enjoin
19968	such person or persons from continuing such fraudulent practices
19969	or engaging therein or doing any act or acts in furtherance
19970	thereof or in violation of this chapter. In any such court
19971	proceedings, the officedepartmentmay apply for, and on due
19972	showing be entitled to have issued, the court's subpoena
19973	requiring forthwith the appearance of any defendant and her or
19974	his employees, associated persons, or agents and the production
19975	of documents, books, and records that may appear necessary for
19976	the hearing of such petition, to testify or give evidence
19977	concerning the acts or conduct or things complained of in such
19978	application for injunction. In such action, the equity courts
19979	shall have jurisdiction of the subject matter, and a judgment
19980	may be entered awarding such injunction as may be proper.
19981	(2) In addition to all other means provided by law for the
19982	enforcement of any temporary restraining order, temporary
19983	injunction, or permanent injunction issued in any such court
19984	proceedings, the court shall have the power and jurisdiction,
19985	upon application of the officedepartment, to impound and to
19986	appoint a receiver or administrator for the property, assets,
19987	and business of the defendant, including, but not limited to,
19988	the books, records, documents, and papers appertaining thereto.
19989	Such receiver or administrator, when appointed and qualified,
19990	shall have all powers and duties as to custody, collection,
19991	administration, winding up, and liquidation of said property and
19992	business as shall from time to time be conferred upon her or him
19993	by the court. In any such action, the court may issue orders
19994	and decrees staying all pending suits and enjoining any further
19995	suits affecting the receiver's or administrator's custody or
19996	possession of the said property, assets, and business or, in its
19997	discretion, may with the consent of the presiding judge of the
19998	circuit require that all such suits be assigned to the circuit
19999	court judge appointing the said receiver or administrator.
20000	(3) In addition to any other remedies provided by this
20001	chapter, the officedepartmentmay apply to the court hearing
20002	this matter for an order of restitution whereby the defendants
20003	in such action shall be ordered to make restitution of those
20004	sums shown by the officedepartmentto have been obtained by
20005	them in violation of any of the provisions of this chapter.
20006	Such restitution shall, at the option of the court, be payable
20007	to the administrator or receiver appointed pursuant to this
20008	section or directly to the persons whose assets were obtained in
20009	violation of this chapter.
20010	Section 371. Section 517.201, Florida Statutes, is amended
20011	to read:
20012	517.201 Investigations; examinations; subpoenas; hearings;
20013	witnesses.--
20014	(1) The officedepartment:
20015	(a) May make investigations and examinations within or
20016	outside of this state as it deems necessary:
20017	1. To determine whether a person has violated or is about
20018	to violate any provision of this chapter or a rule or order
20019	hereunder; or
20020	2. To aid in the enforcement of this chapter.
20021	(b) May require or permit a person to file a statement in
20022	writing, under oath or otherwise as the officedepartment
20023	determines, as to all the facts and circumstances concerning the
20024	matter to be investigated.
20025	(2) When it is proposed to conduct an investigation or
20026	examination, the officedepartmentmay gather evidence in the
20027	matter. The officedepartmentmay administer oaths, examine
20028	witnesses, and issue subpoenas.
20029	(3) Subpoenas for witnesses whose evidence is deemed
20030	material to any investigation or examination may be issued by
20031	the officedepartment under the seal of the officedepartment,
20032	or by any county court judge or clerk of the circuit court or
20033	county court, commanding such witnesses to be or appear before
20034	the officedepartmentat a time and place to be therein named
20035	and to bring such books, records, and documents as may be
20036	specified or to submit such books, records, and documents to
20037	inspection; and such subpoenas may be served by an authorized
20038	representative of the officedepartment.
20039	(4)(a) In the event of substantial noncompliance with a
20040	subpoena or subpoena duces tecum issued or caused to be issued
20041	by the officedepartment pursuant to this section, the office
20042	departmentmay petition the circuit court of the county in which
20043	the person subpoenaed resides or has its principal place of
20044	business for an order requiring the subpoenaed person to appear
20045	and testify and to produce such books, records, and documents as
20046	are specified in such subpoena duces tecum. The court may grant
20047	injunctive relief restraining the issuance, sale or offer for
20048	sale, purchase or offer to purchase, promotion, negotiation,
20049	advertisement, or distribution in or from offices in this state
20050	of securities or investments by a person or agent, employee,
20051	broker, partner, officer, director, or stockholder thereof, and
20052	may grant such other relief, including, but not limited to, the
20053	restraint, by injunction or appointment of a receiver, of any
20054	transfer, pledge, assignment, or other disposition of such
20055	person's assets or any concealment, alteration, destruction, or
20056	other disposition of subpoenaed books, records, or documents, as
20057	the court deems appropriate, until such person has fully
20058	complied with such subpoena or subpoena duces tecum and the
20059	officedepartmenthas completed its investigation or
20060	examination. The officedepartmentis entitled to the summary
20061	procedure provided in s. 51.011, and the court shall advance the
20062	cause on its calendar. Costs incurred by the officedepartment
20063	to obtain an order granting, in whole or in part, such petition
20064	for enforcement of a subpoena or subpoena duces tecum shall be
20065	taxed against the subpoenaed person, and failure to comply with
20066	such order shall be a contempt of court.
20067	(b) When it shall appear to the officedepartmentthat the
20068	compliance with a subpoena or subpoena duces tecum issued or
20069	caused to be issued by the officedepartmentpursuant to this
20070	section is essential and otherwise unavailable to an
20071	investigation or examination, the officedepartment, in addition
20072	to the other remedies provided for herein, may, by verified
20073	petition setting forth the facts, apply to the circuit court of
20074	the county in which the subpoenaed person resides or has its
20075	principal place of business for a writ of ne exeat. The court
20076	shall thereupon direct the issuance of the writ against the
20077	subpoenaed person requiring sufficient bond conditioned on
20078	compliance with the subpoena or subpoena duces tecum. The court
20079	shall cause to be endorsed on the writ a suitable amount of bond
20080	on payment of which the person named in the writ shall be freed,
20081	having a due regard to the nature of the case.
20082	(5) Witnesses shall be entitled to the same fees and
20083	mileage as they may be entitled by law for attending as
20084	witnesses in the circuit court, except where such examination or
20085	investigation is held at the place of business or residence of
20086	the witness.
20087	Section 372. Subsections (1) and (3) of section 517.2015,
20088	Florida Statutes, are amended to read:
20089	517.2015 Confidentiality of information relating to
20090	investigations and examinations.--
20091	(1)(a) Except as otherwise provided by this section,
20092	information relative to an investigation or examination by the
20093	officedepartmentpursuant to this chapter, including any
20094	consumer complaint, is confidential and exempt from s. 119.07(1)
20095	until the investigation or examination is completed or ceases to
20096	be active. The information compiled by the officedepartmentin
20097	such an investigation or examination shall remain confidential
20098	and exempt from s. 119.07(1) after the office'sdepartment's
20099	investigation or examination is completed or ceases to be active
20100	if the officedepartmentsubmits the information to any law
20101	enforcement or administrative agency or regulatory organization
20102	for further investigation. Such information shall remain
20103	confidential and exempt from s. 119.07(1) until that agency's or
20104	organization's investigation is completed or ceases to be
20105	active. For purposes of this section, an investigation or
20106	examination shall be considered "active" so long as the office
20107	departmentor any law enforcement or administrative agency or
20108	regulatory organization is proceeding with reasonable dispatch
20109	and has a reasonable good faith belief that the investigation or
20110	examination may lead to the filing of an administrative, civil,
20111	or criminal proceeding or to the denial or conditional grant of
20112	a license, registration, or permit. This section shall not be
20113	construed to prohibit disclosure of information which is
20114	required by law to be filed with the officedepartmentand
20115	which, but for the investigation or examination, would be
20116	subject to s. 119.07(1).
20117	(b) Except as necessary for the officedepartmentto
20118	enforce the provisions of this chapter, a consumer complaint and
20119	other information relative to an investigation or examination
20120	shall remain confidential and exempt from s. 119.07(1) after the
20121	investigation or examination is completed or ceases to be active
20122	to the extent disclosure would:
20123	1. Jeopardize the integrity of another active
20124	investigation or examination.
20125	2. Reveal the name, address, telephone number, social
20126	security number, or any other identifying number or information
20127	of any complainant, customer, or account holder.
20128	3. Disclose the identity of a confidential source.
20129	4. Disclose investigative techniques or procedures.
20130	5. Reveal a trade secret as defined in s. 688.002.
20131	(c) In the event that officedepartmentpersonnel are or
20132	have been involved in an investigation or examination of such
20133	nature as to endanger their lives or physical safety or that of
20134	their families, then the home addresses, telephone numbers,
20135	places of employment, and photographs of such personnel,
20136	together with the home addresses, telephone numbers,
20137	photographs, and places of employment of spouses and children of
20138	such personnel and the names and locations of schools and day
20139	care facilities attended by the children of such personnel are
20140	confidential and exempt from s. 119.07(1).
20141	(d) Nothing in this section shall be construed to prohibit
20142	the officedepartmentfrom providing information to any law
20143	enforcement or administrative agency or regulatory organization.
20144	Any law enforcement or administrative agency or regulatory
20145	organization receiving confidential information in connection
20146	with its official duties shall maintain the confidentiality of
20147	the information so long as it would otherwise be confidential.
20148	(e) All information obtained by the officedepartmentfrom
20149	any person which is only made available to the officedepartment
20150	on a confidential or similarly restricted basis shall be
20151	confidential and exempt from s. 119.07(1). This exemption shall
20152	not be construed to prohibit disclosure of information which is
20153	required by law to be filed with the officedepartmentor which
20154	is otherwise subject to s. 119.07(1).
20155	(3) A privilege against civil liability is granted to a
20156	person who furnishes information or evidence to the office
20157	department, unless such person acts in bad faith or with malice
20158	in providing such information or evidence.
20159	Section 373. Section 517.221, Florida Statutes, is amended
20160	to read:
20161	517.221 Cease and desist orders.--
20162	(1) The officedepartmentmay issue and serve upon a
20163	person a cease and desist order whenever the officedepartment
20164	has reason to believe that such person is violating, has
20165	violated, or is about to violate any provision of this chapter,
20166	any rule or order promulgated by the commission or office
20167	department, or any written agreement entered into with the
20168	officedepartment.
20169	(2) Whenever the officedepartmentfinds that conduct
20170	described in subsection (1) presents an immediate danger to the
20171	public requiring an immediate final order, it may issue an
20172	emergency cease and desist order reciting with particularity the
20173	facts underlying such findings. The emergency cease and desist
20174	order is effective immediately upon service of a copy of the
20175	order on the respondent named therein and remains effective for
20176	90 days. If the officedepartmentbegins nonemergency cease and
20177	desist proceedings under subsection (1), the emergency cease and
20178	desist order remains effective until conclusion of the
20179	proceedings under ss. 120.569 and 120.57.
20180	(3) The officedepartmentmay impose and collect an
20181	administrative fine against any person found to have violated
20182	any provision of this chapter, any rule or order promulgated by
20183	the commission or officedepartment, or any written agreement
20184	entered into with the officedepartmentin an amount not to
20185	exceed $5,000 for each such violation. All fines collected
20186	hereunder shall be deposited as received in the Anti-Fraud Trust
20187	Fund.
20188	Section 374. Subsection (1) of section 517.241, Florida
20189	Statutes, is amended to read:
20190	517.241 Remedies.--
20191	(1) Any person aggrieved by a final order of the office
20192	departmentmay have the order reviewed as provided by chapter
20193	120, the Administrative Procedure Act.
20194	Section 375. Paragraph (c) of subsection (1) and paragraph
20195	(b) of subsection (2) of section 517.301, Florida Statutes, are
20196	amended to read:
20197	517.301 Fraudulent transactions; falsification or
20198	concealment of facts.--
20199	(1) It is unlawful and a violation of the provisions of
20200	this chapter for a person:
20201	(c) In any matter within the jurisdiction of the office
20202	department, to knowingly and willfully falsify, conceal, or
20203	cover up, by any trick, scheme, or device, a material fact, make
20204	any false, fictitious, or fraudulent statement or
20205	representation, or make or use any false writing or document,
20206	knowing the same to contain any false, fictitious, or fraudulent
20207	statement or entry.
20208	(2) For purposes of ss. 517.311 and 517.312 and this
20209	section, the term "investment" means any commitment of money or
20210	property principally induced by a representation that an
20211	economic benefit may be derived from such commitment, except
20212	that the term "investment" does not include a commitment of
20213	money or property for:
20214	(b) The purchase of tangible personal property through a
20215	person not engaged in telephone solicitation, where said
20216	property is offered and sold in accordance with the following
20217	conditions:
20218	1. There are no specific representations or guarantees
20219	made by the offeror or seller as to the economic benefit to be
20220	derived from the purchase;
20221	2. The tangible property is delivered to the purchaser
20222	within 30 days after sale, except that such 30-day period may be
20223	extended by the officedepartmentif market conditions so
20224	warrant; and
20225	3. The seller has offered the purchaser a full refund
20226	policy in writing, exercisable by the purchaser within 10 days
20227	of the date of delivery of such tangible personal property,
20228	except that the amount of such refund in no event shall exceed
20229	the bid price in effect at the time the property is returned to
20230	the seller. If the applicable sellers' market is closed at the
20231	time the property is returned to the seller for a refund, the
20232	amount of such refund shall be based on the bid price for such
20233	property at the next opening of such market.
20234	Section 376. Subsection (3) of section 517.302, Florida
20235	Statutes, is amended to read:
20236	517.302 Criminal penalties; alternative fine; Anti-Fraud
20237	Trust Fund; time limitation for criminal prosecution.--
20238	(3) In lieu of a fine otherwise authorized by law, a
20239	person who has been convicted of or who has pleaded guilty or no
20240	contest to having engaged in conduct in violation of the
20241	provisions of this chapter may be sentenced to pay a fine that
20242	does not exceed the greater of three times the gross value
20243	gained or three times the gross loss caused by such conduct,
20244	plus court costs and the costs of investigation and prosecution
20245	reasonably incurred.
20246	(a) There is created within the officedepartmenta trust
20247	fund to be known as the Anti-Fraud Trust Fund. Any amounts
20248	assessed as costs of investigation and prosecution under this
20249	subsection shall be deposited in the trust fund. Funds deposited
20250	in such trust fund shall be used, when authorized by
20251	appropriation, for investigation and prosecution of
20252	administrative, civil, and criminal actions arising under the
20253	provisions of this chapter. Funds may also be used to improve
20254	the public's awareness and understanding of prudent investing.
20255	(b) The officedepartmentshall report to the Executive
20256	Office of the Governor annually by November 15, the amounts
20257	deposited into the Anti-Fraud Trust Fund during the previous
20258	fiscal year. The Executive Office of the Governor shall
20259	distribute these reports to the President of the Senate and the
20260	Speaker of the House of Representatives.
20261	Section 377. Subsections (1) and (2) of section 517.313,
20262	Florida Statutes, are amended to read:
20263	517.313 Destroying certain records; reproduction.--
20264	(1) The commission and office maydepartment is authorized
20265	tophotograph, microphotograph, or reproduce on film or prints
20266	documents, records, data, and information of a permanent
20267	character.
20268	(2) The commission and office maydepartment is authorized
20269	to destroy any of said documents after audit of the officehas
20270	been completed for the period embracing the dates of said
20271	instruments, after complying with the provisions of chapter 119.
20272	Section 378. Section 517.315, Florida Statutes, is amended
20273	to read:
20274	517.315 Fees.--All fees and charges of any nature
20275	collected by the officedepartmentpursuant to this chapter,
20276	except the fees and charges collected pursuant to s. 517.131,
20277	shall be paid into the State Treasury and credited to the
20278	General Revenue Fund; and an appropriation shall be made
20279	annually of necessary funds for the administration of the
20280	provisions of this chapter.
20281	Section 379. Section 517.32, Florida Statutes, is amended
20282	to read:
20283	517.32 Exemption from excise tax, certain obligations to
20284	pay.--There shall be exempt from all excise taxes imposed by
20285	chapter 201 all promissory notes, nonnegotiable notes, and other
20286	written obligations to pay money bearing dates subsequent to
20287	July 1, 1957, when the maker thereof is a security dealer
20288	registered by the officedepartmentunder this chapter and when
20289	such promissory note, nonnegotiable note or notes, or other
20290	written obligation to pay money shall be for the duration of 30
20291	days or less and secured by pledge or deposit, as collateral
20292	security for the payment thereof, security or securities as
20293	defined in s. 517.021, provided all excise taxes imposed by
20294	chapter 201 shall have been paid upon such collateral security.
20295	Section 380. Section 520.996, Florida Statutes, is amended
20296	to read:
20297	520.996 Investigations and complaints.--
20298	(1)(a) The officedepartmentor its agent may, at
20299	intermittent periods, make such investigations and examinations
20300	of any licensee or other person as it deems necessary to
20301	determine compliance with this chapter. For such purposes, it
20302	may examine the books, accounts, records, and other documents or
20303	matters of any licensee or other person. It shall have the power
20304	to compel the production of all relevant books, records, and
20305	other documents and materials relative to an examination or
20306	investigation. Such investigations and examinations shall not
20307	be made more often than once during any 12-month period unless
20308	the officedepartmenthas good and sufficient reason to believe
20309	the licensee is not complying with the provisions of this
20310	chapter. Such examination fee shall be calculated on an hourly
20311	basis and shall be rounded to the nearest hour.
20312	(b) The officedepartmentshall conduct all examinations
20313	at a convenient location in this state unless the office
20314	departmentdetermines that it is more effective or cost-
20315	efficient to perform an examination at the licensee's out-of-
20316	state location. For an examination performed at the licensee's
20317	out-of-state location, the licensee shall pay the travel expense
20318	and per diem subsistence at the rate provided by law for up to
20319	thirty 8-hour days per year for each examiner who participates
20320	in such an examination. However, if the examination involves or
20321	reveals possible fraudulent conduct of the licensee, the
20322	licensee shall pay the travel expenses and per diem subsistence
20323	provided by law, without limitation, for each participating
20324	examiner.
20325	(2) The examination expenses incurred by the office
20326	departmentin each examination shall be paid by the licensee
20327	examined. The expenses of the officedepartmentincurred in
20328	each examination of a home improvement finance seller or of an
20329	employee representing such home improvement finance seller shall
20330	be paid by the home improvement finance seller. Expenses
20331	incurred for each examination of a sales finance company shall
20332	be paid by it. The examination expenses shall be paid by such
20333	licensee examined or such other person obligated to pay such
20334	examination expenses within 30 days after demand therefor by the
20335	officedepartment.
20336	(3) Any retail buyer or owner having reason to believe
20337	that the provisions of this chapter have been violated may file
20338	with the office or the Department of Financial Servicesa
20339	written complaint setting forth the details of such alleged
20340	violations and the officedepartmentupon receipt of such
20341	complaint, may inspect the pertinent books, records, letters,
20342	and contracts of the licensee and of the seller involved,
20343	relating to such specific written complaint.
20344	Section 381. Section 520.9965, Florida Statutes, is
20345	amended to read:
20346	520.9965 Confidentiality of information relating to
20347	investigations and examinations.--
20348	(1)(a) Except as otherwise provided by this section,
20349	information relative to an investigation or examination by the
20350	officedepartmentpursuant to this chapter, including any
20351	consumer complaint received by the office or the Department of
20352	Financial Services, is confidential and exempt from s. 119.07(1)
20353	until the investigation or examination is completed or ceases to
20354	be active. The information compiled by the officedepartmentin
20355	such an investigation or examination shall remain confidential
20356	and exempt from s. 119.07(1) after the office'sdepartment's
20357	investigation or examination is completed or ceases to be active
20358	if the officedepartmentsubmits the information to any law
20359	enforcement or administrative agency for further investigation.
20360	Such information shall remain confidential and exempt from s.
20361	119.07(1) until that agency's investigation is completed or
20362	ceases to be active. For purposes of this section, an
20363	investigation or examination shall be considered "active" so
20364	long as the officedepartmentor any law enforcement or
20365	administrative agency is proceeding with reasonable dispatch and
20366	has a reasonable good faith belief that the investigation or
20367	examination may lead to the filing of an administrative, civil,
20368	or criminal proceeding or to the denial or conditional grant of
20369	a license, registration, or permit. This section shall not be
20370	construed to prohibit disclosure of information which is
20371	required by law to be filed with the officedepartmentand
20372	which, but for the investigation or examination, would be
20373	subject to s. 119.07(1).
20374	(b) Except as necessary for the officedepartmentto
20375	enforce the provisions of this chapter, a consumer complaint and
20376	other information relative to an investigation or examination
20377	shall remain confidential and exempt from s. 119.07(1) after the
20378	investigation or examination is completed or ceases to be active
20379	to the extent disclosure would:
20380	1. Jeopardize the integrity of another active
20381	investigation or examination.
20382	2. Reveal the name, address, telephone number, social
20383	security number, or any other identifying number or information
20384	of any complainant, customer, or account holder.
20385	3. Disclose the identity of a confidential source.
20386	4. Disclose investigative techniques or procedures.
20387	5. Reveal a trade secret as defined in s. 688.002.
20388	(c) In the event that officedepartment personnel or
20389	personnel of the former Department of Banking and Financeare or
20390	have been involved in an investigation or examination of such
20391	nature as to endanger their lives or physical safety or that of
20392	their families, then the home addresses, telephone numbers,
20393	places of employment, and photographs of such personnel,
20394	together with the home addresses, telephone numbers,
20395	photographs, and places of employment of spouses and children of
20396	such personnel and the names and locations of schools and day
20397	care facilities attended by the children of such personnel are
20398	confidential and exempt from s. 119.07(1).
20399	(d) Nothing in this section shall be construed to prohibit
20400	the officedepartmentfrom providing information to any law
20401	enforcement or administrative agency. Any law enforcement or
20402	administrative agency receiving confidential information in
20403	connection with its official duties shall maintain the
20404	confidentiality of the information so long as it would otherwise
20405	be confidential.
20406	(e) All information obtained by the officedepartmentfrom
20407	any person which is only made available to the officedepartment
20408	on a confidential or similarly restricted basis shall be
20409	confidential and exempt from s. 119.07(1). This exemption shall
20410	not be construed to prohibit disclosure of information which is
20411	required by law to be filed with the officedepartmentor which
20412	is otherwise subject to s. 119.07(1).
20413	(2) If information subject to subsection (1) is offered in
20414	evidence in any administrative, civil, or criminal proceeding,
20415	the presiding officer may, in his or her discretion, prevent the
20416	disclosure of information which would be confidential pursuant
20417	to paragraph (1)(b).
20418	(3) A privilege against civil liability is granted to a
20419	person who furnishes information or evidence to the office
20420	department, unless such person acts in bad faith or with malice
20421	in providing such information or evidence.
20422	Section 382. Paragraph (b) of subsection (2) of section
20423	537.008, Florida Statutes, is amended to read:
20424	537.008 Title loan agreement.--
20425	(2) The following information shall also be printed on all
20426	title loan agreements:
20427	(b) The name and address of the Department of Financial
20428	Servicesas well as a telephone number to which consumers may
20429	address complaints.
20430	Section 383. Section 537.009, Florida Statutes, is amended
20431	to read:
20432	537.009 Recordkeeping; reporting; safekeeping of
20433	property.--
20434	(1) Every title loan lender shall maintain, at the
20435	lender's title loan office, such books, accounts, and records of
20436	the business conducted under the license issued for such place
20437	of business as will enable the officedepartmentto determine
20438	the licensee's compliance with this act.
20439	(2) The officedepartmentmay authorize the maintenance of
20440	books, accounts, and records at a location other than the
20441	lender's title loan office. The officedepartmentmay require
20442	books, accounts, and records to be produced and available at a
20443	reasonable and convenient location in this state within a
20444	reasonable period of time after such a request.
20445	(3) The title loan lender shall maintain the original copy
20446	of each completed title loan agreement on the title loan office
20447	premises, and shall not obliterate, discard, or destroy any such
20448	original copy, for a period of at least 2 years after making the
20449	final entry on any loan recorded in such office or after ana
20450	department examination by the Office of Financial Institutions
20451	and Securities Regulation, whichever is later.
20452	(4) Loan property which is delivered to a title loan
20453	lender shall be securely stored and maintained at the title loan
20454	office unless the loan property has been forwarded to the
20455	appropriate state agency for the purpose of having a lien
20456	recorded or deleted.
20457	(5) The commissiondepartmentmay prescribe by rule the
20458	books, accounts, and records, and the minimum information to be
20459	shown in the books, accounts, and records, of licensees so that
20460	such records will enable the officedepartmentto determine
20461	compliance with the provisions of this act.
20462	Section 384. Subsection (2) and paragraph (c) of
20463	subsection (4) of section 537.011, Florida Statutes, are amended
20464	to read:
20465	537.011 Title loan charges.--
20466	(2) The annual percentage rate that may be charged for a
20467	title loan may equal, but not exceed, the annual percentage rate
20468	that must be computed and disclosed as required by the federal
20469	Truth in Lending Act and Regulation Z of the Board of Governors
20470	of the Federal Reserve System. The maximum annual percentage
20471	rate of interest that may be charged is 12 times the maximum
20472	monthly rate, and the maximum monthly rate must be computed on
20473	the basis of one-twelfth of the annual rate for each full month.
20474	The commissionDepartment of Banking and Financeshall establish
20475	by rule the rate for each day in a fraction of a month when the
20476	period for which the charge is computed is more or less than 1
20477	month.
20478	(4) Any interest contracted for or received, directly or
20479	indirectly, by a title loan lender, or an agent of the title
20480	loan lender, in excess of the amounts authorized under this
20481	chapter is prohibited and may not be collected by the title loan
20482	lender or an agent of the title loan lender.
20483	(c) The officedepartmentmay order a title loan lender,
20484	or an agent of the title loan lender, to comply with the
20485	provisions of paragraphs (a) and (b).
20486	Section 385. Paragraphs (b), (f), and (n) of subsection
20487	(1) of section 537.013, Florida Statutes, are amended to read:
20488	537.013 Prohibited acts.--
20489	(1) A title loan lender, or any agent or employee of a
20490	title loan lender, shall not:
20491	(b) Refuse to allow the officedepartmentto inspect
20492	completed title loan agreements, extensions of such agreements,
20493	or loan property during the ordinary operating hours of the
20494	title loan lender's business or other times acceptable to both
20495	parties.
20496	(f) Fail to exercise reasonable care, as defined by
20497	commissiondepartmentrule, in the safekeeping of loan property
20498	or of titled personal property repossessed pursuant to this act.
20499	(n) Act as a title loan lender under this act within a
20500	place of business in which the licensee solicits or engages in
20501	business outside the scope of this act if the officedepartment
20502	determines that the licensee's operation of and conduct
20503	pertaining to such other business results in an evasion of this
20504	act. Upon making such a determination, the officedepartment
20505	shall order the licensee to cease and desist from such evasion;
20506	provided, no licensee shall engage in the pawnbroker business.
20507	Section 386. Section 537.016, Florida Statutes, is amended
20508	to read:
20509	537.016 Subpoenas; enforcement actions; rules.--
20510	(1) The officedepartmentmay issue and serve subpoenas to
20511	compel the attendance of witnesses and the production of
20512	documents, papers, books, records, and other evidence before the
20513	officedepartment in any matter pertaining to this act. The
20514	officedepartmentmay administer oaths and affirmations to any
20515	person whose testimony is required. If any person refuses to
20516	testify; produce books, records, and documents; or otherwise
20517	refuses to obey a subpoena issued under this section, the office
20518	departmentmay enforce the subpoena in the same manner as
20519	subpoenas issued under the Administrative Procedure Act are
20520	enforced. Witnesses are entitled to the same fees and mileage as
20521	they are entitled to by law for attending as witnesses in the
20522	circuit court, unless such examination or investigation is held
20523	at the place of business or residence of the witness.
20524	(2) In addition to any other powers conferred upon the
20525	officedepartment to enforce or administer this act, the office
20526	departmentmay:
20527	(a) Bring an action in any court of competent jurisdiction
20528	to enforce or administer this act, any rule or order adopted
20529	under this act, or any written agreement entered into with the
20530	officedepartment. In such action, the officedepartmentmay
20531	seek any relief at law or equity, including a temporary or
20532	permanent injunction, appointment of a receiver or
20533	administrator, or an order of restitution.
20534	(b) Issue and serve upon a person an order requiring such
20535	person to cease and desist and take corrective action whenever
20536	the officedepartmentfinds that such person is violating, has
20537	violated, or is about to violate any provision of this act, any
20538	rule or order adopted under this act, or any written agreement
20539	entered into with the officedepartment.
20540	(c) Whenever the officedepartmentfinds that conduct
20541	described in paragraph (b) presents an immediate danger to the
20542	public health, safety, or welfare requiring an immediate final
20543	order, the officedepartmentmay issue an emergency cease and
20544	desist order reciting with particularity the facts underlying
20545	such findings. The emergency cease and desist order is effective
20546	immediately upon service of a copy of the order on the
20547	respondent named in the order and shall remain effective for 90
20548	days. If the officedepartmentbegins nonemergency proceedings
20549	under paragraph (b), the emergency cease and desist order
20550	remains effective until the conclusion of the proceedings under
20551	ss. 120.569 and 120.57.
20552	(3) The commissiondepartmentmay adopt rules to
20553	administer this act.
20554	Section 387. Section 537.017, Florida Statutes, is amended
20555	to read:
20556	537.017 Investigations and complaints.--
20557	(1) The officedepartmentmay make any investigation and
20558	examination of any licensee or other person the office
20559	departmentdeems necessary to determine compliance with this
20560	act. For such purposes, the officedepartmentmay examine the
20561	books, accounts, records, and other documents or matters of any
20562	licensee or other person. The officedepartmentmay compel the
20563	production of all relevant books, records, and other documents
20564	and materials relative to an examination or investigation.
20565	Examinations shall not be made more often than once during any
20566	12-month period unless the officedepartmenthas reason to
20567	believe the licensee is not complying with the provisions of
20568	this act.
20569	(2) The officedepartmentshall conduct all examinations
20570	at a convenient location in this state unless the office
20571	departmentdetermines that it is more effective or cost-
20572	efficient to perform an examination at the licensee's out-of-
20573	state location. For an examination performed at the licensee's
20574	out-of-state location, the licensee shall pay the travel expense
20575	and per diem subsistence at the rate provided by law for up to
20576	thirty 8-hour days per year for each officedepartmentexaminer
20577	who participates in such an examination. However, if the
20578	examination involves or reveals possible fraudulent conduct by
20579	the licensee, the licensee shall pay the travel expenses and per
20580	diem subsistence provided by law, without limitation, for each
20581	participating examiner.
20582	(3) Any person having reason to believe that any provision
20583	of this act has been violated may file with the Department of
20584	Financial Services or the officea written complaint setting
20585	forth the details of such alleged violation, and the office
20586	departmentmay investigate such complaint.
20587	Section 388. Section 559.725, Florida Statutes, is amended
20588	to read:
20589	559.725 Consumer complaints; administrative duties.--
20590	(1) The Division of Consumer Services of the Department of
20591	Agriculture and Consumer Servicesshall serve as the registry
20592	for receiving and maintaining records of inquiries,
20593	correspondence, and complaints from consumers concerning any and
20594	all persons who collect debts, including consumer collection
20595	agencies.
20596	(2) The division shall classify complaints by type and
20597	identify the number of written complaints against persons
20598	collecting or attempting to collect debts in this state,
20599	including credit grantors collecting their own debts, debt
20600	collectors generally, and, specifically, consumer collection
20601	agencies as distinguished from other persons who collect debts
20602	such as commercial debt collection agencies regulated under part
20603	V of this chapter. The division shall identify the nature and
20604	number of various kinds of written complaints, including
20605	specifically those alleging violations of s. 559.72.
20606	(3) The division shall inform and furnish relevant
20607	information to the appropriate regulatory body of the state, or
20608	The Florida Bar in the case of attorneys, when any consumer debt
20609	collector exempt from registration under this part has been
20610	named in five or more written consumer complaints alleging
20611	violations of s. 559.72 within a 12-month period.
20612	(4) The division shall furnish a form to each complainant
20613	whose complaint concerns an alleged violation of s. 559.72 by a
20614	consumer collection agency. Such form may be filed with the
20615	officeDepartment of Banking and Finance. The form shall
20616	identify the accused consumer collection agency and provide for
20617	the complainant's summary of the nature of the alleged violation
20618	and facts which allegedly support the complaint. The form shall
20619	include a provision for the complainant to state under oath
20620	before a notary public that the allegations therein made are
20621	true.
20622	(5) Upon receipt of such sworn complaint, the office
20623	departmentshall promptly furnish a copy of the sworn complaint
20624	to the accused consumer collection agency.
20625	(6) The officedepartmentshall investigate sworn
20626	complaints by direct written communication with the complainant
20627	and the affected consumer collection agency. In addition, the
20628	officedepartmentshall attempt to resolve each sworn complaint
20629	and shall record the resolution of such complaints.
20630	(7) Periodically, the officedepartmentshall identify
20631	consumer collection agencies that have unresolved sworn consumer
20632	complaints from five or more different consumers within a 12-
20633	month period under the provisions of this part.
20634	(8) The officedepartmentshall issue a written warning
20635	notice to the accused consumer collection agency if the office
20636	departmentis unable to resolve all such sworn complaints and
20637	fewer than five unresolved complaints remain. Such notice shall
20638	include a statement that the warning may constitute evidence in
20639	any future investigation of similar complaints against that
20640	agency and in any future administrative determination of the
20641	imposition of other administrative remedies available to the
20642	officedepartmentunder this part.
20643	(9) The officedepartmentmay issue a written reprimand
20644	when five or more such unresolved sworn complaints against a
20645	consumer collection agency collectively fall short of
20646	constituting apparent repeated violations that warrant more
20647	serious administrative sanctions. Such reprimand shall include a
20648	statement that the reprimand may constitute evidence in any
20649	future investigation of similar complaints against that agency
20650	and in any future administrative determination of the imposition
20651	of other administrative remedies available to the office
20652	department.
20653	(10) The officedepartmentshall issue a notice of intent
20654	either to revoke or suspend the registration or to impose an
20655	administrative fine when the officedepartmentpreliminarily
20656	determines that repeated violations of s. 559.72 by an accused
20657	registrant have occurred which would warrant more serious
20658	administrative sanctions being imposed under this part. The
20659	officedepartmentshall advise each registrant of the right to
20660	require an administrative hearing under chapter 120, prior to
20661	the agency's final action on the matter as authorized by s.
20662	559.730.
20663	(11) The officedepartmentshall advise the appropriate
20664	state attorney, or the Attorney General in the case of an out-
20665	of-state consumer debt collector, of any determination by the
20666	officedepartmentof a violation of the requirements of this
20667	part by any consumer collection agency which is not registered
20668	as required by this part. The officedepartmentshall furnish
20669	the state attorney or Attorney General with the office's
20670	department'sinformation concerning the alleged violations of
20671	such requirements.
20672	Section 389. Section 560.128, Florida Statutes, is amended
20673	to read:
20674	560.128 Consumer disclosure.--
20675	(1) Every money transmitter and authorized vendor shall
20676	provide each consumer of a money transmitter transaction a toll-
20677	free telephone number for the purpose of consumer contacts;
20678	however, in lieu of such toll-free telephone number, the money
20679	transmitter or authorized vendor may provide the address and
20680	telephone number of the office and the Division of Consumer
20681	Services of the Department of Financial Servicesdepartment.
20682	(2) The commissiondepartmentmay by rule require every
20683	money transmitter to display its registration at each location,
20684	including the location of each person designated by the
20685	registrant as an authorized vendor, where the money transmitter
20686	engages in the activities authorized by the registration.
20687	Section 390. Section 560.129, Florida Statutes, is amended
20688	to read:
20689	560.129 Confidentiality.--
20690	(1) For purposes of this section, the definitions
20691	contained in s. 560.103, as created by chapter 94-238, Laws of
20692	Florida, and chapter 94-354, Laws of Florida, apply.
20693	(1)(2)(a) Except as otherwise provided in this section,
20694	all information concerning an investigation or examination by
20695	the officedepartmentpursuant to this chapter, including any
20696	consumer complaint received by the office or the Department of
20697	Financial Services, is confidential and exempt from s. 119.07(1)
20698	and s. 24(a), Art. I of the State Constitution until the
20699	investigation or examination ceases to be active. For purposes
20700	of this section, an investigation or examination is considered
20701	"active" so long as the officedepartmentor any other
20702	administrative, regulatory, or law enforcement agency of any
20703	jurisdiction is proceeding with reasonable dispatch and has a
20704	reasonable good faith belief that action may be initiated by the
20705	officedepartmentor other administrative, regulatory, or law
20706	enforcement agency.
20707	(b) Notwithstanding paragraph (a), all information
20708	obtained by the officedepartmentin the course of its
20709	investigation or examination which is a trade secret, as defined
20710	in s. 688.002, or which is personal financial information shall
20711	remain confidential. If any administrative, civil, or criminal
20712	proceeding against the money transmitter or a money transmitter-
20713	affiliated party is initiated and the officedepartmentseeks to
20714	use matter that a registrant believes to be a trade secret or
20715	personal financial information, such records shall be subject to
20716	an in camera review by the administrative law judge, if the
20717	matter is before the Division of Administrative Hearings, or a
20718	judge of any court of this state, any other state, or the United
20719	States, as appropriate, for the purpose of determining if the
20720	matter is a trade secret or is personal financial information.
20721	If it is determined that the matter is a trade secret, the
20722	matter shall remain confidential. If it is determined that the
20723	matter is personal financial information, the matter shall
20724	remain confidential unless the administrative law judge or judge
20725	determines that, in the interests of justice, the matter should
20726	become public.
20727	(c) If any administrative, civil, or criminal proceeding
20728	against the money transmitter or a money transmitter-affiliated
20729	party results in an acquittal or the dismissal of all of the
20730	allegations against the money transmitter or a money
20731	transmitter-affiliated party, upon the request of any party, the
20732	administrative law judge or the judge may order all or a portion
20733	of the record of the proceeding to be sealed, and it shall
20734	thereafter be confidential and exempt from s. 119.07(1) and s.
20735	24(a), Art. I of the State Constitution.
20736	(d) Except as necessary for the officedepartmentor any
20737	other administrative, regulatory, or law enforcement agency of
20738	any jurisdiction to enforce the provisions of this chapter or
20739	the law of any other state or the United States, a consumer
20740	complaint and other information concerning an investigation or
20741	examination shall remain confidential and exempt from s.
20742	119.07(1) and s. 24(a), Art. I of the State Constitution after
20743	the investigation or examination ceases to be active to the
20744	extent that disclosure would:
20745	1. Jeopardize the integrity of another active
20746	investigation;
20747	2. Reveal personal financial information;
20748	3. Reveal the identity of a confidential source; or
20749	4. Reveal investigative techniques or procedures.
20750	(2)(3)This section does not prevent or restrict:
20751	(a) Furnishing records or information to any appropriate
20752	regulatory agency if such agency adheres to the confidentiality
20753	provisions of the code;
20754	(b) Furnishing records or information to an independent
20755	third party or a certified public accountant who has been
20756	approved by the officedepartmentto conduct an examination
20757	under s. 560.118(1)(b), if the independent third party or
20758	certified public accountant adheres to the confidentiality
20759	provisions of the code; or
20760	(c) Reporting any suspected criminal activity, with
20761	supporting documents and information, to appropriate law
20762	enforcement or prosecutorial agencies.
20763	(3)(4)All quarterly reports submitted by a money
20764	transmitter to the officedepartmentunder s. 560.118(2)(b) are
20765	confidential and exempt from s. 119.07(1) and s. 24(a), Art. I
20766	of the State Constitution.
20767	(4)(5)Examination reports, investigatory records,
20768	applications, and related information compiled by the office
20769	department, or photographic copies thereof, shall be retained by
20770	the officedepartmentfor a period of at least 10 years.
20771	(5)(6)Any person who willfully discloses information made
20772	confidential by this section commits a felony of the third
20773	degree, punishable as provided in s. 775.082 or s. 775.083.
20774	Section 391. Subsection (3), paragraph (b) of subsection
20775	(19), paragraph (b) of subsection(22), and subsection (23) of
20776	section 560.404, Florida Statutes, are amended to read:
20777	560.404 Requirements for deferred presentment
20778	transactions.--
20779	(3) Each written agreement shall contain the following
20780	information, in addition to any information the commission
20781	departmentrequires by rule:
20782	(a) The name or trade name, address, and telephone number
20783	of the deferred presentment provider and the name and title of
20784	the person who signs the agreement on behalf of the deferred
20785	presentment provider.
20786	(b) The date the deferred presentment transaction was
20787	made.
20788	(c) The amount of the drawer's check.
20789	(d) The length of deferral period.
20790	(e) The last day of the deferment period.
20791	(f) The address and telephone number of the office and the
20792	Division of Consumer Services of the Department of Financial
20793	Servicesdepartment.
20794	(g) A clear description of the drawer's payment
20795	obligations under the deferred presentment transaction.
20796	(h) The transaction number assigned by the office's
20797	department'sdatabase.
20798	(19) A deferred presentment provider may not enter into a
20799	deferred presentment transaction with a person who has an
20800	outstanding deferred presentment transaction with that provider
20801	or with any other deferred presentment provider, or with a
20802	person whose previous deferred presentment transaction with that
20803	provider or with any other provider has been terminated for less
20804	than 24 hours. The deferred presentment provider must verify
20805	such information as follows:
20806	(b) The deferred presentment provider shall access the
20807	office'sdepartment'sdatabase established pursuant to
20808	subsection (23) and shall verify whether any other deferred
20809	presentment provider has an outstanding deferred presentment
20810	transaction with a particular person or has terminated a
20811	transaction with that person within the previous 24 hours. Prior
20812	to the time that the officedepartmenthas implemented such a
20813	database, the deferred presentment provider may rely upon the
20814	written verification of the drawer as provided in subsection
20815	(20).
20816	(22)
20817	(b) At the commencement of the grace period, the deferred
20818	presentment provider shall provide the drawer:
20819	1. Verbal notice of the availability of the grace period
20820	consistent with the written notice in subsection (20).
20821	2. A list of approved consumer credit counseling agencies
20822	prepared by the officedepartment. The department shall prepare
20823	the list by October 1, 2001. The officedepartmentlist shall
20824	include nonprofit consumer credit counseling agencies affiliated
20825	with the National Foundation for Credit Counseling which provide
20826	credit counseling services to Florida residents in person, by
20827	telephone, or through the Internet. The officedepartmentlist
20828	must include phone numbers for the agencies, the counties served
20829	by the agencies, and indicate the agencies that provide
20830	telephone counseling and those that provide Internet counseling.
20831	The officedepartmentshall update the list at least once each
20832	year.
20833	3. The following notice in at least 14-point type in
20834	substantially the following form:
20835
20836	AS A CONDITION OF OBTAINING A GRACE PERIOD EXTENDING THE TERM OF
20837	YOUR DEFERRED PRESENTMENT AGREEMENT FOR AN ADDITIONAL 60 DAYS,
20838	UNTIL [DATE], WITHOUT ANY ADDITIONAL FEES, YOU MUST COMPLETE
20839	CONSUMER CREDIT COUNSELING PROVIDED BY AN AGENCY INCLUDED ON THE
20840	LIST THAT WILL BE PROVIDED TO YOU BY THIS PROVIDER. YOU MAY ALSO
20841	AGREE TO COMPLY WITH AND ADHERE TO A REPAYMENT PLAN APPROVED BY
20842	THE AGENCY. THE COUNSELING MAY BE IN PERSON, BY TELEPHONE, OR
20843	THROUGH THE INTERNET. YOU MUST NOTIFY US WITHIN SEVEN (7) DAYS,
20844	BY [DATE], THAT YOU HAVE MADE AN APPOINTMENT WITH SUCH A
20845	CONSUMER CREDIT COUNSELING AGENCY. YOU MUST ALSO NOTIFY US
20846	WITHIN SIXTY (60) DAYS, BY [DATE], THAT YOU HAVE COMPLETED THE
20847	CONSUMER CREDIT COUNSELING. WE MAY VERIFY THIS INFORMATION WITH
20848	THE AGENCY. IF YOU FAIL TO PROVIDE EITHER THE 7-DAY OR 60-DAY
20849	NOTICE, OR IF YOU HAVE NOT MADE THE APPOINTMENT OR COMPLETED THE
20850	COUNSELING WITHIN THE TIME REQUIRED, WE MAY DEPOSIT OR PRESENT
20851	YOUR CHECK FOR PAYMENT AND PURSUE ALL LEGALLY AVAILABLE CIVIL
20852	MEANS TO ENFORCE THE DEBT.
20853	(23) On or before March 1, 2002, the officedepartment
20854	shall implement a common database with real-time access through
20855	an Internet connection for deferred presentment providers, as
20856	provided in this subsection. The database must be accessible to
20857	the officedepartmentand the deferred presentment providers to
20858	verify whether any deferred presentment transactions are
20859	outstanding for a particular person. Deferred presentment
20860	providers shall submit such data before entering into each
20861	deferred presentment transaction in such format as the
20862	commissiondepartmentshall require by rule, including the
20863	drawer's name, social security number or employment
20864	authorization alien number, address, driver's license number,
20865	amount of the transaction, date of transaction, the date that
20866	the transaction is closed, and such additional information as is
20867	required by the commissiondepartment. The commissiondepartment
20868	may impose a fee not to exceed $1 per transaction for data
20869	required to be submitted by a deferred presentment provider. A
20870	deferred presentment provider may rely on the information
20871	contained in the database as accurate and is not subject to any
20872	administrative penalty or civil liability as a result of relying
20873	on inaccurate information contained in the database. The
20874	commissiondepartmentmay adopt rules to administer and enforce
20875	the provisions of this section and to assure that the database
20876	is used by deferred presentment providers in accordance with
20877	this section.
20878	Section 392. Section 609.05, Florida Statutes, is amended
20879	to read:
20880	609.05 Qualification with Office of Financial Institutions
20881	and Securities RegulationDepartment of Banking and
20882	Finance.--Before any person may offer for sale, barter or sell
20883	any unit, share, contract, note, bond, mortgage, oil or mineral
20884	lease or other security of an association doing business under
20885	what is known as a "declaration of trust" in this state, such
20886	person shall procure from the Office of Financial Institutions
20887	and Securities Regulation of the Financial Services Commission
20888	Department of Banking and Financea permit to offer for sale and
20889	sell such securities, which permit shall be applied for and
20890	granted under the same conditions as like permits are applied
20891	for and granted to corporations.
20892	Section 393. Section 655.012, Florida Statutes, is amended
20893	to read:
20894	655.012 General supervisory powers of the department;
20895	rulemaking; seal.--
20896	(1)In addition to other powers conferred by the financial
20897	institutions codes, the officedepartmentshall have:
20898
20899	(a)(1)General supervision over all state financial
20900	institutions, their subsidiaries, and service corporations.
20901	(b)(2)Access to all books and records of all persons over
20902	whom the officedepartmentexercises general supervision as is
20903	necessary for the performance of the duties and functions of the
20904	officedepartmentprescribed by the financial institutions
20905	codes.
20906	(c)(3)Power to issue orders and declaratory statements,
20907	disseminate information, and otherwise exercise its discretion
20908	to effectuate the purposes, policies, and provisions of the
20909	financial institutions codes.
20910	(2) In addition to other powers conferred by the financial
20911	institutions codes, the commission shall have the powerandto
20912	adopt rules pursuant to ss. 120.536(1) and 120.54 to implement
20913	the provisions of such codes.
20914	(3) The office shall have an official seal by which its
20915	proceedings are authenticated.
20916	Section 394. This act shall not affect the validity of any
20917	administrative or judicial action involving the Department of
20918	Banking and Finance or the Department of Insurance occurring
20919	prior to, or pending on, January 7, 2003, and the Department of
20920	Financial Services or the Financial Services Commission, or the
20921	respective office, shall be substituted as a party in interest
20922	on any such pending action.
20923	Section 395. Any certificate of authority, license, form,
20924	rate, or other filing or action that was approved or authorized
20925	by the Department of Insurance or the Department of Banking and
20926	Finance, or that was otherwise lawfully in use prior to January
20927	7, 2003, may continue to be used or be effective as originally
20928	authorized or permitted, until the Chief Financial Officer, the
20929	Department of Financial Services, the Financial Services
20930	Commission, or either of the respective offices, otherwise
20931	prescribes.
20932	Section 396. In the event of any conflict between any
20933	provision of this act and any provision of other legislation
20934	enacted during the 2003 Regular Session, the provisions of this
20935	act shall control.
20936	Section 397. This act shall take effect upon becoming a
20937	law.
20938